1.  Background
 
 Mather and Piatt Pumps Limited (the Company) was originally promoted
 in 1870 by Mr. Peter Mather and Mr. John Piatt, who had introduced the
 worlds first turbine type multi-stage centrifugal pumps. The Company
 started its marketing operations in India in 1913 and set up its first
 manufacturing unit in Kolkata in 1940 and thereafter its second
 manufacturing unit at Pune 1959.
 
 The Company is currently a subsidiary of WILO SE (the Holding
 Company), previously known as WILO AG, a company headquartered in
 Dortmund, Germany.
 
 The equity shares were delisted from Bombay Stock Exchange Ltd. with
 effect from 3 February 2009 and Pune Stock Exchange Ltd. with effect
 from 7 February 2009. Consequent to delisting, the Holding Company
 offered to acquire the equity shares, having face value of Indian
 Rupees 10/- from remaining public shareholders at a price of Indian
 Rupees 250/- per share during six months exit period commencing on 4
 February 2009. The Holding Companys stake increased to 93.15% upon
 completion of the open offer and position has remained the same as at
 the year end.
 
 The Company is primarily engaged in the business of design,
 development, manufacture, sales, installation and servicing of
 centrifugal pumps, pump sets, valves, fire systems, contracts of
 pumping systems on turnkey basis and trading of pumps. The Company has
 its corporate office and manufacturing plant at Chinchwad, Pune and a
 foundry at Kolhapur.
 
 2 Related party disclosure
 
 a) List of related parties where control exists
 
 Sr. No.    Name of the Related Party        Relationship
 
 1           WILO SE , Germany *             Holding Company
 
 2           M & P Subhash ,Pune           Joint Venture Partnership 
                                   firm in which the Company holds 60%
 
 * The holding company holds more than one-half in nominal value of the
 equity share capital
 
 b) Names of the related parties with whom transactions were carried out
 during the year and description of relationship:
 
 Enterprises over which the Company exercises control
 
 1 Allied Centrifugal Pumps Pvt Ltd
 
 Associate Companies:
 
 1 Mather and Piatt Fire Systems Limited
 
 2 Pompes Salmson,S.A
 
 3 Wilo Pumps Ltd, Kimhae
 
 4 Wilo China Ltd
 
 5 Wilo Turkey
 
 6 Wilo EMU GmbH
 
 7 Salmson South Africa
 
 8 Wilo EMU Taiwan
 
 9 Wilo Russia 0.0.0
 
 10 Wilo Indonesia
 
 11 Wilo Salmson Argentina S.
 
 12 Vaish Associates-
 
 Joint Ventures (Other than Associates):
 
 1 M & P Subhash
 
 Key management personnel and their relatives:
 
 1   Mr.Ravindra Pal Bhatia             Managing Director
 
 2   Mrs.Dipti Bhatia             Wife of Mr.Ravindra Pal Bhatia
 
 e) Notes to related party transactions:
 
 i) No provisions pertaining to above referred related parties have been
 written back during the year.
 
 ii) As a strategic measure the Company had advanced Rs. 29,487,645
 (2008 Rs. 25,750,326) net of provision of Rs.  12,862,460 (previous
 year Rs. 12,887,866) to Mather and Piatt Fire Systems Limited, a
 co-subsidiary for completion of certain ongoing jobs. The management is
 hopeful of recovering the same and accordingly no further provision has
 been considered at this stage. Further, the Company also provides
 administration and support services to the Company free of charge.
 
 iii) Particulars regarding partnership firm (Joint Venture) where the
 Company is partner:
 
 Name of the firm: M & P + SUBHASH
 Country of incorporation : India
 
 Name of partners and their share:
 
 i) Mather and Piatt Pumps Limited : - 60%
 
 ii) Subhash Projects & Marketing Limited : - 40%
 
 Capital contribution as on 31 December 2009 Rs. 120,000 (2008 :
 Rs.120,000)
 
 3 Transfer pricing regulations
 
 The Company has established a comprehensive system of maintenance of
 information and documentation as required by the transfer pricing
 legislation under section 92- 92F of the Income Tax Act, 1961.
 
 The management is of the opinion that its international transactions
 are at arms length such that the aforesaid legislation will not have
 any impact on the financial statements, particularly on the amount of
 tax expense and that of provision for taxation.
 
 4 Leases
 
 The Company has taken various residential /commercial premises under
 cancellable operating leases. These lease agreements are normally
 renewed on expiry. There are no non cancellable operating leases.
 
 Lease rental expense in respect of operating lease Rs. 14,846,532 (2008
 Rs.7,806,102).
 
 5 Segmental information
 
 The Companys activities involve predominantly one business segment
 i.e. Manufacture of Water Pumps, which are considered to be within a
 single business segment since these are subject to similar risks and
 returns. Accordingly, Manufacture of Water Pumps comprises the primary
 basis of segmental information as set out in these financial
 statements, which therefore reflects the information required by AS 17
 - Segment Reporting, with respect to primary segments.
 
 The Company has identified India and Rest of the World as geographical
 segments for secondary segmental reporting.  Geographical sales are
 segregated based on the location of the customer who is invoiced or in
 relation to which the sale is otherwise recognised. Assets other than
 receivables used in the Companys business or liabilities contracted
 have not
 
 6 Scheme of arrangement with Allied Centrifugal Pumps Private Limited
 (ACP)
 
 a) Proposed acquisition of ACP
 
 The Company has decided to acquire all the assets and liabilities of
 ACP, a WILO Group company as on the appointed date i.e. 1 October 2009.
 With this acquisition, ACP will stand merged with the Company and the
 legal entity of ACP will stand dissolved without winding-up. Further,
 the entire business and undertaking of ACP will get transferred to and
 vested in the Company, subject to all statutory and regulatory
 approvals in this regard.
 
 The Honble High Court of Mumbai vide its Order dated 18 December 2009
 has directed a meeting of the equity shareholders of the Company in
 pursuant to Section 391 to 394 and other applicable provisions of the
 Companies Act, 1956 for the purpose of considering and approving the
 above proposed Scheme of Arrangement (the Scheme) between ACP and the
 Company. The meeting was convened on 23 January 2010 and the Scheme was
 approved by the shareholders.  Subsequently the Company has made the
 necessary filings on 5 February 2010 with the Honble High Court of
 Mumbai requesting for sanction of the Scheme.
 
 b) Buy back of shares from small shareholders
 
 The shareholding pattern of the company suggests that small
 shareholders cumulatively hold less than 7% of the equity paid up
 capital of the Company. As an integral part of the above proposed
 Scheme subject to High Court sanction, the Company intend to provide an
 exit offer by purchasing equity shares from such small shareholders at
 a price of Rs. 275 per equity share of Rs. 10 each.
 
 c) Proposed share exchange ratio i.e. Swap ratio
 
 Pursuant to the Scheme coming into effect, the Company proposes a swap
 ratio of 65 (sixty five) equity shares of Rs 10 each for every 10 (ten)
 fully paid up equity shares of the face value of Rs. 10 each held in
 ACP.
 
 d) Reorganisation of share capital
 
 Consequent to the sanction of the Scheme by the Honble High Court of
 Mumbai and in pursuant to Section 391 to 394 and other applicable
 provisions of the Companies Act, 1956 and subject to all statutory and
 regulatory approvals in this regard, the Scheme provides for reduction
 and reorganisation of the paid up capital of the Company held by
 remaining shareholders by reducing face value from Rs. 10 per equity
 share to Rs. 5 per equity share. The above reduction of equity share
 capital to Rs.5 per equity share will be consolidated for every two
 such shares of Rs. 5 each that will constitute one equity share of Rs.
 10 each fully paid.
 
 7 Prior period comparatives
 
 Previous years comparative figures have been regrouped/reclassified
 wherever necessary to conform to current years presentation.