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Accounting Policies of Butterfly Gandhimathi Appliances Ltd. Company

Mar 31, 2022

1. Corporate Information:

''Gandhimathi Appliances Limited'', was originally incorporated as Private Limited Company on 24th February 1986 and was converted into a Public Limited Company on 25th April 1990. The name of the Company was changed to ''Butterfly Gandhimathi Appliances Limited'' (BGMAL), with effect from 25th October 2011. BGMAL is listed with Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). BGMAL is involved in manufacturing and Trading of a wide range of domestic kitchen and electrical appliances under the brand ''BUTTERFLY''. BGMAL is domiciled in India and it has its Registered Office at Chennai, India.

On February 22, 2022, a Share Purchase Agreement ("SPA") was entered into amongst the Company, erstwhile Promoters and certain members of the erstwhile Promoter group of the Company and Crompton Greaves Consumer Electricals Limited ("Crompton") for the sale of 55% of the issued and paid-up equity share capital of the Company. Subsequent to the acquisition of 55% of the issued and paid-up equity share capital of the Company, Crompton has become the Promoter and Holding Company of the Company with effect from March 30, 2022. In accordance with regulations 3(1) and 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011, the Public Announcement in connection with the Open Offer was made by Crompton on February 22, 2022 for acquisition of 26.00% of the voting share capital of the Company from the public shareholders of the Company. The Draft Letter of Open Offer has been filed by Crompton with the Securities & Exchange Board of India ("SEBI") on March 04, 2022 and SEBI has given final observations on May 10, 2022. Pursuant to this, Crompton will further progress on the open offer process.

2. Significant Accounting Policies2.1 Basis of Preparation of Financial Statements2.1.1 Statement of Compliance

The financial statements comprising Balance Sheet, Statement of Profit and Loss, Cash flow Statement and Statement of changes in Equity, together with notes as at and for the year ended March 31, 2022 have been prepared in accordance with Ind AS''s notified under Section 133 of the Companies Act, 2013 (''the Act''), Companies (Indian Accounting Standards) Rules, 2015,

other relevant provision of the Act and amendments there to.

2.1.2 Historical Cost Convention

The Financial Statements have been prepared under historical cost convention on accrual basis except for certain assets and liabilities as stated in the respective policies, which have been measured at fair value.

2.1.3 Current / Non-Current Classification

The assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities. Accordingly, all assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in Ind AS-1 ''Presentation of Financial Statements'' and Schedule III to the Companies Act, 2013. Cash or cash equivalent is treated as current, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

2.1.4 Functional and Presentation Currency

Items included in the Financial Statements of the Company are measured and presented using the currency of the primary economic environment in which the Company operates ("Functional Currency"). Indian Rupee is the Functional and Presentation Currency of the Company.

2.2 Revenue Recognition2.2.1 Revenue from Sale of Goods / Services

Sales are stated at net of returns and taxes on sales. Revenue from sale of goods / services are recognised on satisfaction of performance obligations and at transaction price as per the terms of the contract with customers.

2.2.2 Interest Income

Interest income is recognised using the effective interest rate method. The effective interest rate is the rate that

exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset.

2.3 Property Plant and Equipment2.3.1 Tangible Assets

All property plant and equipment are stated at historical cost of acquisition less accumulated depreciation and impairment, if any. Historical cost includes purchase price, taxes and duties (net of tax credits), labour cost and directly attributable overhead expenditure incurred upto the date the asset is ready for its intended use.

The Cost of self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a working conditions for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.

2.3.2 Intangible Assets

Intangible assets are measured at cost less accumulated amortisation and impairment losses, if any.

Identifiable intangible assets are recognized when the Company controls the asset; it is probable that future economic benefits expected with the respective assets will flow to the Company for more than one economic period; and the cost of the asset can be measured reliably. Amortisation is provided on Straight Line Method (SLM), which reflect the management''s estimate of the useful life of the intangible assets.

The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required for assets. Based on such review, the useful life may change. The impact of such changes, if any, is accounted for as a change in accounting estimate.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Intangible Asset	Useful Life
Software 6-10 years Usage Right of Trade Mark/Trade Mark and Licence 20-25 years

2.3.3 Impairment of Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. If any such indication exists, an estimate of the recoverable amount of the asset/ cash generating unit is made. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.

2.4 Depreciation

The depreciable amount of an item of Property, Plant and Equipment (PPE) is allocated on a straight-line basis over its useful life as prescribed in the manner specified in Schedule II of the Act.

Description	Useful Life in Years
Buildings	5 to 30
Plant and Machinery	15
Dies, Tools and Equipment	8
Electrical Equipment	10
Office Equipment	5
Furniture and Fittings	10
Vehicles	8 to 10
Computer and Information System	3 to 6

If part of an item of PPE with a cost that is significant in relation to the total cost of the asset and useful life of that part is different from remaining part of the asset; such significant part is depreciated separately.

Depreciation is charged on pro-rata basis from the date of addition (i.e., when the assets are ready for their intended use) / till the date of disposal. An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains or losses on such disposal of assets are recognised in statement of profit and loss.

Where the residual values are not more than 5% of original cost of the asset no depreciation is provided.

2.5 Borrowing Costs

The Company capitalises borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset as a part of the cost of the asset. The Company recognises other borrowing costs as an expense in the period in which it incurs them. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

To the extent the Company borrows generally and uses them for the purpose of obtaining a qualifying asset, amount of borrowing cost eligible for capitalization is computed by applying a capitalization rate to the expenditure incurred. The capitalization rate is determined based on the weighted average of borrowing costs, other than borrowings made specifically towards purchase of a qualifying asset.

2.6 Foreign Currency Translation2.6.1 Functional and Presentation Currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (''the functional currency''). i.e in Indian rupee (INR - '')

2.6.2 Transaction and Balances

Foreign currency transactions are recorded in functional currency using the exchange rates prevailing on the date of transaction. As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate prevailing at the date of the transaction. All monetary assets

and liabilities denominated in foreign currency are restated at the closing exchange rates. Exchange differences arising out of foreign currency transactions are recognised in the Statement of Profit and Loss.

2.7 Inventories

2.7.1 Inventories are stated at the lower of cost (computed on moving weighted average basis) and net realizable value

2.7.2 Cost includes the cost of purchase including duties and taxes (net of tax credit), freight inward and other expenditure directly attributable to purchase.

Cost of work in progress and finished goods comprises of all direct costs and applicable manufacturing overheads incurred to bringing the inventories to the present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

2.8 Employee Benefits2.8.1 Defined Benefit Plan:

Provision for gratuity, is made on the basis of actuarial valuation using the projected unit credit method. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets excluding interest (if applicable), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Statement of Profit or Loss.

Past service cost is recognized in Statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

â¢ Service cost (including current service cost, past service cost as well as gains and losses on curtailments and settlements);

â¢ Net interest expense or income; and

â¢ Re-measurement.

The Company presents the first two components of defined benefit costs in statement profit and loss in the line item "Employee Benefits Expenses" Curtailment gains and losses are accounted for as past service costs. The defined benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plans.

2.8.2 Defined Contribution Plan:

Company''s contributions during the year towards provident fund, pension scheme and employees'' state insurance (''ESI'') scheme are recognised in the statement of profit and loss.

2.8.3 Short term employee benefits obligations are measured on an undiscounted basis and are expensed as the related services provided. A liability is recognized for the amount expected to be paid under short-term employee benefits if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

2.9 Taxes on Income

Income tax expense represents the sum of the current tax and deferred tax.

2.9.1 Current Tax

The current tax is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts and it is intended to settle the liability on a net basis or simultaneously.

2.9.2 Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and l iabilities where the Company has a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

2.9.3 Current and Deferred Tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

Minimum Alternate Tax (MAT) is accounted as current tax when the Company is subjected to such provisions of the Indian Income Tax Act, 1961. However, credit of such MAT paid is available when the Company is subjected to tax as per normal provisions in the future. Credit on account of MAT is recognized as an asset based on its recoverability in the future. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

2.10 Provisions and Contingent Liabilities2.10.1 Provisions

A provision is recorded when the Company has a present or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. A provision is reversed when it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Provision for warranty claims is recognised at the time of sale based on the historical experience. Initial estimate of warranty expense is reviewed annually.

2.10.2 Contingent Liabilities

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. Show cause notices are not considered as Contingent Liabilities unless converted into demand.

2..11 Leases

The Company''s leases primarily consist of leases for certain plant and machinery, Vehicles and Go-down. The Company, being a lessee, assesses whether a contract contains a lease, at inception of a contract. Company recognises Right of Use Asset and lease liability only when the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets, for which the entity is reasonably certain to exercise the right to purchase are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.

For the short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

2.12 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

2.13 Financial Assets2.13.1 Classification

The Company classifies its financial assets in the following measurement categories:

(i) Those measured subsequently at fair value through profit or loss (in case of investments in mutual funds)

(ii) Those measured at amortised cost

2.13.2 Measurement

Initial Recognition Measurement

Financial assets are recognised when the company becomes party to the contract. The Company measures a financial asset at its fair value plus cost that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are recognised in the Statement of Profit and Loss.

2.13.3 Subsequent Measurement2.13.3.1 Investments

Investments are subsequently measured at Fair value through Profit and loss. Income or loss from these financial assets is included in other income or other expenses.

2.13.3.2 Other Financial Assets

After Initial Measurement, financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR method). Amortised cost is calculated by

taking into account any discount or premium and fees or cost that are an integral part of EIR. The EIR amortization is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss.

2.13.4 Impairment of Financial Assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been significant increase in credit risk. Note 7.2 details how the Company determines whether there has been a significant increase in credit risk.

For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires Expected Credit Losses (ECL) to be recognised from initial recognition of the receivables.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each Balance Sheet date, right from its initial recognition.

2.13.5 De-recognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when the rights to receive cash flows from the asset have expired.

2.14 Financial Liabilities2.14.1 Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost.

2.14.2 Initial recognition and measurement

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

2.14.3 Loans and Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in

the Statement of Profit and Loss when the liabilities are derecognised.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss. This category generally applies to interest-bearing loans and borrowings.

2.14.4 De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

2.14.5 Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.15 Derivative Financial Instruments

The Company enters into forward contract to manage its exposure to foreign currency exchange risks. These derivative contracts that do not qualify for hedge accounting under Ind AS 109, are initially recognized at fair value on the date the contract is entered into and subsequently measured through at profit or loss. Gains or loss arising from changes in the fair value of the derivative contracts are recognized in statement of profit and loss.

2.16 Dividend to Shareholders

Final dividend proposed and distributed to equity shareholders is recognized only in the financial year in which it is approved by the members of the Company in the Annual General Meeting. Interim dividend is recognized when approved by the Board of Directors at the Board Meeting. Dividend distributed is recognized in the Statement of Changes in Equity.

2.17 Earnings Per Share

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

For the purpose of calculating 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 year are adjusted for the effects of all dilutive potential equity shares.

2.18 Segment Information

The Company has identified "Domestic Appliances" as a only reportable segment based on the manner in which operating results are reviewed by the Chief Operating Decision Maker (CODM).

2.19 Prior Period

Errors of material amount relating to prior period(s) are disclosed by a note with nature of prior period errors, amount of correction of each such prior period presented retrospectively, to the extent practicable along with change in basic and diluted earnings per share. However where retrospective restatement is not practicable for a particular period then the circumstances that led to the existence of that condition and the description of how and from where the error is corrected are disclosed in notes forming part of Financial statements.

2.20 Cash Flow Statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 ''Statement of Cash Flows''.

Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non cash nature and any deferrals or

accruals of past or future cash receipts or payments. Cash flow for the year is classified as operating, investing and financing activities.

2.21 Critical Estimates & Judgements

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date and reported revenue and expenses for the year and disclosure of contingent liabilities as of the date of balance sheet. The estimates and assumptions used in the accompanying financial statements are based upon the management''s evaluation of the relevant circumstances as of the date of financial statements. Actual amounts could differ from these estimates.

2.22 Estimation of uncertainties relating to COVID-19 pandemic:

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of these financial statements including the recoverability of carrying amounts of financial and nonfinancial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the company has, at the date of approval of these financial statements, used internal and external sources of information including economic forecasts and expects that the carrying amount of these assets will be recovered. The -impact of COVID-19 on the company''s financial statements may differ from that estimated as at the date of approval of these financial statements

2.23 Rounding of Amounts

All amounts disclosed in the financial statements and notes are presented in INR lakhs and has been rounded off to two decimals as per the requirements of Division II of schedule III to the Act, unless otherwise stated

Mar 31, 2018

1 - Significant Accounting Policies

1.1 - Basis of Preparation of Financial Statements

1.1.1 - Preparation and compliance with Indian Accounting Standards ( IND AS)

The Ministry of Corporate Affairs (âthe MCAâ), Government of India in exercise of the powers conferred by Section 133 read with Section 469 of the Companies Act, 2013 (The âActâ) and subsection 1 of section 210A of the Companies Act 1956 (The Erstwhile Act) in consultation with National Advisory Committee on Accounting Standards vide G.S.R. 111(E) dated February 16,2015 notified Rules called Companies (Indian Accounting Standard) Rules 2015 effective April 1,2015 which was further amended by MCA vide its notification dated March 30, 2016

In line with the road map framed by the MCA, regarding the applicability of Ind AS, the Company is covered under Phase II of implementation and accordingly Ind AS Financials are prepared for the accounting period commencing from April 1, 2017 with comparatives for the year ended on March 31, 2017 with transition Balance sheet as at April 1, 2016

1.1.2 - Statement of Compliance

The financial statements comprising Balance Sheet, Statement of Profit and Loss, Cash flow Statement, Statement of changes in Equity, together with notes as at and for the year ended March 31, 2018 have been prepared in accordance with Ind AS.

1.1.3 - Historical Cost convention

1.1.4 - Current / Non Current classification

The assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities. Cash or cash equivalent is treated as current, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

1.1.5 - Functional and Presentation currency

Items included in the Financial Statements of the Company are measured and presented using the currency of the primary economic environment in which the Company operates (âFunctional Currencyâ). Indian Rupee is the functional Currency of the Company.

1.2 - Revenue recognition

1.2.1 - Revenue from Sale of goods:

Sales are stated at net of returns and taxes on sales. Sales Revenue is recognized when significant risks and rewards of ownership of the goods have passed to the buyer. Revenue is measured at the fair value of the consideration received or receivable.

1.2.2 - Interest Income

Interest income is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset.

1.3 - Property Plant and Equipment

1.3.1 - Tangible Assets

All property plant and equipment are stated at historical cost of acquisition less accumulated depreciation and amortization and impairment, if any. Historical cost includes purchase price, taxes and duties (Net of tax credits), labour cost and directly attributable overhead expenditure incurred upto the date the asset is ready for its intended use.

Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.

1.3.2 - Intangible assets

Intangible assets are measured at cost less accumulated amortisation and impairment losses, if any.

Identifiable intangible assets are recognized when the Company controls the asset; it is probable that future economic benefits expected with the respective assets will flow to the Company for more than one economic period; and the cost of the asset can be measured reliably. Amortisation is provided on Straight Line Method (SLM), which reflect the managementâs estimate of the useful life of the intangible assets.

1.3.3 - Impairment of assets

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. If any such indication exists, an estimate of the recoverable amount of the asset/ cash generating unit is made. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of cash generating unitâs net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.

1.4 - Depreciation

The depreciable amount of an item of PPE is allocated on a straight-line basis over its useful life as prescribed in the manner specified in Schedule II of the Act.

Depreciation is charged on pro-rata basis from the date of addition / till the date of disposal. An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains or losses on such disposal of assets are recognised in statement of profit and loss.

Where the residual values are not more than 5% of original cost of the asset no depreciation is provided.

1.5 - Borrowing Costs

1.6 - Foreign Currency Translation

1.6.1 - Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (âthe functional currencyâ). i.e in Indian rupee (INR â Rs..)

1.6.2 - Transaction and Balances

Foreign currency transactions are recorded in functional currency using the exchange rates prevailing on the date of transaction. As at the reporting date, nonmonetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate prevailing at the date of the transaction. All monetary assets and liabilities denominated in foreign currency are restated at the closing exchange rates. Exchange differences arising out of foreign currency transactions are recognised in the Statement of Profit and Loss.

1.7 - Inventories

1.7.1 - Inventories are stated at the lower of cost (computed on moving weighted average) and net realizable value.

1.7.2 - Cost includes the cost of purchase including duties and taxes (net of tax credit), freight inward and other expenditure directly attributable to purchase.

Cost of work in progress and finished goods comprises of all direct costs and applicable manufacturing overheads incurred to bringing the inventories to the present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

1.8 - Employee Benefits

1.8.1 - Defined Benefit Plan

Provision for gratuity, is made on the basis of actuarial valuation using the projected unit credit method. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets excluding interest (if applicable), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Statement of Profit or Loss.

1.8.2 - Defined Contribution Plan:

Companyâs contributions during the year towards provident fund, pension scheme and employeesâ state insurance (âESIâ) scheme are recognised in the statement of profit and loss.

1.8.3 - Short term employee benefits obligations are measured on an undiscounted basis and are expensed as the related services provided. A liability is recognized for the amount expected to be paid under short-term employee benefits if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

1.9 - Taxes on Income

Income tax expense represents the sum of the current tax and deferred tax.

Current Tax

The current tax is based on taxable profit for the year. Taxable profit differs fromâprofit before taxâas reported in the statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts and it is intended to settle the liability on a net basis simultaneously.

Deferred Tax

Deferred tax assets â unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company has a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

Current and Deferred Tax for the year

Minimum Alternate Tax (MAT) is accounted as current tax when the Company is subjected to such provisions of the Income Tax Act. However, credit of such MAT paid is available when the Company is subjected to tax as per normal provisions in the future. Credit on account of MAT is recognized as an asset based on its recoverability in the future.

1.10 - Provisions and Contingent Liabilities

1.10.1 - Provisions

Provision for warranty claims is recognised at the time of sale based on the historical experience. Initial estimate of warranty expense is reviewed annually.

1.10.2 - Contingent Liabilities

1.11 - Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are charged to profit or loss in the year in which the rent is actually incurred as the payments made to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increase.

1.12 - Cash and Cash Equivalents

1.13 - Financial Assets

1.13.1 - Classification

The Company classifies its financial assets in the following measurement categories:

(i) Those measured subsequently at fair value through profit or loss (in case of investments in mutual funds)

(ii) Those measured at amortised cost

1.13.2 - Measurement Initial Measurement

The Company measures a financial asset at its fair value plus cost that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

1.13.3 - Subsequent Measurement Investments

Investments are subsequently measured at Fair value through Profit and loss. Interest income from these financial assets is included in other income.

1.13.4 - Other Financial Assets

After Initial Measurement, financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or cost that are an integral part of EIR. The EIR amortization is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss.

1.13.5 - Impairment of Financial Assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been significant increase in credit risk. Note 38.2 details how the Company determines whether there has been a significant increase in credit risk.

For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected credit losses to be recognised from initial recognition of the receivables.

1.13.6 - De recognition of Financial Assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when the rights to receive cash flows from the asset have expired.

1.14 - Financial Liabilities

1.14.1 - Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost.

1.14.2 - Initial recognition and measurement

The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

1.14.3 - Loans and Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the Statement of Profit and Loss when the liabilities are derecognised.

1.14.4 - De-recognition

1.14.5 - Offsetting of Financial Instruments

1.15 - Dividend to Shareholders

1.16 - Earnings Per Share

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

1.17 - Derivative Financial Instruments

The Company enters into forward contract to manage its exposure to foreign currency exchange risks. These derivative contracts that do not qualify for hedge accounting under IND AS 109, are initially recognized at fair value on the date the contract is entered into and subsequently measured through at profit or loss. Gains or loss arising from changes in the fair value of the derivative contracts are recognized in profit or loss.

1.18 - Segment Information

The Company has identified âDomestic Appliancesâ as a only reportable segment.

1.19 - Prior Period

1.20 - Cash Flow Statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 âStatement of Cash Flowsâ.

Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. Cash flow for the year is classified by operating, investing and financing activities.

1.21 - Critical Estimates and Judgements

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date and reported revenue and expenses for the year and disclosure of contingent liabilities as of the date of balance sheet. The estimates and assumptions used in the accompanying financial statements are based upon the managementâs evaluation of the relevant circumstances as of the date of financial statements. Actual amounts could differ from these estimates.

Mar 31, 2017

NOTE: 26 OTHER NOTES

1 .SIGNIFICANT ACCOUNTING POLICIES:

(i) Basis for Preparation of accounts:

The Financial Statements have been prepared on the historical cost convention in accordance with the Generally Accepted Accounting Principles in India, to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 as applicable to the company during the current financial year.

(ii) Fixed Assets and Depreciation:

a. Fixed Assets are Capitalized at acquisition cost, including directly attributable cost of bringing the assets to their working condition for the intended use, less CENVAT and VAT Credits and as reduced by accumulated depreciation.

b. Depreciation on tangible fixed assets is charged over the estimated useful life on straight line method, in accordance with Part A of Schedule II to the Companies Act 2013.

d. Dies and Tools are depreciated at the rate of 11.88 percent.

e. In respect of additions/deductions made during the year, depreciation is charged on pro-rata basis from the date of addition/till the date of disposal.

f. Intangible assets in the form of Software are amortized over their useful life of 10 years and in the form of Usage Right of Trade Mark/Trade Mark and License are amortized over the period of Usage of 20 - 25 years.

(iii) Inventories:

Inventories are stated at lower of cost (net of CENVAT and VAT credits) or net realizable value. Cost includes all direct costs and other applicable manufacturing overheads and in ascertaining the cost, Moving Weighted Average Method is adopted. In the case of work-in-progress and finished goods, cost represents materials (net of CENVAT and VAT credits), direct labour and appropriate portion of factory overheads.

(iv) Revenue recognition:

Revenue in respect of sale of products is recognized at the point of dispatch to customers. Sales also includes products which are manufactured through third party on contract basis, which represents invoiced value of goods including excise duty and are net of sales tax, returns and inter-branch transfers. The excise duty is separately disclosed and deducted from sales. Export sales are accounted at the prevailing rate of exchange as on the date of invoicing. The difference in the rate of exchange, if any, is accounted at the time of realization if it is made within the same financial year and if unrealized at the rate of exchange as at the end of the financial year.

(v) Impairment of Assets:

As on the Balance sheet date, the Company''s assets net of accumulated depreciation/amortization is not less than the recoverable amount of those assets. Hence no impairment loss on the assets of the Company is recognized and charged to the profit and loss statement during the year.

(vi) Research & Development Expenditure:

Revenue Expenditure on Research & Development is charged off to the Profit and Loss Statement in the period in which it is incurred.

(vii) Staff Terminal Benefits:

a) Accrued Liability for gratuity has been provided in the accounts in accordance with the provisions of the Payment of Gratuity Act, 1972, calculated on the basis of Actuarial Valuation in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard (AS15) for employees who are eligible for gratuity funded by Life Insurance Corporation (LIC).

The Company contributes to the said Gratuity fund covering specified employees. The contributions are by way of annual premium payable on such policy issued by the LIC of India, which confers benefits to those specified employees based on policy norms.

b) Contribution to Provident fund are accounted at the applicable rates and paid over to the Government authorities.

c) Accrued liability for encashment of leave to employees is accounted on calendar year basis, in accordance with the Company''s Rules and paid to the employees after the end of calendar year.

2. EXCISE DUTY:

CENVAT credit/Service Tax credit on inputs and other capital goods are accounted fully and to the extent the sum availed is adjusted towards payment of excise duty on dispatches leaving the unutilized balance being carried forward to subsequent year and kept under Loans and Advances.

This information has been given in respect of such vendors to the extent they could be treated as ''Micro, Small and Medium Enterprises'' on the basis of information available with the Company on which the Auditors have relied upon.

4. TAXES ON INCOME:

Current tax is determined as the amount of Tax payable in respect of Taxable income for the year determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the difference between the taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and unabsorbed losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

5. FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currency are recorded at exchange rate prevailing at the time of the transactions and exchange difference arising from foreign currency transaction are dealt within the Profit and Loss Statement and capitalized where they relate to the Fixed Assets. Current Assets and Liabilities at the yearend are being converted at closing rates and exchange gains / losses are dealt within the Profit and Loss Statement, as per AS 11.

Mar 31, 2015

(i) Basis for Preparation of accounts:

The Financial Statements have been prepared on the historical cost convention in accordance with the Generally Accepted Account- ing Principles in India, to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(ii) Fixed Assets and Depreciation:

a. Fixed Assets are Capitalised at acquisition cost, including directly attributable cost of bringing the assets to their working condition for the intended use, less CENVAT and VAT Credits and as reduced by accumulated depreciation.

b. Depreciation on tangible fixed assets is charged over the estimated useful life on straight line method, in accordance with Part A of Schedule II to the Companies Act 2013.

c. The estimated useful life of the tangible fixed assets followed by the Company is given below:

Description Years

Factory building and other buildings 5 to 60

Plant and machinery 15

Electrical equipments 10

Office equipment 5

Furniture and Fittings 10

Vehicles 8 to 10

Computers and information systems 3 to 6

d. Dies and Tools are depreciated at the rate of 11.88 percent.

e. In respect of additions/deductions made during the year, depreciation is charged on pro-rata basis from the date of addition/ till the date of disposal.

f. Intangible assets in the form of Software are amortised over their useful life of 10 years and in the form of Usage Right of Trade Mark/Trade Mark and Licence are amortised over the period of Usage of 20 - 25 years.

(iii) Inventories:

Inventories are stated at lower of cost (net of CENVAT and VAT credits) or net realisable value. Cost includes all direct costs and other applicable manufacturing overheads and in ascertaining the cost, Moving Weighted Average Method is adopted. In the case of work- in-progress and finished goods, cost represents materials (net of CENVAT and VAT credits) direct labour and appropriate portion of factory overheads. Adequate provision for defective, slow/non moving, obsolete stocks are made on the basis of technical evaluation.

(iv) Revenue recognition:

Revenue in respect of sale of products is recognised at the point of despatch to customers. Sales also includes products which are manufactured through third party on contract basis, which represents invoiced value of goods including excise duty and are net of sales tax, returns and inter-branch transfers. The excise duty is separately disclosed and deducted from sales. Export sales are accounted at the prevailing rate of exchange as on the date of invoicing. The difference in the rate of exchange, if any, is accounted at the time of realization if it is made within the same financial year.

(v) Impairment of Assets:

As on the Balance sheet date, the Company's assets net of accumulated depreciation/amortization is not less than the recoverable amount of those assets. Hence, there is no impairment loss on the assets of the Company. Any such impairment loss is recognized by charging it to the profit and loss statement.

(vi) Research & Development Expenditure:

Revenue Expenditure on Research & Development is charged off to the Profit and Loss Statement in the period in which it is incurred.

(vii) Staff Terminal Benefits:

a) Accrued Liability for gratuity and superannuation has been provided in the accounts in accordance with the provisions of the Payment of Gratuity Act, 1972, calculated on the basis of Actuarial Valuation in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard (AS15) for employees who are eligible for gratuity and super- annuation funded by Life Insurance Corporation (LIC). For a few employees who are in service even after Superannuation age as per LIC norms, gratuity and superannuation is calculated manually and necessary provision is made in the books of account.

The Company contributes to the said superannuation fund covering specified employees. The contributions are by way of annual premium payable on such superannuation policy issued by the LIC of India, which confers benefits to those specified employees based on policy norms.

b) Contribution to Provident fund are accounted at the applicable rates and paid over to the Government authorities.

c) Accrued liability for encashment of leave to employees is accounted on calendar year basis, in accordance with the Company's Rules and paid to the employees after the end of calendar year.

Mar 31, 2013

(i) Basis for Preparation of accounts:

The Accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standard notified under Section 211(3C) of the Companies Act, 1956 and the Financial Statements have been prepared on the historical cost convention and in accordance with normally accepted accounting principles in India.

(ii) Fixed Assets and Depreciation: ,

Fixed Assets are capitalised at acquisition cost, including directly attributable cost of bringing the assets to their working condition for the intended use less CENVAT Credits.

Depreciation on Fixed Assets has been provided on the basis of straight line method at the rates specified in Schedule XIV to the Companies Act, 1956. In respect of additions/deductions made during the year, depreciation is charged on pro-rata basis from the date of addition/upto the date of deletions in the financial year.

Usage Right of Trade Marks are amortised over the period of Usage.

(iii) Inventories :

Inventories are stated at lower of cost or net realisable value. Cost includes all direct costs and other applicable manufacturing overheads and in ascertaining the cost, FIFO method is adopted.

(iv) Revenue recognition:

Revenue in respect of sale of products is recognised at the point of despatch to customers. Sales also includes products which are manufactured through third party on Contract basis, which represents invoiced value of goods including excise duty and are net of sales tax, returns and inter-branch transfers. The excise duty is separately disclosed and deducted from sales. Export sales are accounted at the prevailing rate of exchange as on the date of invoicing. The difference in the rate of exchange, if any, is accounted at the time of realisation.

(v) Impairment of Assets:

As on the Balance sheet date, the Company''s assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence, there is no impairment loss on the assets of the Company.

(vi) Research & Development Expenditure:

Revenue Expenditure on Research & Development is charged off to the Profit and Loss statement in the period in which it is incurred.

(vii) Staff TerminalBenefits:

a) Accrued Liability for gratuity and superannuation has been provided in the accounts in accordance with the provisions of the Payment of Gratuity Act, 1972, calculated on the basis of Actuarial Valuation method in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard (AS 15) for employees who are eligible for gratuity and superannuation funded by Life Insurance Corporation (LIC). For few employees who are in service even after Superannuation age, Gratuity and superannuation is calculated manually and necessary provision is made in the books of account.

The Company contributes to the said superannuation fund covering specified employees. The contributions are by way of annual premium payable in respect of superannuation policy issued by the LIC of India which confers benefits to those specified employees based on policy norms.

b) Contribution to Provident fund are accounted at the applicable rates and paid over to the appropriate Government authorities. .

c) Accrued liability for encashment of leave to employees is accounted on calendar year basis, in accordance with the Company''s Rules and paid to the employees after the year end.

Mar 31, 2012

1. Excise duty:

CENVAT credit/Service Tax credit for Excise Duty on inputs and other capital goods is accounted fully and to the extent the sum availed is adjusted towards payment of excise duty on dispatches leaving the unutilized balance being carried forward to subsequent year and kept under Loans and Advances

2. Trade Receivables and Loans and Advances:

Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful balances. In the evaluation of the Managing Director, Sundry Debtors and Loans and Advances have the value on realization in the ordinary course of business at least equal to the amount at which they are stated.

3. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006:

The particulars required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 relating to unpaid balances, interest payable thereon to such small scale industries as defined in the said Act could not be disclosed for want of information on the status of those sundry creditors.

4.Taxation:

Current tax is determined as the amount of Tax payable in respect of taxable income for the year determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the ' difference between the taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and unabsorbed losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets.

Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

5. Foreign Currency transactions:

Transactions in foreign currency are recorded at exchange rate prevailing at the time of the transactions and exchange difference arising from foreign currency transaction are dealt with in the Profit and Loss account and capitalized where they relate to the Fixed Assets. Current Assets and Liabilities at the yearend are being converted at closing rates and exchange gains / losses are dealt with in the Profit and Loss account, as per AS 11.

6. Merger with Gangadharam Appliances Limited

A proposal submitted by erstwhile Gangadharam Appliances Limited (GAL), an associate of the Company, for the merger of its entire undertaking with the Company has been approved by the Hon'ble Board for Industrial and Financial Reconstruction (BIFR) vide their order dated 17th August, 2011 with retrospective effect from 1st January, 2009. The Transactions, Assets and Liabilities of GAL has been incorporated in the books of the Company keeping into account the terms of the BIFR Order (supra) and reflected appropriately in the account of the Company as at 31st March, 2012. In terms of the said BIFR Order, one share of the Company was issued for every two shares held by the shareholders of GAL and as a consequence, the paid up share capital of the Company has been increased by Rs. 579.39 Lakhs.

7. During the financial year 2010-11, there was a Fire accident in the factory, and Inventory of approx Rs. 1.18 Cr got damaged. The necessary claim with the Insurance Company which was made and shown in the 'Profit and Loss account' of 2010-11 as extraordinary item and as 'Claim Receivable' under Loans and Advances in the Balance Sheet as on 31.3.2011, But subsequently the Insurance Company has indicated a lesser value of the claim and hence the excess claim of Rs. 0.49 cr. accounted as "extra-ordinary item" in the previous year is now reversed and shown under exceptional item during the year.

8. Subsequent to the date of the Balance Sheet, the Company with necessary statutory approvals raised Share Capital on preferential basis from Reliance Alternative Investments Fund - Private Equity Scheme-I (Acting through Reliance Alternative Investments Services Private Limited) and issued 24,51,000 equity shares of Rs.10/- each at a premium of Rs.398 per share aggregating Rs.100 Crores and eight thousand.

9. The figures of the current year includes the figures of Gangadharam Appliances Ltd merged with the Company during the year. Therefore, the figures of the current year are not comparable with those of the previous period. Also, the accounts of the Company for the previous financial year has been for a period of nine months.

10. The Figures for the period ended on 31.03.2011 have been re-grouped and re-arranged to conform with the current year's classification.

Mar 31, 2011

The Financial Statements have been prepared on the historical cost convention and in accordance with normally accepted accounting principles.

(i) Fixed Assets and Depreciation :

Fixed Assets are capitalised at acquisition cost, including directly attributable cost of bringing the assets to their working condition for the intended use less CENVAT Credits.

Depreciation on Fixed Assets has been provided on the basis of straight line method at the rates specified in Schedule XIV to the Companies Act, 1956. In respect of additions/deletions made during the period, depreciation is charged on pro-rata basis from the day or upto the date of addition/deletions.

Leasehold properties and Usage Right of Trade Marks are amortised over the period of Lease/Usage.

(ii) Inventories :

Inventories are stated at lower of cost/net realisable value. Cost includes all direct costs and other applicable manufacturing overheads and in ascertaining the cost, FIFO method is adopted.

(iii) Revenue recognition :

Revenue in respect of sale of products is recognised at the point of despatch to customers. Sales also includes products which are manufactured through third party on Contract basis, which represents invoiced value of goods including excise duty and are net of sales tax, returns and inter-branch transfers. Export sales are accounted at the prevailing rate of exchange as on the date of invoicing. The difference in the rate of exchange, if any, is accounted at the time of realisation.

(iv) Research & Development Expenditure :

Revenue Expenditure on Research & Development is charged off to the Profit and Loss account in the period in which it is incurred.

(v) Retirement Benefits :

a) Accrued Liability for gratuity is provided in the accounts in accordance with the provisions of the Payment of Gratuity Act, 1972, calculated on the basis of Actuarial Valuation method in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard. (AS 15).

b) Contribution to Provident Fund & ESI Fund are accounted at the applicable rates on accrual basis and are charged against revenue.

c) Accrued liability for encashment of leave to employees is accounted on calendar year basis, in accordance with the Company's Rules.

Jun 30, 2010

The Financial Statements have been prepared on the historical cost convention and in accordance with normally accepted accounting principles.

(i) Fixed Assets and Depreciation:

Fixed Assets are capitalised at acquisition cost, including directly attributable cost of bringing the assets to their working condition for the intended use less CENVAT Credits.

Depreciation on Fixed Assets has been provided on the basis of straight line method at the rates specified in Schedule XIV to the Companies Act, 1956. In respect of additions/deductions made during the period, depreciation is charged on pro-rata basis from the day or upto the date of addition/deletions.

Leasehold properties and Usage Right of Trade Marks are amortised over the period of Lease/Usage.(ii)

(ii) Inventories:

Inventories are stated at lower of cost/net realisable value. Cost includes all direct costs and other applicable manufacturing overheads and in ascertaining the cost, FIFO method is adopted.

(iii) Revenue recognition:

Revenue in respect of sale of products is recognised at the point of despatch to customers. Sales also includes products which are manufactured through third party on Contract basis, which represents invoiced value of goods including excise duty and are net of sales tax, returns and inter-branch transfers. Export sales are accounted at the prevailing rate of exchange as on the date of invoicing. The difference in the ratetrf exchange, if any, is accounted at the time of realisation.

(iv) Research & Development Expenditure:

Revenue Expenditure on Research & Development is charged off to the Profit and Loss account in the period in which it is incurred.

(v) Retirement Benefits:

a) Accrued Liability for gratuity is provided in the accounts in accordance with the provisions of the Payment of Gratuity Act, 1972, calculated on the basis of Actuarial Valuation method in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard. (AS 15).

b) Contribution to Provident Fund & ESI Fund are accounted at the applicable rates on accrual basis and are charged against revenue.

C) Accrued liability for encashment of leave to employees is accounted on calendar year basis, in accordance, with the Companys Rules.

2. Excise duty:

CENVAT credit for Excise Duty on inputs and other capital goods is accounted fully and to the extent the sum availed off is adjusted towards payment of excise duty on despatches leaving the unutilised balance being carried forward to subsequent year and kept in Advances recoverable in cash or in kind or for value to be received shown under Loans and Advances

3. In the evaluation of the Managing Director, Sundry Debtors and Loans and Advances have the value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

4. The particulars required to be disclosed under the Micro Small and Medium Enterprises Development Act, 2006 relating to unpaid balances, interest payable thereon to such small scale industries as defined in the said Act could not be disclosed for want of information on the status of those sundry creditors.

5. Proposed merger with Gangadharam Appliances Limited

A proposal submitted by Gangadharam Appliances Limited (GAL), an associate of the Company, which is also in the same segment of business as the Company, viz., domestic appliances, for the merger of its entire undertaking with the Company has been approved in principle by the Honble Board for Industrial and Financial Reconstruction (BIFR). The draft Scheme for the said merger as of 1 st January, 2009 (approved date) is submitted by GAL to BIFR. An extraordinary General Meeting of the Company seeking approval of the shareholders of the Company for the proposed merger was convened on 9th September, 2010 at which the share holders unanimously approved through a Special Resolution, the proposed merger and the draft Scheme therefor subject to approval of the same by Honble BIFR. The approval of BIFR has not been received till date. The results now provided are therefor of the Company only and on the proposed merger being approved by Honble BIFR, the Transaction, Assets and Liabilities of GAL will be incorporated as part of the Transaction, Assets and Liabilities of the Company and will be reflected appropriately in the accounts of the Company to be made after such approval is received.

6. Unsecured Loan

During the period, the Company has raised a loan of Rs.21.50 Crores (balance outstanding is Rs.20.54 Crores) from Dewan Housing Finance Corporation Limited (DHFL) classified as Unsecured Loan repayable over a period of seven years for which the securities have been provided by an associate Company, Promoter Directors and their relatives. At the extraordinary General Meeting of the Company held on 29th June 2010, shareholders have unanimously approved availing the said loan through a Special Resolution.

In view of proposed merger of Gangadharam Appliances Limited with Gandhimathi Appliances Limited, for which the Honble BIFR has granted in-principle approval, the Company has advanced a sum of Rs.15 crores to one of the Associate Companies against the security of pledge of certain shares and Demand Promissory Note and another sum of Rs.6.50 crores to Gangadharam Appliances Limited against the second charge of its immovable property, to settle their liabilities out of the loan availed from DHFL as stated above, which will get relinquished once the merger proposal is approved by Honble BIFR and necessary entries are effected in the books of the Transferor and Transferee Companies. The interest on the loan from DHFL is borne by GAL and the Associate | Company. I

7. In terms of the Memorandum of Compromise executed on 1.11.2000 by the Company and M/s L.G Varadarajulu & others, Coimbatore in the matter of patents/designs dispute in the manufacture of Table top wet grinders, the Company is liable to pay to the latter such damages as may be determined by the Court, in the event of the suit C.S. No.613 of 1999, pending in the High Court of Judicature at Chennai being decreed in their favour. In the mean while a Patent has been duly granted under Patents Act, 1970 by Government of India in respect of those Table Top Wet Grinders, which has been duly renewed and in force. This Patent right remains unchallenged as of now.

8. Provision for Taxation charged to the Profit and Loss account for the current period of eighteen months amounting to Rs.10,19,87,384, interalia includes a sum of Rs.3,44,01,285 towards Minimum Alternate Tax (MAT) provided under section 115JB of the Income Tax Act, 1961 treating the said MAT as the current tax liability of the Company. In the year in which the MAT credit becomes eligible to be recognised as an asset, the same will be taken as credit to the Profit and Loss account of that year.

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