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Notes to Accounts of Butterfly Gandhimathi Appliances Ltd.

Mar 31, 2022

7. Financial Risk Management

The Company is primarily exposed to fluctuation in Market risk, Credit risk and Liquidity risk. The Company has a risk management policy which addresses the risk associated with the financial asset and liabilities.

7.1 Market Risk

Market risk is the risk of fluctuation in future cash flow of financial instruments due to change in market prices arising on account of currency risk and Interest rate risk.

7.1.1 Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss, other comprehensive income and equity.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Currently the Company follows a policy of hedging 100% of its trade payables. On an overall basis, the Company has hedged 57.05% of its foreign exchange exposure thus minimising the currency risk.

7.1.2 Interest Rate Risk

Company is exposed to short term and long term borrowings. Long term borrowing''s interest rates are fixed and not subject to any interest rate risk. Short term borrowings being working capital loans are subject to interest rate fluctuation based on the performance and external credit rating of the Company.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. It principally arises from the Company''s Trade Receivables.

Trade Receivables:

The Company has outstanding trade receivables amounting to '' 9,276.74 lakhs and '' 7,436.05 lakhs as of March 31, 2022 and March 31, 2021, respectively. Trade receivables are unsecured in nature, except to the extent of security deposits received from the distributors. Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Default on account of Trade Receivables happens when the counterparty fails to make contractual payment when they fall due.

Credit risk is managed by the Company by continuous monitoring of overdue receivables and also by making adequate provision towards expected credit loss in the books of account as per the simplified approach stated in the accounting policy. With respect to retention money no credit risk is estimated as per terms of the arrangement and accordingly management has not provided for credit loss for the retention money.

7.3 Liquidity Risk

Liquidity needs of the Company are monitored on the basis of monthly and yearly projections. The company''s principal sources of liquidity are cash and cash equivalents, cash generated from the operations and bank borrowings.

The Company manages the liquidity needs by continuously monitoring cash inflows and by maintaining adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfalls.

Short term liquidity requirements consist mainly of sundry creditors, expense payable, employee dues and repayment of loans arising during the normal course of business as of each reporting date. The Company meets its short term liquidity requirements primarily through efficient working capital management and by accessing additional and alternative credit facilities available in the financial market. The Company has acceptances in line with supplier''s financing arrangements which might invoke liquidity risk as a result of liabilities being concentrated with few financial institutions instead of a diverse group of suppliers. The Company has established an appropriate liquidity risk management framework for the management of the Company''s short, medium and long-term funding and liquidity management requirements.

The Company assesses long term liquidity requirements on a periodical basis and manage them through internal accruals and bank borrowings.

8. Capital Management

The Company''s capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Company''s capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The company does so by adjusting dividend paid to shareholders. The total capital as on March 31, 2022 is '' 23,500.61 Lakhs. (Previous Year: '' 22,399.48 Lakhs).

d) The Company has committed to leases of Plant & Machinery which will commence in financial year 2022-23 having monthly lease payments of '' 10.44 Lakhs and security deposit & advance rentals made for such leases is '' 102.10 Lakhs.

e) The lease agreements do not impose any restrictions or covenants other than the security interests in the leased assets that are held by the lessor

12. Disclosure in respect of Indian Accounting Standard (Ind AS)-19 "Employee Benefits"

12.1 General description of various defined employee''s benefits schemes are as under:

a) Provident Fund:

The Company''s Provident Fund (defined contribution fund) is managed by Regional Provident Fund Commissioner. The Company pays fixed contribution to provident fund at pre-determined rate.

b) Gratuity:

Gratuity is a defined benefit plan, in respect of past services provided by the employees is quantified based on the actuarial valuation.

The scheme is funded by the Company and the liability is recognized on the basis of contribution payable to the insurer. Disclosure of information as required under Ind AS-19 have been made in accordance with the actuarial valuation.

21. Code of Social Security, 2020

The date on which the Code of Social Security, 2020 ("the code") relating to employee benefits during the employment and post-employment benefit will come into effect is yet to be notified and the related rules are yet to be finalized. The company will evaluate the code and its rules, assess the impact, if any on account of the same once they become effective

22. Figures for the comparative period have been regrouped wherever necessary in conformity with current period classification.

23. The Financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors at their meeting held on 11th May 2022.


Mar 31, 2018

* Tax payable under the normal provisions is Nil for the year ended 31.03.2018 after setting of the unabsorbed accumulated losses. Hence reconciliation of effective tax rate under normal tax computation does not arise.

** As the Company is liable to pay tax under section 115JB of the Income Tax Act 1961. The effective tax rate reconciliation is provided as per the rate applicable for MAT.

1.1 Terms / Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs..10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

Terms of Payment:

i. Term Loan from Banks (including vehicle loans) are repayable over a period of 3 to 6 years.

ii. Term Loan from Others (including vehicle loans) are repayable over a period of 5 to 15 years.

Security Provided:

a. Term Loan from Banks are Secured

i. By first charge by way of hypothecation of specific Plant and Machinery and Other Fixed Assets / Vehicles acquired out of loan and Equitable Mortgage of certain Land and Building of the Company at Pudupakkam.

ii. Retention money held by Tamil Nadu Civil Supplies corporation (TNCSC) and collateral security of Land and Structure thereon at Pudupakkam.

iii. Personal Guarantee of the Promoter Directors.

b. Other Term Loans:

a. Vehicle Loans are Secured by hypothecation of vehicles purchased out of such loan.

b. Other Term Loans are Secured by Equitable Mortgage of Undivided Land and office complex Building at Egattur.

2.1 Secured by hypothecation by way of first charge on Inventories, book debts, present and future excluding Retention Money receivable from Tamil Nadu Civil Supplies Corporation (TNCSC) and collateral paripassu charge of Land and Buildings, the title deeds of which are in the course of transfer in the Company’s name and also by the paripassu second charge on other Fixed Assets of the Company at Pudupakkam along with personal Guarantee of Promoter Directors.

3.1 Details with respect to Related Parties details are disclosed in note no 45

3.2 No interest due on these outstandings under MSME Act, 2006.

4 - 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 Limited (BSE) and National Stock Exchange Limited (NSE). BGMAL is involved in manufacturing and Trading of a wide range of domestic kitchen and electrical appliances under the brand ‘BUTTERFLY’

5 - Transition to IND AS

These are the Company’s first Financial Statements prepared in accordance with Ind AS. The Accounting Policies set out in note 34 have been applied in preparing the Financial Statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (The Company’s date of transition).

5.1 - In preparing its first Ind AS financial statements in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, the Company has applied the relevant mandatory exceptions and certain optional exemptions from full retrospective application of Ind AS. Material optional exemptions applied by the Company and applicable mandatory exceptions for the Company are as follows:

5.2 - A: Ind AS optional exemptions and mandatory exceptions availed

1. Deemed cost of Property Plant and Equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments as required to be made as per para 10 of Ind AS 101.

The Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

2. Evaluation of arrangements in the nature of Lease

Ind AS 101 allows an entity to determine whether an arrangement existing at the date of transition to Ind ASs contains a lease on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to determine whether the arrangements existing contains a lease on the basis of the facts existing on transition date.

3. Revenue from Contracts with Customers

A first-time adopter is not required to restate contracts that were completed before the earliest period presented. A completed contract is a contract for which the entity has transferred all of the goods or services identified in accordance with previous GAAP. Accordingly the Company has not restated the contracts completed in accordance with the previous GAAP as at the transition date.

5.2 - B: Ind AS mandatory exceptions

1. Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in Mutual fund carried at FVPL

- Impairment of financial assets based on Expected Credit Loss model.

2. Classification and measurement of Financial Assets

As required under Ind AS 101, the Company has assessed the classification and measurement of financial assets based on the facts and circumstances that existed at the date of transition to Ind AS.

6 - Disclosures in respect of Ind AS 107 - Financial Instruments

6.1 - Financial Instruments by Categories

The carrying value and fair value of financial instruments by categories were as follows:

6.2 - Fair Value Hierarchy

- Level 1 - Quoted prices (unadjusted) in active markets for identical Assets or Liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

6.3 - Valuation Technique used to determine Fair Value:

Specific valuation techniques used to value financial instruments include:

- Use of quoted market prices for Listed instruments

7 - Financial Risk Management

The Company is primarily exposed to fluctuation in Market risk, Credit risk and Liquidity risk. The Company has a risk management policy which addresses the risk associated with the financial asset and liabilities.

7.1 - Market Risk

Market risk is the risk of fluctuation in future cash flow of financial instruments due to change in market prices arising on account of currency risk and Interest rate risk.

7.1.1 - Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Currently the Company follows a policy of hedging 100% of its trade payables. On an overall basis, the Company has hedged 90% of its foreign exchange exposure thus minimising the currency risk.

Sensitivity analysis of foreign currency risk for as estimated fluctuation of /- 5% to the outstanding foreign currency exposure is provided below.

Amount in bracket represents additional cash outflow. Other amounts represents additional cash inflow.

7.1.2 - Interest Rate Risk

Company is exposed to short term and long term borrowings. Long term borrowing’s interest rates are fixed and not subject to any interest rate risk. Short term borrowings being working capital loans are subject to interest rate fluctuation based on the performance and external credit rating of the Company

At the reporting date the interest rate profile of the Company’s interest - bearing financial instruments as follows:

The interest expenses and impact on account of Increase/decrease of 100 basis points in interest rates at the balance sheet date is provided in table below:

7.2 - Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. It principally arises from the Company’s Trade Receivables.

Trade Receivables

The Company has outstanding trade receivables amounting to Rs. 13,055.76 lakhs and Rs. 8,796.10 lakhs as of March 31, 2018 and March 31, 2017, respectively.

Trade receivables are unsecured in nature, except to the extent of security deposits received from the distributors. Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company is not exposed to concentration of credit risk to any one single customer. Default on account of Trade Receivables happens when the counterparty fails to make contractual payment when they fall due.

Credit risk is managed by the Company by continuous monitoring of overdue receivables and also by making adequate provision towards expected credit loss in the books of account as per the simplified approach stated in the accounting policy. With respect to retention money no credit risk is estimated as per terms of the arrangement and accordingly management has not provided for credit loss for the retention money.

7.3 - Liquidity Risk

Liquidity needs of the Company are monitored on the basis of monthly and yearly projections. The Company’s principal sources of liquidity are cash and cash equivalents, cash generated from the operations and bank borrowings.

We manage our liquidity needs by continuously monitoring cash inflows and by maintaining adequate cash and cash equivalents. Net cash requirements are compared to available cash in order to determine any shortfalls.

Short term liquidity requirements consist mainly of sundry creditors, expense payable, employee dues and repayment of loans arising during the normal course of business as of each reporting date. We maintain a sufficient balance in cash and cash equivalents to meet our short-term liquidity requirements.

We assess long term liquidity requirements on a periodical basis and manage them through internal accruals and bank borrowings.

The table below provides details regarding the contractual cash outflow for financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

8 - Capital Management

The Company’s capital comprises equity share capital, retained earnings and other equity attributable to equity holders. The primary objective of Company’s capital management is to maximize shareholders value. The Company manages its capital and makes adjustment to it in light of the changes in economic and market conditions. The total capital as on March 31, 2018 is Rs. 18,021 Lakhs. (Previous Year: Rs. 17,516 Lakhs ).

9 - Disclosure in respect of Indian Accounting Standard (Ind AS)-19 “Employee Benefits”

9.1 - General description of various defined employee’s benefits schemes are as under:

a) Provident Fund:

The Company’s Provident Fund (defined contribution fund) is managed by Regional Provident Fund Commissioner. The Company pays fixed contribution to provident fund at pre-determined rate.

b) Gratuity:

Gratuity is a defined benefit plan, in respect of past services provided by the employees is quantified based on the actuarial valuation.

The scheme is funded by the Company and the liability is recognized on the basis of contribution payable to the insurer. Disclosure of information as required under Ind AS-19 have been made in accordance with the actuarial valuation.

9.2 The summarized position of various defined benefits recognized in the Statement of Profit and Loss, Other Comprehensive Income(OCI) and Balance Sheet and other disclosures are as under:

10 - Disclosure in respect of Indian Accounting standard (Ind AS)-108: “Operating Segments”

Since the Company primarily operates in one segment -Domestic appliances and there is no reportable Geographical segment either.

The Company has not derived revenues from any customer which amount to 10 per cent or more of Company’s revenues.

11 - Disclosure in respect of Indian Accounting Standard (Ind AS)-33 “Earnings Per Share(EPS)”

a) Basic EPS

The earnings and weighted average number of ordinary shares used in the calculation of Basic EPS is as follows:

b) Diluted EPS

The earnings and weighted average number of ordinary shares used in the calculation of Diluted EPS is as follows:

12 - Disclosure in respect of Indian Accounting Standard (Ind AS)-37 “Provisions, Contingent Liabilities and Contingent Assets” Warranty:

Provision is made for estimated warranty in respect of products sold which are still under warranty period at the end of the reporting period.

13 - Disclosure in respect of Indian Accounting Standard 24 “Related Parties Disclosures”

Key Managerial Personnel

Mr.V.M.Lakshminarayanan, Chairman & Managing Director

Mr.V.M.Balasubramaniam, Vice-Chairman & Managing Director

Mr.V.M.Seshadri, Managing Director

Mr.V.M.Gangadharam, Executive Director

Mr.V.M.Kumaresan, Executive Director-Technical

Mr.K.S. Ramakrishnan - Company Secretary & General Manager (Legal) (CS)

Mr. Prakash Iyer - Chief Executive Officer (CEO)

Mr. R. Nagarajan - Chief Financial Officer (CFO)

Relatives of Key Managerial Personnel:

Mr. V.M.L.Karthikeyan Mr. G.Viswanathan Mr. V.M.L.Senthilnathan Mr. V.M.L.Ganesan Mr. V.M.G.Mayuresan

13.1 - Related Parties:

Enterprises owned or significantly influenced by Key Management Personnel or their Relatives

LLM Appliances Private Limited

V.M.Chettiar & Sons LLP

Butterfly Quality Centre Private Limited

Butterfly Industrial Designs Private Limited

Swaminathan Enterprises Private Limited

Sivagurunathan Industries

East West Combined Industries

Mrinalini Industries

Bean and Leaf Beverages Private Limited H&S Supply Chain Solution Private Limited Chrysalis Home Needs Private Limited Wintronix (HK) Holdings Limited

During the year Company spent Rs. 30.19 Lakhs towards CSR obligations of an earlier financial year.

14 - Disclosure in respect of Indian Accounting Standard (Ind AS)-8 “Accounting Policies, Changes in Accounting Estimates and Errors”

Consequent to the Order passed under the provisions of Chapter XIX - A of the Income-tax Act, 1961, income amounting to Rs.. 2.06 crores and tax liability amounting to Rs.. 5.72 crores (including interest element of Rs.. 1.90 crores) pertaining to earlier years to earliest reporting period presented had been reckoned in Retained Earnings as at April 01, 2016 and Rs.. 0.15 crores relating to Interest for the f.y. 2016-17 is reckoned under Finance cost in that financial year.

(i) Investments in Quoted Instruments:

Under the previous GAAP, investments in mutual funds were classified as long-term investments or current investments based on the intended holding period. Long-term investments were carried at cost less provision for permanent diminution in the value of such investments. Current investments were carried at lower of cost and market value.

Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes subsequently accounted in the statement of profit or loss for the year ended 31 March 2017. Consequent to the above, the total equity as at 31 March 2017 increased by Rs. 0.08 Lakhs and profit for the year ended 31 March 2017 increased by Rs. 0.08 Lakhs.

(ii) Trade Receivables:

Under the previous GAAP, Provisions for bad and doubtful debts made only when the Company incurred credit loss.

Under Ind AS, Trade Receivables are recognized initially at fair value and subsequently measured at amortized cost using effective Interest method, less allowance for Impairment. Expected credit loss has been provided based on the simplified approach. Amount of provisions made over and above the existing provisions are Rs. 260.30 Lakhs and Rs. 16.09 Lakhs as on 1st April 2016 and 31st March 2017 respectively.

(iii) Retention Receivables:

The Company has retention receivables from its debtors which are interest-free. Under Ind AS, these receivables being Financial Assets have been stated at Fair value on Initial Recognition and subsequently measured at Amortized Cost using Effective rate of Interest. Difference between transaction value and amortized cost has been adjusted in the carrying value of such balances and accounted as prepayment Rs. 125.07 Lakhs as on April 01, 2016 & Rs. 73.16 Lakhs which will be unwound over the period of retention.

(iv) Deferred Tax:

Under previous GAAP, deferred tax asset/liabilities were recognised on temporary timing difference between taxable income and accounting income.

Under Ind AS, Company has recognized Deferred Tax Assets/ Liability being the difference between tax base and carrying value and also Unutilised MAT Credit entitlements has been regrouped as per requirement of IND AS . The Company has created Deferred Tax Liability for difference in carrying value of PPE between books and Income tax and Deferred Tax Assets in case of Re-measurement of Defined Benefit Obligations, losses carried forward.

Due to the Ind AS adjustments as at the date of transition and for the year ended 31 March 2017, deferred tax asset created for Rs. 274.17 Lakhs (1 April 2016 - Rs. 260.10 Lakhs). As a result, total equity increased by Rs. 274.17 Lakhs as at 31 March 2017 (1 April 2016 - Rs. 260.10 Lakhs)

(v) Proposed Dividend:

Under previous GAAP, proposed dividend is recognized as liability in the period to which it relates. Under Ind AS, Dividend is adjusted directly in equity in the period in which it is paid, irrespective of the period to which it relates. Accordingly, an amount of 268.99 Lakhs towards proposed dividend (including Dividend distribution tax) recognised as liability in F.Y. 2015-16 as per previous GAAP has been reversed & the same is adjusted in Equity in the F.Y. 2016-17, when distributed.

(vi) Long Term Borrowings:

Under previous GAAP, the Company recognized the processing fee incurred for availing term loan as an expense, in the respective Financial Years.

Under Ind AS, the issue expenses have been net-off against the Loan proceeds and the Effective Interest rates (EIR) have been recomputed based on the cash flows. Interest has been recomputed in line with the Effective Interest rates and accounted under Ind AS. The Processing fee adjusted against retained earnings Rs.. 20.24 Lakhs in 2016-17 (01 April, 2016 - Rs.. 24.93 Lakhs). Additional Interest expenses recognized under Ind AS, applying EIR for the F.Y. 2016-17 - Rs.. 33.50 Lakhs.

(vii) Other Equity:

Note on Ind AS Adjustments which impact the Equity, are provided separately under the respective heads.

(viii) Provisions:

Provisions for warranty have been recomputed by revisiting the assumptions thereupon, the impact of same in the retained earnings is Rs. 148.24 Lakhs for the FY 2016-17 (01 April 2016 - Rs. 488.37 Lakhs).

15.1 - Explanations for Reconciliation of Statement of Profit & Loss as previously reported under IGAAP to IND AS

(i) Other Income:

Under the IND AS, financial assets and financial liabilities are measured at fair value on transition date; Impact of subsequent re-measurement of financial asset using effective interest rate is included under Other Income amounting to 108.93 Lakhs

(ii) Employee Benefits/OCI:

As per previous GAAP, gains and losses on re-measurement of net defined benefit liability are recognized in Statement of Profit & Loss, whereas as per Ind AS, the same shall be recognized in Other Comprehensive Income, by accumulating in a separate component of Equity. An amount of 42.64 Lakhs has been recognized as gain on re-measurement of net defined benefit liability for the F.Y. 2016-17.

(iii) Finance Cost

Under the IND AS, financial assets and financial liabilities are measured at fair value on transition date; Impact of subsequent measurement of financial liability using effective interest rate and unwinding of discount on financial asset is included under finance cost of Rs. 121.22 Lakhs

(iv) Other Expenses

Impact on account of expected credit loss, warranty and cash discount amounting to Rs. 413.88 Lakhs grouped under other expenses.

16 - The previous year’s figures have been regrouped and reclassified wherever necessary to conform to the current year classification / presentation.


Mar 31, 2017

1. DISCLOSURE ON RELATED PARTY TRANSACTION

2. Key Management Personnel Mr.V.M.Lakshminarayanan, Chairman & Managing Director Mr.V.M.Balasubramaniam, Vice-Chairman & Managing Director Mr.V.M.Seshadri, Managing Director Mr.V.M.Gangadharam, ExecutiveDirector Mr.V.M.Kumaresan, Executive Director-Technical Mr.K.S. Ramakrishnan - Company Secretary &

General Manager (Legal)

Mr. Prakash Iyer - Chief Executive Officer Mr. R. Nagarajan - Chief Financial Officer

3. Enterprises in which key management LLM Appliances Private Limited personnel and their Relatives have V.M.Chettiar & Sons LLP Significant influence Butterfly Quality Centre Private Limited

Butterfly Industrial Designs Private Limited Swaminathan Enterprises Private Limited Sivagurunathan Industries East West Combined Industries Mrinalini Industries

Bean and Leaf Beverages Private Limited H&S Supply Chain Solution Private Limited Chrysalis Home Needs Private Limited

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

Mr.V.M.G.Viswanathan

Mr.V.M.L.Senthilnathan

Mr.V.M.L.Ganesan

Mr.V.M.G.Mayuresan

Finance, Department of Economic Affairs No. SO. 340E, dated the 8th November 2016.

5. SEGMENT INFORMATION IN ACCORDANCE WITH AS17 ISSUED BY ICAI.

The Company operates in only one segment viz. Domestic Appliances.

For the purpose of this clause the term "Specified Bank Notes" shall have the same meaning provided in the notification of the Govt of India, in the Ministry of

6. DURING THE YEAR NO PROVISION MADE FOR CSR ACTIVITY AND ?. 7.30 LAKHS WAS SPENT AGAINST THE LAST YEAR PROVISION OF ?. 58.10 LAKHS.

7. PREVIOUS YEAR''S FIGURES HAVE BEEN REGROUPED AND RECLASSIFIED WHEREVER NECESSARY TO CONFORM TO THIS YEAR''S CLASSIFICATION.


Mar 31, 2016

1. 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.

2. 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.

3. 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.

4. Segment Information in accordance with AS17 issued by ICAI.

The Company operates in only one segment viz. Domestic Appliances.

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


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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