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Butterfly Gandhimathi Appliances Ltd.

BSE: 517421 Sector: Consumer
NSE: BUTTERFLY ISIN Code: INE295F01017
BSE 11:37 | 17 Feb 191.80 -3.65
(-1.87%)
OPEN

196.05

HIGH

196.05

LOW

191.00

NSE 11:29 | 17 Feb 190.95 -4.20
(-2.15%)
OPEN

196.90

HIGH

200.00

LOW

190.30

OPEN 196.05
PREVIOUS CLOSE 195.45
VOLUME 1375
52-Week high 284.70
52-Week low 141.00
P/E 26.86
Mkt Cap.(Rs cr) 343
Buy Price 190.95
Buy Qty 2.00
Sell Price 191.80
Sell Qty 54.00
OPEN 196.05
CLOSE 195.45
VOLUME 1375
52-Week high 284.70
52-Week low 141.00
P/E 26.86
Mkt Cap.(Rs cr) 343
Buy Price 190.95
Buy Qty 2.00
Sell Price 191.80
Sell Qty 54.00

Butterfly Gandhimathi Appliances Ltd. (BUTTERFLY) - Auditors Report

Company auditors report

TO THE MEMBERSOF BUTTERFLY GANDHIMATHI APPLIANCES LIMITED

Report on the Audit of Ind AS Financial Statements

1. Opinion

We have audited the accompanying Ind AS financial statements of ButterflyGandhimathi Appliances Limited ("the Company") which comprise the balancesheet as at March 31 2019 the statement of profit and loss (including othercomprehensive income) the statement of changes in equity the statement of cash flows forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and profit changes in equity and itscash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs)specified undersection143(10)of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Ind AS financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

3. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matter(s) described below are the key audit mattersto be communicated in our audit report

Sl. No Key Audit Matter Auditor's Response
1 Provision towards warranty obligation: Principal Audit Procedures:
Company provides for the warranty expenses based on the certain estimation which involves significant judgment. We have obtained the complete working and basis and assumption made in determining the warranty provision. We have validated the underlying data used for warranty provisioning and actual warranty expenses were compared with the provision made in the earlier years to ascertain that the basis of estimation is adequate to cover the warranty obligation of the Company.
2 Deferred Tax Asset: Principal audit procedures:
Recognition of Deferred Tax Asset especially with respect to accumulated business losses involves significant management estimate of future performance and timing of future taxable profit of the Company. Our procedures focused on evaluating the directors' determination of the estimated manner in which the timing difference will be realized by obtaining other audit evidence such as budgets approved by the Board for the next year estimated cash flows and achievement of Board approved budgets with actuals in the prior periods.

4. Information Other than the Ind AS Financial Statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report and Reporton Corporate Governance but does not include the Ind AS financial statements and ourauditor's report thereon.

Our report on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of financial statement our responsibility is to read theother information and in doing so consider whether the other information is materialityinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

5. Responsibilities of Management and Those Charged with Governance for the Ind ASFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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 Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

6. Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for oneresultingfromerrorasfraudmayinvolvecollusion forgeryintentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatement in the Ind AS financialStatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatement in the financial statements. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit. We also provide thosecharged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

7. Report on Other Legal and Regulatory Requirements

7.1 As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 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.

7.2 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 thebest of 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 bythe Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (including the OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.;

(e) On the basis of the written representations received from the directors as onMarch 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 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";

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act; and

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer Note 33.1.1 to the financialstatements;

ii. The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company.

For ASA & Associates LLP
Chartered Accountants
Firm Registration No: 009571N/N500006
S Sundar Rajan
Place: Chennai Partner
Date: May 24 2019 Membership No: 211414

ANNEXURE A

(As referred to in paragraph 7.1 of our Independent Auditor's Report of even date tothe members of Butterfly Gandhimathi Appliances Limited)

(i) (a) The Company is maintaining proper records showing full particularsincluding quantitative details and situation of its fixed assets;

(b) Some of the fixed assets were physically verified during the year by themanagement in accordance with phased programme of verification which in our opinioncovers all the fixed assets at reasonable intervals. According to the information andexplanation given to us no material discrepancies were noticed on such physicalverification;

(c) The title deeds of immovable properties are under the custody of the lenders assecurity for the various credit facilities sanctioned; as confirmed by lenders and theMortgage deed executed between bank and the Company the tile deeds are in the name of theCompany except a portion of Freehold land situated at Pudupakkam Kanchipuram District inrespect of which the transfer of title deeds in the name of the Company is pending.

ii. The management has conducted the physical verification of inventory during theyear and according to the information and explanation given to us no materialdiscrepancies were noticed on such physical verification;

iii. The Company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Act.

iv. The Company has not granted any loans made investments and provided anyguarantee or security.

v. The Company has not accepted any deposits from the public.

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 pursuantto the Rules made by the Central Government for the maintenance of cost records under thesaid section and are of the opinion that prima facie the prescribed accounts and recordshave been 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 ofour examination of the books of account and records the Company has been generallyregular in depositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Goods and Service Tax Customs Duty Cess and other statutory dueswith the appropriate authorities. There are no undisputed amounts payable in respect ofProvident Fund Employees' State Insurance Income Tax Goods and Service Tax CustomsDuty Cess and other statutory dues in arrears as at March 31 2019 for a period of morethan six months from the date they became payable;

(b) The details of service tax duty of excise and value added tax that have notbeen deposited on account of dispute are as under:

Sl. No Name of the Statue Nature of the dues Amount (Rs.in Lakh) Period to which the amount relates Forum where the dispute is pending
1 Central Excise Act 1944 Excise Duty 1898.62 FY2011-12 to 2013-14 Supreme Court
2 Central Excise Act 1944 Excise Duty 139.23 FY 2011-12 FY 2012-13 FY Customs Excise Service Tax
2014-15 & FY 2015-16 Appellate Tribunal (CESTAT)
3 Central Excise Act 1944 Excise Duty 1.05 1998-99 Assistant Commissioner - Chennai II Commmissionerate
4 Finance Act 1994 Service Tax 73.39 FY 2008-09 to 2014-15 Assistant commissioner / Commissioner Appeals Chennai
5 Tamil Nadu Value Added Tax Act 2006 Value Added Tax (VAT) 115.13 FY 2009-10 to 2013-14 Sales Tax Appellate Tribunal Tamil Nadu
6 Tamil Nadu Value Added Tax Act 2006 Value Added Tax (VAT) 64.70 FY 2006-07 to 2008-09 Assistant Commissioner (CT) Washermanpet II
7 Kerela Value Added Tax Value Added Tax (VAT) 26.07 FY 2011 – 12 and FY 2013-14 Deputy Commissioner Appeals Ernakulam
8 Odhisa Value Added Tax Value Added Tax (VAT) 10.72 FY 2013-14 JC sales tax appeal

viii On this basis of verification of records and according to the information andexplanation 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) during the year. The moneys raised by way ofterm loans were applied for the purpose for which the term loans were raised.

x According to the information and explanations given to us no fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during 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;

xiii The transactions with the related parties are in compliance with section 177and section 188 of the Act where applicable and details have been disclosed in theFinancial 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;

xv The Company has not entered into any non-cash transactions with Directors orpersons connected with them;

xvi The Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934.

For ASA & Associates LLP
Chartered Accountants
Firm Registration No: 009571N/N500006
S Sundar Rajan
Partner
Place: Chennai Membership No: 211414
Date: May 24 2019

ANNEXURE B

(as referred to in paragraph 7.2(f) of our Independent Auditors' Report of even date tothe members of Butter y Gandhimathi Appliances Limited)

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 March 31 2019 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.

Opinion

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 March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For ASA & Associates LLP
Chartered Accountants
Firm Registration No: 009571N/N500006
S Sundar Rajan
Partner
Membership No: 211414
Place: Chennai
Date: May 24 2019