Notes to Accounts of Mahindra EPC Irrigation Ltd.

Mar 31, 2025

The company applies the simplified approach to provide for expected credit losses prescribed by IND AS 109, which permits the use of the lifetime expected credit loss provision for all trade receivables. The company has expected credit losses based on a provision matrix which uses historical credit loss experience of the Company.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

Refer Note 29 for disclosures relating to receivables from related parties.

Trade receivables are hypothecated against the working capital facilities provided by the bank.

Refer Note 5A for trade receivables ageing schedule.

When the impairment is calculated under the simplified approach for trade receivables, an entity is not required to separately track changes in credit risk of trade receivables as the impairment amount represents âlifetimeâ expected credit loss. Accordingly, the disclosure of trade receivables in the manner as required by Schedule III for significant increase in credit risk is not required except when a company has a trade receivable for which credit risk is assessed individually. Further, the disclosure of âtrade receivables - credit impairedâ will be made if such trade receivables meet the definition of âcredit impairedâ as per Ind AS 109.

Out of the above, Rs. 3.72 crores are lying with third parties (year ended March 31, 2024 Rs. 6.92 crores).

The amount of goods in transit as on March 31 2025 is of Rs. 0.84 crores. (As on March 31, 2024 Rs. 0.49 crores).

The amount of inventories recognised as an expense is Rs. 125.49 crores (for the year ended 31 March 2024 Rs. 139.31 crores) including Rs. 0.24 crores (for the year ended 31 March 2024 Rs. 0.10 crores) in respect of write down of inventories to net realisable value, and has been reduced by Rs. 0.12 crores (for the year ended 31 March 2024 - Rs. 0.21 crores) in respect of reversal of such write downs. Reversal in provision is due to sale and/or consumption of inventories provided for in earlier years.

Rights, preferences and restrictions attached to equity shares

The Company is having only one class of equity shares having par value of Rs. 10 each. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

BORROWING NOTE:

i. Company have filed quarterly returns/statement with Banks and same are in agreement with the books of accounts. There are no material discrepancies found.

ii. Working capital facilities are secured by hypothecation of Inventory & Trade receivable.

iii. The Company has availed working capital facilities from Banks aggregating to Rs. 5 Crores (March 31, 2024 - Rs. 15.42 Crores) with the interest rates which are linked to Repo rate with spread ranging from 0% p.a. to 2% p.a.

iv. The Company has availed inter corporate deposit from holding company aggregating to Rs. 20 Crores (March 31, 2024 -Rs. Nil Crores) with the interest rates of 8.15% and repayable within 3 to 6 months from date of availment.

Warranty Claims:

Provision for warranty represents present value of managementâs best estimate of the future outflow of economic benefits that will be required in respect of sale of certain products, the estimated cost of which is accrued at the time of sale. Management estimates the related provision for future warranty claims based on historical warranty claim information and is adjusted regularly to reflect new information. The products are generally covered under a free warranty period ranging from 6 months to 5 years. It is expected that most of these costs will be incurred in the next two financial years and all will have been incurred within five years after the reporting date.

The company recognises revenue as per IND AS 115 âRevenue from contracts with customersâ.

Accordingly, the Company recognises revenue when it transfers control of a product or service to a customer as and when it satisfies the performance obligation by transferring promised goods or services to a customer and customer obtains the control or benefit of the same.

The revenue is recognised on satisfaction of performance obligation / transferring control to the customer and hence the same is recognised at a point in time. The company believes that above disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors.

Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors. The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is Rs. 55.65 Crores out of which 100% is expected to be recognised as revenue in the next year. No consideration from contracts with customers is excluded from the amount mentioned above.

Pursuant to the âEmployees Stock Option Scheme - 2014â (ESOS) approved by the Shareholders in the Annual General Meeting held on July 31, 2014, the Company had granted 80,424, 3,228, 1,33,432, 11,129, 80,110 and 71,459 Stock Options to the eligible employees on October 28, 2014, October 31,2015, November 22,2016, November 22,2017, February 28, 2019 and March 12, 2021 respectively as per the recommendations of the Nomination and Remuneration Committee, at an exercise price of Rs. 10/- each. In respect of the options granted in 2014, 2016, 2017, 2019 and 2021 the equity settled options vest in 5 tranches of 20% each upon the expiry of 12 months, 24 months, 36 months, 48 months and 60 months, respectively from the date of grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 20% of the options vested, except in case of the last date of the exercise, where the employee can exercise all options vested but not exercised till that date. In respect of options granted in 2015, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months, respectively from the date of grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all options vested but not exercised till that date.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option representing share based payment expenses is expected over the vesting period.

Expected early exercise option is not considered in the assumption at the time of valuation. Hence relevant disclosure is not applicable.

The fair value of the employee share options has been measured using the Black-Scholes option Pricing formula.

Expected volatility has been based on an evaluation of the historical volatility of the Companyâs share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour.

The companyâs capital management objectives are:

â to ensure the companyâs ability to continue as a going concern.

â to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk.

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of the statement of financial position.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors.

CREDIT RISK

Credit risk management

Definition of default

The financial services business considers a financial asset to be in âdefaultâ and therefore Stage 3 (credit impaired) for ECL calculations when the borrower becomes 90 days past due on its contractual payments.

Credit risk arises when a counterparty defaults on its contractual obligations to pay, resulting in financial loss to the Company. The company has dealings with government organisation for subsidy related transaction and with private parties. For private non government parties credit limits are set quarterly. The Company has adopted a policy of only dealing with creditworthy non government parties and obtaining security cheques, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Companyâs exposure and credit worthiness of such parties are continuously monitored and controlled by counterparty limits that are reviewed by Credit Control function based on the approved process.

No interest is charged on overdue balance.

Trade receivables consist of a large number of customers, spread across geographical areas. On going credit evaluation is performed on the financial condition of accounts receivable. There are no non government customers who represent more than 5% of the total balance of trade receivable.

The loss allowance provision has changed during the year due to recovery from debtors and business circumstances.

Cash & Cash equivalents

The Company held cash and cash equivalents with credit worthy banks of Rs. 1.69 Crores as at 31 March 2025 (Rs. 0.20 Crores as at 31 March 2024) and fixed deposits of Rs. 2.10 Crores as at 31 March 2025 (Rs. 2.08 Crores as at 31 March 2024).

LIQUIDITY RISK

(i) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Companyâs short - medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities

The following tables detail the Companyâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The following table details the Companyâs expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Companyâs liquidity risk management as the liquidity is managed on a net asset and liability basis.

MARKET RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

There has been no significant changes to the companyâs exposure to market risk or the methods in which they are managed or measured.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. As at the year end, there were no material foreign currency exposure.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to market risk for changes in interest rates relates to fixed deposits and borrowings from banks.

Exposure to interest rate

The Companyâs main interest rate risk arises from short term borrowings with variable interest rate and fixed interest rate carrying investments like fixed deposits with banks, which exposes the Company to cash flow interest rate risk.

Fair value sensitivity analysis for fixed-rate instruments

The Companyâs fixed rate bank deposits and inter corporate deposit are carried at amortised cost. They are therefore not subject to interest rate risk as defined in IND AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis for floating rate liabilities is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole period. A reasonable possible change of 100 basis points (100 bps) in interest rate at the reporting date would have increased / (decreased) profit after tax and equity by the amount shown below:

The gross carrying amount of a financial asset is written off when there is no realistic prospect of further recovery. This is generally the case when the MEIL business determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. However, financial assets that are written off could still be subject to enforcement activities under the recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

NOTE NO. 25 - FAIR VALUE MEASUREMENT

The directors consider that the carrying amounts of financial assets and financial liabilities that are not measured at fair value, recognised in the financial statement approximate their fair values.

NOTE NO. 26 - LEASES (REFER NOTE 2B)

In adopting Ind AS 116, the Company has applied the below practical expedients:

The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics

The Company has treated the leases with remaining lease term of less than 12 months as if they were âshort term leasesâ

The Company has excluded the initial direct costs from measurement of the right-of-use asset at the date of transition

The Company has used hindsight, in determining the lease term if the contract contains options to extend or terminate the lease

On transition to Ind AS 116, the Company has followed the Modified Retrospective Approach, accordingly recognised right-of-use assets amounting to Rs. 360.55 lakhs, lease liabilities amounting to Rs. 55.21 lakhs as at April 1, 2019. The Company has discounted lease payments using the applicable incremental borrowing rate as at April 1, 2019, which is 8.50% for measuring the lease liability. In view of this, the operating lease rent which was hitherto accounted under âOther expensesâ in previous periods has now been accounted as depreciation and finance costs.

NOTE NO. 27 - SEGMENT INFORMATION

The Company is engaged in the business of Precision Farming Products and Services and in a single geography viz, India. The Information reported to the chief operating decision maker (CODM) [Viz, The Managing Director] for assessment of performance of business and allocation of resources is under this segment.

Accordingly, The Company has identified a single segment under Ind AS 108 -ââOperating Segmentsâ.

Refer Note 17 for the analysis of revenue from it major products and services.

There is no single customer contributing 10% or more of total revenue.

NOTE NO. 28 - EMPLOYEE BENEFITS

(a) Defined Contribution Plan:

The Companyâs contribution to Provident Fund Rs. 1.09 Crores (year ended March 31, 2024: Rs. 1.11 Crores) and Superannuation Fund Rs. 0.42 Crores (year ended March 31, 2024: Rs. 0.42 Crores) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India.

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

Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to government bond yields; if plan assets under perform compared to the government bond discount rate, this will create or increase a deficit. The defined benefit plans hold on investment with LIC, which are expected to perform in line with government bonds in the long-term.

The company believes that due to the long-term nature of the plan liabilities, investments of funds with LIC is an appropriate element of the Companyâs long term strategy to manage the plans efficiently.

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plan assets.

Life expectancy

The planâs obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the planâs liabilities.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance sheet.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

NOTE NO. 30 - CONTINGENT LIABILITIES AND COMMITMENTS Contingent liabilities (to the extent not provided for)	As at March 31, 2025	Rs. in Crores As at March 31, 2024
Contingent liabilities Claims against the Company not acknowledged as debt: (i) Demands against the Company, relating to issues of availement of credits, valuation, deductibility and taxability in respect of which the company is in appeal / Department is in appeal: â Income tax matters	3.20	2.99
â Excise duty	2.38	2.32
â Service Tax	28.96	-
â Sales Tax	0.09	0.09
â Goods and Service Tax (GST)	12.36	6.83
(ii) Other Claims	0.27	0.27
Total	47.26	12.51

Note: In respect of items mentioned above the timing of outflows of economic benefits is not practical to be ascertained, till the matters are decided by relevant authorities.

The Companyâs pending litigations comprise of claims against the Company and pertaining to proceedings pending with various direct tax, indirect tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required or disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its standalone financial statements.

NOTE NO. 31 - COMMITMENTS Particulars

As at March 31, 2025

Rs. in Crores

As at March 31, 2024

Estimated amount of contracts remaining to be executed on capital account and not provided for in respect of Tangible assets.

0.70

Reasons for changes in ratios:

Debt Equity Ratio

Increase in debt because of delayed payments from Government bodies mainly in the state of Andhra Pradesh, Telangana.

Net Profit Margin, Return on Equity & Return on Capital employed

Improved revenue, lower input costs resulting to improvement in earnings.

Trade Payable Turnover

Utilisation of inventory leading to lower purchases, higher purchases in Q4 in line with sales volumes leading to higher payables

at year end.

NOTE NO. 34B - ADDITIONAL REGULATORY INFORMATION

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

(ii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(iv) The Company has neither declared nor paid any dividend during the year.

(v) The Company has not been declared a wilful defaulter by any bank or financial institution or government or government authority.

(vi) The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) The company has complied with the number of layers prescribed under the Companies Act, 2013.

(viii) The Company has reviewed the transactions to identify if there are any transactions with struck off companies. To the extent information is available, there are no such transactions.

NOTE NO. 35 - DISCLOSURE UNDER RULE 11(E) OF THE COMPANIES RULES 2014

No Funds have been advanced, loaned, invested or provided any guarantee, security or the like to or on (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity including foreign entities (âintermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE NO. 36 - CODE OF SOCIAL SECURITY

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

NOTE NO. 37 - APPROVAL OF STANDALONE FINANCIAL STATEMENTS

The standalone financial statements of the Company were approved by the Board of Directors and authorised for issue on April 17, 2025.

Mar 31, 2024

R. Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits - Refer Note No. 28) are discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. Provisions & contingent liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Contingent liabilities and assets are not recognised but are disclosed in the notes.

S. Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified by the company. The CODM of the company reviews the operation of the company as Precision Farming Products & Services.

T. Investment in Joint Venture

The company accounts for its investments in Joint Venture at cost less accumulated impairment, if any.

U. Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Classification and subsequent measurement Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification of financial assets:

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

â¢ the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

â¢ the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Trade Receivables

Trade receivables are initially recognised at fair value except for those without a significant financing component which are initially measured at transaction price. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

All other financial assets are subsequently measured at fair value.

Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.

Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instrument as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the âOther incomeâ line item.

Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables, other contractual rights to receive cash or other financial asset.

Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information. Assessment of whether there is significant increase in the credit risk of a particular customer is performed periodically basis a review of collection trends, credit worthiness and other macro economic factors.

Off-setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL. Financial liabilities subsequently measured at amortised cost:

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ line item.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group is recognised at the proceeds received, net of directly attributable transaction costs.

V. Use of judgements and estimates

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Companyâs accounting policies and the reported amounts of assets, liabilities, income, expenses and the

disclosures of contingent assets and liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on going basis. Revisions to estimates are recognised prospectively.

Following are areas that involved a higher degree of estimate and judgement or complexity in determining the carrying amount of some assets and liabilities.

- useful life of property, plant and equipment and intangible assets (Refer Note 1, Point F)

- estimation of defined benefit obligation (Refer Note 28)

- provision for warranty claims (Refer Note 14)

- income taxes - current and deferred taxes (Refer Note 7)

- impairment of trade receivables (Refer Note 5)

Detailed information about each of these estimates and judgements that have a significant risk of resulting in material adjustment within the next financial year is included in relevant notes for the above items.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

W. Contingent Liabilities & Commitments

Contingent liabilities are disclosed 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 the obligation or a reliable estimate of the amount cannot be made

(i) I t is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

(ii) The Company does not expect any reimbursements in respect of the contingent liabilities.

(iii) The Companyâs pending litigations comprise of claims against the Company by employees and pertaining to proceedings pending with various direct tax, indirect tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required or disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its standalone financial statements.

X. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet includes cash at bank and on hand, deposits with banks & financial institutions, other short term highly liquid investments, with original maturities less than three months which are readily convertible into cash and which are subject to insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents as defined above is net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.

Y. Earnings per share

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

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

Refer Note 24 for disclosures related to credit risk, impairment of trade receivables under expected credit loss model and related disclosures.

Refer Note 29 for disclosures relating to receivables from related parties.

Trade receivables are hypothicated against the working capital facilities provided by the bank.

Refer Note 5A for trade receivables ageing schedule.

Financial Risk Management Framework

CREDIT RISK

Credit risk management

Definition of default

No interest is charged on overdue balance.

LIQUIDITY RISK

(i) Liquidity risk management

(ii) Maturities of financial liabilities

MARKET RISK

There has been no significant changes to the companyâs exposure to market risk or the methods in which they are managed or measured.

Currency Risk

Policy for write off of Loan Assets

NOTE NO. 26 - LEASES (REFER NOTE 2B)

In adopting Ind AS 116, the Company has applied the below practical expedients:

The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics

The Company has treated the leases with remaining lease term of less than 12 months as if they were âshort term leasesâ

The Company has excluded the initial direct costs from measurement of the right-of-use asset at the date of transition

The Company has used hindsight, in determining the lease term if the contract contains options to extend or terminate the lease

Accordingly, The Company has identified a single segment under Ind AS 108 - âOperating Segmentsâ.

Refer Note 17 for the analysis of revenue from it major products and services.

There is no single customer contributing 10% or more of total revenue.

NOTE NO. 28 - EMPLOYEE BENEFITS

(a) Defined Contribution Plan

The Companyâs contribution to Provident Fund Rs.1.11 Crores (year ended March 31, 2023 : Rs. 1.10 Crores) and Superannuation Fund Rs. 0.42 Crores (year ended March 31,2023 : Rs. 0.50 Crores) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

Asset Volatility

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plan assets.

Reasons for changes in ratios:

Debt Service Coverage Ratio

Improvement in earnings.

Net Profit Margin, Return on Equity & Return on Capital employed

Improved revenue, lower input costs resulting to improvement in earnings.

Return on Investments

Increase in investments held.

NOTE NO. 34B - ADDITIONAL REGULATORY INFORMATION

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

(ii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The Company has neither declared nor paid any dividend during the year.

(v) The Company has not been declared a wilful defaulter by any bank or financial institution or government or government authority.

(vi) The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) The company has complied with the number of layers prescribed under the Companies Act, 2013.

NOTE NO. 35 - DISCLOSURE UNDER RULE 11(E) OF THE COMPANIES RULES 2014

NOTE NO. 36 - CODE OF SOCIAL SECURITY

NOTE NO. 37 - APPROVAL OF FINANCIAL STATEMENTS

The financial statements of the Company were approved by the Board of Directors and authorised for issue on April 23, 2024.

In terms of our report attached For and on behalf of the Board of Directors

For B S R & Co. LLP Ramesh Ramachandran Anand Daga

Chartered Accountants Managing Director Director

Firmâs Registration No : 101248W/W-100022 DIN-09562621 DIN-00696171

Place : Nashik Place : Nashik

Rupen Shah Abhijit Page Sunetra Ganesan

Partner Chief Executive Officer Chief Financial Officer

Membership no.116240 Place : Nashik Place : Nashik

R. V. Nawghare

Company Secretary Place : Nashik

Place : Nashik

Date : April 23, 2024 Date : April 23, 2024

Mar 31, 2018

A. Corporate Information:

EPC Industrie Limited is a Public Limited Company listed on the Bombay Stock Exchange Limited. It was incorporated on November 28, 1981 under the Companies Act, 1956. It is engaged in the business of Micro Irrigation Systems such as Drip and Sprinklers, Agricultural Pumps, Greenhouses and Landscape Products. The Company is a subsidiary of Mahindra and Mahindra Limited.

Rights, preferences and restrictions attached to equity shares

Note:

Loans repayable on demand is secured by way of first charge on entire stock and debtors of the Company both present and future. The above loan is also secured by way of second charge on fixed assets.

The Interest rate is 9.85%

Warranty Claims:

Pursuant to the âEmployees Stock Option Scheme - 2014â (ESOS) approved by the Shareholders in the Annual General Meeting held on July 31, 2014, the Company had granted 80,424, 3,228, 1,33,432 and 11,129 stock options to the eligible employees on October 28, 2014, October 31,2015 , November 22,2016 and November 22,2017 respectively as per the recommendations of the Nomination and Remuneration Committee, at an exercise price of Rs 10/- each. In respect of the options granted in 2014, 2016 and 2017 the equity settled options vest in 5 tranches of 20% each upon the expiry of 12 months, 24 months, 36 months, 48 months and 60 months respectively from the date of grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 20% of the options vested, except in case of the last date of the exercise, where the employee can exercise all options vested but not exercised till that date. In respect of options granted in 2015, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all options vested but not exercised till that date.

The Holding Company has recovered Rs. 0.23 lakhs (March 31, 2017 Rs. 1.55 lakhs ) as ESOP cost from the Company in respect of employees deputed to the Company.

Note No. 1 - Financial Instruments I Capital management

The companyâs capital management objectives are:

- to ensure the companyâs ability to continue as a going concern.

- to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk.

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of the statement of financial position.

Financial Risk Management Framework

CREDIT RISK

Credit risk management

No interest is charged on overdue balance.

Trade receivables consist of a large number of customers, spread across geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable. There are no non government customers who represent more than 5% of the total balance of trade receivable.

The Company applies the simplified approach to provide expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company and individual receivable specific provision where applicable. Forward-looking information (including macroeconomic information) has been incorporated into the determination of expected credit losses. The Company has taken dealer deposit of Rs. 428.75 lakhs (March 31, 2017 Rs. 396.82 lakhs) and bank guarantees of Rs. 50.25 lakhs (March 31,2017 Rs. 91 lakhs) which is considered as collateral and these are considered in determination of expected credit losses, where applicable.

LIQUIDITY RISK

(i) Liquidity risk management

(ii) Maturities of financial liabilities

(iv) Maturities of financial assets

MARKET RISK

There has been no significant changes to the companyâs exposure to market risk or the methods in which they are managed or measured.

Currency Risk

NOTE NO. 2 - FAIR VALUE MEASUREMENT

a) The directors consider that the carrying amounts of financial assets and financial liabilities that are not measured at fair value, recognised in the financial statement approximate their fair values.

NOTE NO. 3 - SEGMENT INFORMATION

Accordingly, The Company has identified a single segment under Ind AS 108 -ââOperating Segmentsâ.

There is no single customer who accounts for 10% more of the company revenues.

Refer Note 19 for the analysis of revenue from it major products and services.

NOTE NO. 4 - EMPLOYEE BENEFITS

(a) Defined Contribution Plan

The Companyâs contribution to Provident Fund Rs. 75.65 lakhs (year ended March 31, 2017 : Rs.75.47 lakhs) and Superannuation Fund Rs. 28.28 lakhs (year ended March 31, 2017 : Rs.18.74 lakhs) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

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

Asset Volatility

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plan assets.

Life expectancy

The planâs obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the planâs liabilities.

NOTE NO. 5 -

The Director Horticulture, Pune, Maharashtra has vide letter dated September 26, 2017, registered the Company for five years from 2017-18 under the MIS schemes thereby making the Company eligible to participate in subsidy related business in the State.

NOTE NO. 6 -

The Board has recommended a dividend of Rs.0.50 per equity share, subject to the approval of shareholders of the Company at the forthcoming Annual General Meeting scheduled to be held on 31st July, 2018.

NOTE NO. 7 - NATURE OF RESERVES

Securities Premium Account- The Securities Premium is created on issue of shares at a premium.

General Reserve - The general reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.

Note No. 8 - Event occuring after the Reporting Period

No material events have occured between the Balance sheet date and before the approvals of financials statements by Board of Directors.

Note No. 9 - Previous yearâs figures

Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification / disclosure. Note No. 40 - Approval of financial statements

The financial statements of the Company were approved by the Board of Directors and authorised for issue on May 03, 2018.

Mar 31, 2017

NOTE NO. 1 - FINANCIAL INSTRUMENTS

I. Capital management

The companyâs capital management objectives are:

- to ensure the companyâs ability to continue as a going concern.

- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of the statement of financial position.

The company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

Financial Risk Management Framework

CREDIT RISK

(i) Credit risk management

Credit risk arises when a counterparty defaults on its contractual obligations to pay, resulting in financial loss to the Company. The company has dealings with government organization for subsidy related transaction and with private parties. For private non government parties credit limits are set quarterly. The Company has adopted a policy of only dealing with creditworthy non government parties and obtaining security cheques, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Companyâs exposure and credit worthiness of such parties are continuously monitored and controlled by counterparty limits that are reviewed by Credit Control function based on the approved process.

Trade receivables consist of a large number of customers, spread across geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable. There are no non government customers who represent more than 5% of the total balance of trade receivable.

The Company has a policy of providing for receivables @ 100% for receivables for more than 2 years, as reduced by subsequent collection.

The average credit period considering government sales of goods is 241 days and non government customers on sale of goods is 91 days. No interest is charged on overdue balance.

The Company applies the simplified approach to provide expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company and individual receivable specific provision where applicable. Forward-looking information (including macroeconomic information) has been incorporated into the determination of expected credit losses. The Company has taken dealer deposit of Rs. 3,96,81,617 (March 31, 2016 Rs. 3,69,76,698, April 1, 2015 Rs. 3,37,37,602) and bank guarantees of Rs. 91,00,000 (March 31, 2016 Rs. 63,00,000, April 1, 2015 Rs. 15,00,000) which is considered as collateral and these are considered in determination of expected credit losses, where applicable.

The loss allowance provision has changed during the year due to recovery from debtors and business circumstances.

During the year, the Company has written off Rs. 42,23,850 (March 31, 2016 Rs. 6,98,60,138) of trade receivables.

The Credit risk on bank balances and investment in mutual funds is limited as the counterparties are banks and fund houses with high credit ratings.

LIQUIDITY RISK

(i) Liquidity risk management

(ii) Maturities of financial liabilities

(iv) Maturities of financial assets

MARKET RISK

There has been no significant changes to the companyâs exposure to market risk or the methods in which they are managed or measured.

Currency Risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Companyâs exposure to currency risk relates primarily to the Companyâs operating activities.

The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows and are not hedged

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.

NOTE NO. 2 - FAIR VALUE MEASUREMENT

a) The directors consider that the caring amounts of financial assets and financial liabilities that are not measured at fair value, recognized in the financial statement approximate their fair values.

b) Fair value of financial assets that are measured at fair value on recurring basis.

Details of leasing arrangements As Lessee Operating Lease

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are non-cancellable and are for a period of 11 months to 36 months and may be renewed for further period based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 5% to 10% every year.

NOTE NO. 3 - SEGMENT INFORMATION

The Company is engaged in the business of Precision Farming Products and Services and in a single geography viz, India. The Information reported to the chief operating decision maker (CODM) [Viz, The managing Director] for assessment of performance of business and allocation of resources is under this segment.

Accordingly, The Company has identified a single segment under Ind AS 108 - âOperating Segmentsâ.

There is no single customer who accounts for 10% more of the company revenues.

Refer Note 17 for the analysis of revenue from it major products and services.

NOTE NO. 4 - EMPLOYEE BENEFITS

(a) Defined Contribution Plan:

The Companyâs contribution to Provident Fund Rs. 75,46,844 (year ended March 31, 2016 : Rs. 71,69,514) and Superannuation Fund Rs. 18,73,713 (year ended March 31, 2016 : Rs. 18,66,675) has been recognized in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

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

Asset volatility

The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets under perform compared to the government bonds discount rate, this will create or increase a deficit. The defined benefit plans hold on investment with LIC, which are expected to perform in line with government bonds in the long-term.

The Company believes that due to the long-term nature of the plan liabilities, investments of funds with LIC is an appropriate element of the Companyâs long term strategy to manage the plans efficiently.

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plan assets.

Life expectancy

The planâs obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the planâs liabilities.

The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to previous period. The Company expects to contribute Rs. 24,89,732 to the gratuity trusts during the next financial year of 2018.

The expected rate of return on plan assets is based on the average long term rate of return expected on investments of the fund during the estimated term of obligation.

NOTE NO. 5 - RELATED PARTY DISCLOSURES

Name of the parent Company Relationship

Mahindra and Mahindra Ltd Holding Company Other related parties with whom transaction have been undertaken

Mahindra Logistics Ltd Fellow subsidiary

Mahindra HZPC Pvt Ltd Fellow subsidiary

Mahindra Susten Pvt Ltd Fellow subsidiary

Mahindra Agri Solutions Ltd Fellow subsidiary

Mahindra Life space Developers Ltd Fellow subsidiary

Mahindra Residential Developers Ltd Fellow subsidiary

Mahindra Integrated Business Solutions Pvt Ltd Fellow subsidiary

Mr. Ashok Sharma Key Management Personnel (Managing Director)

Mr. Sanjeev Mohoni Key Management Personnel (Chief Executive Officer)

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. Post employment benefits accounted as per actuarial valuation.

These are determined on actuarial basis and amount for each individual employee is not available.

@ Excludes amount recovered by Holding Company in respect of options granted by the Holding Company.

NOTE NO. 6 -

The Director Horticulture, Maharashtra has passed an Order dated July 30, 2016 deregistering the Company from carrying subsidy related business in the state of Maharashtra. The Company has filed an appeal with the appropriate authorities.

NOTE NO. 7 - EVENTS AFTER THE REPORTING PERIOD

No material events have occurred after the Balance Sheet date but before the approval of financial statements by the Board of Directors except an Order received dated April 1, 2017 from the Director Horticulture and Farm Forestry, Madhya Pradesh, staying his earlier Order dated March 28, 2017 restricting the Company from participating in State sponsored Horticulture Subsidy Scheme in the country for a period one year.

Notes to the reconciliations

a. Under previous GAAP, leasehold land was classified under fixed assets which was depreciated over the term of the lease. Under Ind AS -17, the leasehold land has been classified as Operating Lease and accordingly classified as a prepaid asset. The effect of this change led to reduction in property, plant and equipmentâs as at April 1, 2015 by Rs. 3,22,59,523 and as at March 31, 2016 by Rs. 3,18,27,136 and increase in Prepayment-Land Lease which forms part of Non Financial Assets.

b. Under previous GAAP, grant received from the Government in the form of custom duty deferral under the Export Promotion Capital Goods Scheme was deducted from the carrying amount of fixed asset as permitted under previous GAAP, i.e. AS

12, Accounting for Government Grants. As per Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, such a grant is required to be accounted by setting up the grant as deferred income on the date of transition. Accordingly, as on the transition date, PPE is increased by the grant amount with a corresponding a deferred Government Grant Liability of Rs. 1,38,28,658.

c. Under previous GAAP, discounting of provisions was not permitted and provisions were measured at best estimate of the expenditure required to settle the obligations at the balance sheet date. Under Ind AS, provisions are measured at the discounted amounts, if the effect of time value of money is material. The Company has discounted the provision for warranty to present value at the reporting dates resulting in the provisions being decreased by Rs. 16,25,262 as at April 1, 2015 and Rs. 18,91,255 as at March 31, 2016. Deferred tax is recognized of Rs. 87,945 as at March 31, 2016.

d. Under previous GAAP, actuarial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gains & losses form part of remeasurement of the net defined benefit liabilities / assets, which is recognized in other comprehensive income. Consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of profit & loss. The actuarial gains for the year ended March 31, 2016 were Rs 64,17,991 and the tax effect thereon Rs 24,74,777. This change does not affect total equity, but there is decrease in profit before tax of Rs 64,17,991 and in total profit of Rs. 39,43,214 for the year ended March 31, 2016.

e. Under previous GAAP, the cost of equity settled employee share-based payments was recognized using the intrinsic value method. Under Ind AS, the cost of equity settled employee share-based payments is recognized based on the fair value of the options as on the date of grant. Effect of this change led to increase in expenses by Rs. 6,12,624 for the year ended March 31, 2016.

f. Under previous GAAP, Minimum Alternate Tax credit was recognized as an asset under Loans and Advances whereas under Ind AS, it is recognized as a component of Deferred Tax asset.

g. Under previous GAAP, Octroi refund was recognized under revenue from operations whereas under Ind AS it is recognized as reduction from cost of materials consumed.

Note No. 8 Additional Information to the Financial Statements

35.1 Details of unutilized amounts out of issue of securities made for specific purpose

In June, 2012, the Company had allotted 1,03,58,199 equity shares at a price of Rs. 40 per share (including a premium of Rs. 30/- per share) resulting in total issue size of Rs. 41,43,27,960 under the Rights Issue.

35.2 Disclosure under Regulation 34 (3) SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms/companies in which directors are interested. Further, the Company has not made any loans and advances where there is no repayment schedule or repayment beyond seven years or no interest or interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenure of the loan as per section 186 of the Companies Act, 2013.

The Company has received Rs. 1,11,500 in cash (Specified Bank Notes) on December 23, 2016, recovered by Police in the Criminal case no. 315/2015 as per Court Order dated December 19, 2016.

Note No.9 Previous yearâs figures

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.

Note No. 10 Approval of financial statements

The financial statements of the Company were approved by the Board of Directors and authorized for issue on April 27, 2017.

Mar 31, 2016

Rights, preferences and restrictions attached to the equity shares

Shares held by the holding company 1,51,44,433 shares (As at March 31, 2015: 1,51,44,433 shares) are held by the Holding Company viz., Mahindra and Mahindra Limited.

1. Disclosure under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms/ companies in which directors are interested. Further, The Company has not made any loans and advances where there is no repayment schedule or repayment beyond seven years or no interest or interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenure of the loan as per Section 186 of the Companies Act, 2013.

2. There are no amounts due to Investor Education and Protection Fund.

3. Disclosure required in terms of Regulation 32 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

NOTE NO. 4. - DISCLOSURES ON EMPLOYEE SHARE BASED PAYMENTS Employee Stock Option Scheme

(a) Pursuant to the âEmployees Stock Option Scheme - 2014â (ESOS) approved by the Shareholders in the Annual General Meeting held on July 31, 2014, the Company had granted 80,424 and 3228 Stock Options to the eligible employees on October 28, 2014 and October 31, 2015 respectively as per the recommendation of the Nomination and Remuneration Committee, at an exercise price of Rs. 10 /- each.

In respect of the options granted in 2014, the equity settled options vest in 5 tranches of 20% each upon the expiry of 12 months, 24 months, 36 months, 48 months and 60 months, respectively from the date of the grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 20% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

In respect of options granted in 2015, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months, respectively from the date of the grant. Each tranche is exercisable within one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

NOTE NO. 5. - EMPLOYEE BENEFIT PLANS

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 71,69,514 [Year ended March 31, 2015 Rs. 70,79,141] for Provident Fund contributions and Rs. 18,66,675 [Year ended March 31, 2015 Rs. 18,71,565] for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

NOTE NO. 6. - RELATED PARTY DISCLOSURES

(a) Parties where control exists

Name Relationship

Mahindra and Mahindra Limited Holding Company

(b) Other related parties with whom transactions have been undertaken Name Relationship

Mahindra Logistics Limited Fellow subsidiary

Mahindra ZHPC Pvt Ltd Fellow subsidiary

Mahindra Lifespace Developers Ltd Fellow subsidiary

Mr. Ashok Sharma Key Management Personnel (Managing Director)

Mr. Sanjeev Mohoni Key Management Personnel (Chief Executive Officer)

Mr. Mayur Bumb Key Management Personnel (Chief Financial Officer)

NOTE NO. 7. - SEGMENT REPORTING

The Company is engaged in the business of âMicro Irrigation Systemâ (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments, as per the Accounting Standard on âSegment Reportingâ (AS 17).

NOTE NO. 8. - DETAILS OF LEASING ARRANGEMENTS As Lessee

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are generally cancellable and are for a period of 11 months to 10 years under leave & license agreements and may be renewed by mutual consent on mutually agreeable terms.

NOTE NO. 9. - PROVISION FOR FRAUD

During the year other expenses included a provision of Rs. 29,25,000 in respect of expected loss due to alleged misappropriation of funds by an ex-employee. The Company has already taken remedial action in the matter which is now under investigation with the appropriate authorities.

NOTE NO. 10. - PREVIOUS YEARâS FIGURES

Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.

Mar 31, 2015

Rights, preferences and restrictions attached to the equity shares

The Company is having only one class of equity shares having par value of Rs. 10 each. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Shares held by the holding company

1,51,44,433 shares (As at March 31, 2014: 1,51,44,433 shares) are held by the Holding Company viz., Mahindra and Mahindra Limited.

Details of shareholders holding more than 5% shares in the Company

Shares reserved for issue under options

Shares reserved for issue under options 5,52,765 shares (As at March 31, 2014 - 4,74,125 shares) of Rs. 10 each towards outstanding employee stock options granted [Refer Note No. 29]

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax net off of other balances constituting deferred tax asset.

* Includes margin monies amounting to Rs. 5,11,98,083/- [As at March 31,2014 Rs. 4,24,05,382/-] with maturity greater than 12 months from the Balance Sheet date.

** Includes Rs. 1,10,078/- [As at March 31, 2014 Rs. 3,03,305/-] towards interest payable on Public Deposits Rs. 3,95,000/- [As at March 31,2014 Rs. Nil] toward unclaimed Public Deposits, Rs. 4,77,66,293/- [As at March 31,2014 Rs. 5,01,84,186/-] being unutilised proceeds out of the Rights Issue and Rs. Nil [As at March 31, 2014 Rs. 1,000,000/-] towards liquid assets maintained in respect of public deposits.

Particulars As at As at March 31, 2015 March 31, 2014 Rupees Rupees

2.1 Contingent liabilities (to the extent not provided for)

(a) Claims against the Company not acknowledged as debts 2,649,921 1,533,641

(b) Custom Duty/Interest on account of commitment to Export, under Export

Promotion Capital Goods Scheme 21,886,226 19,992,408

(c) Demands against the Company, relating to issues of deductibility and taxability in respect of which the company is in appeal/Department is in appeal

Income Tax: 4,933,598 4,933,598

Sales Tax: 743,552 743,552

Excise Duty: 7,944,000 7,944,000

(d) Long Term Loans & Advances include refund claim made for excise duty paid under protest consequent upon the judicial pronouncement made by CESTAT in favour of the Company, which was disputed by the department before higher authorities. 16,679,302 16,679,302

The Commissioner (Appeals), Central Excise and Customs, Nashik has sanctioned the claim on merit but taking recourse to the principle of "Unjust Enrichment" has ordered the claim to be transferred to the credit of the "Consumer Welfare Fund". The Company had filed an appeal against the order. On hearing the appeal the Hon' CESTAT, Mumbai remanded back the case to the adjudicating authorities to examine the issue afresh. The Adjudicating Authority issued a Show Cause Notice and after personal hearing passed an ]order rejecting the claim without following the guidelines given by the Hon' CESTAT.

The Company had filed an appeal against the order with the Commissioner (Appeals),

Central Excise & Customs, Nashik. The order Passed by the Commissioner (Appeals),

Central Excise & Customs, Nashik is similar to order as given in order in appeal. The Company has filed an appeal to CESTAT Mumbai and no hearing has happened thereafter.

The Claim is still tenable, no provision has been considered.

Note: In respect of items mentioned above, till the matters are finally decided, the timing of outflows of economic benefits cannot be ascertained.

2.2 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchange

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms/ companies in which directors are interested. Further, the Company has not made any loans and advances where there is no repayment schedule or repayment beyond seven years or no interest or interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenure of the loan as per section 186 of the Companies Act, 2013.

2.3 There are no amounts due to Investor Education and Protection Fund.

2.4 Disclosure required in terms of Chapter VII of SEBI (Issue of Capital & Disclosure requirements') Regulations 2009

In June, 2012, the Company had allotted 1,03,58,199 equity shares at a price of Rs. 40 per share (including a premium of Rs. 30/- per share) resulting in total issue size of Rs. 41,43,27,960 under the Rights Issue.

The uses and application of funds raised under the Rights Issue are given as under:

NOTE NO. 3 - DISCLOSURES ON EMPLOYEE SHARE BASED PAYMENTS Employee Stock Option Scheme

(a) Pursuant to the "Employees Stock Option Scheme - 2010" (ESOS) approved by the Shareholders in the Annual General Meeting held on July 21, 2010, the Company had granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on November 19, 2010, as per the recommendation of the Compensation Committee, at exercise price of Rs. 35/- each.

Pursuant to the "Employees Stock Option Scheme - 2014" (ESOS) approved by the Shareholders in the Annual General Meeting held on July 31, 2014, the Company had granted 80,424 Stock Options to the eligible employees on October 28, 2014 as per the recommendation of the Nomination and Remuneration Committee, at exercise price of Rs. 10/- each. In respect of the ESOP-2010 options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is exercisable within two years from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

In respect of the ESOP-2014 options granted, the equity settled options vest in 5 tranches of 20% each upon the expiry of 12 months, 24 months, 36 months, 48 months and 60 months, respectively from the date of the grant. Each tranche is exercisable after one year from the respective date of vesting. The number of options exercisable in each tranche is minimum 20% of the options granted.

The compensation costs of the stock options granted are accounted by the Company on the basis of intrinsic value of share on the date of grant of options.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 70,79,141 [Year ended March 31, 2014 Rs. 75,88,127] for Provident Fund contributions and Rs. 18,71,565 [Year ended March 31, 2014 Rs. 16,95,221] for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Compensated absences

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

NOTE NO. 4 - RELATED PARTY DISCLOSURES

(a) Parties where control exists

Name Relationship

Mahindra and Mahindra Limited Holding Company

(b) Other related parties with whom transactions have been undertaken

Name Relationship

Mahindra EPC Services Pvt Ltd Fellow subsidiary

Mahindra Logistics Limited Fellow subsidiary

Mahindra Holidays and Resorts India Ltd Fellow subsidiary

Mr. Ashok Sharma Key Management Personnel (Executive Director & CEO)

Mr. Mayur Bumb Key Management Personnel (Chief Financial Officer)

The Company is engaged in the business of 'Micro Irrigation System' (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments, as per the Accounting Standard on 'Segment Reporting' (AS 17).

NOTE NO. 5 - DETAILS OF LEASING ARRANGEMENTS As Lessee

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are generally cancellable and are for a period of 11 months to 10 years under leave & license agreements and may be renewed by mutual consent on mutually agreeable terms.

NOTE NO. 6 - PROVISION FOR WARRANTY

(a) Provision for warranty is made in respect of sale of certain products, the estimated cost of which is accrued at the time of sale. The products are generally covered under a free warranty period ranging from 6 months to 5 years.

(b) The movement in provision for warranty is as follows:

NOTE NO. 7 - PREVIOUS YEAR'S FIGURES

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

Mar 31, 2014

1. Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchange

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms/companies in which directors are interested. Further, The Company has not made any loans and advances where there is no repayment schedule or repayment beyond seven years or no interest or interest below section 372A of The Companies Act, 1956.

2. There are no amounts due to Investor Education and Protection Fund.

NOTE NO. 3 - DISCLOSURES ON EMPLOYEE SHARE BASED PAYMENTS Employee Stock Option Scheme

(a) Pursuant to the "Employees Stock Option Scheme - 2010" (ESOS) approved by the Shareholders in the Annual General Meeting held on July 21, 2010, the Company had granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on November 19, 2010, as per the recommendation of the Compensation Committee, at exercise price of Rs. 35/- each.

In respect of the options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is exercisable within two years from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date. In case the option is not exercised by the Employee within the time limits as prescribed in the Scheme, the Options would lapse and no right shall be deemed to accrue or arise after that date.

The compensation costs of the stock options granted are accounted by the Company on the basis of intrinsic value of share on the date of grant of options.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

NOTE NO. 4 - EMPLOYEE BENEFIT PLANS

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to Defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 75,88,127 [Year ended March 31, 2013 Rs. 63,88,137] for Provident Fund contributions and Rs. 16,95,221 [Year ended March 31, 2013 Rs. 15,17,716] for Superannuation Fund contributions in the Statement of profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

NOTE NO. 5 - PUBLIC DEPOSITS CLASSIFICATION

The provisions of the Companies Act, 2013 (''the Act'') requires that all outstanding deposits be repaid within one year from the date of commencement of the Act or from the date on which such payments are due, whichever is earlier. Accordingly, fixed deposits with original maturity more than one year have been classifed under "Current maturities of long term debt" in Note no. 8 to the financial statements.

NOTE NO. 6 - SEGMENT REPORTING

The Company is engaged in the business of ''Micro Irrigation System'' (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments, as per the Accounting Standard on ''Segment Reporting'' (AS 17) notifed under the Companies (Accounting Standards) Rules, 2006.

NOTE NO. 7 - DETAILS OF LEASING ARRANGEMENTS As Lessee

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are generally cancellable and are for a period of 11 months to 10 years under leave & license agreements and may be renewed by mutual consent on mutually agreeable terms.

NOTE NO. 8 - PREVIOUS YEAR''S FIGURES

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

Mar 31, 2013

1.1 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the period end, together with interest paid / payable under this Act, have not been given.

1.2 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchange

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms / companies in which directors are interested.

NOTE NO. 2 - DISCLOSURES ON EMPLOYEE SHARE BASED PAYMENTS

Employee Stock Option Scheme

(a) Pursuant to the "Employees Stock Option Scheme - 2010" (ESOS) approved by the Shareholders in the Annual General Meeting held on July 21, 2010, the Company had granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on November 19, 2010, as per the recommendation of the Compensation Committee, at exercise price of Rs. 35 /- each.

In respect of the options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is exercisable within two years from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

In case the option is not exercised by the Employee within the time limits as prescribed in the Scheme, the Options would lapse and no right shall be deemed to accrue or arise after that date.

The compensation costs of the stock options granted are accounted by the Company on the basis of intrinsic value of share on the date of grant of options.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

NOTE NO. 3- EMPLOYEE BENEFIT PLANS

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 63,88,137 [Year ended March 31, 2012 Rs. 51,88,935] for Provident Fund contributions and Rs. 15,17,716 [Year ended March 31, 2012 Rs. 13,80,182] for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Compensated absences

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

NOTE NO. 4- RELATED PARTY DISCLOSURES Details of Related Party

a) Parties where control exists

Name Relationship

Mahindra and Mahindra Limited Holding Company

b) Other related parties with whom transactions have been undertaken Name Relationship

Mahindra Logistics Limited Fellow subsidiary

Credit Renaissance Fund Limited Associate upto January 8, 2013

Credit Renaissance Development Fund LP Associate upto January 8, 2013

Mr. K. L. Khanna Key Management Personnel (KMP) upto September 30, 2011

Kimplas Piping Systems Limited Entities in which KMP / relatives of KMP have significant influence upto September 30, 2011

Patkaai Plastics Private Limited Entities in which KMP / relatives of KMP have significant influence upto September 30, 2011

NOTE NO. 5 - SEGMENT REPORTING

The Company is mainly engaged in the business of ''Micro Irrigation System'' (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments, as per the Accounting Standard on ''Segment Reporting'' (AS 17) notified under the Companies (Accounting Standards) Rules, 2006.

NOTE NO. 6 - DETAILS OF LEASING ARRANGEMENTS

As Lessee

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are generally cancellable and are for a period of 11 months to 10 years under leave & license agreements and may be renewed by mutual consent on mutually agreeable terms.

Pursuant to the Rights Issue, Earnings Per Share (EPS) has been restated as per the Accounting Standard on Earnings Per Share (AS 20), notified under the Companies (Accounting Standards) Rules, 2006 for the previous periods / year.

Note No. 7 - Previous year''s figures

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

Mar 31, 2012

Rights, preferences and restrictions attached to the equity shares

The Company is having only one class of equity shares having par value of Rs. 10 each. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

Shares held by the holding company

Mahindra and Mahindra Limited, the holding company (by virtue of control over the composition of the Board of Directors) holds 6,577,865 shares of the Company as at the Balance Sheet date.

Details of shareholders holding more than 5% shares in the Company

Shares reserved for issue under options 490,500 shares (As at March 31, 2011 - 500,000 shares) of Rs. 10 each towards outstanding employee stock options granted [Refer Note No. 28]

* The Company had issued Optionally Cumulative Convertible Debentures (OCCDs) carrying, interest @12% p.a. (Net of Withholding Tax). The Debenture holders had an option to convert these Debentures (equivalent to the face value) into 12% Preference Shares of Rs. 100/- each from September 30, 2010 to March 31, 2012.

In accordance with the Shareholders' Agreement and Amendment to the Debenture Subscription Agreement both dated February 9, 2011 entered into with Mahindra and Mahindra Limited, the terms of the Debentures had been changed so as to make them compulsorily redeemable by February 28, 2012 in a phased manner, which has been further extended to July 1,2012 by mutual consent.

During the year, the Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax net off of other balances constituting deferred tax asset.

* Balances with banks include deposits amounting to Rs. 30,240 [As at March 31,2011 Rs. 30,240} and margin monies amounting to Rs. 65,367,270 [As at March 31, 2011 Rs. 25,604,997] which have an original maturity of more than 12 months.

Particulars As at As at March 31,2012 March 31, 2011 Rupees Rupees

1.1 Contingent liabilities (to the extent not provided for)

(i)Contingent liabilities

(a)Claims against the Company not acknowledged as debt 1,301,081 1,185,665

(b) Guarantees issued by Banks secured by Fixed Deposits 72,745,705 30,178,300

(c) Custom Duty / Interest on account of commitment to Export, under Export 26,313,276 17,950,748 Promotion Capital Goods Scheme

(d)Show Cause cum Demand Notices are received from / issued by the Excise authorities. The major 7,944,000 7,944,000 issues raised therein have been decided in favour of the Company at the Tribunal level. The said Notices are pending adjudication and the Company is confident of favourable decisions.

(e)Disputed income tax liability (Net of Provision) and interest demanded by 2,366,859 2,366,859 department for the assessment year 1993-94 .

Based on the decisions of the Appellate Orders and interpretations of relevant provisions, the Company has been advised that the demand is expected to be either deleted or substantially reduced.

(f)Long Term Loans & Advances include refund claim made for excise duty paid 16,679,302 16,679,302 under protest consequent upon the judicial pronouncement made by CESTAT in favour of the Company, which was disputed by the department before higher authorities.

The Commissioner (Appeals), Central Excise and Customs, Nashik has sanctioned the claim on merit but taking recourse to the principle of "Unjust Enrichment" has ordered the claim to be transferred to the credit of the "Consumer Welfare Fund".

The Company had filed an appeal against the order. On hearing the appeal the Hon' CESTAT, Mumbai remanded back the case to the adjudicating authorities to examine the issue afresh. The Adjudicating Authority issued a Show Cause Notice and after personal hearing passed an order rejecting the claim without following the guidelines given by the Hon' CESTAT.

The Company has filed an appeal against the order with the Commissioner (Appeals), Central Excise & Customs, Nashik. As the Company has been advised that the claim is tenable, no provision has been considered. Note: In respect of items mentioned above, till the matters are finally decided, the timing of outflows of economic benefits cannot be ascertained.

1.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the period end, together with interest paid / payable under this Act, have not been given. 27.4 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchange

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and firms / companies in which directors are interested.

Employee Stock Option Scheme

(a) Pursuant to the "Employees Stock Option Scheme - 2010" (ESOS) approved by the Shareholders in the Annual General Meeting held on July 21, 2010, the Company had granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on November 19, 2010, as per the recommendation of the Remuneration / Compensation Committee, at exercise price of Rs. 35 /- each.

In respect of the options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is exercisable within two years from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

In case the option is not exercised by the Employee within the time limits as prescribed in the Scheme, the Options would lapse and no right shall be deemed to accrue or arise after that date.

The compensation costs of the stock options granted are accounted by the Company on the basis of intrinsic value of share on the date of grant of options.

The difference between the fair price of the share underlying the options granted on the date of grant of option and the exercise price of the option (being the intrinsic value of the option) representing Stock compensation expense is expensed over the vesting period.

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 5,188,935 [Year ended March 31, 2011 Rs. 4,352,472] for Provident Fund contributions and Rs. 1,380,182 [Year ended March 31, 2011 Rs. 1,249,197] for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Compensated absences

NOTE NO. 2 - SEGMENT REPORTING

The Company is mainly engaged in the business of 'Micro Irrigation System' (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments, as per the Accounting Standard on 'Segment Reporting' (AS 17) notified under the Companies (Accounting Standards) Rules, 2006.

As Lessee

The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are generally cancellable and are for a period of 11 months to 3 years under leave & license agreements and may be renewed by mutual consent on mutually agreeable terms.

Note no. 3 - Previous year's figures

The Revised Schedule VI has become effective from April 1,2011 for the preparation^ 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.

Mar 31, 2011

Previous Year

Rupees Rupees

1 Contingent Liabilities not provided for :

a. Guarantees issued by Banks secured by Fixed Deposits 30,178,300 24,463,758

b. Custom Duty / Interest under Export Promotion Capital Goods Scheme 17,950,748 17,175,896

The Director General of Foreign Trade, New Delhi, vide it's letter dated 12th January, 2011, has extended the Export Obligation period granted to the Company till 31st March, 2015.

2 During the year pursuant to the "Employees Stock Option Scheme - 2010" (ESOS) approved by the Shareholders in the Annual General Meeting held on 21st July 2010. The Company has granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on 19th November, 2010, as per the recommendation of the Compensation Committee, at exercise price of Rs. 35 /- each.

In respect of the Options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is exercisable within two years from the respective date of Vesting. The number of options exercisable in each tranche is minimum 25% of the Options Vested, except in case of the last date of the exercise, where the employee can exercise all the Options Vested but not exercised till that date.

In case the Option is not exercised by the Employee within the time limits as prescribed in the Scheme, the Options would lapse and no right shall be deemed to accrue or arise after that date.

The compensation costs of the Stock Options granted are accounted by the Company on the basis of market price of share on the date of grant of Options minus the exercise price of the Option.

The range exercise price is Rs. 35 in respect of 60,500 Stock Options, whose weighted average remaining lite is 4.13 years.

In respect of the Options granted under the Employees Stock Options Scheme, in accordance with guidelines issued by SEBI, the accounting value of the Options is accounted as deferred employee compensation, which is amortised on a straight line basis over the period between the date of grant of Options and eligible dates of conversion into Equity Shares. Consequently, salaries, wages, bonus etc. includes amortisation of deferred employee compensation of Rs. 332,974.

Had the Company adopted fair value method been used, in respect stock options granted under the ESOP Scheme, 2010, the employee compensation would have been higher by Rs. 1.47 lacs, Profit after Tax lower by Rs. 1.47 lacs and the basic and diluted earnings per share would have lower by Rs. 0.01 and Rs. 0.01 respectively.

3 Pursuant to the resolution passed in the Extra Ordinary General Meeting of the Shareholders, the Company has received funds aggregating to Rs. 433,488,096/- on 17th March, 2011 from Mahindra & Mahindra Limited against the Preferential Allotment of 65,58,065 Equity shares of Rs. 10/- each for cash at a premium of Rs. 56.10/- per share.

4 Disputed Income Tax Liability (Net of Provision) and interest demanded by department for the assessment year 1993-94 .

Based on the decisions of the Appellate Orders and interpretations of relevant provisions, the Company has been advised that the demand is expected to be either deleted or substantially reduced.

In view of carry forward losses/depreciation available to Company and absence of the book profit under section 115JB of the Income Tax Act, 1961, no provision of current Income Tax has been made.

5 Liabilities in respect of pending Sales Tax Assessments have been provided on the basis of Returns filed and/or Assessment Orders received.

6 Loans & Advances includes refund claim made for excise duty paid under protest consequent upon the judicial pronouncement made by CESTAT in favour of the Company, which was disputed by the department before higher authorities.

The Commissioner (Appeals) of Central Excise and Customs, Nashik has sanctioned the claim on merit but taking recourse to the principle of "Unjust Enrichment" has ordered the claim to be transferred to the credit of the "Consumer Welfare Fund".

The appeal is filed by the Company against the Order. The Company has been legally advised that the claim is tenable, hence no provision has been considered.

7 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end, together with interest paid/payable under this Act, have not been given.

The Company operates Defined Contribution Scheme like Provident Fund and Superannuation Schemes. Contributions to Provident Fund are made by the Company, based on current salaries, to the funds maintained by the Government . In case of Provident Fund Schemes, contributions are also made by the employees. Contribution to Superannuation Schemes, as applicable for certain categories of employees and the contribution by the Company is invested with a Life Insurance Corporation of India.

Defined Benefit Plan

The Employees' Gratuity Fund Scheme, managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

The estimate of rate of escalation in salary, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market. The above information is certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

Hitherto provision for Gratuity payable to Chairman & Managing Director has been made on estimated basis. During the year provision has been made on actuarial basis, as a result charge to Profit & Loss Account is higher by Rs. 228,585/-.

The Payment of Gratuity (Amendment) Bill 2010 amending the maximum gratuity payable under The Payment of Gratuity Act, 1972 from Rs. 3.50 lakhs to Rs. 10.00 lakhs has been passed by both the houses of Parliament in May 2010. The Company has given effect to the same in valuing it's actuarial liability for gratuity as at 31st March, 2011. The impact of the same is not material.

8 SEGMENT INFORMATION

The Company has disclosed Business Segment as the primary segment. Segments have been identified by the Management taking into account the nature of products, customer profiles and other relevant factors.

The Company's operations have been mainly classified between two primary segments, 'Micro Irrigation System' (MIS) and 'Industrial and Infrastructure Piping' (IIP).

Composition of business segments is as follows :

1 Micro Irrigation Systems (MIS)

2 Industrial and Infrastructure ( Gas and Water ) Pipes (IIP)

Segmentwise Revenue, Results, Assets and Liabilities include the respective amounts identifiable to either of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated assets and liabilities respectively

3 Inter Segment Transfer Pricing.

There are no Inter segment transfer of material.

9 Related Party Disclosures

(a) List of Related Parties with whom transactions have taken place during the year

Schroder Credit Renaissance Fund Ltd (Significant Influence)

Credit Renaissance Development Fund L P. (Significant Influence)

Kimplas Piping Systems Limited (Significant Influence of relative of Key Management Personnel)

Trans Continental Capital Advisors Private Limited

(Significant Influence of Key Management Personnel)

Garuda Plant Products Limited(Significant Influence of Key Management Personnel)

Patkaai Plastics Private Limited (Significant Influence of relative of Key Management Personnel)

Mr. K. L. Khanna ( Key Management Personnel)

10 There are no amounts due to Investor Education and Protection Fund.

11 Figures relating to previous year have been regrouped and rearranged, wherever necessary.

Mar 31, 2010

Previous Year Rupees Rupees 1 Contingent Liabilities not provided for: 1 Guarantees issued by Banks secured by Fixed Deposits. 2,44,63,758 2,62,04,016

2 Custom Duty/Interest under Export Promotion Capital Goods Scheme. 1,71,75,896 1,60,78,188 2 Estimated amount of Contracts remained to be executed on Capital Account and not provided for (Net of Advance). 57,72,160 8,91,510

3 Claims against the Company not acknowledged as debt. 48,09,509 15,65,919

4 Depreciation charged to Profit & Loss Account is after deducting additional depreciation arising on revaluation uplifitment and withdrawn from Capital (Revaluation) Reserve. 32,37,630 32,24,278

5 The balances shown under Debtors, Advances, Deposits and Creditors are subject to confirmations and reconciliations, if any.

6 Professional fees include Remuneration to Auditors - Audit fees (Including Service Tax) 3,30,900 3,30,900 Taxation Matters 1,21,330 1,11,049 Certification 30,333 1,51,480 Management Services 1,84,201 49,632 Out of Pocket Expenses 3,51,847 2,08,147

7 Miscellaneous Expenses include Board/Committee Meeting Fees paid to Directors 2,20,000 2,40,000

8 With effect from 1 st April, 2009, the Company has implemented Microsoft Business Solutions - Navision as ERP platform and the valuation of inventories of Raw Material, Components and Finished Goods is done on the basis of Weighted Average Method instead of FIFO/YTD Average basis as applied in earlier years. The impact of this change on profit is not material.

9 Disputed income tax liability (Net of Provision) and interest demanded by department for the assessment year 1993-94.

Based on the decisions of the Appellate Orders and interpretations of relevant provisions, the Company has been advised that the demand is expected to be either deleted or substantially reduced.

In view of carry forward losses/depreciation available to the Company and in absence of the book profit under Section 115JB of the Income Tax Act, 1961, no provision of current Income Tax has been made. 23,66,859 23,66,859

10 Liabilities in respect of pending sales tax assessments have been provided on the basis of Returns filed and/or Assessment Orders received.

11 Loans & Advances includes refund claim made for excise duty paid under protest consequent upon the judicial pronouncement made by CESTAT in favour of the Company, which was disputed by the Department before hisher authorities.

The Commisssioner (Appeals) of Central Excise and Customs, Nashik has sanctioned the claim on merit but taking recourse to the principle of "Unjust Enrichment" has ordered the claim to be transferred to the credit of the "Consumer Welfare Fund".

The appeal is filed by the Company against the order. The Company has been legally advised that the claim is tenable. Hence no provision has been considered. 1,66,79,302 1,66,79,302

12 Show Cause cum Demand Notices are received from/issued by the Excise authorities. The major issues raised therein have been decided in favour of the Company at the Tribunal level. The said Notices are pending adjudication and the Company is confident of favourable decisions. Hence no provision has been made. 79,44,000 79,44,000

13 The Company has not received information From vendors regarding their status under the Micro,Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act have not been given.

14 As per Accountins Standard 15 " Employee Benefits", the disclosures of Employee benefits as defined in the Accountins Standard are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expenses for the year are as under: Employers Contribution to Provident Fund Employers Contribution to Superannuation Fund The Company operates Defined Contribution Scheme like Provident Fund and Superannuation schemes. Contributions to Provident Fund are made by the Company,based on current salaries, to the funds maintained by the Government. In case of Provident Fund Schemes, contributions are also made by the employees. Contribution to Superannuation Scheme is applicable for certain categories of employees and the contribution by the Company is invested with a Insurance Company.

Defined Benefit Plan

The Employees Gratuity Fund Scheme, managed by LIC is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as given rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. 39,97,315 31,96,245 11,33,595 10,77,911

The estimate or rate of escalation in salary, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market. The above information is certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Companys policy for plan assets management.

15 SEGMENT INFORMATION

The Company has disclosed Business Segment as the primary segment. Segments have been identified by the management taking into account the nature of products, customer profiles and other relevant factors.

The Companys operations have been mainly classified between two primary segments, Micro Irrigation System(MIS) and Industrial and Infrastructure Piping.(IIP).

Composition of business segments are as follows :

1 Micro Irrigation Systems (MIS)

2 Industrial and Infrastructure ( Gas and Water) Pipes (IIP)

Segmentwise Revenue, Results, Assets and Liabilities include the respective amounts identifiable to either of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated cost. Assets and Liabilities that can not be allocated between the segments are shown as a part of unallocated assets and liabilities respectively.

3 Inter Segment Transfer Pricing.

There are no Inter segment transfers of material. 4 Segment Revenues, Results and other Information 20 Related Party Disclosures

(a) List of Related Parties with whom transactions have taken place during the year

Schroder Credit Renaissance Fund Ltd (Significant Influence) Credit Renaissance Development Fund LP. (Earlier known as Schroder Credit Renaissance Fund L.P.) (Significant Influence) Kimplas Piping Systems Limited (Significant Influence of relative of Key Management Personnel) Kimplas Limited, UK (Significant Influence of relative of Key Management Personnel) Mr. K. L. Khanna (Key Management Personnel)

16 Figures relating to previous year have been regrouped and rearranged, wherever necessary.

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