The Members of
Butterfly Gandhimathi Appliances Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Butterfly GandhimathiAppliances Limited ("the Company") which comprises the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
3. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the "Act" for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
4. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions
of the "Act" and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of"theAct". Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
7. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by 'the Act'in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its loss and its cash flows for the year ended on that date.
Report on other Legal and Regulatory Requirements
8. As required by the Companies (Auditor's Report) Order 2016 ('the Order') asamended issued by the Central Government of India in terms of Sub-Section (11) of section143 of 'the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the said Order to the extent applicable.
9. As required by section 143(3) of 'the Act' we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
(c) The Balance sheet the Statement of Profit & Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of 'the Act' read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of written representations received from the Directors as on 31stMarch 2017 and taken on record by the Board of Directors none of the Directors aredisqualified as on 31st March 2017 from being appointed as a Director in terms of section164(2) of 'the Act';
(f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" and
(g) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to explanations give to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statement - Refer Note 25 to the financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There have been no delays in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its financial statements asholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30 December 2016 and these are in accordance with the books of accountsmaintained by the Company.
for RUDHRAKUMAR ASSOCIATES
Chartered Accountants Registration
Membership No. 019444
Date: 25th May 2017
INDEPENDENT AUDITORS' REPORT
(REFERRED TO IN OUR REPORT OF EVEN DATE)
To the Members of Butterfly Gandhimathi
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. No material discrepancies as compared to book records were noticed on suchverification.
(c) The title deeds of immovable properties are held in the name of the company excepta portion of Freehold land situated at Pudupakkam Kanchi- puram District in respect ofwhich the transfer of title deeds in the name of the company is pending.
(ii) (a) The management has conducted the physical verification of inventory atreasonable intervals.
(b) The discrepancies noticed on verification between the physical stocks and the bookstocks were not material and have been properly dealt with in the books of account.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of 'the Act'. Hence the clauses (iii) (a) (b) and (c) of this paragraph ofthe Order are not applicable.
(iv) The Company has not granted any loans made investments and provided any guaranteeor security. Hence the provisions of Section 185 and 186 of the "Act" are notapplicable.
(v) The Company has not accepted any deposits from the public. Hence the provisions ofclause (v) of this paragraph of the order are not applicable.
(vi) The Central Government has prescribed maintenance of cost records U/s. 148(1) of'the Act' We have broadly reviewed the records maintained by the Company pursuant to theRules made by the Central Government for the maintenance of cost records under the saidsection and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have however not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete.
(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax Customs Duty Excise Duty Value Added Tax Cess andother statutory dues with the appropriate authorities.
(b) The details of the disputed Statutory dues which have not been deposited arecontested in appeals are as under:
|Name of the Statute ||Nature of the Dues ||Amount (Rs. in Lakhs) ||Forum where the dispute is pending |
|Central Excise Act 1944 ||Excise Duty Interest and penalty ||3201.69 ||CESTAT Chennai |
|VAT Acts ||Sales tax ||208.89 ||Appellate Deputy Commissioner |
|ESI Act ||ESI contribution / interest / damages ||19.78 ||Principal Labour Court Chennai |
|Labour Act ||Additional Compensation ||28.63 ||Principal Labour Court Chennai |
(viii) On this basis of verification of records and according to the information andexplanations given to us the Company has not defaulted in repayment of dues to FinancialInstitutions/Banks.
(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). The moneys raised by way of term loans wereapplied for the purpose for which the term loans were raised.
(x) According to the information and explanations given to us no fraud by the Companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to the"Act";
(xii) The Company is not a Nidhi Company. Therefore this paragraph of the Order is notapplicable.
(xiii) The transactions with the related parties are in compliance with section 177 andsection 188 of the "Act" and details have been disclosed in the
Financial Statements as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Hence this paragraph ofthe Order is not applicable.
(xv) The Company has not entered into any non-cash transactions with Directors orpersons connected with them. Hence this paragraph of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934. Hence this paragraph of the Order is not applicable.
For RUDHRAKUMAR ASSOCIATES
Registration No: 007033S
| ||(R. Rudhrakumar) |
|Place: Chennai ||Proprietor |
|Date: 25th May 2017 ||Membership No. 019444 |
TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ButterflyGandhimathi Appliances Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the "Act".
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing (the standards) issued byICAI and deemed to be prescribed under section 143(10) of the "Act" to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and the receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.
For RUDHRAKUMAR ASSOCIATES
Registration No: 007033S
Membership No. 019444
Date: 25th May 2017