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Butterfly Gandhimathi Appliances Ltd.

BSE: 517421 Sector: Consumer
NSE: BUTTERFLY ISIN Code: INE295F01017
BSE 00:00 | 26 Feb 566.10 -3.15
(-0.55%)
OPEN

562.95

HIGH

569.65

LOW

558.00

NSE 00:00 | 26 Feb 569.55 -0.55
(-0.10%)
OPEN

570.00

HIGH

574.20

LOW

552.50

OPEN 562.95
PREVIOUS CLOSE 569.25
VOLUME 27056
52-Week high 668.40
52-Week low 84.50
P/E 51.65
Mkt Cap.(Rs cr) 1,012
Buy Price 551.55
Buy Qty 5.00
Sell Price 588.00
Sell Qty 1.00
OPEN 562.95
CLOSE 569.25
VOLUME 27056
52-Week high 668.40
52-Week low 84.50
P/E 51.65
Mkt Cap.(Rs cr) 1,012
Buy Price 551.55
Buy Qty 5.00
Sell Price 588.00
Sell Qty 1.00

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 2020 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 2020 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) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a 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 described below is the key audit matter to becommunicated in our audit report

Report on the Audit of Ind AS Financial Statements for the year ended March 31 2020

Key Audit Matter Auditor's Response
1 Provision towards warranty obligation: Audit Procedures:
Company provides for the warranty expenses based on the certain estimation which involves significant judgment. We have obtained the workings basis and assumptions 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 appropriate to cover the warranty obligation of the Company.

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 principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for oneresultingfromerrorasfraudmayinvolvecollusion forgery intentionalomissions misrepresentations or the override of internal control.

? Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct 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 reasonableness ofaccounting estimates and related disclosures made by management.

? Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable 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 havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; (b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books; (c) The Balance Sheet theStatement of Profit and Loss (including the Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flow dealt with by this Report are inagreement with the books of account; (d) In our opinion the aforesaid IndAS financial statements comply with the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended.;

(e) On the basis of the written representations received from the directors as onMarch 31 2020 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2020 from being appointed as a director in terms of Section164(2) of the Act; (f) With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B"; (g) With respectto the other matters to be included in the Auditor's Report in accordance with therequirements of section 197(16) of the Act as amended: In our opinion and to the best ofour information and according to the explanations given to us the remuneration paid bythe Company to its directors during the year is in accordance with the provisions ofsection 197 of the Act; and (h) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: (i) The Company has disclosed the impact of pendinglitigations on its financial position in its Ind AS financial statements – Refer Note33.1.1 to the financial statements; (ii) The Company did not have any long termcontracts including derivative contracts for which there were any material foreseeablelosses; and (iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For ASA & Associates LLP

Chartered Accountants Firm Registration No: 009571N/N500006

S Sundar Rajan

Partner Membership No: 211414 UDIN: 20211414AAAADF3770

Place: Chennai Date: June 12 2020

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 ismaintaining proper records showing full particulars including quantitative details andsituation of its fixed assets; (b) A portion of the fixed assets were physicallyverified during the year by the management in accordance with phased programme ofverification which in our opinion covers all the fixed assets at reasonable intervals.According to the information and explanation given to us no material discrepancies werenoticed on such physical verification; (c) The title deeds of immovable propertiesare under the custody of the lenders as security for the various credit facilitiessanctioned; as confirmed by lenders and the Mortgage deed executed between bank and theCompany the tile deeds are in the name of the Company except a portion of Freehold landsituated at Pudupakkam Kanchipuram District in respect of which the transfer of titledeeds in the name of the Company is pending. ii. The management has conducted thephysical verification of inventory during the year and according to the information andexplanation given to us no material discrepancies were noticed on such physicalverification; iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly reporting under sub- clauses a b& c to clause (iii) are not applicable. iv. The company has not granted anyloans made any investments or provided any security during the year. The company hascomplied with the provisions of the section

186 of the Act in respect of guarantee issued during the year. v. The Companyhas not accepted any deposits from the public. vi. The Central Government hasprescribed maintenance of cost records U/s. 148(1) of ‘the Act'. We have broadlyreviewed the records maintained by the Company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under the said section and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete. vii. (a) According toinformation and explanations given to us and on the basis of our examination of the booksof account and records the Company has been generally regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goods andService Tax Customs Duty Cess and other statutory dues with the appropriate authorities.There are no undisputed amounts payable in respect of Provident Fund Employees' StateInsurance Income Tax Goods and Service Tax Customs Duty Cess and other statutory duesin arrears as at March 31 2020 for a period of more than six month from the date theybecame payable; (b) The details of 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 1.05 FY 1998-99 Assistant Commissioner Chennai – II Commissionerate
2 Central Excise Act 1944 Excise Duty 1898.62 FY2011-12 to 2013-14 Supreme Court
3 Central Excise Act 1944 Excise Duty 66.24 FY 2011-12 Customs Excise Service Tax Appellate Tribunal (CESTAT)
4 Customs Act 1962 Customs 48.14 FY 2011-12 CESTAT
5 Tamil Nadu Value Added Tax Act 2006 Value Added Tax (VAT) 64.70 FY 2006-07 to 2008-09 Assistant Commissioner (CT) Washermanpet II
6 Tamil Nadu Value Added Tax Act 2006 Value Added Tax (VAT) 73.46 FY 2009-10 to 2013-14 Sales Tax Appellate Tribunal Tamil Nadu
7 Kerala Value Added Tax Value Added Tax (VAT) 67.96 FY 2011-12 2012-13 2013-14 & 2015 -16. Deputy Commissioner Appeals Ernakulam

viii. On the 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 initialpublic offer or further public offer (including debt instruments) during the year. Themoneys raised by way of term loans were applied for the purpose for which the term loanswere raised. x. According to the information and explanations given to us no fraudby the Company or any fraud on the Company by its officers or employees has been noticedor reported during the year; xi. The managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the "Act"; xii. The Company is not a NidhiCompany; xiii. The transactions with the related parties are in compliance withsection 177 and section 188 of the Act where applicable and details have been disclosedin the Financial Statements as required by the applicable accounting standards; xiv. TheCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year; xv. The Company has not entered intoany non-cash transactions with Directors or persons connected with them; xvi. TheCompany is not required to be registered under section 45 IA of the Reserve Bank of IndiaAct 1934.

For ASA & Associates LLP

Chartered Accountants Firm Registration No: 009571N/N500006

S Sundar Rajan

Partner Membership No: 211414 UDIN: 20211414AAAADF3770

Place: Chennai Date: June 12 2020

ANNEXURE _ B

(as referred to in paragraph 7.2(f) of our Independent Auditors' Report of even date tothe members of Butterfly 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 2020 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 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 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 2020 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 UDIN: 20211414AAAADF3770

Place: Chennai Date: June 12 2020.

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