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Notes to Accounts of Butterfly Gandhimathi Appliances Ltd.

Mar 31, 2015

NOTE 1

Rs. In Lakhs

CONTINGENT LIABILITIES AND COMMITMENTS As at 31st As at 31st (TO THE EXTENT NOT PROVIDED FOR) March, 2015 March, 2014

(i) CONTINGENT LIABILITIES

1 Claim against the Company not acknowledged as debts

Central Excise 982.09 2,158.57

Sales Tax 115.95 476.92

Employee State Insurance matter. 9.35 2.30

Claims on merged erstwhile Gangadharam Appliances Limited not acknowledged as debts comprising of

Central Excise 24.00 24.00

Employee State Insurance 16.70 12.24

Labour matter 47.08 43.67

2 Guarantee

Liabilities to banks on counter Guarantees given by the Company. 1,096.00 443.40

Guarantees issued to Commercial Tax Department 30.87 6.00

Guarantees issued to Central Excise Department 3.00 -

3 Other money for which the Company is contingently liable

In term of the Memorandum of Compromise executed on 1.11.2000 by the Company Amount Not Amount Not and M/s. L.G.Varadarajulu & others, determinable determinable 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.

(ii) COMMITMENTS

Estimated amount of contracts remaining 87.22 72.33 to be executed on capital account and not provided for

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 adjust- ed towards payment of excise duty on despatches leaving the unutilised balance being carried forward to subsequent year and kept under Loans and Advances.

3. 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 recognised, 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 realise such assets. Other deferred tax assets are recognized if there is rea- sonable certainty that there will be sufficient future taxable income available to realise such assets.

4. 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 year end are being converted at closing rates and exchange gains / losses are dealt within the Profit and Loss Statement, as per AS 11.

5. The Company is not liable for Corporate Social Responsibility (CSR) expenses as required under section 135 of Companies Act, 2015.

6. Previous year's figures have been regrouped and reclassified wherever necessary to conform to this year's classification.


Mar 31, 2013

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 despatches leaving the unutilised 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 realisation 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 recognised, 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 realise such assets. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realise 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 statement and capitalized where they relate to the Fixed Assets. Current Assets and Liabilities at the year end are being converted at closing rates and exchange gains / losses are dealt with in the Profit and Loss statement, as per AS 11. /

6. In the current year, the Company with necessary statutory approvals raised Share Capital on preferential basis received from Reliance Alternative Investments Fund and issued 24,51,000 equity shares off. 10/- each at a premium of Rs..398 per share aggregating Rs..100 Crores and eight thousand.

7. Disclosure on Related Party Transaction

1. Key Management Personnel Mr.V.M.Lakshminarayanan,

Chairman & Managing Director Mr.V.M.Balasubramaniam, Director Mr.V.M.Seshadri, Managing Director Mr.V.M.Gangadharam, Executive Director Mr.V.M.Kumaresan, Executive Director-Technical

2. Enterprises in which key management personnel and their Relatives have Significant influence

LLM Appliances Limited Butterfly Constructions Limited Butterfly Marketing Private Limited V.M. Chettiar& Sons India Private Limited Butterfly Quality Center Private Limited Chrysalis Home Needs Private Limited Swaminathan Enterprises Private Limited Sivagurunathan Industries Butterfly Home Appliances East West Combined Industries Vetrivel Transport Mrinalini Industries

3. Relatives of Key Management Personnel Mr.V.M.L.Karthikeyan

Mr.V.M.S.Namasivayam Mr.V.M.GViswanathan Mr.V.M.L.Senthilnathan Mr.V.M.S.Kumaraguru Mr.V.M.L.Ganesan Mr.V.M.S.Selvamuthukumaran Mr.V.M.GMayuresan Mrs.A.Gandhimathi Mr.RElansudar

8. Segment Information in accordance with AS17 issued by ICAI. The Company operates in only one segment viz. Domestic Appliances.

9. The previous year figures have been regrouped and reclassified wherever necessary.


Mar 31, 2012

Notes:

1. Vehicles include Assets acquired on "Hire Purchase"

2. Freehold Land includes Rs. 10,00,000/- and Freehold Buildings include Rs. 15,37,686/- in respect of which the transfer of title deeds to the name of the company is pending

3. Usage Right of Trade Marks represents assignment of trade marks for future usage and the amount written off during the year on account of amortization by charging off to Profit and Loss account as Usage right of Trade Marks.

4. Additions to Plant & Machinery includes machineries purchased under term loan assistance from banks and Hire Purchase/ Finance Companies.

5. Additions in Freehold Land and Building includes the Leasehold Land and Building held by the Company as on 31.03.2011 acquired during the year.

Note 1

CONTIGENT LIABILITIES

AND COMMITMENTS As at As at (TO THE EXTENT NOT 31st March, 31st March, PROVIDED FOR) 2012 2011

CONTIGENT LIABILITIES

1 Claim against the Company not

acknowledged as debts Rs. In lakhs Rs. In lakhs

a Claim against the Company under litigation against which Bank Guarantee has been provided 7.26 7.26

b Central Excise demand on merged erstwhile Gangadhram Appliances Limited under appeal disputed 22.94 -

c Claim by Employees State Insurance Corporation towards ESI contribution/interest /damages on merged

erstwhile Gangadharam Appliances Limited disputed. 12.24 -

d Claim by Employees State Insurance Corporation towards ESI contribution on Job work parties 9.56 -

e Claim by Employees Provident Fund authorities towards damages on merged erstwhile Gangadharam Appliances Limited 21.66 -

f Claim against the Company before Labour Court by terminated employees of the Company / merged erstwhile Gangadharam Appliances Limited disputed. 43.67 -

2 Guarantee

Liabilities to bank on Counter Guarantee towards supply/performance to Tamilnadu Civil Supplies Corporation and Indian Oil Corporation 688.80 15.00

3 Other money for which the Company is contingently liable

In term 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 manu facture 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 Madras being Amount Not Amount Not decreed in their favour. determinable determinable

COMMITMENTS NOT PROVIDED FOR

Estimated amount of contracts remaining to be executed on capital account and not provided for 259.36 -

Note: 2

OTHER NOTES TO FTOANCIAL'STATEMENTS

1. Significant Accounting Policies

(Forming part of the Financial Statements for the year ended on 31st March, 2012)

(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.

All the Assets and Liabilities have been classified as current and non-current as per criteria set out in Revised Schedule VI, to the Companies Act, 1956 for preparation and presentation of financial statements of the Company under report. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also re-classified the previous year figures in accordance with the requirements applicable in the current year. .

(ii) Fixed Assets and Depreciation:

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 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 day of addition/up to the date of deletions in the financial year.

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

(iii) Inventories:

Inventories are stated at lower of cost or net realizable 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 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.

(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 account 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 method in accordance with the guidelines of the Institute of Chartered Accountants of India under Accounting Standard (AS 15). During the year, the Company has entered into an agreement with Life Insurance Corporation of India, for managing the Gratuity and Superannuation Fund.

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 statutory 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.

As per Accounting Standard AS-15 (Revised) Employee Benefits, the disclosures as defined in the Accounting Standard are given below:


Jun 30, 2010

As on As on 30.06.2010 31.12.2008 Rs Rs

1 Contingent Liabilities not provided for Claim against the Company under litigation against which, Bank Guarantee has been provided 726,000 726,000

2 Licensed and Installed Capacity (per annum) and Actual Production

3 Disclosure on Related Party Transaction

Names of related parties and description of relationship:

1. Key Management Personnel

Mr. V.M.Lakshminarayanan, Chairman Mr. V.M.Balasubramaniam, Managing Director Mr. V.M.Gangadharam, Executive Director Mr. V.M.Kumaresan Executive Director Technical

2. Enterprises in which key management personnel and their relatives have significant influence

Butterfly Constructions Limited Butterfly Home Appliances Butterfly Quality Center Private Limited Butterfly Marketing Private Limited Swaminathan Enterprises Private Limited Gangadharam Appliances Limited LLM Appliances Limited Sivagurunathan Industries Vishalss Enterprises

3. Relatives of Key Management Personnel

Mr. V.M.L.Karthigeyan Mr. V.M.L.Senthilnathan Mr. V.M.G.Viswanathan Mr. V.M.S.Selvamuthukumaran. Mr. V.M.LGanesan

4 Honble Board for Industrial and Financial Reconstruction (BIFR) has de-registered the Companys reference under the provisions of Sick Industrial Companies (Special Provisions) Act, 1965 on 31.08.2009 and the Company is no longer a Sick Industrial Company with in the meaning of that Act.

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

6 The Financial Year of the Company has been extended for a period of eighteen months upto 30th June,

7 The Figures for the period 31.12.2008 have been regrouped and rearranged to conform with the current period.

8 Statement pursuant to Part IV of Schedule VI of the Companies Act, 1956. Balance Sheet Abstract and Companys General Business Profile.

 
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