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Directors Report of Butterfly Gandhimathi Appliances Ltd.
Mar 31, 2025
The Board of Directors (âBoardâ) are pleased to present the 38th (Thirty Eight) Annual Report of Butterfly Gandhimathi Appliances Limited (âthe Companyâ or âButterflyâ) on the business and operations, along with the audited Financial Statements for the Financial Year ended March 31, 2025.
1. State of the affairs of the Company
In the face of a challenging economic environment marked by higher inflation, degrowth among peer companies, and a generally sluggish market, the Company undertook strategic measures to optimise its product portfolio by concentrating on high-potential offerings and advancing digital penetration to broaden customer access. A prudent pricing strategy was implemented to maintain competitiveness while safeguarding margins, complemented by premiumisation initiatives aimed at enhancing brand equity through the introduction of premium product variants. Concurrently, cost optimisation efforts were pursued to improve operational efficiency, and product laddering was employed to provide a structured range of offerings tailored to diverse customer segments. Collectively, these initiatives have reinforced the Company''s market position and underpin its commitment to sustainable growth despite prevailing macroeconomic challenges.
The performance of the business(es) of the Company are detailed out in the Management Discussion and Analysis Report (âMDAâ), which forms part of this Annual Report.
2. Financial performance
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The Company''s financial performance for the year ended March 31, 2025 is summarised below: (H in Lakhs) |
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|
Particulars |
F.Y. ended on March 31, 2025 |
F.Y. ended on March 31, 2024 |
|
Revenue from Operations (Net) |
86,450.15 |
93,128.25 |
|
Other Income |
697.58 |
485.77 |
|
Operating Expenditure |
79,924.94 |
90,390.91 |
|
Operating Profit before Depreciation and Finance Cost |
6,525.21 |
2,525.80 |
|
Operating Profit before Depreciation, Finance cost and Exceptional Items |
6,525.21 |
2,737.34 |
|
Finance Cost |
518.68 |
642.44 |
|
Depreciation |
2,309.43 |
1,806.27 |
|
Profit before Exceptional Items and Tax |
4,394.68 |
774.40 |
|
Exceptional Items |
- |
211.54 |
|
Profit before Tax |
4,394.68 |
562.86 |
|
Income Tax/ Deferred Tax |
1,141.37 |
(176.12) |
|
Profit after Tax |
3,253.31 |
738.98 |
|
Other Comprehensive Income net of tax |
55.83 |
(84.50) |
|
Total Comprehensive Income for the year |
3,309.14 |
654.48 |
|
Earnings Per Equity Share (Face Value of J 10/- (Rupees Ten Only) |
18.20 |
4.13 |
⢠During the year under review, the Revenue from operations amounted to H 86,450.15 Lakhs as against H 93,128.25 Lakhs during the previous year.
⢠EBITDA for the year stood at H 6,525.21 Lakhs as against H 2,525.80 Lakhs during the previous year.
⢠Depreciation for the year stood at H 2,309.43 Lakhs as against H 1,806.27 Lakhs during the previous year.
⢠Interest expense for the year stood at H 518.68 Lakhs as against H 642.44 Lakhs during the previous year.
⢠Profit before Tax stood at H 4,394.68 Lakhs as against H 562.86 Lakhs during the previous year.
⢠No material changes or commitments have occurred between the end of the Financial Year and the date of this Report, which affects the Financial Statements of the Company with respect to the reporting year.
The Board has not recommended any dividend for the Financial Year 2024-25.
In terms of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (âthe Listing Regulationsâ), the Company has formulated a Dividend Distribution Policy. The said policy is enclosed as Annexure-1 to this Report.
It is also available on the Company''s website and can be accessed at https://butterflyindia. com/wp-content/uploads/2021/04/Dividend-Distribution-Policy-20.10.2020.pdf
Your Company does not propose to transfer any amount to the General Reserve.
6. Report on Management Discussion and Analysis (âMDAâ)
As required under Regulation 34, read with Schedule V (B) of the Listing Regulations, report on MDA is presented in a separate section, forming part of this Annual Report and are restricted to the areas, which are relevant to the current scenario and outlook of the Company.
During the year under review, there was no change in the share capital of the Company.
The total paid-up share capital of the Company as on March 31, 2025 stood at H 17,87,95,510 divided into 1,78,79,551 equity shares of H 10 each.
Your Company has neither issued any shares with differential rights as to dividends, voting or otherwise nor issued any sweat equity shares during the year under review.
Cash and cash equivalent as on March 31, 2025 stood at H 966.70 Lakhs vis-a-vis H 4,091.10 Lakhs in the previous year. The Company''s working capital management is robust and involves a well-organised process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.
CRISIL, a credit rating agency has provided the Company''s credit rating for its bank facilities. During the financial year under review there was no change in the credit rating. The details of the ratings are as follows:
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Instrument(s) |
Rating(s) |
|
1. Long-Term Rating |
CRISIL AA/Stable |
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2. Short-Term Rating |
CRISIL A1 |
No public deposits have been accepted or renewed by your Company during the Financial Year under review, pursuant to the provisions of Section 73 and 74 of (the âActâ) read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter V of the Act is not applicable.
11. Particulars of loans, guarantees or investments
During the year under review, the Company has not granted any Loans and/ or given any Guarantees and/ or provided any security and/or made any investments under the provisions of Section 186 of the Act, read with Companies (Meetings of Board and its Powers) Rules, 2014.
12.1 Internal controls and its adequacy
Your Company prioritises reinforcing financial and operational controls to enhance transparency, accountability and efficiency in its processes. Your Company adheres to an internal control framework that includes key process coverage that impacts the reliability of financial reporting, periodic control testing to assure design and operational effectiveness, implementation of remedial measures and regular monitoring by senior management and the Audit Committee of the Board. Internal audits are conducted periodically and any design deficiencies or operational inefficiencies are reported and improvement measures are recommended. The adequacy of controls is reviewed by the Audit Committee of the Board and specific processes are assessed for improvement in systems and outcomes.
12.2 Internal controls over financial reporting
The Company''s internal financial controls are commensurate with the scale and complexity of its operations. These systems are designed keeping in view the nature of activities carried out at each location and the various business operations. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets, timely preparation of reliable financial information, accuracy and
Appointment of Mr. Kunnawalkam Elayavalli Ranganathan (DIN: 00058990) as Non-Executive Independent Director of the Company
During the year under review, the Board of the Company at its meeting held on April 4, 2024, and on the basis of the recommendation of the N&RC and based on the evaluation of balance of skills, knowledge, experience and expertise, considered and approved the appointment of Mr. Kunnawalkam Elayavalli Ranganathan (DIN: 00058990) as an Additional Director (Non-Executive, Independent) for a period of 5 (Five) consecutive years commencing from April 4, 2024 to April 3, 2029, who is not liable to retire by rotation.
The resolution pertaining to the above appointment was duly approved by the shareholders of the Company, with requisite majority, on May 28, 2024, by means of Postal Ballot, through remote e-Voting, details of which have been provided in the Report on Corporate Governance which forms part of this Annual Report.
Retirement by rotation and subsequent re-appointment
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Promeet Ghosh (DIN: 05307658) is liable to retire by rotation at the forthcoming Annual General Meeting (âAGMâ) and, being eligible, has offered himself for re-appointment. The Board recommends re-appointment of Mr. Promeet Ghosh for the consideration of the Members of the Company at the forthcoming AGM. The relevant details including brief profile of Mr. Promeet Ghosh is included separately in the Notice of AGM and Report on Corporate Governance of this Company, forming part of the Annual Report.
Retirement & Cessation
During the year under review, Mr. Rangarajan Sriram (DIN: 09550640), Managing Director, had resigned from its position w.e.f. closure of business hours of June 14, 2024 to pursue career options outside the organisation. Mr. Sriram confirmed that there was no other material reason other than those provided herein above. The Board recognised and expressed their gratitude for the exceptional leadership and contributions made by Mr. Sriram during his tenure as the Managing Director of the Company.
completeness in maintaining accounting records, prevention & detection of frauds & errors and economical and efficient use of resources.
13. Vigil Mechanism/ Whistle-Blower Policy (âWB Policyâ)
During the Financial Year under review, trainings were conducted to keep the employees informed of the Company''s Code of Conduct (âCOCâ), Prevention of Sexual Harassment and Whistle-Blower rights. This ensures compliance and a controlled environment, while achieving our objectives.
The Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behaviour. Your Company has formulated a WB Policy intending to provide a mechanism for employees to report violation(s). It also assures them of the process that will be observed to address the reported violation. The Policy also lays down the procedures to be followed for tracking complaint(s), giving feedback, conducting investigation, and taking disciplinary action(s). It also provides assurances and guidelines on confidentiality of the reporting process and protection from reprisal to complainant(s). No personnel have been denied access to the Audit Committee of the Board. The Audit Committee oversees the functioning of this policy. Protected disclosures can be made by a whistle-blower through several channels to report actual or suspected fraud(s) and violation(s) of the COC.
The WB Policy also establish a framework to encourage and safeguard genuine whistleblowing by Vendor(s).
Any incident that reported, is investigated and suitable action is taken in line with the WB Policy.
The WB Policy of your Company is available on the website of the Company and can be accessed at the web-link https://www.butterflyindia.com/ wp-content/uploads/2022/09/Whistle-Blower-Policy 28092022.pdf
Your Company received 9 (Nine) Whistle-Blower complaints during the F.Y. 2024-25 and suitable action(s) were taken, in accordance with the WB Policy.
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electrical Limited (âCromptonâ), the Holding Company, incorporated on February 25, 2015 inter alia, engaged in the business of manufacturing, trading, selling and distribution of fans, lighting, pumps and appliances. The equity shares of the Crompton are listed on BSE Limited (âBSEâ) and National Stock Exchange Limited (âNSEâ).
Total revenue of Crompton on a consolidated basis for the F.Y. ended March 31, 2025, was H 7,932.38 Crore (including H 68.83 Crore as other income). Profit after Tax was H 564.08 Crore as compared to H 441.78 Crore in the previous year.
Pursuant to Section 2(87)(ii) of the Act, Crompton holds 75% of the paid up equity share capital of the Company.
15. Subsidiaries, associates and joint venture companies
The Company does not have any Subsidiaries, Associates or Joint Venture during the financial year or at any time after the closure of the financial year and till the date of this report.
16. Board of Directors & Key Managerial Personnel
Your Company''s Board consists of distinguished professionals with a track record of integrity and excellence. Their collective experience, strategic acumen, and leadership strength contribute significantly to the Company''s governance and growth
The Board of your Company comprises of 8 (Eight) members as on the date of this Report.
16.1 Directorate
a) Appointment(s), Re-appointment(s), and Retirement by Rotation of Directors
The appointment and remuneration of Directors are governed by the Policy devised by the Nomination and Remuneration Committee (âN&RCâ) of your Company. The detailed Nomination and Remuneration Policy is available on the website of the Company and can be accessed at https://butterflyindia. com/wp-content/uploads/2025/05/BGMAL-Policy-for-Appointment-Evaluation-OF-BOD-Senior-Management.pdf
Pursuant to completion of the respective tenure of Mr. A. Balasubramanian (DIN: 00490921), Mr. M. Padmanabhan (DIN: 00101997), Mr. G. S. Samuel (DIN: 05284689) and Mr. T. R. Srinivasan (DIN: 00367302), retired w.e.f. July 31, 2024. The Board placed on record its appreciation for the contribution made by them during their tenure as Non-Executive, Independent Directors of the Company.
16.2 Key Managerial Personnel (âKMPâ)
During the year under review, Mr. Rangarajan Sriram, Managing Director of the Company, resigned w.e.f. closure of business hours of June 14, 2024.
Ms. Swetha Sagar G was appointed as the Manager & Chief Business Officer w.e.f. June 15, 2024 for a period of 5 (Five) years effective from June 15, 2024 and the resolution pertaining to the appointment of Ms. Swetha Sagar G was duly approved by the shareholders of the Company, with requisite majority, at the 37th Annual General Meeting of the Company held on July 19, 2024, details of which have been provided in the Report on Corporate Governance which forms part of this Annual Report.
The Board in its meeting held on May 13, 2025, on the recommendation of Nomination & Remuneration Committee, pursuant to Section 203 of the Act and the Regulation 6 of the Listing Regulations, and Regulation 9 of the SEBI (Prohibition of Insider Trading) Regulations, 2015 appointed Mr. Jayant Barde (A-61954) as the Company Secretary & Compliance Officer of the Company w.e.f. May 13, 2025.
In accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) or re-enactment(s) thereof for the time being in force the following are the KMPs of the Company:
1. Ms. Swetha Sagar G, Manager & Chief Business Officer (âManager & CBOâ)
2. Mr. V. A. Jospeh, Chief Financial Officer
3. Mr. Viral Sarvaiya, Company Secretary & Compliance Officer*
4. Mr. Jayant Barde, Company Secretary & Compliance Officer#
*Resigned w.e.f. April 07, 2025 #Appointed w.e.f. May 13, 2025
16.3 Independent Directors
The Independent Directors of the Company have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company''s Code of Conduct. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company and can be accessed at https://butterflyindia.com/investor-relations/#downcont.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar (âIICAâ) for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment & Qualification of Directors) Rules, 2014 as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than 3 (Three) years on the Board of listed Company(ies) as on the date of inclusion of their names in the database, they are not required to undertake online proficiency self-assessment test conducted by the Institute.
As on the date of this report, Mr. P. M. Murty, Ms. Smita Anand, Ms. Maheshwari Mohan and Mr. Kunnawalkam Elayavalli Ranganathan are the Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance which forms part of this Annual Report.
16.4 Non-Independent Directors
As on March 31, 2025, Mr. Shantanu Khosla, Mr. Promeet Ghosh, Mr. Kaleeswaran Arunachalam, and Mr. Nithiyanandam Anandkumar were the Non-Executive Non-Independent Directors of the Company.
Mr. Shantanu Khosla, Non-Executive Director liable to retire by rotation was re-appointed at the Annual General Meeting of the Company held on July 19, 2024.
16.5 Board effectiveness
Familiarisation Programme for Independent Directors
Your Company has in place a structured induction programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme aims to provide insights into the Company to enable the Independent Directors to understand its business in depth, to acclimatise them with the processes, business and functionaries of the Company and to assist them in performing their role as Independent Directors of the Company. The programme of the Company provides information relating to the Company, operational activities, business model of the Company, geographies in which Company operates, etc. The programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarisation Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Regular presentations and updates on relevant statutory changes encompassing economic outlook; market trends; peer trends; changes in laws where Company is operating are made to the Directors at regular Board/ Committee(s) Meetings of the Company.
The Manager & CBO along with senior leadership team makes presentation(s) on the performance & strategic initiatives of the Company
The Familiarisation Programme, topics covered and details of programs conducted during the year under review have been disclosed on the website of the Company at https://butterflyindia.com/ wp-content/uploads/2025/06/Familiarization-Programme-for-FY-24-25.pdf
Evaluation of the Board''s performance
In terms of requirements of the Act read with the Rules framed thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board of Directors as a whole, Committees of the Board and individual Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. Criteria for Board evaluation is duly approved by N&RC. Performance evaluation
is facilitated by the Chairperson of the Board who is supported by the Chairperson of N&RC.
The process of Board Evaluation is conducted through structured questionnaires which includes various aspects of the Board''s functioning such as adequacy of the Board composition diversity, skill set of members, the appointment process, understanding of roles and responsibilities, circulation of board papers, quality of information provided, strategic oversight, risk evaluation, acquisitions guidance, individual Board Members'' and contributions, execution of duties, governance performance for the Board as a whole, Committees of the Board and Individual Directors and has been undertaken digitally.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, understanding the terms of reference, adherence to the charters, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
Some of the performance indicators for the Committees inter alia includes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-avis its responsibilities.
Performance of individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibility towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors were evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest. Further, the evaluation process was based on the affirmation received from the Independent Directors that they meet the independence criteria as required under the Act and the Listing Regulations.
In addition to the questionnaires, detailed one-on-one in sighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
⢠A separate Meeting of the Independent Directors was held, wherein performance of Non-Independent Directors including the Manager & CBO, Chairperson of the Board and of the Board as a whole was evaluated;
⢠The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the Manger & CBO, the Board as a whole and all Committee(s) of the Board; and
⢠As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committee(s) such as structure, composition, Meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board''s functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committee(s) of the Board. They were functioning well with periodic reporting by the Committee(s) to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaires based evaluations had been acted upon.
The Board of Directors has expressed its satisfaction with the evaluation process.
The Company has the following 6 (Six) Board-level Committee(s), which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee (âN&RCâ)
3. Corporate Social Responsibility Committee (âCSR Committeeâ)
4. Risk Management Committee (âRMCâ)
5. Stakeholder Relationship Committee (âSRCâ)
6. Share Transfer Committee (âSTCâ)
The composition, terms of reference, number of meetings held and business transacted by the Committee(s) are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committee(s) of the Board are as follows:
17.2.1 Audit Committee
The Audit Committee comprises of 4 (Four) Members out of which 3 (Three) are Independent Directors. The Committee is chaired by Mr. K. E. Ranganathan (Non-Executive, Independent Director). The other Members of the Committee are Mr. P. M. Murty (Non-Executive, Independent Director), Ms. Smita Anand (Non-Executive, Independent Director), and Mr. Promeet Ghosh (Non-Executive, Non-Independent Director). Details of the roles and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings, are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. K. E. Ranganathan and Mr. Promeet Ghosh were appointed as the Members of the Audit Committee w.e.f. May 14, 2024.
Mr. A. Balasubramanian, Mr. M. Padmanabhan and Mr. G. S. Samuel ceased to be Committee Member(s) w.e.f. July 31, 2024, pursuant to their retirement as Directors of the Company upon completion of the second term as an Independent Directors. Additionally, Mr. Shantanu Khosla ceased to be the Member of the Committee w.e.f. July 31, 2024, and Mr. K. E Ranganathan was appointed as the Chairperson of the Committee w.e.f. August 1, 2024.
Remuneration policy and criteria for selection of candidates for appointment as Directors, KMP''s and Senior Management
The Company has in place a policy for remuneration of Directors, KMP''s and Members of Senior Management as well as a well-defined criteria for the selection of candidates for appointment to the said positions, which has been approved by the Board based on the recommendation of N&RC. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMP''s and members of Senior Management.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the N&RC and the Board of Directors while selecting candidates. The policy on remuneration of Directors, KMP''s and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at https://butterflyindia.com/ wp-content/uploads/2025/05/BGMAL-Policy-for-Appointment-Evaluation-OF-BOD-Senior-Management.pdf
17. Number of Meetings of the Board & its Committee(s)
17.1 Board Meetings
Regular Meetings of the Board and its Committee(s) are held to discuss and decide on various business policies, strategies, financial matters, digitalisation, governance and other businesses.
The schedule of the Board/ Committee Meetings to be held in the forthcoming financial year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board also approves several proposals by circulation as and when required.
Your Board of Directors met 7 (Seven) times during the F.Y. 2024-25. The details of the meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
17.2 Board Committee(s)
The Board has established Committee(s) as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
17.2.2 Nomination & Remuneration Committee (âN&RCâ)
The N&RC comprises of 4 (Four) Members out of which 3 (Three) Members are Independent Directors. The Committee is chaired by Ms. Smita Anand (Non-Executive, Independent Director). The other Members of the Committee are Mr. P. M. Murty (Non-Executive, Independent Director), Ms. Maheshwari Mohan (Non-Executive, Independent Director) and Mr. Promeet Ghosh (Non-Executive, Non-Independent Director). Details of the roles and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings, are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. Promeet Ghosh and Ms. Maheshwari Mohan were appointed as the Members of N&RC w.e.f. May 14, 2024.
Mr. A. Balasubramanian, Mr. M. Padmanabhan and Mr. G. S. Samuel ceased to be a Committee Member w.e.f. July 31, 2024, pursuant to their retirement as Directors of the Company upon completion of second term as Independent Directors. Additionally, Mr. Shantanu Khosla ceased to be the Member of the Committee w.e.f. July 31, 2024.
N&RC is inter alia responsible for, recommendation and approval of appointment and remuneration of the Directors, KMP''s and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board Members and KMP''s.
During the year under review, all the recommendations made by the N&RC were accepted by the Board.
17.2.3 Corporate Social Responsibility Committee (âCSR Committeeâ)
The CSR Committee comprises of 4 (Four) Members out of which 3 (Three) are Independent Directors.
The Committee is chaired by Mr. Shantanu Khosla (Non-Executive, Non-Independent Director). The other Members of the Committee Mr. P. M.
Murty (Non-Executive, Independent Director), Ms. Smita Anand (Non-Executive, Independent Director) and Ms. Maheshwari Mohan (NonExecutive, Independent Director). Details of the roles and responsibilities of the CSR Committee, the particulars of Members held and attendance of the Members at such Meetings, are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. R. Sriram (Managing Director) ceased to the Member of the Committee w.e.f. June 14, 2024 and Mr. G. S. Samuel (Non-Executive Independent Director) and Mr. T. R. Srinivasan (Non-Executive Independent Director) ceased to be the member of the Committee w.e.f. July 31, 2024, pursuant to their retirement as Directors of the Company upon completion of second term as Independent Directors.
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Company has set up CSR Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure-2. The CSR Policy as recommended by the CSR Committee and as approved by the Board is available on the website of the Company and can be accessed at https://butterflyindia. com/wp-content/uploads/2021/04/CSR-POLICY-20.10.2020.pdf
17.2.4 Stakeholdersâ Relationship Committee and Share Transfer Committee (âSRC and STCâ)
17.2.4.1 Stakeholdersâ Relationship Committee
As on March 31, 2025, the SRC comprises of 4 (Four) Members out of which 2 (Two) Members are Independent Directors. The Committee is chaired by Ms. Maheshwari Mohan (Non-Executive Independent Director). The other Members of the Committee are, Ms. Smita Anand (Non-Executive Independent Director) Mr. Nithiyanandam Anandkumar (Non-Executive Non-Independent Director) and Mr. Promeet Ghosh (Non-Executive Director Non-Independent Director). Details of the roles and responsibilities of the SRC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. Nithiyanandam Anandkumar and Ms. Maheshwari Mohan were appointed as the Members of the Committee w.e.f. May 14, 2024, and July 25, 2024 respectively.
Mr. M. Padmanabhan and Mr. T. R. Srinivasan ceased to be the Committee Members w.e.f. July 31, 2024, pursuant to their retirement as the Independent Directors of the Company and Mr. Rangarajan Sriram, Managing Director of the Company, ceased to be the Member of the Committee w.e.f. from June 14, 2024. Additionally, Mr. Promeet Ghosh ceased to be the Chairman the Committee and Ms. Maheshwari Mohan was appointed as the Member and Chairperson of the Committee w.e.f. July 25, 2024.
During the year under review, all the recommendations made by the SRC were accepted by the Board.
17.2.4.2 Share Transfer Committee
As on March 31, 2025, the STC comprises of 3 (Three) Members out of which 2 (Two) Members are Independent Directors. The Committee is chaired by Ms. Maheshwari Mohan (Non-Executive Independent Director). The other Members of the Committee are Ms. Smita Anand (Non-Executive Independent Director) and Mr. Promeet Ghosh (Non-Executive Non-Independent Director). Details of the roles and responsibilities of the STC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. M. Padmanabhan and Mr. T. R. Srinivasan ceased to be a Committee Member w.e.f. July 31, 2024, pursuant to their retirement as the Independent Directors of the Company upon completion of second term as an Independent Directors. Additionally, Mr. Promeet Ghosh ceased to be the Chairperson of the Committee and Ms. Maheshwari Mohan was appointed as the Member & Chairperson of the Committee w.e.f. July 25, 2024.
SRC and STC is inter alia responsible for various aspects of interest of the stakeholders, monitoring the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement of the quality of investor services as and when the need arises, resolve the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report and non-receipt of declared dividends, etc.
During the year under review, all the recommendations made by the STC were accepted by the Board.
17.2.5 Risk Management Committee (âRMCâ)
The RMC comprises of 6 (Six) Members. The Committee is chaired by Mr. P. M. Murty (Non-Executive Independent Director). The other Members of the Committee are Mr. K. E. Ranganathan (Non-Executive Independent Director), Ms. Smita Anand (NonExecutive Independent Director), Ms. Maheshwari Mohan (Non-Executive Independent Director), Mr. Shantanu Khosla (Non-Executive NonIndependent Director) and Mr. Kaleeswaran Arunachalam (Non-Executive Non- Independent Director). Details of the roles and responsibilities of the RMC, the particulars of meetings held and attendance of the Members at such Meetings, are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the RMC were accepted by the Board.
Mr. K. E. Ranganathan and Mr. Kaleeswaran Arunachalam were appointed as the members of the Committee w.e.f. May 14, 2024.
Mr. A. Balasubramanian, Mr. G. S. Samuel, ceased to be the Member of the Committee w.e.f. July 31, 2024, pursuant to their retirement as the Independent Directors of the Company. Mr. M. Padmanabhan ceased to be the Chairman & Member of the committee w.e.f. July 31, 2024 pursuant to his retirement as the Independent Director of the Company and Mr. P. M. Murty was appointed as the Chairman of the Committee w.e.f. August 1, 2024.
RMC assists the Board in monitoring and reviewing the risk management plan and implementation of the risk management and mitigation framework of the Company. The main objective of the RMC is to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of risks including risks related to cyber security.
18. Risk Management Framework
In the realm of today''s dynamic economic environment, navigating risk is critical aspect of our sustainable growth objective. Our commitment to effective risk management is not just the cornerstone of our operations but a testament to our dedication to stakeholders'' trust and long-term success. Developing an agile and robust risk management framework will enable us to overcome obstacles, innovate and deliver value to consumers in rapidly changing market
landscapes. In this section, we delve into our risk management framework, highlighting the proactive measures undertaken to identify, assess and mitigate potential threats. By embracing this framework, we strive to enhance value creation, safeguard assets and capitalise on opportunities amidst an ever evolving business landscape. The Board has formulated the Risk Management Policy identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134(3)(n) of the Act, which has been exhibited on the Company''s website and can be accessed at https://butterflyindia.com/wp-content/uploads/2022/04/Risk-Management-Policy.pdf
19. Particulars of contracts or arrangements with related parties
In accordance with the requirements of the Act and the Listing Regulations, your Company has a Policy on Related Party Transactions (âRPTsâ) uploaded on the Company''s website and can be accessed at https://butterflyindia.com/wp-content/uploads/2025/05/BGMAL-RPT-Policy.pdf
All the RPTs transactions are placed before the Audit Committee for its review and approval and also before the Board for its approval, wherever required. Prior omnibus approval of the Audit Committee and the Board is obtained for all the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee for their noting/ approval every quarter.
There were no material significant transactions with related parties during the financial year as per the last audited financial statements.
The details pertaining to RPTs during the year is given in Form AOC-2, as a good corporate governance practice attached as Annexure - 3.
None of the Directors and the KMP''s has any pecuniary relationships or transactions vis-a-vis the Company. All RPTs are mentioned in the notes to the accounts. The Directors draw attention of the Members to the Notes to the financial statements which sets out the disclosure for RPT''s.
20. Transfer to Investor Education and Protection Fund (âIEPFâ)
Pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe IEPF Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after completion of 7 (Seven) years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the Members for 7 (Seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority.
During the year under review, since 7 (Seven) years have not elapsed from the date of declaration and payment of any dividend, transfer of unpaid dividend and the shares on which dividend has not been paid or claimed, to IEPF is not applicable to the Company.
Further, in F.Y. 2023-24, in compliance with the applicable provisions of the Act and IEPF Rules, the Company transferred an unclaimed dividend of H 5,82,689 (Rupees Five Lakhs Eighty Two Thousand Six Hundred and Eighty Nine Only) for F.Y. 2015-16 to the IEPF Fund. Additionally, 2,97,583 (Two Lakhs Ninety Seven Thousand Five Hundred and Eighty Three) equity shares of H 10 (Rupees Ten Only) each, for which dividends remained unclaimed for 7 (Seven) consecutive years, were transferred to the IEPF Authority''s demat account. Members may reclaim both the unclaimed dividend and corresponding shares, along with any accrued benefits, by following the procedure prescribed under Rule 7 of the IEPF Rules.
21. Significant and material orders passed by the Regulators or Courts or Tribunals, Statutory and Quasi-Judicial Body
During the year under review, there were no significant/ material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.
22. Risk arising out of litigation, claims and uncertain tax positions
The Company is exposed to a variety of different laws, regulations, positions and interpretations thereof which encompasses direct taxation and
legal matters. In the normal course of business, provisions and contingencies may arise due to uncertain tax positions and legal matters.
Based on the nature of matters, the management applies significant judgement when considering evaluation of risk, including how much to provide for the potential exposure of each of the matters. These estimates could change substantially over time as new facts emerge as each matter progresses, hence these are reviewed regularly. For matters where expert opinion is required, the Company involves the best legal counsel.
23. Auditors
a) Statutory Auditors
M/s. ASA & Associates LLP, Chartered Accountants (Firm Registration Number: 009571N/N500006), were appointed as Statutory Auditors of the Company by the shareholders of the Company at the 35th Annual General Meeting (âAGMâ) held on July 14, 2022 to hold office as Statutory Auditors for a second term of 5 (Five) consecutive years, commencing from the conclusion of the 35th AGM till the conclusion of the 40th AGM.
The Board at their Meeting held on May 13, 2025, and basis the recommendation of the Audit Committee approved a remuneration of M/s. ASA & Associates at H 30.5 Lakhs for the F.Y. 2025-26.
The Auditors'' Report for the F.Y. 2024-25 does not contain any reservation, qualification or adverse remark, on the financial statements of the Company. Auditors'' Report is self-explanatory and therefore, does not require further comments and explanation. The report given by the auditors on the financial statements of the Company form part of this Annual Report.
Further, in terms of Section 143 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended notifications/ circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit Process.
b) Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to maintain cost records as specified by the Central Government. Accordingly, the Company has made and maintained such cost accounts and records in the prescribed manner. The records maintained by the Company under Section 148 of the Act are required to be audited by a Cost Accountant.
The Board at its Meeting held on May 13, 2025, based on the recommendation of the Audit Committee, approved the appointment of M/s. S. Mahadevan & Co, Cost Accountants (Firm Registration Number: 000007), as the Cost Auditors of the Company to conduct audit of the cost records of the Company for the F.Y. 2025-26.
A remuneration of H 2.25 Lakhs plus applicable taxes and out-of-pocket expenses, has been fixed for the Cost Auditors subject to the ratification of such fees by the Members at the ensuing AGM.
Accordingly, the matter relating to the ratification of the remuneration payable to the Cost Auditors for the F.Y. 2025-26 will be placed at the ensuing AGM. Your Company has received consent and eligibility certificate from M/s. S. Mahadevan & Co.
M/s. S. Mahadevan & Co., have confirmed that the cost records of the Company for the F.Y. 2024-25, are free from any disqualifications as specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.
c) Secretarial Auditors & Secretarial Audit Report
The Board at its meeting held on May 14, 2024, appointed M/s Alagar & Associates LLP (Formerly known as M/s M. Alagar & Associates), Practicing Company Secretaries as Secretarial Auditors of the Company to conduct the Secretarial Audit for F.Y. 2024-25.
The Secretarial Audit Report is annexed herewith as Annexure-4 to this Report. There has been no qualification, reservation, or adverse remark given by the Secretarial Auditors in their Report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Third amendment to the Listing Regulations, as per Regulation 24(1)
(b), the Board , at its meeting held on May 13, 2025, based on recommendation of the Audit
Committee approved the appointment of M/s Alagar & Associates LLP (Formerly known as M/s M. Alagar & Associates), Practicing Company Secretaries (ICSI Unique Code: L2025TN019200) as Secretarial Auditors to conduct audit of the Secretarial records of the Company for a period of consecutive 5 (Five) Financial Years i.e. from F.Y. 2025-26 to F.Y. 2029-30 subject to the approval of the members of the Company at the ensuing Annual General Meeting.
The Board of Director(s) at their meeting held on May 13, 2025, basis the recommendation of the Audit Committee, approved the remuneration of M/s Alagar & Associates LLP (Formerly known as M/s M. Alagar & Associates) H 1.40 Lakhs for conducting the audit of the secretarial records of the Company for the F.Y. 2025-26.
Pursuant to the provisions of Regulation 24A of the Listing Regulations read with the SEBI Circulars issued in this regard, M/s M. Alagar & Associates, has undertaken an audit for the F.Y. 2024-25 for all applicable compliances as per SEBI Regulations and circulars/ guidelines issued thereunder.
d) Internal Auditors
Pursuant to the provisions of Section 138 of the Act, the Board, at its meeting held on May 13, 2025, based on the recommendation of the Audit Committee, approved the appointment of M/s. Ernst & Young to conduct the internal audit of your Company for the F.Y. 2025-26.
24. Material changes and commitments affecting financial position between the end of the financial year and date of the report
No material changes or commitments have occurred between the end of the Financial Year and the date of this Report, which affects the Financial Statements of the Company with respect to the reporting year.
25. Awards and recognitions
The detailed section on awards & recognitions forms part of this Annual Report.
26. Enhancing stakeholders value
Your Company is dedicated towards generating sustainable value and ensuring meaningful returns for its stakeholders. Accordingly, the Company is dedicated to achieve high levels of operating performance, cost competitiveness, and striving for excellence in all areas of operations. The Company firmly believes that its success in the marketplace and good reputation are among the primary determinants of stakeholders value. Its close relationship with customers and a deep understanding of their challenges and expectations drive the development of new products and services. Anticipating customer requirements early and being able to address them effectively requires a strong commercial backbone.
Your Company continues to develop this strength by institutionalising sound commercial processes and building world-class commercial capabilities across its marketing and sales teams. The Company uses an innovative approach in the development of its products and services, as well as execution of growth opportunities.
The Company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the economic, societal and environmental dimensions of the triple bottom line.
27. Business Responsibility and Sustainability Report (âBRSRâ)
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social, and governance perspective are provided in the BRSR which is included as a separate section in the Annual Report.
28. Corporate Governance
The Board reaffirm their continued commitment to good corporate governance practices. During the year under review, the Company has complied with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report together with a certificate from practicing Company Secretaries Firm confirming the compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the Listing Regulations is provided in the Report on Corporate Governance, which forms part of this Annual Report and provided as Annexure-5.
The employees are sensitised from time to time in respect of matters connected with prevention of sexual harassment. Training programmes on POSH were conducted at unit levels to sensitise the employees to uphold the dignity of their female colleagues at workplace.
During the year under review, no complaints were received.
35. Registrar & Share Transfer Agent (âRTAâ)
M/s. GNSA Infotech Private Limited is the RTA of the Company. Their contact details are mentioned in the Corporate Governance Report and same is also available on the website of the Company https://www.butterflyindia.com/investor-relations/
36. Listing with Stock Exchanges
The equity shares of your Company are listed on The National Stock Exchange of India Limited (âNSEâ) and BSE Limited (âBSEâ). Details of the Company in the Stock Exchanges are as follows:
NSE Symbol BUTTERFLY
BSE Scrip Code 517421
ISIN INE295F01017
Your Company has paid the Annual Listing Fees for the F.Y. 2024-25 and F.Y. 2025-26 of both NSE and BSE, where the equity shares of the Company are listed.
37. Directorsâ responsibility statement
Your Directors'' would like to assure the Members that the Financial Statements for the year under review confirm in their entirety the requirements of the Act and guidelines issued by the SEBI. Pursuant to the provisions of Section 134(3)(c) of the Act, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:
(a) in the preparation of the annual accounts for the Financial Year ended March 31, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(b) the accounting policies selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
29. Particulars of employees
There was 1 (One) employee who was in receipt of remuneration of not less than '' 1,02,00,000 (Rupees One Crore and Two Lakhs Only), and 2 (Two) employees who were in receipt of remuneration of not less than 8,50,000 (Rupees Eight Lakhs and Fifty Thousand Only) per month.
Disclosures concerning the remuneration of Directors, KMPs and employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-6 to this Board''s Report. Your Directors affirm that the remuneration is as per the remuneration policy of the Company.
Details of employee remuneration as required under provisions of Section 197(12) of the Act, read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the Registered Office of your Company during working hours. The Annual Report and accounts are being sent to the shareholder''s excluding the aforesaid exhibit. Any Member interested in obtaining such information may write to the Company Secretary & Compliance Officer at butterfly. investorrelations@butterflyindia.com
30. Reporting of fraud by auditors
During the year under review, neither the Statutory Auditors, the Secretarial Auditors nor the Cost Auditors nor the Internal Auditors have reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
31. Annual return
As required under Section 92 (3) read along with Section 134(3)(a) of the Act, the Annual Return of the Company is placed on the Company''s website and can be accessed at https://butterflyindia. com/wp-content/uploads/2025/06/Annual-Return-2024-25.pdf
32. Compliance with Secretarial Standards (âSS-1 and SS-2â)
Your Directors state that applicable Secretarial Standards issued by the Institute of Company Secretaries of India (âICSIâ) i.e. SS-1 and SS-2 relating to ''Meetings of the Board of Directors'' and ''General Meetings'' respectively, have been duly followed by the Company.
33. Conservation of energy, technology, absorption and foreign exchange outgo
Information relating to energy conservation, technology absorption, foreign exchange earned and spent, and research and development activities undertaken by the Company in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014, are given in Annexure-7 of this Board''s Report.
34. Disclosures pertaining to the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSHâ)
Your Company is committed in creating a healthy working environment that enables employees to work without fear of prejudice and gender bias. Your Company is committed to ensure that every employee is treated with dignity and respect and works in a conducive work environment, which promotes professional growth of employee and encourages equality of opportunity. The Company has zero tolerance towards any act on the part of any executive, which may fall under the ambit of "sexual harassmentâ at workplace, and is fully committed to uphold and maintain the dignity of every woman executive working in the Company. Further, to provide an empowering and enabling atmosphere to women employees, the Company has continuously endeavoured to build the work culture, which promotes the respect and dignity of all women employees across the organisation.
The Company has formulated a comprehensive policy on prevention, prohibition and redressal against sexual harassment of women at workplace, which is also in accordance with the provisions of POSH. The said policy has been made available on the website of the Company. The Company has constituted of Internal Complaints Committee (âICCâ) under the POSH Act and has complied with the provision relating to the same. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The constitution of ICC is as per the POSH Act and includes an external member who is an independent POSH consultant with relevant experience. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality.
Company as at March 31, 2025 and of the profit and loss of the Company for that year;
(c) sufficient care has been taken and that adequate accounting records have been maintained for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and
(f) the systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.
38. Insider trading
In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 (âPIT Regulationsâ), as amended from time to time, your Company has instituted a comprehensive Code titled as "Policy on Determination of Legitimate Purpose for Sharing UPSIâ which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company.
39. General
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the financial year under review:
(i) The Company has not resorted to any buy-back of the equity shares during the financial year under review;
(ii) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
(iii) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;
(iv) The Company has not issued Sweat Equity Shares to the employees of the Company;
(v) There has been no change in the nature of business of the Company as on the date of this report;
(vi) There was no revision in the Financial Statements;
(vii) There were no proceedings, either filed by the Company or filed against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other courts during the year under review;
(viii) No instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act;
(ix) Disclosure of reason for difference between valuation done at the time of taking loan from bank and at the time of one-time settlement. There was no instance of onetime settlement with any Bank or Financial Institution; and
(x) No fraud has been reported by the Auditors to the Audit Committee or the Board.
(xi) During the year under review, the company complied with the provisions of the Maternity Benefit Act 1961 along with all the applicable amendments & undertook necessary measures to ensure compliance for all eligible employees.
⢠Right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes;
⢠Opportunity to participate effectively and vote in General Meetings and during the postal ballot conducted by the Company;
⢠Being informed of the rules, including voting procedures that govern general shareholder meetings;
⢠Opportunity to ask questions to the Board at General Meetings;
⢠Effective Members participation in key corporate governance decisions such as election of Members of Board;
⢠Exercise of ownership rights by all Members, including institutional investors; adequate mechanism to address the grievances of the Members;
⢠Protection of minority Members from abusive actions by, or in the interest of, controlling Members acting either directly or indirectly, and effective means of redress;
⢠To receive Dividends and other corporate benefits like rights, bonus etc. once approved;
⢠To inspect statutory registers and documents, including minutes books of the general meetings, as permitted under law; and
⢠Any other rights as specified in the statutory enactments from time to time.
Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Company''s performance. Your Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.
Statements in the Board''s Report and the Management Discussion and Analysis Report, describing the Company''s objectives, projections, estimates, expectations or predictions may be ''forward-looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company''s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company is not obliged to publicly amend, modify or revise any forwardlooking statement, on the basis of any subsequent development, information or events or otherwise.
Mar 31, 2024
The Board of Directors (âBoardâ) are pleased to present the Company''s 37th (Thirty Seventh) Annual Report on the business and operations of your Company (âthe Companyâ or âButterflyâ), along with the audited Financial Statements for the Financial Year ended March 31,2024.
1. State of the affairs of the Company
Various initiatives were taken to expand the market for the Company''s products to new geographies, and for maximisation of efficiencies particularly in the area of cost reduction and working capital management.
The business contingency plans focused on digitalisation of sales process, innovative marketing strategies and careful optimisation of supplies to various channels as and when each channel became operational.
The performance of the business(es) of the Company are detailed out in the Management Discussion and Analysis Report (âMDAâ), which forms part of this Annual Report.
2. Financial performance
The Company''s financial performance for the year ended March 31, 2024, is summarised below:
|
(Rs. in Lakhs) |
||
|
Particulars |
F.Y. ended on March 31, 2024 |
F.Y. ended on March 31, 2023 |
|
Revenue from Operations (Net) |
93,128.25 |
1,05,655.24 |
|
Other Income |
485.77 |
659.03 |
|
Operating Expenditure |
90,390.91 |
96,003.09 |
|
Operating Profit before Depreciation and Finance Cost |
2,737.34 |
9,652.15 |
|
Profit before Depreciation, Finance Cost and Exceptional Items |
3,223.11 |
10,311.18 |
|
Finance Cost |
642.44 |
650.59 |
|
Depreciation |
1,806.27 |
1,615.26 |
|
Profit before Exceptional Items and Tax |
774.40 |
8,045.33 |
|
Exceptional Items |
211.54 |
- |
|
Profit before Tax |
562.86 |
8,045.33 |
|
Income Tax/ Deferred Tax |
(176.12) |
2,878.75 |
|
Profit after Tax |
738.98 |
5,166.58 |
|
Other Comprehensive Income net of tax |
(84.50) |
(102.89) |
|
Total Comprehensive Income for the year |
654.48 |
5,063.69 |
|
Earnings Per Equity Share (Face Value of 110 (Rupees Ten Only) |
4.13 |
28.90 |
During the year under review, the Revenue from operations amounted to 193,128.25 Lakhs as against 11,05,655.24 Lakhs in the previous year.
EBITDA for the year stood at 13,223.11 Lakhs as against 110,311.18 Lakhs during the previous year.
Depreciation for the year stood at 11,806.27 Lakhs as against 11,615.26 Lakhs during the previous year.
I nterest expense for the year stood at 1642.44 Lakhs as against 1650.59 Lakhs during the previous year.
Profit before Tax stood at 1562.86 Lakhs as against 18,045.33 Lakhs, during the previous year.
No material changes or commitments have occurred between the end of the Financial Year and the date of this Report, which affects the Financial Statements of the Company with respect to the reporting year.
The Board has not recommended any dividend for the Financial Year ended 2023-24.
In terms of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (âthe Listing Regulationsâ), the Company has formulated a Dividend Distribution Policy. The
policy is given as Annexure-1 to this Report. It is also available on the Company''s website and can be accessed at https://www.butterflyindia.com/ wp-content/uploads/2021/04/Dividend-Distribution-Policv-20.10.2020.pdf
Your Company does not propose to transfer any amount to the General Reserve.
As required under Regulation 34 read with Schedule V(B) the Listing Regulations, report on MDA is presented in a separate section, forming part of this Annual Report and are restricted to the areas which are relevant to the current scenario of the Company and outlook.
During the year under review, there was no change in the share capital of the Company.
The total paid-up equity share capital of the Company as on March 31,2024, stood at 11,787.96 Lakhs divided into 1,78,79,551 (One Crore Seventy Eight Lakhs Seventy Nine Thousand Five Hundred and Fifty One) equity shares of 110 (Rupees Ten Only) each.
Cash and cash equivalent as on March 31, 2024, stood at 14,091.10 Lakhs vis-a-vis 13,268.84 Lakhs in the previous year. The Company''s working capital management is robust and involves a well-organised process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.
CRISIL, a Credit Rating Agency has provided the Company''s credit rating for its bank facilities. During the year under review credit rating for the long-term facilities were upgraded from CRISIL AA/ Watch Positive to CRISIL AA/ Stable. The details of the ratings are as below:
|
1. Long-Term Rating |
CRISIL AA/Stable |
|
2. Short-Term Rating |
CRISIL A1 |
No public deposits have been accepted or renewed by your Company during the Financial Year under review pursuant to the provisions of Section 73 and 74 of the the Companies Act, 2013, (âthe Actâ) read together with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement with respect to furnishing of details relating to deposits covered under Chapter V of the Act or details of deposits which are not in compliance with the Chapter V of the Act is not applicable. The requisite return for F.Y. 2022-23 has been filed and the Company does not have any unclaimed deposits as of date.
11. Particulars of loans, guarantees or investments
During the year under review, the Company has not granted any Loans and/ or given any Guarantees and/ or provided any security and/ or made any investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014.
12. Internal control systems12.1 Internal controls and its adequacy
Your Company prioritises reinforcing financial and operational controls to enhance transparency, accountability and efficiency in its processes. Your Company adheres to an internal control framework that includes key process coverage that impacts the reliability of financial reporting, periodic control testing to assure design and operational effectiveness, implementation of remedial measures and regular monitoring by Senior Management and the Audit Committee of the Board. Internal audits are conducted periodically and any design deficiencies or operational inefficiencies, if any, are reported and improvement measures are recommended. The adequacy of controls is reviewed by the Audit Committee of the Board and specific processes are assessed for improvement in systems and outcomes.
During the Financial Year under review, trainings were conducted to keep the employees informed of the Company''s Code of Conduct (âCOCâ), Prevention of Sexual Harassment and Whistle-Blower rights. This ensures compliance and a controlled environment, while achieving our objectives. A certificate from the Managing Director (âMDâ) and Chief Financial Officer (âCFOâ) forms part of this Annual Report on the adequacy of internal control systems and procedures.
12.2 Internal controls over financial reporting
The Company''s internal financial controls commensurates with the scale and complexity of its operations. These systems are designed keeping in view the nature of activities carried out at each location and the various business operations. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.
13. Vigil Mechanism/ Whistle-Blower Policy (âWB Policyâ)
The Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behaviour. Your Company has formulated a Vigil Mechanism and WB Policy intending to provide a mechanism for employees to report violations. It also assures them of the process that will be observed to address the reported violation(s). The Vigil Mechanism and WB Policy also lays down the procedures to be followed for tracking compliant(s), giving feedback(s), conducting investigation(s), and taking disciplinary action(s), if required. It also provides assurance and guidelines on confidentiality of the reporting process and protection from reprisal to complainant(s). No personnel have been denied access to the Audit Committee of the Board. The Audit Committee oversees the functioning of the Vigil Mechanism and WB Policy. Protected disclosures can be made by a Whistle Blower through several channels to report actual or suspected fraud(s) and violation(s) under the Company''s COC.
The Vigil Mechanism and WB Policy also provides a mechanism to encourage and protect genuine Whistle Blowing amongst the Vendors.
Any incident that is reported is investigated and suitable action, if any, is undertaken in line with the Vigil Mechanism and WB Policy.
The Vigil Mechanism and WB Policy of your Company is available on the website of the Company and can be accessed at the weblink https://www.butterflyindia. com/wp-content/uploads/2022/09/Whistle-Blower-Policy 28092022.pdf
Your Company received 2 (Two) Whistle-Blower complaints during the F.Y. 2023-24 and suitable action was taken in accordance with the WB Policy.
14. Holding Company
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electricals Limited (âCromptonâ), the Holding Company incorporated on February 25, 2015, inter alia, is engaged in the business of manufacturing, trading, selling and distribution of fans, lighting, pumps and appliances. The equity shares of Crompton are listed on BSE Limited and National Stock Exchange of India Limited (âNSEâ).
Total revenue of Crompton on a consolidated basis for the F.Y. ended March 31, 2024, was H7,380.20 Crore (including H67.39 Crore as other income). Profit after Tax was H441.78 Crore as compared to H476.40 in the previous year.
Pursuant to Section 2(87)(ii) of the Act, Crompton holds 75% of the equity share capital of the Company.
15. Subsidiaries, Associates and Joint Venture Companies
The Company does not have any Subsidiaries, Associates or Joint Venture during the Financial Year or at any time after the closure of the Financial Year and till the date of this report.
16. Board of Directors and Key Managerial Personnel
Your Company''s Board comprises 13 (Thirteen) Members as on the date of this Report.
a) Appointment(s)/ re-appointment(s) and Directors retiring by rotation
The appointment and remuneration of Directors are governed by a Policy devised by the Nomination and Remuneration Committee (âN&RCâ) of your Company. The detailed Nomination and Remuneration Policy is available on the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
Further, there were following changes in the directorate during the year under review.
⢠Appointment/ Re-appointment
During the year under review, the Board of the Company at its Meeting held on November 09, 2023, and basis the recommendation of the N&RC of the Board considered and approved the appointment of Mr. Kaleeswaran Arunachalam (DIN:07625839) and Mr. Nithiyanandam Anandkumar (DIN:10381096) as Additional Directors (Non-Executive, Non-Independent) of the Company liable to retire by rotation w.e.f. November 09, 2023.
The resolutions pertaining to the above appointments were duly approved by the Members of the Company, on December 21, 2023, by means of Postal Ballot.
Mr. Promeet Ghosh (DIN:05307658) was appointed as an Additional Director by the Board basis the recommendation of N&RC w.e.f. May 12, 2023. The Members of the Company at their Annual General Meeting (âAGMâ) held on July 19, 2023, approved the appointment of Mr. Promeet Ghosh as Non-Executive, Non-Independent Director of the Company liable to retire by rotation.
The Board of Directors of the Company at its meeting held on April 4, 2024, basis the recommendation of the N&RC of the Board and based on the evaluation of the balance of skills, knowledge, experience and expertise considered and approved the appointment
of Mr. Kunnawalkam Elayavalli Ranganathan (DIN:00058990) (âMr. K E Ranganathanâ) as Additional Director (Non-Executive, Independent) for a period of 5 (Five) consecutive years commencing from April 4, 2024, to April 3, 2029, not liable to retire by rotation.
⢠Re-appointment of the Managing Director
The Board of the Company, basis the recommendation of N&RC of the Board, re-appointed Mr. Rangarajan Sriram (DIN:09550640) as the Managing Director of the Company for a further term of 2 (Two) years commencing from March 30, 2024, liable to retire by rotation.
The aforesaid re-appointment of Mr. Sriram was subsequently approved by the Members on March 30, 2024, through postal ballot.
⢠Retirement by rotation and subsequent re-appointment
I n accordance with the provisions of Section 152 of the Act and the Company''s Articles of Association, Mr. Shantanu Khosla (DIN:00059877), Non-Executive, Non-Independent Director, is liable to retire by rotation at the forthcoming AGM and being eligible has offered himself for re-appointment. The Board recommends re-appointment of Mr. Khosla for the consideration of the Members at the forthcoming AGM. The relevant details including profile of Mr. Khosla are disclosed under the Notice of AGM and Report on Corporate Governance forming part of this Annual Report.
⢠Cessation
During the year under review, Mr. Mathew Job (DIN:02922413), Non-Executive, Non-Independent Director, tendered his resignation from the Board w.e.f April 30, 2023 to pursue other career interests. Mr. Job had also confirmed that there were no other material reason other than those stated above. The Board expressed its appreciation towards Mr. Job for the valuable guidance and services rendered by him during his tenure as a Director of the Company.
16.2 Key Managerial Personnel (âKMPâ)
I n accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) or re-enactment(s) thereof for the time being in force, the following are the KMPs of the Company as on the date of this Report:
1. Mr. Rangarajan Sriram, Managing Director
2. Mr. V A Joseph, Chief Financial Officer
During the year under review, Mr. R Nagarajan, Chief Financial Officer, resigned w.e.f. April 5, 2023. Ms. B Ananda Shalini was appointed as Chief Financial Officer w.e.f. April 6, 2023, and resigned w.e.f. October 20, 2023. Mr. V A Joseph was appointed as Chief Financial Officer w.e.f. November 9, 2023.
The Company''s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company''s Code of Conduct. The terms and conditions of appointment/ re-appointment of the Independent Directors are placed on the website of the Company and can be accessed at https://www. butterflyindia.com
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar (âIICAâ) for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than 3 (Three) years on the Board of Listed Compan(ies) as on the date of inclusion of their names in the database, they were not required to undertake online proficiency self-assessment test conducted by IICA, except for Mr. K E Ranganathan who shall complete the online self assessment proficiency test within the designated timeline as stipulated in the Act.
As on the date of this Report, Mr. P M Murty, Ms. Smita Anand, Mr. A Balasubramanian, Mr. M Padmanabhan, Mr. G S Samuel, Mr. T R Srinivasan, Ms. Maheshwari Mohan and Mr. K E Ranganathan are the Non-Executive Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance which forms part of this Annual Report.
16.4 Non-Independent Directors
As on the date of this Report, Mr. Shantanu Khosla, Mr. Promeet Ghosh, Mr. Kaleeswaran Arunachalam, and Mr. Nithiyanandam Anandkumar are the Non-Executive, Non-Independent of the Company. Mr. Rangarajan Sriram, Managing Director is the only Executive Director on the Board.
13. Vigil Mechanism/ Whistle-Blower Policy (âWB Policyâ)
The Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behaviour. Your Company has formulated a Vigil Mechanism and WB Policy intending to provide a mechanism for employees to report violations. It also assures them of the process that will be observed to address the reported violation(s). The Vigil Mechanism and WB Policy also lays down the procedures to be followed for tracking compliant(s), giving feedback(s), conducting investigation(s), and taking disciplinary action(s), if required. It also provides assurance and guidelines on confidentiality of the reporting process and protection from reprisal to complainant(s). No personnel have been denied access to the Audit Committee of the Board. The Audit Committee oversees the functioning of the Vigil Mechanism and WB Policy. Protected disclosures can be made by a Whistle Blower through several channels to report actual or suspected fraud(s) and violation(s) under the Company''s COC.
The Vigil Mechanism and WB Policy also provides a mechanism to encourage and protect genuine Whistle Blowing amongst the Vendors.
Any incident that is reported is investigated and suitable action, if any, is undertaken in line with the Vigil Mechanism and WB Policy.
The Vigil Mechanism and WB Policy of your Company is available on the website of the Company and can be accessed at the weblink https://www.butterflyindia. com/wp-content/uploads/2022/09/Whistle-Blower-Policy 28092022.pdf
Your Company received 2 (Two) Whistle-Blower complaints during the F.Y. 2023-24 and suitable action was taken in accordance with the WB Policy.
14. Holding Company
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electricals Limited (âCromptonâ), the Holding Company incorporated on February 25, 2015, inter alia, is engaged in the business of manufacturing, trading, selling and distribution of fans, lighting, pumps and appliances. The equity shares of Crompton are listed on BSE Limited and National Stock Exchange of India Limited (âNSEâ).
Total revenue of Crompton on a consolidated basis for the F.Y. ended March 31, 2024, was H7,380.20 Crore (including H67.39 Crore as other income). Profit after Tax was H441.78 Crore as compared to H476.40 in the previous year.
Pursuant to Section 2(87)(ii) of the Act, Crompton holds 75% of the equity share capital of the Company.
15. Subsidiaries, Associates and Joint Venture Companies
The Company does not have any Subsidiaries, Associates or Joint Venture during the Financial Year or at any time after the closure of the Financial Year and till the date of this report.
16. Board of Directors and Key Managerial Personnel
Your Company''s Board comprises 13 (Thirteen) Members as on the date of this Report.
a) Appointment(s)/ re-appointment(s) and Directors retiring by rotation
The appointment and remuneration of Directors are governed by a Policy devised by the Nomination and Remuneration Committee (âN&RCâ) of your Company. The detailed Nomination and Remuneration Policy is available on the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
Further, there were following changes in the directorate during the year under review.
⢠Appointment/ Re-appointment
During the year under review, the Board of the Company at its Meeting held on November 09, 2023, and basis the recommendation of the N&RC of the Board considered and approved the appointment of Mr. Kaleeswaran Arunachalam (DIN:07625839) and Mr. Nithiyanandam Anandkumar (DIN:10381096) as Additional Directors (Non-Executive, Non-Independent) of the Company liable to retire by rotation w.e.f. November 09, 2023.
The resolutions pertaining to the above appointments were duly approved by the Members of the Company, on December 21, 2023, by means of Postal Ballot.
Mr. Promeet Ghosh (DIN:05307658) was appointed as an Additional Director by the Board basis the recommendation of N&RC w.e.f. May 12, 2023. The Members of the Company at their Annual General Meeting (âAGMâ) held on July 19, 2023, approved the appointment of Mr. Promeet Ghosh as Non-Executive, Non-Independent Director of the Company liable to retire by rotation.
The Board of Directors of the Company at its meeting held on April 4, 2024, basis the recommendation of the N&RC of the Board and based on the evaluation of the balance of skills, knowledge, experience and expertise considered and approved the appointment
of Mr. Kunnawalkam Elayavalli Ranganathan (DIN:00058990) (âMr. K E Ranganathanâ) as Additional Director (Non-Executive, Independent) for a period of 5 (Five) consecutive years commencing from April 4, 2024, to April 3, 2029, not liable to retire by rotation.
⢠Re-appointment of the Managing Director
The Board of the Company, basis the recommendation of N&RC of the Board, re-appointed Mr. Rangarajan Sriram (DIN:09550640) as the Managing Director of the Company for a further term of 2 (Two) years commencing from March 30, 2024, liable to retire by rotation.
The aforesaid re-appointment of Mr. Sriram was subsequently approved by the Members on March 30, 2024, through postal ballot.
⢠Retirement by rotation and subsequent re-appointment
I n accordance with the provisions of Section 152 of the Act and the Company''s Articles of Association, Mr. Shantanu Khosla (DIN:00059877), Non-Executive, Non-Independent Director, is liable to retire by rotation at the forthcoming AGM and being eligible has offered himself for re-appointment. The Board recommends re-appointment of Mr. Khosla for the consideration of the Members at the forthcoming AGM. The relevant details including profile of Mr. Khosla are disclosed under the Notice of AGM and Report on Corporate Governance forming part of this Annual Report.
⢠Cessation
During the year under review, Mr. Mathew Job (DIN:02922413), Non-Executive, Non-Independent Director, tendered his resignation from the Board w.e.f April 30, 2023 to pursue other career interests. Mr. Job had also confirmed that there were no other material reason other than those stated above. The Board expressed its appreciation towards Mr. Job for the valuable guidance and services rendered by him during his tenure as a Director of the Company.
16.2 Key Managerial Personnel (âKMPâ)
I n accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) or re-enactment(s) thereof for the time being in force, the following are the KMPs of the Company as on the date of this Report:
1. Mr. Rangarajan Sriram, Managing Director
2. Mr. V A Joseph, Chief Financial Officer
During the year under review, Mr. R Nagarajan, Chief Financial Officer, resigned w.e.f. April 5, 2023. Ms. B Ananda Shalini was appointed as Chief Financial Officer w.e.f. April 6, 2023, and resigned w.e.f. October 20, 2023. Mr. V A Joseph was appointed as Chief Financial Officer w.e.f. November 9, 2023.
The Company''s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company''s Code of Conduct. The terms and conditions of appointment/ re-appointment of the Independent Directors are placed on the website of the Company and can be accessed at https://www. butterflyindia.com
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar (âIICAâ) for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than 3 (Three) years on the Board of Listed Compan(ies) as on the date of inclusion of their names in the database, they were not required to undertake online proficiency self-assessment test conducted by IICA, except for Mr. K E Ranganathan who shall complete the online self assessment proficiency test within the designated timeline as stipulated in the Act.
As on the date of this Report, Mr. P M Murty, Ms. Smita Anand, Mr. A Balasubramanian, Mr. M Padmanabhan, Mr. G S Samuel, Mr. T R Srinivasan, Ms. Maheshwari Mohan and Mr. K E Ranganathan are the Non-Executive Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance which forms part of this Annual Report.
16.4 Non-Independent Directors
As on the date of this Report, Mr. Shantanu Khosla, Mr. Promeet Ghosh, Mr. Kaleeswaran Arunachalam, and Mr. Nithiyanandam Anandkumar are the Non-Executive, Non-Independent of the Company. Mr. Rangarajan Sriram, Managing Director is the only Executive Director on the Board.
Familiarisation programme for Independent Directors
Your Company has in place a structured programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme of the Company provides information relating to the Company, operational activities, business model, geographies in which Company operates, etc. The Programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarisation Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Regular presentations and updates on relevant statutory changes encompassing economic outlook, market trends, peer trends, changes in laws where Company is operating were made to the Directors at regular Board Meetings of the Company.
The Managing Director along with senior leadership team delivers presentation(s) on the performance and strategic initiatives of the Company.
Evaluation of the Boardâs performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board as a whole, its Committees and Individual and Independent Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. Criteria for Board evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairperson of the N&RC.
The process of Board evaluation is conducted through structured questionnaires for the Board as a whole, its Committees, Individual and Independent Directors.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, process of appointment of the Board, common understanding of the roles and responsibilities of the Board Members, timelines for circulating Board papers, content and quality of the information provided to the Board, attention to the Company''s long-term strategic issues, evaluating strategic risks, overseeing and guiding acquisitions, strengths of Board Members and their contribution, governance etc.
Some of the performance indicators for the evaluation of the Committees inter al/aincludes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
The performance of Individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibilities towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors was evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest. Further, the evaluation process was based on the affirmation received from the Independent Directors that they meet the independence criteria as required under the Act and the Listing Regulations.
In addition to the questionnaires, detailed one-on-one in-sighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board Effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
⢠A separate Meeting of the Independent Directors was held, wherein performance of Non-Independent Directors including the MD, Chairman of the Board and of the Board as a whole was evaluated;
⢠The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the MD, the Board as a whole and all Committees of the Board; and
⢠As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committees such as structure, composition, meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board''s functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board. They were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaire-based evaluations had been acted upon.
During the F.Y. 2023-24, the Company enacted the feedback from the Board evaluation process conducted in the F.Y. 2022-23. The Board noted the key
improvement areas that emerged from this exercise in the F.Y. 2023-24 and action plans to address the same were in progress.
Remuneration Policy and criteria for selection of candidates for appointment as Directors, KMPs and Senior Management
The Company has in place a policy for remuneration to Directors, KMPs and Senior Management as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the N&RC and the Board. The Policy on remuneration to Directors, KMPs and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
17. Number of Meetings of the Board and its Committees17.1 Board Meetings
Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/ Committee Meetings to be held in the forthcoming Financial Year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the Meetings. Due to business exigencies, the Board also approves several proposals via circular resolution from time to time.
Your Board of Directors met 8 (Eight) times during the F.Y. 2023-24. The details of the Meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
The Company has the following 6 (Six) Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee (âN&RCâ)
3. Corporate Social Responsibility Committee (âCSR Committeeâ)
4. Stakeholder Relationship Committee (âSRCâ)
5. Share Transfer Committee (âSTCâ)
6. Risk Management Committee (âRMCâ)
The composition, terms of reference, number of Meetings held and business(es) transacted by the Committees are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committees of the Board are as follows:
The Audit Committee comprises 6 (Six) Members out of which 5 (Five) are Non-Executive Independent Directors. The Committee is chaired by Mr. A Balasubramanian, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. M Padmanabhan, Mr. G S Samuel all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
17.2.2. Nomination & Remuneration Committee (âN&RCâ)
The N&RC comprises 6 (Six) Members out of which 5 (Five) Members are Non-Executive Independent Directors. The Committee is chaired by Ms. Smita Anand, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Mr. A Balasubramanian, Mr. G S Samuel, Mr. M Padmanabhan, all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the N&RC were accepted by the Board. N&RC is responsible for, inter alia, recommendation and approval of remuneration of the Directors, KMPs and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board and KMPs.
Familiarisation programme for Independent Directors
Your Company has in place a structured programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme of the Company provides information relating to the Company, operational activities, business model, geographies in which Company operates, etc. The Programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarisation Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Regular presentations and updates on relevant statutory changes encompassing economic outlook, market trends, peer trends, changes in laws where Company is operating were made to the Directors at regular Board Meetings of the Company.
The Managing Director along with senior leadership team delivers presentation(s) on the performance and strategic initiatives of the Company.
Evaluation of the Boardâs performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board as a whole, its Committees and Individual and Independent Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. Criteria for Board evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairperson of the N&RC.
The process of Board evaluation is conducted through structured questionnaires for the Board as a whole, its Committees, Individual and Independent Directors.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, process of appointment of the Board, common understanding of the roles and responsibilities of the Board Members, timelines for circulating Board papers, content and quality of the information provided to the Board, attention to the Company''s long-term strategic issues, evaluating strategic risks, overseeing and guiding acquisitions, strengths of Board Members and their contribution, governance etc.
Some of the performance indicators for the evaluation of the Committees inter al/aincludes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
The performance of Individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibilities towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors was evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest. Further, the evaluation process was based on the affirmation received from the Independent Directors that they meet the independence criteria as required under the Act and the Listing Regulations.
In addition to the questionnaires, detailed one-on-one in-sighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board Effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
⢠A separate Meeting of the Independent Directors was held, wherein performance of Non-Independent Directors including the MD, Chairman of the Board and of the Board as a whole was evaluated;
⢠The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the MD, the Board as a whole and all Committees of the Board; and
⢠As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committees such as structure, composition, meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board''s functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board. They were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaire-based evaluations had been acted upon.
During the F.Y. 2023-24, the Company enacted the feedback from the Board evaluation process conducted in the F.Y. 2022-23. The Board noted the key
improvement areas that emerged from this exercise in the F.Y. 2023-24 and action plans to address the same were in progress.
Remuneration Policy and criteria for selection of candidates for appointment as Directors, KMPs and Senior Management
The Company has in place a policy for remuneration to Directors, KMPs and Senior Management as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the N&RC and the Board. The Policy on remuneration to Directors, KMPs and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
17. Number of Meetings of the Board and its Committees17.1 Board Meetings
Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/ Committee Meetings to be held in the forthcoming Financial Year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the Meetings. Due to business exigencies, the Board also approves several proposals via circular resolution from time to time.
Your Board of Directors met 8 (Eight) times during the F.Y. 2023-24. The details of the Meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
The Company has the following 6 (Six) Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee (âN&RCâ)
3. Corporate Social Responsibility Committee (âCSR Committeeâ)
4. Stakeholder Relationship Committee (âSRCâ)
5. Share Transfer Committee (âSTCâ)
6. Risk Management Committee (âRMCâ)
The composition, terms of reference, number of Meetings held and business(es) transacted by the Committees are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committees of the Board are as follows:
The Audit Committee comprises 6 (Six) Members out of which 5 (Five) are Non-Executive Independent Directors. The Committee is chaired by Mr. A Balasubramanian, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. M Padmanabhan, Mr. G S Samuel all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
17.2.2. Nomination & Remuneration Committee (âN&RCâ)
The N&RC comprises 6 (Six) Members out of which 5 (Five) Members are Non-Executive Independent Directors. The Committee is chaired by Ms. Smita Anand, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Mr. A Balasubramanian, Mr. G S Samuel, Mr. M Padmanabhan, all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the N&RC were accepted by the Board. N&RC is responsible for, inter alia, recommendation and approval of remuneration of the Directors, KMPs and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board and KMPs.
17.2.3 Corporate Social Responsibility (âCSRâ) Committee
The CSR Committee comprises 7 (Seven) Members out of which 5 (Five) are Non-Executive, Independent Directors. The Committee is chaired by Mr. Shantanu Khosla, Non-Executive, Non-Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. G S Samuel, Ms. Maheshwari Mohan, Mr. T R Srinivasan all of whom are NonExecutive Independent Directors and Mr. Rangarajan Sriram, Managing Director. Details of the roles and responsibilities of the CSR Committee, the particulars of the Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Company has set up CSR Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR activities forms part of this Report as Annexure-2. The CSR Policy as recommended by the CSR Committee and approved by the Board is available on the website of the Company and can be accessed at https://www. butterflyindia.com/wp-content/uploads/2021/04/CSR-POLICY-20.10.2020.pdf
17.2.4 Stakeholdersâ Relationship Committee and Share Transfer Committee (âSRCâ and âSTCâ)
Stakeholdersâ Relationship Committee (âSRCâ)
The SRC comprises 5 (Five) Members out of which 3 (Three) Members are Non-Executive Independent Directors. The Committee is chaired by Mr. Promeet Ghosh Ghosh, Non-Executive, Non-Independent Director. The other Members of the Committee are Ms. Smita Anand, Mr. M Padmanabhan, Mr. T R Srinivasan all of whom are Non-Executive Independent Directors and Mr. Rangarajan Sriram, who is the Managing Director.
Details of the roles and responsibilities of the SRC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the SRC were accepted by the Board.
Share Transfer Committee (âSTCâ)
The STC comprises 5 (Five) Members out of which 3 (Three) Members are Non-Executive Independent Directors. The Committee is chaired by Mr. Promeet Ghosh, Non-Executive, Non-Independent Director. The other Members of the Committee are Ms. Smita Anand, Mr. M Padmanabhan, Mr. T R Srinivasan all of
whom are Non-Executive, Independent Directors and Mr. Rangarajan Sriram who is the Managing Director.
Details of the roles and responsibilities of the STC the particulars of meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
SRC and STC are collectively responsible for inter alia various aspects of interest of the stakeholders, monitoring the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement of the quality of investor services as and when the need arises, resolve the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends and issue of duplicate certificates, etc.
17.2.5 Risk Management Committee (âRMCâ)
The RMC comprises 8 (Eight) Members out of which 6 (Six) are Non-Executive Independent Directors. The Committee is chaired by Mr. M Padmanabhan, NonExecutive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. G S Samuel, Mr. A Balasubramanian, Ms. Maheshwari Mohan all of whom are Non-Executive Independent Directors, Mr. Rangarajan Sriram, the Managing Director and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the roles and responsibilities of the RMC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the RMC were accepted by the Board.
RMC assists the Board in monitoring and reviewing the risk management plan and implementation of the risk management and mitigation framework of the Company. The main objective of the RMC is to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of risks including risks related to cyber security.
18. Risk Management Framework
The Board formulated the Company''s Risk Management Policy identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134(3)(n) of the Act, which has been exhibited on the Company''s website and can be accessed at https:// www.butterflyindia.com/wp-content/uploads/2022/04/ Risk-Management-Policv.pdf
19. Particulars of contracts or arrangements with related parties
I n accordance with the requirements of the Act and the Listing Regulations, your Company has a Policy on Related Party Transactions (âRPTsâ) uploaded on the Company''s website and can be accessed at https:// www.butterflyindia.com/wp-content/uploads/2022/06/ RPT-Policy 15.06.2022.pdf
Your Company did not enter into any RPTs during the year under review, which could be prejudicial to the interest of minority shareholders.
All the RPTs are placed before the Audit Committee for their review and approval and also before the Board, wherever required. An omnibus approval from the Audit Committee and the Board is obtained for all the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee for their noting/ approval every quarter.
All transactions with related parties entered into during the year under review were in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder, the Listing Regulations and your Company''s Policy on RPTs.
During the Year under review, your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act.
However, the details pertaining to transactions which were not at arm''s length basis is disclosed in Form No. AOC-2, along with details of all the RPTs entered into by the Company during the year under review, as a measure of adoption of good corporate governance practices and forms part of this report as Annexure-3.
None of the Directors and the KMPs has any pecuniary relationships or transactions vis-a-vis the Company.
Pursuant to the provisions of Regulation 23 of the Listing Regulations, your Company has filed half yearly disclosures with the stock exchanges on the date of publication of its financial results and the same is uploaded on the Company''s website and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2024/05/RPT 31.03.2024.pdf
Your Directors draw attention of the Members to the Notes in the financial statements that sets out the disclosure of RPTs.
20. Transfer of unpaid/ unclaimed amounts and shares to Investor Education and Protection Fund (âIEPFâ)
Pursuant to the applicable provisions of the Section 125 and 124 of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe IEPF Rulesâ), the dividend amount that remains unpaid or unclaimed for a period of 7 (Seven) years
or more is required to be transferred to the IEPF administered by the Central Government. Further, in accordance with the IEPF Rules, the shares on which dividend has not been paid or claimed by the Members for 7 (Seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority.
During the year under review and in terms of the applicable provisions of the Act read with IEPF Rules as amended from time to time, unclaimed dividend for the F.Y. 2015-16, aggregating to 15,82,689 (Rupees Five Lakhs Eighty Two Thousand Six Hundred Eighty Nine Only) was transferred to the IEPF Fund.
Further, during the year under review, in compliance with the requirements of the IEPF Rules, the Company had transferred 2,97,583 (Two Lakhs Ninety Seven Thousand Five Hundred Eighty Three) equity shares of 110 (Rupees Ten Only) each in respect of which dividend has not been claimed for a period of 7 (Seven) consecutive years to the demat account of the IEPF Authority.
The Members may note that both the said unclaimed dividend and corresponding shares transferred to the IEPF Authority including all the benefits accruing on such shares, if any, can be claimed by the Members from the IEPF Authority after following procedure prescribed in the Rule 7 of the said IEPF Rules for refund of shares/ dividend etc.
21. Significant and material orders passed by the Regulators, Courts, Tribunals, Statutory and Quasi-Judicial Body
No significant or material orders were passed by the Regulators, Courts, Tribunals, Statutory and QuasiJudicial Body that would impact the going concern status and Company''s operations in the future.
During the year under review, the Board of the Company at their Meeting held on March 25, 2023, considered and approved the Scheme of Amalgamation of the Company with the Crompton Greaves Consumer Electricals Limited (âTransferee Companyâ) and their respective Members and creditors under Sections 230 to 232 and other applicable provisions of the Act read with rules made thereunder (âSchemeâ). The Scheme was filed with BSE Limited and The National Stock Exchange of India Limited (âStock Exchangesâ) on April 07, 2023, and subsequently, it was approved by the stock exchanges on July 21, 2023 & July 24, 2023, respectively.
Further, the Company filed the Scheme Application with the Hon''ble National Company Law Tribunal, Chennai Bench (âNCLTâ) on August 20, 2023, and pursuant to the order issued by NCLT on September 12, 2023, the Company had convened an Extra-Ordinary General Meeting for the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company on October 28, 2023. However, approval of the majority of the public shareholders of the Company was not
received in favor of the Scheme, and accordingly, the Scheme was not acted upon.
This does not have any impact on the Company''s growth strategy and both the Companies continued to operate as separate entities and work towards fulfilling their mutual strengths, thereby creating value for all the stakeholders.
22. Risk arising out of litigation, claims and uncertain tax positions
The Company is exposed to a variety of laws, regulations, and interpretations, particularly in the areas of direct taxation and legal matters. In the normal course of business, provisions and contingencies may arise due to uncertain tax positions and legal issues.
Management uses significant judgment when evaluating risks and determining the amount to provide for potential exposures related to these matters. These estimates may change substantially over time as new facts emerge, so they are reviewed regularly. When expert opinions are needed, the Company consults with top legal counsel.
23. Auditors
a) Statutory Auditors
M/s. ASA & Associates LLP, Chartered Accountants (Firm Registration Number: 009571N/ N500006), were appointed as the Statutory Auditors of the Company by the Members at their 35th AGM held on July 14, 2022, to hold office as Statutory Auditors for a second term of 5 (Five) consecutive years, commencing from the conclusion of the 35th AGM till the conclusion of the 40th AGM.
The Board of Directors at their Meeting held on May 14, 2024, and basis the recommendation of the Audit Committee approved a remuneration of M/s. ASA & Associates at 131,50,000 (Rupees Thirty One Lakhs and Fifty Thousand Only) for the F.Y.2024-25.
The Auditors'' Report for the F.Y. 2023-24 does not contain any reservation, qualification or adverse remark, on the Financial Statements of the Company. The Auditors'' Report is self-explanatory and therefore, does not require further comments and explanation. The Auditors'' Report on the Financial Statements of the Company forms part of this Annual Report.
Further, in terms of Section 143 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended read with any notifications/ circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company not they have reason to believe that an offence involving fraud has been committed in the Company by its'' officers or employees and therefore no details are
required to be disclosed under Section 134(3)(ca) of the Act.
The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process.
b) Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records as specified by the Central Government. Accordingly, the Company has maintained the requisite cost accounts and records in the prescribed manner and the same are audited by a Cost Accountant.
The Board at its Meeting held on May 14, 2024, based on the recommendation of the Audit Committee, approved the appointment of M/s. S. Mahadevan & Co., Cost Accountants (Firm Registration Number 000007) as the Cost Auditors of the Company to conduct audit of the cost records of the Company for the F.Y. 2024-25 at a remuneration of 11,75,000 (Rupees One Lakh and Seventy Five Thousand Only) plus applicable taxes and out-of-pocket expenses subject to the ratification of such fees by the Members at the ensuing AGM. Accordingly, the matter relating to the ratification of the remuneration payable to the Cost Auditors for the F.Y. 2024-25 will be placed at the ensuing AGM. Your Company has received consent, eligibility and status of independence certificate from M/s. S. Mahadevan & Co.
M/s. S. Mahadevan & Co., have confirmed that the cost records of the Company for the F.Y. 2023-24, are free from any disqualifications as specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.
c) Secretarial Auditors and Secretarial Audit Report
The Board at its Meeting held on May 12, 2023, appointed M/s. M. Alagar & Associates, Company Secretaries, as the Secretarial Auditors of the Company to conduct the Secretarial Audit for F.Y. 2023-24. The Secretarial Audit Report is annexed as Annexure-4 to this Report. There has been no qualification, reservation, or adverse remark given by the Secretarial Auditors in their Report.
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board at its Meeting held on May 14, 2024, based on recommendation of the Audit Committee approved the appointment of M/s. M. Alagar & Associates, Company Secretaries (ICSI Unique Code: P2011TN078800) as the Secretarial Auditors to conduct audit of the secretarial
records of the Company for the F.Y. 2024-25 at a remuneration of 11,40,000 (Rupees One Lakh and Forty Thousand Only).
d) Internal Auditors
Pursuant to the provisions of Section 138 of the Act, the Board, at its Meeting held on May 12, 2023, and based on the recommendation of the Audit Committee approved the appointment of M/s. Grant Thornton Bharat LLP (Identity number AAA-7677) to conduct the internal audit of your Company for the F.Y. 2023-24.
The Board of Directors at their Meeting held on May 14, 2024, had re-appointed M/s. Grant Thornton Bharat LLP as the Internal Auditors of your Company for the F.Y. 2024-25 a remuneration of 126,00,000 (Rupees Twenty Six Lakhs Only).
24. Material changes and commitments affecting financial position between the end of the Financial Year and date of the Report
There are no material changes and commitments affecting the financial position of your Company, which has occurred between the end of the Financial Year of the Company, i.e. March 31,2024, and the date of this Report, i.e. May 14, 2024.
25. Awards and recognitions
The detailed section on awards and recognitions forms part of this Annual Report.
26. Enhancing Stakeholders value
Your Company is committed to creating and returning value to its stakeholders. Accordingly, the Company is dedicated to achieving high levels of operating performance, cost competitiveness, and striving for excellence in all areas of operations. The Company firmly believes that its success in the marketplace and good reputation are among the primary determinants of its'' stakeholders value. Its close relationship with customers and a deep understanding of their challenges and expectations drive the development of new products and services. Anticipating customer requirements early and being able to address them effectively requires a strong commercial backbone. Your Company continues to develop this strength by institutionalising sound commercial processes and building world-class commercial capabilities across its marketing and sales teams. The Company uses an innovative approach in the development of its products and services, as well as execution of growth opportunities. The Company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the economic, societal and environmental dimensions of the triple bottom line.
27. Business Responsibility and Sustainability Report (âBRSRâ)
Pursuant to the Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social, and governance (ESG) perspective are provided in the BRSR and forms part of this Annual Report.
28. Corporate Governance
The Board of Directors re-affirm their continued commitment to good corporate governance practices. During the year under review, the Company has complied with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report together with a certificate from the Company''s Auditors'' confirming compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the Listing Regulations is provided in the Report on Corporate Governance, which forms part of this Annual Report as Annexure-5.
29. Particulars of employees
There was 1 (One) employee who was in receipt of remuneration of not less than '' 1,02,00,000 (Rupees One Crore and Two Lakh Only), if employed for the full year and 2 (Two) employees who were in receipt of remuneration of not less than '' 8,50,000 (Rupees Eight Lakh and Fifty Thousand Only) per month, if employed for part of the year.
Disclosures concerning the remuneration of Directors, KMPs and Employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-6 to this Board''s Report. Your Directors affirm that the remuneration is as per the remuneration policy of the Company.
Details of Employee remuneration as required under provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection by the Members at the Registered Office of your Company during working hours. The Annual Report along with Financial Statement are being sent to the Members excluding the aforesaid exhibit. Any Member interested in obtaining such information may write to the Company Secretary & Compliance Officer at butterflv.investorrelations@butterflvindia.com
30. Reporting of fraud by Auditors
During the year under review, neither the Statutory Auditors, the Secretarial Auditor, the Cost Auditors nor the Internal Auditors have reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.
31. Annual Return
As required under 92(3) and 134(3)(a) of the Act, the Annual Return of the Company is uploaded on the Company''s website and can be accessed at https://www.butterflyindia.com/investor-relations/
32. Compliance with Secretarial Standards (âSS-1 and SS-2â)
Your Directors state that the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (âICSIâ) i.e. SS-1 and SS-2 relating to Meetings of the Board of Directors and General Meetings respectively have been duly followed by the Company.
33. Conservation of Energy, Technology, Absorption and Foreign Exchange Outgo
Information relating to Energy Conservation, Technology Absorption, Foreign Exchange earned and spent, and Research and Development activities undertaken by the Company during the year under review in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are given in Annexure-7 of this Board''s Report.
34. Mergers and acquisitions
During the year under review, the Board of the Company at their Meeting held on March 25, 2023, considered and approved the Scheme of Amalgamation of the Company (âTransferor Companyâ) with the Crompton Greaves Consumer Electricals Limited and their respective Members and creditors under Sections 230 to 232 and other applicable provisions of the Act read with rules made thereunder (âSchemeâ). The Scheme was filed with the Stock Exchanges on April 07, 2023, and subsequently, it was approved by the stock exchanges on July 21, & July 24, 2023.
Further, the Company filed the Scheme Application with the Hon''ble NCLT on August 20, 2023, and pursuant to the order issued by NCLT on September 12, 2023, the Company had convened an Extra-Ordinary General Meeting for the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company on October 28, 2023. However, approval of the majority of the public shareholders of the Company was not received in favor of the Scheme, and accordingly, the Scheme was not acted upon.
This does not have any impact on the Company''s growth strategy and both entities continued to operate as separate entities and work towards fulfilling their mutual strengths, thereby creating value for all the stakeholders.
35. Disclosures pertaining to the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company is an equal opportunity employer and is committed to creating a healthy working environment that enables employees to work without fear of prejudice and gender bias. Your Company is committed to ensure that every employee is treated with dignity and respect and works in a conducive work environment, which promotes professional growth of employee and encourages equality of opportunity. The Company has zero tolerance towards any act on the part of any executive, which may fall under the ambit of âSexual Harassmentâ at workplace, and is fully committed to uphold and maintain the dignity of every woman executive working in the Company. Further, to provide an empowering and enabling atmosphere to women employees, the Company has continuously endeavoured to build the work culture, which promotes the respect and dignity of all women employees across the organisation.
The Company has formulated a comprehensive Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (âPOSHâ). The said Policy has been made available on the website of the Company. The Company has constituted Internal Complaints Committee (âICCâ) under POSH and has complied with the provision relating to the same. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The constitution of ICC includes an external member who is an independent POSH consultant with relevant experience. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality of complaints received, if any. During the year under review, no complaint was received.
Further, the employees are sensitised from time to time in respect of matters connected with prevention of sexual harassment. Training programmes on POSH were conducted at unit levels to ensure that employees uphold the dignity of their female colleagues at workplace.
36. Registrar & Share Transfer Agent (âRTAâ)
M/s. GNSA Infotech Private Limited is the RTA of the Company. Their contact details are mentioned in the Report on Corporate Governance and same can be accessed at https://www.butterflyindia.com/investor-relations/
37. Listing with stock exchanges
The equity shares of your Company are listed on NSE and BSE Details of the Company in the Stock Exchanges are as follows:
|
NSE Symbol |
BUTTERFLY |
|
BSE Scrip Code |
517421 |
|
ISIN |
INE295F01017 |
Your Company has paid the Annual Listing Fees for the F.Y. 2023-24 and F.Y. 2024-25 to both NSE and BSE, with whom the equity shares of the Company are listed within the statutory timeline(s).
38. Directorsâ Responsibility Statement
Your Directors would like to assure the Members that the Financial Statements for the year under review confirm in their entirety to the requirements of the Act and guidelines issued by the SEBI. Pursuant to the provisions of Section 134(3)(c) of the Act, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:
(a) i n the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(b) t he accounting policies selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024, and of the profit and loss of the Company for that year;
(c) sufficient care has been taken and that adequate accounting records have been maintained for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;
(d) t he annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and
(f) the systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.
39. Insider Trading
I n compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, your Company has instituted a comprehensive Code titled as âPolicy on Determination of Legitimate Purpose for Sharing UPSIâ which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company same can also be accessed at https://www.butterflyindia. com/wp-content/uploads/2021/04/14.Policy-on-Determination-of-Legitimate-Purpose-for-Sharing-UPSI-20-10-2020.pdf.
40. General
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the Financial Year under review:
(i) The Company has not resorted to any buy-back of the equity shares during the Financial Year under review;
(ii) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
(iii) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;
(iv) The Company has not issued sweat equity shares to the employees of the Company;
(v) There has been no change in the nature of business of the Company as on the date of this report;
(vi) There was no revision in the Financial Statements;
(vii) There were no proceedings, either filed by the Company or filed against the Company, pending under the Insolvency and Bankruptcy Code, 2016, as amended, before NCLT or other courts during the year under review;
(viii) No instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act;
(ix) Disclosure of reason for difference between valuation done at the time of taking loan from bank and at the time of one-time settlement. There was no instance of one-time settlement with any Bank or Financial Institution; and
(x) Suggested to be deleted as already stated under Statutory Auditors section and also under Fraud reported by Auditors.
⢠right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes;
⢠opportunity to participate effectively and vote in General Meeting(s);
⢠being informed of the rules, including voting procedures that govern General Meeting(s);
⢠opportunity to ask questions to the Board at General Meeting(s);
⢠effective participation of the Members in key corporate governance decisions such as election of Members of the Board;
⢠exercise of ownership rights by all Members, including institutional investors;
⢠adequate mechanism to address the grievances of the Members;
⢠protection of minority Members from abusive actions by, or in the interest of, controlling Members acting either directly or indirectly, and effective means of redressal;
⢠to receive dividends and other corporate benefits like rights, bonus etc., if approved;
⢠to inspect statutory registers and documents, including minutes books of the General Meeting(s), as permitted under law; and
⢠any other rights as specified in the statutory enactments from time to time.
Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Company''s performance. Your Directors would also like to thank the members, customers, dealers, suppliers, bankers, government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.
Statements in the Board''s Report and the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company''s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company is not obliged to publicly amend, modify or revise any forwardlooking statement, on the basis of any subsequent development, information or events or otherwise.
Mar 31, 2023
The Board of Directors are pleased to present the Company''s 36th Annual Report on the business and operations of your Company ("the Company" or "Butterfly"), along with the audited financial statements for the financial year ended March 31,2023.
STATE OF THE AFFAIRS OF THE COMPANY
The performance of the businesses are detailed out in the Management Discussion and Analysis Report, which forms part of this Annual Report.
The Company''s financial performance for the year ended March 31,2023 is summarised below:
|
(Rs. in Lakhs) |
||
|
Particulars |
Financial Year ended on March 31,2023 |
Financial Year ended on March 31,2022 |
|
Revenue from Operations (Net) |
1,05,655.24 |
95,985.86 |
|
Other Income |
659.03 |
194.22 |
|
Operating Expenditure |
96,003.09 |
90,383.35 |
|
Operating Profit before Depreciation and Finance Cost |
9,652.15 |
5,602.51 |
|
Profit before Depreciation, Finance cost and |
10,311.18 |
5,796.73 |
|
Exceptional Items |
||
|
Finance Cost |
650.59 |
1,113.44 |
|
Depreciation |
1,615.26 |
1,546.49 |
|
Profit before Exceptional Items and Tax |
8,045.33 |
3,136.80 |
|
Exceptional Items |
- |
660.48 |
|
Profit before Tax |
8,045.33 |
2,476.32 |
|
Income Tax/Deferred Tax |
2,878,75 |
863.64 |
|
Profit after Tax |
5,166.58 |
1,612.68 |
|
Other Comprehensive Income net of tax |
(102.89) |
24.84 |
|
Total Comprehensive Income for the year |
5,063.69 |
1,637.52 |
|
Earnings Per Equity Share (Face Value of H10 each) |
28.90 |
9.02 |
During the year under review, the Revenue from operations amounted to H1,05,655.24 lakhs as against H95,985.86 lakhs in the previous year.
EBITDA for the year stood at H10,311.18 lakhs as against H5,796.73 lakhs during the previous year.
Depreciation for the year stood at H1,615.26 lakhs as against H1,546.49 lakhs recognized during the previous year.
Interest expense for the year stood at H650.59 lakhs as against the previous year of H1,113.44 lakhs.
Profit before Tax was H8,045.33 lakhs compared to H2,476.32 lakhs, during the previous year.
No material changes or commitments have occurred between the end of the financial year and the date of this Report, which affect the Financial Statements of the Company with respect to the reporting year.
BUSINESS PERFORMANCE/ STATE OF THE COMPANY''S AFFAIRS
Various initiatives were taken to expand the market for Company''s products to new geographies, and for maximisation of efficiencies particularly in the area of cost reduction and working capital management.
The business contingency plans focussed on digitalization of sales process, innovative marketing strategies and careful optimisation of supplies to various channels as and when each channel became operational.
DIVIDEND
The Board has not recommended any dividend for the Financial Year 2022-23.
Your Company has formulated a Dividend Distribution Policy in compliance with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 as amended ("the Listing Regulations"). The policy is given as Annexure-1 to this Report. This is also available on the Company''s website and can be accessed at: https://www.butterflyindia.com/wp-content/ uploads/2021/04/Dividend-Distribution-Policv-20.10.2020.pdf
TRASNFER TO RESERVES
Your Company does not propose to transfer any amount to the General Reserve.
MANAGEMENT DISCUSSION AND ANALYSIS
As required under Regulation 34 read with Schedule V(B) the Listing Regulations, report on Management Discussion and Analysis is presented in a separate section, forming part of this Annual Report and are restricted to the areas which are relevant to the current scenario of the Company and outlook.
SHARE CAPITAL
During the year under review, there was no change in the Share Capital of the Company.
The total paid-up share capital of the Company as on March 31, 2023 stood at H1,787.96 lakhs divided into 1,78,79,551 equity shares of H10.00 (Rupees Ten) each.
FINANCIAL LIQUIDITY
Cash and Cash equivalent as on March 31, 2023 stood at H3,268.84 lakhs vis-a-vis H120.48 lakhs in the previous year. The Company''s working capital management is robust and involves a well-organize process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.
CREDIT RATING
CRISIL, a credit rating agency has provided the Company''s credit rating for its bank facilities. The details of the ratings are as follows:
|
Long Term Rating |
CRISIL AA/ Watch Positive |
|
Short Term Rating |
CRISIL A1 |
No public deposits have been accepted or renewed by your Company during the financial year under review pursuant to the provisions of Section 73 and 74 of the Act read together with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter V of the Act is not applicable.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the Company has not granted any Loans and/or given any Guarantees and/or provided any security and/or made any investments under the provisions of section 186 of the Companies Act, 2013 ("the Act") read with Companies (Meetings of Board and its Powers) Rules, 2014.
Your Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities carried out at each location and the various business operations. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.
The Internal Auditors monitors and evaluates the efficacy and adequacy of internal controls system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. During the year, the Audit Committee met regularly to review the reports submitted by the Internal Auditors. All audit observations and follow-up actions thereon were reported to the Audit Committee. The Audit Committee has also taken the views of Company''s Statutory Auditors on the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of the internal controls and systems followed by the Company.
Your Company also has a Risk Management Framework in place covering all critical areas of operation. This framework is reviewed periodically keeping in mind the business dynamics and external environment and provides the guidelines for managing the various risks across the business.
VIGIL MECHANISM/ WHISTLE-BLOWER POLICY ("WB Policy")
Over the years, the Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behavior. Your Company has formulated a Vigil Mechanism and WB Policy intending to provide a mechanism for employees to report violations. The Audit Committee oversees the functioning of this policy. Protected disclosures can be made by a whistle-blower through several channels to report actual or suspected frauds and violation of the Company''s Code of Conduct
The Company has established vigil mechanism for Directors and employees to report genuine concerns pursuant to section 177(9) and (10) of the Act and Regulation 22 of the Listing Regulations.
The Vigil Mechanism Policy of the Company also incorporates a WB Policy in terms of the Listing Regulations. The aggrieved person shall have direct access to the Chairman of the
Audit Committee of the Company. The Company''s WB Policy is available on the Company''s website and can be accessed at: https://www.butterflyindia.com/wp-content/ uploads/2022/09/Whistle-Blower-Policy_28092022.pdf
During the year under review, your Company did not receive any complaints.
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electricals Limited ("CGCEL") is the Holding Company. CGCEL holds 75% of the equity share capital of the Company.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The Company does not have any Subsidiaries, Associates or Joint Venture during the financial year or at any time after the closure of the financial year and till the date of this report.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
Your Company''s Board comprises of Ten (10) Members as on the date of this Report.
Appointments/ Re-appointments
The appointment and remuneration of Directors are governed by the Policy devised by the Nomination and Remuneration Committee of your Company. The detailed Nomination and Remuneration Policy is contained in the Corporate Governance Section of this Annual Report.
Mr. Shantanu Khosla (DIN:00059877) was appointed as an Additional Director by the Board on the recommendation of Nomination and Remuneration Committee ("N&RC") w.e.f. March 30, 2022. The Members of the Company vide special resolution passed through postal ballot on June 25, 2022 approved the appointment of Mr. Shantanu Khosla as NonExecutive, Non-Independent Director of the Company liable to retire by rotation.
Mr. Mathew Job (DIN:02922413) was appointed as an Additional Director by the Board on the recommendation of N&RC w.e.f. March 30, 2022. The Members of the Company vide special resolution passed through postal ballot on June 25, 2022 approved the appointment of Mr. Mathew Job as Non-Executive, Non-Independent Director of the Company liable to retire by rotation.
Mr. Rangarajan Sriram (DIN:09550640) was appointed as an Additional Director designated as the Managing Director by the Board on the recommendation of N&RC w.e.f. March 30, 2022. The Members of the Company vide special resolution passed through postal ballot on June 25, 2022 approved the appointment of Mr. Rangarajan Sriram as Managing Director of the Company for a period of Two (2) years w.e.f. March 30, 2022.
Mr. P. M. Murty (DIN:00011179) was appointed as an Additional Independent Director by the Board on the recommendation of N&RC w.e.f. April 1, 2022. The Members of the Company vide special resolution passed through postal ballot on June 25, 2022 approved the appointment of Mr. P. M. Murty as an Independent Director for a period of Five (5) years w.e.f. April 1,2022.
Mr. P. R. Ramesh (DIN: 01915274) was appointed as an Additional Independent Director by the Board on the recommendation of N&RC w.e.f. April 1, 2022. The Members of the Company vide special resolution passed through postal ballot on
June 25, 2022 approved the appointment of Mr. P. R. Ramesh as an Independent Director for a period of Five (5) years w.e.f. April 1,2022.
Ms. Smita Anand (DIN: 00059228) was appointed as an Additional Independent Director by the Board on the recommendation of N&RC w.e.f. April 1, 2022. The Members of the Company vide special resolution passed through postal ballot on
June 25, 2022 approved the appointment of Ms. Smita Anand as an Independent Director for a period of Five (5) years w.e.f. April 1,2022.
Mr. Promeet Ghosh (DIN:05307658) was appointed as an Additional Director by the Board on the recommendation of N&RC w.e.f. May 12, 2023. The Board of Directors of the Company have also recommended to the Members, the appointment of Mr. Ghosh as Non-Executive Non Independent Director of the Company liable to retire by rotation at the ensuing Annual General Meeting ("AGM").
The N&RC had evaluated the balance of skills, knowledge and experience as required for being eligible for appointment on the Board of the Company and on the basis of such evaluation had prepared a description of the role and capabilities required of an Independent Director and Mr. P. M. Murty, Mr. P. R. Ramesh & Ms. Smita Anand met such capabilities as identified by the Committee.
Cessation
Mr. P. R. Ramesh, Independent Director resigned from the Board of the Company w.e.f. November 9, 2022.
Mr. Mathew Job, Non- Executive, Non-Independent Director resigned from the Board w.e.f April 30, 2023.
The Board express its appreciation for Mr. P. R. Ramesh and Mr. Mathew Job for the valuable guidance and services rendered by them during their tenure as Directors of the Company.
KEY MANAGERIAL PERSONNEL ("KMP")
During the year under review, Ms. Priya Varshinee V. M. Company Secretary & Compliance Officer, resigned w.e.f. February 3, 2023 and Mr. R. Nagarajan, Chief Financial Officer, resigned w.e.f. April 5, 2023.
Mr. Viral Sarvaiya was appointed as the Company Secretary & Compliance Officer and designated as KMP w.e.f March 25, 2023 and Ms. Ananda Shalini was appointed as Chief Financial Officer and designated as KMP w.e.f April 6, 2023.
In accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, including
any statutory modification(s) or re-enactment(s) thereof for the time being in force below are the KMP''s of the Company:
1. Mr. Rangarajan Sriram, Managing Director;
2. Ms. Ananda Shalini, Chief Financial Officer and
3. Mr. Viral Sarvaiya, Company Secretary & Compliance Officer
Independent Directors
The Company''s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company''s Code of Conduct. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company and can be accessed at: https://www.butterflyindia.com/investor-relations/#policies
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar ("IICA") for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment & Qualification of Directors) Rules, 2014 as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than Three (3) years on the Board of listed companies as on the date of inclusion of their names in the database, they are not required to undertake online proficiency self-assessment test conducted by the said Institute.
Mr. P. M. Murty (DIN:00011179), Mr. A. Balasubramanian (DIN:00490921), Ms. Smita Anand (DIN:00059228) Mr. G. S. Samuel (DIN:05284689), Mr. T. R. Srinivasan (DIN:00367302), Ms. Maheshwari Mohan (DIN:07156606) and Mr. M. Padmanabhan (DIN:00101997) are Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance.
During the year under review, the Members of the Company, vide special resolution passed by way of Postal Ballot dated March 2, 2023 approved continuation of directorship of Mr. T.R. Srinivasan (DIN:00367302) & Mr. A. Balasubramanian (DIN:00490921), Non-Executive Independent Directors beyond the age of 75 years till the expiry of their current tenure i.e., July 31,2024.
Non-Independent Directors
As on March 31, 2023, Mr. Shantanu Khosla and Mr. Mathew Job were the Non-Executive Non-Independent Directors.
Mr. Mathew Job had tendered his resignation from the position of Non-Executive Non-Independent Directors on the Board w.e.f. close of business hours of April 30, 2023. The Board had placed on record its appreciation for the valuable guidance and services rendered by him during his tenure as Director of the Company.
The Board of Directors of the Company on May 12, 2023 with the recommendation of N&RC appointed Mr. Promeet Ghosh (DIN:05307658) as an Additional Director (Non-Executive
Non Independent) on the Board w.e.f. May 12, 2023. Further, the N&RC and Board of Directors of the Company have also recommended to the Members the appointment of Mr. Ghosh as Non-Executive Non-Independent Director at the ensuing AGM.
Mr. Shantanu Khosla (DIN:00059877), Non-Executive Director is liable to retire by rotation. Mr. Shantanu Khosla being eligible for re-appointment at the ensuing AGM of your Company has offered himself for re-appointment. His details as required under the Listing Regulations are contained in the accompanying notice convening the ensuing AGM of your Company.
Familiarisation Programme for Independent Directors
Your Company has in place a structured induction programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme of the Company provides information relating to the Company, operational activities, business model of the Company, geographies in which Company operates, etc. The programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarization Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Evaluation of the Board''s Performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board of Directors as a whole, Committees of the Board and individual Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. The Policy and criteria for Board Evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairman of N&RC.
The process of Board Evaluation is conducted through structured questionnaires for the Board as a whole, Committees of the Board and individual Directors.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, process of appointment to the Board of Directors, common understanding of the roles and responsibilities of the Board Members, timelines for circulating Board papers, content and quality of the information provided to the Board, attention to the Company''s long-term strategic issues, evaluating strategic risks, overseeing and guiding acquisitions, strengths of Board Members and their contribution, governance etc.
Some of the performance indicators for the Committees inter alia includes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
Performance of individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibility towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors were evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest.
In addition to the questionnaires, detailed one-on-one insighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board Effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
⢠A separate Meeting of the Independent Directors was held on March 17, 2023 wherein performance of Non-Independent Directors including the Managing Director ("MD"), Chairman of the Board and of the Board as a whole was evaluated.
⢠The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the MD, the Board as a whole and all Committees of the Board.
⢠As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committees such as structure, composition, Meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board''s functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board. They were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaires based evaluations had been acted upon.
During the F.Y. 2022-23, the Company actioned the feedback from the Board evaluation process conducted in the F.Y. 202122.
Remuneration policy and criteria for selection of candidates for appointment as Directors, KMPs and Senior Management
The Company has in place a policy for remuneration of Directors, KMPs and Members of Senior Management as well
as a well defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Members of Senior Management. The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination & Remuneration Committee and the Board of Directors while selecting candidates. The policy on remuneration of Directors, KMPs and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at: https://www.butterflyindia.com/wp-content/ uploads/2021/04/policy-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
NUMBER OF MEETINGS OF THE BOARD & ITS COMMITTEES
Board Meetings
Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/ Committee Meetings to be held in the forthcoming financial year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the meetings. Due to business exigencies, the Board also approves several proposals by circulation from time to time. Your Board of Directors met Eight (8) times during the financial year 2022-23. The details of the meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
Board Committees
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
The Company has the following Six (6) Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee ("N&RC")
3. Corporate Social Responsiblity Committee ("CSR Committee")
4. Stakeholder Relationship Committee ("SRC")
5. Share Transfer Committee ("STC")
6. Risk Management Committee ("RMC")
The composition, terms of reference, number of meetings held and business transacted by the Committees are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committees of the Board are as follows:
Audit Committee
The Audit Committee comprises of Six (6) members out of which Five (5) are Independent Directors. The Committee is chaired by Mr. A. Balasubramanian (Independent Director). The other Members of the Committee are Mr. P. M. Murty (Independent Director), Ms. Smita Anand (Independent Director), Mr. M. Padmanabhan (Independent Director), Mr. G. S. Samuel (Independent Director) and Mr. Shantanu Khosla (Non-Executive, Non Independent Director). Details of the role and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
Corporate Social Responsibility Committee ("CSR Committee")
The CSR Committee comprises of Seven (7) Members out of which Five (5) are Independent Directors. The Committee is chaired by Mr. Shantanu Khosla (Non Executive, Non Independent Director). The other Members of the Committee are Mr. Rangarajan Sriram (Managing Director), Mr. P. M. Murty (Independent Director), Ms. Smita Anand (Independent Director), Mr. G. S. Samuel (Independent Director) and Ms. Maheshwari Mohan (Independent Director). Details of the roles and responsibilities of the CSR Committee, the particulars of Members held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Company has set up CSR Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure-2. The CSR Policy as recommended by the CSR Committee and as approved by the Board is available on the website of the Company and can be accessed at: https:// www.butterflyindia.com/wp-content/uploads/2021/04/CSR-POLICY-20.10.2020.pdf
Nomination & Remuneration Committee ("N&RC"):
The N&RC comprises of Six (6) Members out of which Five (5) Members are Independent Directors. The Committee is chaired by Ms. Smita Anand (Independent Director). The other Members of the Committee are Mr. P. M. Murty (Independent Director), Mr. A. Balasubramanian (Independent Director), Mr. G. S. Samuel (Independent Director), Mr. M. Padmanabhan, (Independent Director) and Mr. Shantanu Khosla (NonExecutive, Non Independent Director). Details of the role and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
During the year under review, all the recommendations made by the N&RC were accepted by the Board.
N&RC is responsible for, inter alia, recommendation and approval of remuneration of the Directors, KMPs and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board Members and KMPs.
Stakeholders'' Relationship Committee ("SRC")
As on March 31,2023, the SRC comprises of Five (5) Members out of which Three (3) Members were Independent Directors. The Committee was chaired by Mr. Mathew Job (Non-Executive NonIndependent Director). The other Members of the Committee were Mr. R. Sriram (Managing Director), Ms. Smita Anand (Independent Director), Mr. M. Padmanabhan (Independent Director) and Mr. T. R. Srinivasan (Independent Director). Details of the roles and responsibilities of the SRC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the SRC were accepted by the Board.
Mr. Mathew Job, Chairman of SRC ceased to be the Member and Chairman of the Committee w.e.f. April 30, 2023 pursuant to his resignation as Director of the Company.
Further, Mr. Promeet Ghosh was appointed as Chairman of SRC w.e.f. May 12, 2023.
As on the date of this report, the SRC comprises of Five (5) members. The Committee is chaired by Mr. Promeet Ghosh (Non-Executive Non-Independent Director).The other Members of the Committee are Mr. R. Sriram (Managing Director), Ms. Smita Anand (Independent Director), Mr. M. Padmanabhan (Independent Director) and Mr. T. R. Srinivasan (Independent Director).
Share Transfer Committee ("STC")
As on March 31,2023, the STC comprises of Five (5) members out of which Three (3) Members are Independent Directors. The Committee was chaired by Mr. Mathew Job (NonExecutive Non-Independent Director). The other Members of the Committee were Mr. R. Sriram (Managing Director), Ms. Smita Anand (Independent Director), Mr. M. Padmanabhan (Independent Director) and Mr. T. R. Srinivasan (Independent Director). Details of the roles and responsibilities of the STC the particulars of meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
Mr. Mathew Job, Chairman of STC ceased to be the Member and Chairman of the Committee w.e.f. April 30, 2023 pursuant to his resignation as Director of the Company.
Further Mr. Promeet Ghosh was appointed as Chairman of SRC w.e.f. May 12, 2023.
Stakeholders'' Relationship & Share Transfer Committee (âSRC & STC") is responsible for inter alia various aspects of interest of the stakeholders, monitoring the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement of the quality of investor services as and when the need arises, resolve the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends and issue of duplicate certificates, etc.
Risk Management Committee (âRMC")
The RMC comprises of Eight (8) Members. The Committee is chaired by Mr. M. Padmanabhan (Independent Director). The other Members of the Committee are Mr. P. M. Murty (Independent Director), Ms. Smita Anand (Independent Director), Mr. G. S. Samuel (Independent Director), Mr. A. Balasubramanian (Independent Director), Ms. Maheshwari Mohan (Independent Director), Mr. R. Sriram (Managing Director) and Mr. Shantanu Khosla (Non-Executive NonIndependent Director). Details of the roles and responsibilities of the RMC, the particulars of meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the RMC were accepted by the Board.
RMC assists the Board in monitoring and reviewing the risk management plan and implementation of the risk management and mitigation framework of the Company. The main objective of the RMC is to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of risks including risks related to cyber security.
Risk Management Policy
The Board has formulated the Company''s Risk Management Policy identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134(3)(n) of the Act, which has been exhibited on the Company''s website and can be accessed at: https://www.butterflyindia.com/wp-content/ uploads/2022/04/Risk-Management-Policy.pdf
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In accordance with the requirements of the Act and the Listing Regulations, your Company has a Policy on Related Party Transactions (RPTs) uploaded on the Company''s website and can be accessed at: https://www.butterflyindia.com/investor-relations/#policies
All RPTs transactions are placed before the Audit Committee for review and approval and to the Board for approval, wherever required. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee for their noting/ approval every quarter.
There were no material significant transactions with related parties during the year as per the last audited financial statements.
Accordingly, the disclosure of transactions entered into with related parties pursuant to the provisions of Section 188(1) of the Act and Rule 8(2) of the Companies (Accounts), Rules 2014 in Form AOC-2 is attached as Annexure-3.
None of the Directors and the KMPs has any pecuniary relationships or transactions vis-a-vis the Company.
All RPTs are mentioned in the notes to the accounts. The Directors draw attention of the Members to the Notes to the financial statements which sets out the disclosure for RPTs.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND [âIEPF"]
During the year under review, there was no transfer of funds to Investor Education and Protection Fund since such transfer was not applicable for the F.Y. 2022-23.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS, STATUTORY AND QUASI-JUDICIAL BODY
No significant or material orders were passed by the Regulators/ Court/ Tribunals/ Statutory and quasi-judicial bodies which impact the going concern and Company''s operation in future.
RISK ARISING OUT OF LITIGATION, CLAIMS AND UNCERTAIN TAX POSITIONS
The Company is exposed to a variety of different laws, regulations, positions and interpretations thereof which encompasses direct taxation and legal matters. In the normal course of business, provisions and contingencies may arise due to uncertain tax positions and legal matters.
Based on the nature of matters, the management applies significant judgement when considering evaluation of risk, including how much to provide for the potential exposure of each of the matters. These estimates could change substantially over time as new facts emerge as each matter progresses, hence these are reviewed regularly. For matters where expert opinion is required, the Company involves the best legal counsel.
a) Statutory Auditors
M/s. ASA & Associates LLP, Chartered Accountants (Firm Registration Number: 009571N/N500006), were appointed as Statutory Auditors of the Company by the shareholders at the 35th Annual General Meeting (âAGM") held on July 14, 2022 to hold office as Statutory Auditors for a second term of Five (5) years, i.e. from conclusion of the 35th AGM till conclusion of the 40th AGM.
The Board of Directors at their meeting held on May 12, 2023 on the recommendation of the Audit Committee approved the remuneration of M/s. ASA & Associates at H22,00,000 (Rupees Twenty Two Lakhs only) for F.Y. 2023-24.
The Auditors'' Report for the F.Y. 2022-23 does not contain any reservation, qualification or adverse remark, on the financial statements of the Company. Auditors'' Report is self explanatory and therefore, does not require further comments and explanation.
Further, in terms of Section 143 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications/ circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
b) Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, your Company is required to maintain cost records as specified by the Central Government. Accordingly, the Company has made and maintained such cost accounts and records in the prescribed manner. The records maintained by the Company under Section 148 of the Act are required to be audited by a Cost Accountant.
The Board at its Meeting held on May 12, 2023 based on the recommendation of the Audit Committee, approved the appointment of M/s. S. Mahadevan & Co, Cost Accountants (Firm Registration Number: 000007) as the Cost Auditors of the Company to conduct audit of the cost records of the Company for the F.Y. 2023-24. A remuneration of H1,75,000 (Rupees One Lakh Seventy Five Thousand only) plus applicable taxes and out-of-pocket expenses, has been fixed for the Cost Auditors subject to the ratification of such fees by the Members at the ensuing AGM. Accordingly, the matter relating to the ratification of the remuneration payable to the Cost Auditors for the H1,75,000 2023-24 will be placed at the ensuing AGM. Your Company has received consent and eligibility certificate from M/s. S. Mahadevan & Co.
c) Secretarial Auditors & Secretarial Audit Report
The Board at its meeting held on May 11,2022, appointed M/s. M. Alagar & Associates, Practising Company Secretaries as Secretarial Auditors of the Company to conduct the Secretarial Audit for F.Y. 2022-23. The Secretarial Audit Report is annexed herewith as Annexure-4 to this Report. There has been no qualification, reservation, or adverse remark given by the Secretarial Auditors in their Report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board based on recommendation of the Audit
Committee approved the appointment of M/s. M. Alagar & Associates, Company Secretaries (ICSI Unique Code: P2011TN078800) as Secretarial Auditors to conduct audit of the secretarial records of the Company for the F.Y. 2023-24 at a remuneration of H1,40,000 (One lakh Forty Thousand only).
d) Internal Auditors
Pursuant to the provisions of Section 138 of the Act, the Board, at its meeting held on May 11, 2022 based on the recommendation of the Audit Committee, had approved the appointment of M/s. Grant Thornton Bharat LLP (Identity number AAA-7677) to conduct the internal audit of your Company for the F.Y. 2022-23.
The Board of Directors at their meeting held on May 12, 2023 has re-appointed M/s. Grant Thornton Bharat LLP as the Internal Auditors of your Company for the F.Y. 2023-24 to review various operations of the Company at remuneration of H26,00,000 lakhs (Rupees Twenty Six lakhs only).
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of your Company, which has occurred between the end of the F.Y. of the Company, i.e. March 31,2023 and the date of this Board Report, i.e. May 12, 2023.
The detailed section on awards & recognitions forms part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Your Company is now moving from Business Responsibility Report ("BRR") to the newly introduced reporting parameters, i.e. Business Responsibility & Sustainability Report ("BRSR"). Your Company is proud to publish its first BRSR for the F.Y. 2022-23. The BRSR would follow the format detailed in the amendment to Regulation 34(2)(f) of the Listing Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021 and forms part of this Annual Report.
The BRSR for F.Y. 2022-23 is aligned with the Nine (9) principles of the National Guidelines on Responsible Business Conduct notified by the Ministry of Corporate Affairs, Government of India.
Your Company has been complying with the provisions of Corporate Governance as stipulated under applicable provisions of the Listing Regulations. A separate report on Corporate Governance along with Auditors'' Certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the Listing Regulations forms part of Annual Report are provided as Annexure-5 to this Board Report.
There are Two (2) employees who were in receipt of remuneration of not less than H1,02,00,000 per annum if employed for the full year or not less than H8,50,000 per month if employed for any part of the year.
The information as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-6 to this Board''s Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Act read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available for inspection at the Registered Office of your Company during working hours. The Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Any Member interested in obtaining such information may write to the Company Secretary & Compliance Officer at the Registered Office of the Company.
REPORTING OF FRAUD BY AUDITORS
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this Report.
As required under Section 92 (3) read along with Section 134(3)
(a) of the Act, the Annual Return of the Company is placed the website of the Company and can be accessed at: www. butterflyindia.com
COMPLIANCE WITH SECRETARIAL STANDARDS ("SS-1 and SS-2")
The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India (ICSI) i.e. SS-1 and SS-2 relating to ''Meetings of the Board of Directors'' and ''General Meetings'' respectively.
RE-CLASSIFICATION OF PROMOTERS
During the year under review, the Board of Directors of the Company had received request from Mr. V. M. Lakshminarayanan, Mr. V. M. Balasubramaniam, Mr. V. M. Seshadri, Mr. V. M. Gangadharam, Mr. V. M. Kumaresan, Mr. V. M. L. Karthikeyan, Mr. V. M. L. Senthilnathan, Mr. V. M. S. Namasivayam, Mr. V. M. S. Kumaraguru, Mrs. A. Gandhimathi, Mr. Gangadharam Viswanathan, Mr. V. M. G. Mayuresan, Mrs. V. M. L. Shenbagalakshmi, Mrs. V. M. B. Unnamalai, Mrs. V. M. S. Karpagam, Mrs. V. M. G. Sivakami, Mrs. V. M. K. Mangalam, V. M. Chettiar and Sons India LLP and LLM Appliances Private Limited belonging to promoter / members of
promoter group of the Company vide their letter dated August 17, 2022, for reclassifying their shareholding in the Company from the "Promoter and Promoter group" category to the "public" shareholder category, in accordance with applicable Listing Regulations as amended and rules, regulations and guidelines as applicable in this regard.
Pursuant to the same, an application in terms of Regulation 31A of the Listing Regulations was made to the stock exchanges for their approval for the reclassification.
The Company has received the approval from National Stock Exchange of India Limited and BSE Limited, on January 3, 2023 for reclassification of the said Members of Promoter and Promoter Group to Public Shareholders.
OPEN OFFER AND MINIMUM PUBLIC SHAREHOLDING COMPLIANCE
An Open Offer was made by Crompton Greaves Consumer Electricals Limited ("the Holding Company/ Crompton") to
the Public Shareholders of the Company in accordance with Regulation 3(1) and Regulation 4 of the SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011 for acquisition of up to 46,48,684 fully paid-up equity shares of face value of H10.00 (Rupees Ten only) each of the Company, representing 26% of the voting rights of the Company from the Public Shareholders at a price of H1,433.90 (Rupees One Thousand Four Hundred Thirty Three and Ninety Paise only). The open offer was fully subscribed and subsequently 81% of equity share capital of the Company was held by the Holding Company.
MINIMUM PUBLIC SHAREHOLDING COMPLIANCE
Crompton, sold 10,72,775 equity shares of the Company constituting 6% of the total paid-up capital of the Company to the public in accordance with the "Comprehensive Guidelines on Offer for Sale ("OFS") of Shares by Promoters through the Stock Exchange Mechanism" issued by the Securities and Exchange Board of India on February 14, 2020 and February 17, 2020, respectively.
Consequently, the Company is now compliant with the Minimum Public Shareholding requirements as mandated under Rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 read with Regulation 38 of the Listing Regulations.
The breakup of Promoter and Public Shareholding of the Company post aforesaid sale of shares is provided below:
|
Category |
No of equity shares |
% of total paid-up share capital |
|
Promoter and Promoter |
1,34,09,663 |
75.00 |
|
Group |
||
|
Public |
44,69,888 |
25.00 |
|
Non-Promoter Non |
Nil |
Nil |
|
Public |
||
|
Total |
1,78,79,551 |
100.00 |
MERGERS AND ACQUISITIONS
During the year under review, the Board of Directors of the Company ("the Board") at its meeting held on March 25, 2023, considered and approved the Scheme of Amalgamation of the Company, ("Transferor Company") with Crompton Greaves Consumer Electricals Limited ("Transferee Company") and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Act read with rules made thereunder ("Scheme").
It is intended to merge the Company with Crompton Greaves Consumer Electricals Limited, with the rationale of further leveraging & utilizing the strengths of both the entities, accelerating the realization of identified synergies, bringing in integrated and coordinated business approach, and improving organizational capability.
The Board of both the entities have approved the proposed transaction on March 25 2023, which is subject to regulatory approvals. Pursuant to the proposed Scheme, the Transferee Company shall issue equity shares to the shareholders of the Transferor Company (other than the Transferee Company) in accordance with the Share Swap Ratio as determined by the registered valuers and as approved by the Board.The Scheme is subject to the receipt of necessary statutory and regulatory approvals including approval of Stock Exchanges, the Securities and Exchange Board of India, the respective shareholders and creditors of respective companies and National Company Law Tribunal(s) (Mumbai & Chennai Benches). Further, the Company has filed the said Scheme of Amalgamation with BSE Ltd. and National Stock Exchange of India Limited on April 7, 2023.
CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE OUTGO
Information relating to energy conservation, technology absorption, foreign exchange earned and spent, and research and development activities undertaken by the Company in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014, are given in Annexure-7 of this Board''s Report.
DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has formulated a comprehensive policy on prevention, prohibition and redressal against sexual harassment of women at workplace, which is also in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"). The said policy has been made available on the website of the Company. The Company has constituted of Internal Complaints Committee ("ICC") under the POSH and has complied with the provision relating to the same. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The constitution of ICC is as per the POSH Act and includes an external member who is an independent POSH consultant with
relevant experience. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality. During the year under review, no complaint was received.
SHARE REGISTRAR & TRANSFER AGENT
M/s. GNSA Infotech Private Limited is the RTA of the Company. Their contact details are mentioned in the Corporate Governance Report and same is also available on the website of the Company https://www.butterflyindia.com/investor-relations/
LISTING WITH STOCK EXCHANGES
The equity shares of your Company are listed on The National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE"). Details of the Company in the Stock Exchanges are as follows:
|
NSE Symbol |
BUTTERFLY |
|
BSE Scrip Code |
517421 |
|
ISIN |
INE295F01017 |
Your Company has paid the Annual Listing Fees for the F.Y. 2022-23 and F.Y. 2023-24 to both the NSE and BSE, with whom the equity shares of the Company are listed.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors would like to assure the Members that the Financial Statements for the year under review confirm in their entirety to the requirements of the Act and guidelines issued by SEBI. Pursuant to the provisions of Section 134(3)(c) of the Act, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:
(a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(b) the accounting policies selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2023 and of the profit and loss of the Company for that year;
(c) sufficient care has been taken and that adequate accounting records have been maintained for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and
(f) the systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.
In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, your Company has instituted a comprehensive Code titled as "Policy on Determination of Legitimate Purpose for Sharing UPSI" which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company.
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:
(i) The Company has not resorted to any buy back of the equity shares during the year under review;
(ii) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
(iii) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;
(iv) The Company has not issued Sweat Equity Shares to the employees of the Company;
(v) There has been no change in the nature of business of the Company as on the date of this report;
(vi) There was no revision in the Financial Statements;
(vii) There were no proceedings, either filed by the Company or filed against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other courts during the year under review;
(viii) No instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act;
(ix) Disclosure of reason for difference between valuation done at the time of taking loan from bank and at the time of one-time settlement. There was no instance of onetime settlement with any Bank or Financial Institution; and
(x) No fraud has been reported by the Auditors to the Audit Committee or the Board.
⢠right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes;
⢠opportunity to participate effectively and vote in general shareholder Meetings;
⢠being informed of the rules, including voting procedures that govern general shareholder meetings;
⢠opportunity to ask questions to the Board of Directors at General Meetings;
⢠effective shareholder participation in key corporate governance decisions such as election of Members of Board of Directors;
⢠exercise of ownership rights by all shareholders, including institutional investors;
⢠adequate mechanism to address the grievances of the shareholders;
⢠protection of minority shareholders from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly, and effective means of redress;
⢠to receive Dividends and other corporate benefits like rights, bonus etc. once approved;
⢠to inspect statutory registers and documents, including minutes books of the general meetings, as permitted under law; and
⢠any other rights as specified in the statutory enactments from time to time.
Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Company''s performance.
Your Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.
Statements in the Board''s Report and the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company''s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company is not obliged to publicly amend, modify or revise any forward-looking statement, on the basis of any subsequent development, information or events or otherwise.
Mar 31, 2022
Your Directors have pleasure in presenting this Thirty Fifth Annual Report together with the Audited Statement of Accounts for the financial year ended on 31st March, 2022.
FINANCIAL RESULTS:
The Company''s financial performance for the year ended 31st March 2022 is summarised below:
|
('' in lakhs) |
|||
|
Financial Year ended on |
|||
|
31st March, 2022 |
31 st |
March, 2021 |
|
|
Revenue from Operations (Net) |
1,00,530.40 |
86,963.81 |
|
|
Other Income |
194.22 |
158.05 |
|
|
Operating Expenditure |
94,927.89 |
79,269.05 |
|
|
Operating profit before Depreciation and Finance Cost |
5,602.51 |
7,694.76 |
|
|
profit before Depreciation, Finance cost and Exceptional Items |
5,796.73 |
7,852.81 |
|
|
Finance Cost |
1,113.44 |
1,462.78 |
|
|
Depreciation |
1,546.49 |
1,555.17 |
|
|
profit before Exceptional Items and Tax |
3,136.80 |
4,834.86 |
|
|
Exceptional Items |
660.48 |
- |
|
|
profit before Tax |
2,476.32 |
4,834.86 |
|
|
Income Tax/Deferred Tax |
863.64 |
1,219.05 |
|
|
profit after Tax |
1,612.68 |
3,615.81 |
|
|
Other Comprehensive Income net of tax |
24.84 |
51.98 |
|
|
Total Comprehensive Income for the year |
1,637.52 |
3,667.79 |
|
During the year under review, the total revenue amounted to '' 1,00,530.40 Lakhs as against '' 86,963.81 Lakhs in the previous year.
EBITDA for the year stood at '' 5,136.25 Lakhs as against '' 7,852.81 Lakhs during the previous year. EBITDA margins for the year stood at 5.11 % as against 9.03 % for previous year.
Depreciation for the year stood at '' 1,546.49 Lakhs as against '' 1,555.17 Lakhs recognized during the previous Year.
Interest expense for the year stood at '' 1,113.44 Lakhs as against the previous year of '' 1,462.78 Lakhs.
profit before Tax was '' 2,476.32 Lakhs compared to '' 4,834.86 Lakhs, during the previous Year.
The Board has declared and paid the following interim dividend on shares of Face Value '' 10/- each
|
Date of Board Meeting |
27th October, 2021 |
|
Dividend Rate per Share |
'' 3.00 per share of face value '' 10/- each |
|
Record Date |
5th November, 2021 |
Note:
The Board has recommended the same to be confirmed as Final Dividend for the Financial Year 2021-22.
Your Company has formulated a Dividend Distribution policy in compliance with Regulation 43A of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015 ("Listing Regulations"), copy of which is available on the website of the Company at www.butterflyindia.com.
The year began with the pandemic induced lockdown disrupting operations, and bringing the market to a standstill. The adverse impact of the challenging business environment was reflected in the less than targeted performance of the Company in the first quarter of the year. However, strategic
measures were deployed to resume operations under a stringent safety protocol to meet the burgeoning market demand from the second quarter onwards. Additionally, various initiatives were taken to expand the market for Company''s products to new geographies, and for maximisation of efficiencies particularly in the area of cost reduction and working capital management.
The business contingency plans focussed on digitalization of sales process, innovative marketing strategies and careful optimisation of supplies to various channels as and when each channel became operational. During Q2 the Company''s performance improved and achieved the sale of '' 403.12 crores. During the year your Company achieved the Sale of '' 1,005.20 Crores against '' 869.64 Crores during the previous year.
During the year under review, there was no change in the Share Capital of the Company.
Your Company does not propose to transfer any amount to the General Reserve.
A Share purchase Agreement ("Spa") between your Company, along with certain members of the promoter and Promoter group of the Company and Crompton Greaves Consumer Electricals Limited ("Crompton") ("Acquirer Company") was executed on 22nd February, 2022.
Pursuant to the SPA, Crompton has acquired 98,33,754 equity shares representing 55.00% of the equity share capital of the Company from the Promoters & Members of promoter Group through the stock exchange settlement process on 25th March, 2022 as follows:
|
S. No. |
Name of Promoter |
No. of Shares |
% of Shares |
|
1. |
Mr. V. M. Lakshminarayanan |
6,91,776 |
3.87% |
|
2. |
Mr. V. M. Balasubramaniam |
6,91,776 |
3.87% |
|
3. |
Mr. V. M. Seshadri |
6,91,776 |
3.87% |
|
4. |
Mr. V. M. Gangadharam |
6,91,776 |
3.87% |
|
5. |
Mr. V. M. Kumaresan |
6,91,776 |
3.87% |
|
6. |
M/s. LLM Appliances Private Limited |
28,67,774 |
16.04% |
|
7. |
M/s. V. M. Chettiar & Sons India LLP |
35,07,100 |
19.62% |
|
TOTAL |
98,33,754 |
55.00% |
Subsequent to the acquisition of 55% of equity shares of the Company, Crompton has acquired sole control over the Company and has become a Promoter of the Company.
With a brand legacy of 80 years, Crompton Greaves Consumer Electricals Limited is India''s market leader in the category of fans and residential pumps.
The Open Offer is being made by Crompton to the Public Shareholders in accordance with regulations 3(1) and 4 of the Securities and Exchange Board of India ("SEBI") (Substantial Acquisition of Shares & Takeover ) Regulations, 2011 for acquisition of up to 46,48,684 fully paid-up equity shares of face value of ''10.00 (Indian Rupees Ten only) each ("Equity Shares") representing 26.00% of the voting rights of the Company from the Public Shareholders at a price of '' 1,433.90 (Indian Rupees One Thousand Four Hundred and Thirty Three and Ninety Paise only). The Draft Letter of Offer has been filed with the Securities Exchange Board of India ("SEBI") on 4th March, 2022. SEBI has given final observations on the draft Letter of Offer on 10th May, 2022. Pursuant to this, Crompton will further progress on the open offer process.
Further, a request letter from the Promoters & Members of Promoter Group seeking reclassification from the ''Promoter and Promoter Group'' category to the ''Public'' category in accordance with the provisions of Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was received on 30th March, 2022 and taken on record by the Board of Directors on 1st April, 2022. The said letter shall be considered for further action by the Board of Directors in accordance with Regulation 31A(10) and other applicable provisions of the Listing Regulations once the intention of the existing Promoters to reclassify is disclosed in the Letter of Offer to be issued by Crompton Greaves Consumer Electricals Limited under the applicable provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Your Company''s Board comprises eleven members as on the date of this Report.
Mr. Rangarajan Sriram (DIN:09550640) is the Managing Director, Mr. P. M. Murty (DIN:00011179), Mr. M. Padmanabhan (DIN:00101997), Mr. A. Balasubramanian (DIN:00490921), Mr. G. S. Samuel (DIN:05284689), Mr. T. R. Srinivasan (DIN:00367302), Ms. Maheshwari Mohan ( DIN:07156606), Ms. Smita Anand (DIN:00059228) & Mr. P. R. Ramesh (DIN:01915274) are Independent Directors of the Company. Mr. Shantanu Khosla (DIN:00059877) and Mr. Mathew Job (DIN:02922413) are Non-Executive, Non-Independent Directors. The following changes took place during the year under review:-
a) Appointments
⢠Mr. P M. Murty (DIN: 00011179) was appointed as an Additional Independent Director in the capacity of Chairman of the Company with effect from 1st April, 2022 in accordance with the provisions of Sections
149, 150, 152 & 161 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Mr. Rangarajan Sriraim (DIN: 09550640) was appointed as an Additional Director and he has been designated as the Managing Director of the Company with effect from 30th March, 2022, in accordance with the provisions of Sections 152, 161, 196 and 203 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Mr. Shantanu Khosla (DIN: 00059877) was appointed as an Additional Non-Executive, Non-Independent Director of the Company with effect from 30th March, 2022, in accordance with the provisions of Sections 152 and 161 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Mr. Mathew Job (DIN: 02922413) was appointed as an Additional Non-Executive, Non-Independent Director of the Company with effect from 30th March, 2022, in accordance with the provisions of Sections 152 and 161 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Mr. P R. Ramesh (DIN: 01915274) was appointed as an Additional Non-Executive, Independent Director of the Company with effect from 1st April, 2022 in accordance with the provisions of the Sections 149,
150, 152 and 161 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Ms. Smita Anand (DIN: 00059228) was appointed as an Additional Non-Executive, Independent Director of the Company with effect from 1st April, 2022 in accordance with the provisions of the Sections 149, 150, 152 and 161 of the Companies Act, 2013 subject to approval of the Shareholders.
⢠Mr. V. M. Gangadhram (DIN:00106466) Whole Time Executive Director of the Company was reappointed at Annual General Meeting held on 29th July, 2021 for a period of 5 years from 1st October, 2021 to 30th September, 2026.
⢠Mr. V. M. Kumaresan (DIN:00835948) Whole Time Executive Director (Technical) of the Company was
reappointed at Annual General Meeting held on 29th July, 2021 for the period of 5 years from 1st June, 2021 to 31st May, 2026.
⢠Ms. Priya Varshinee V M was appointed as the Deputy Company Secretary & Compliance Officer with effect from 30th June, 2021, subsequent to the demise of Mr. K. S. Ramakrishnan, Company Secretary and General Manager-Legal on 18th May, 2021.
⢠Change in Designation Ms. Priya Varshinee V M as Company Secretary & Compliance Officer with effect from 11th May, 2022.
b) Resignations
⢠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, resigned from the Company pursuant to Share Purchase Agreement entered between your Company with certain Member of Promoter & Promoter Group and Crompton Greaves Consumer Electricals Limited (CGCEL) of the Company with effect from 30th March, 2022.
⢠Mr. K.Ganesan (DIN:00102274), Independent Director of the Company resigned from the Company owing to his ill-health and advancing age with effect from 3rd March, 2022.
The Board expresses its appreciation for the valuable guidance and services rendered by them during their tenure as Directors of the Company.
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committees are Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Shareholders'' Relationship & Share Transfer Committee, Risk Management Committee. The composition, terms of reference, number of meetings held and business transacted by the Committees are given in the Corporate Governance Report.
Your Company recognizes and embraces the importance of a diverse board in its success. Your Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender that will help us retain our competitive advantage.
MANAGEMENT DISCUSSION AND ANALYSIS
The Directors'' comments under the head Management Discussion and Analysis, which forms a part of this report, are restricted to the areas which are relevant to the current scenario of the Company and outlook as per Annexure I.
CRISIL has provided the Company''s credit rating for its bank facilities as follows:
|
Long Term Rating |
CRISIL A-/Stable |
|
Short Term Rating |
CRISIL A2 |
LOANS, GUARANTEES AND INVESTMENTS
There were no particulars of Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 for the Financial Year 31st March, 2022.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year of the Company i.e. 31st March, 2022 and the date of the Board Report.
holding company
pursuant to Section 2(87)(ii) of Companies Act, 2013, Crompton Greaves Consumer Electricals Limited (CGCEL) has become the Holding Company with effect from 30th March, 2022.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The Company doesn''t have any Subsidiaries, Associates or Joint Venture etc.
DIRECTORS RESPONSIBILITY STATEMENT
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (''the Act''), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with applicable transition guidance. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The Directors confirm that,
(i) In the preparation of the annual accounts for the year ended 31st March 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2022, and of the profit and loss of the Company for that year;
(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts of the Company on a ''going concern'' basis;
(v) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are reasonably adequate and operating effectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are reasonably adequate and operating effectively.
RELATED PARTY TRANSACTIONS AND PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts/arrangements/transactions entered by your Company during the financial year 2021-22 with related parties were in the ordinary course of business and on an ''arm''s length'' basis. The Company had not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The Company enjoys distinct advantages in the form of competitive prices, product quality, economy in transportation cost and lower inventories by virtue of the existing related party transactions.
All Related Party Transaction along with the Statement specifying the nature, value and terms and conditions of the transactions were presented before the Audit Committee and the Board for its consideration and approval.
There were no materially significant transactions with related parties (i.e. transactions exceeding 10% of the annual standalone turnover) during the year as per the last audited financial statements. Accordingly, the disclosure of transactions entered into with related parties pursuant to the provisions of Section 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts), Rules 2014 in Form AOC-2 is not applicable.
The Board has formulated the Company''s Risk Management Policy identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134(3)(n) of the Act, which has been exhibited on the Company''s website at https://www.butterflyindia.com/investor-relations/
Your Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed keeping in view the nature of activities carried out at each location and the various business operations. The company has documented a robust and comprehensive internal control
system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal controls system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. During the year, the Audit Committee met regularly to review the reports submitted by the Internal Auditor. All audit observations and follow-up actions thereon were reported to the Audit Committee. The Audit Committee has also taken the views of Company''s Statutory Auditors on the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of the internal controls and systems followed by the Company.
Your Company also has a Risk Management Framework in place covering all critical areas of operation. This framework is reviewed periodically keeping in mind the business dynamics and external environment and provides the guidelines for managing the various risks across the business.
STATEMENT ON DECLARATION BY THE INDEPENDENT DIRECTORS OF THE COMPANY
The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 that they meet with the criteria of independence laid down in Section 149(6) of the Act and Rules made thereunder and also Regulation 16(1) (b) of the SEBI (LODR) Regulations 2015. Further they have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge the duties with an objective independent judgement and without any external influence.
The terms and conditions of appointment of the Independent Directors are posted on the Company''s website: https://www.butterflyindia.com/investor-relations.
A statement regarding the opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year under review has been detailed in the Corporate Governance Report.
APPOINTMENT OF DIRECTORS AND MANAGERIAL PERSONS AND THEIR REMUNERATION
Pursuant to the provisions of Section 178(3) of the Act read with Companies (Meetings of Board and its powers) Rules, 2014 and Regulation 19(4) read with Schedule II part-D of SEBI Listing Regulations, 2015, the Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director and for evaluating performance of the Directors and Key Management personnel as well as other employees and, which can be viewed at the Company''s website: https://www.butterflyindia.com/investor-relations/
KEY MANAGERIAL PERSONNEL (KMP)
In terms of the provisions of Section 2(51) and 203 of the Act, the following managerial personnel are Key Managerial personnel (KMp) of the Company:
1. Mr. Rangarajan Sriram Managing Director
"Seconded from the Holding Company"
2. Mr. R Nagarajan Chief Financial Officer
3. Ms. Priya Varshinee V M
Company Secretary & Compliance Officer
Your Company has been complying with the provisions of Corporate Governance as stipulated under applicable provisions of the Listing Regulations. A separate report on Corporate Governance along with Auditors'' Certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the Listing Regulations forming part of this report are provided as Annexure II in this Annual Report.
No public deposits have been accepted or renewed by your Company during the financial year under review pursuant to the provisions of Section 73 and 74 of the Act read together with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter V of the Act is not applicable.
EVALUATION OF THE BOARD''S PERFORMANCE
In compliance with the Companies Act, 2013 and Listing Regulations, the performance evaluation of the Board was
carried out during the year under review. More details on the same are given in the Corporate Governance Report.
familiarization program for independent
Your Company has in place a structured induction programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarization Programme of the Company provides information relating to the Company, operational activities, business model of the Company, geographies in which Company operates, etc. The programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarization Programme also provides information relating to the financial performance of the Company and budget and control process of the Company.
PREVENTION OF SEXUAL Harassment AT WORKPLACE
Your Company has always provided a congenial atmosphere for work to all the employees that is free from discrimination and harassment including sexual harassment. It has provided equal opportunities of employment to all without any regard to their caste, religion, colour, marital status and sex. The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review there were no cases of sexual harassment received by the Committee.
Audit Reports
1. The Statutory Auditors'' Report for the FY 2021-22 does not contain any qualification, reservation or adverse remark. The Auditors'' Report is enclosed with the financial statements in this Annual Report.
2. The Secretarial Auditors'' Report for the FY 2021- 2022 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors'' Report is enclosed as Annexure III to the Board''s Report. Your Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
3. The Cost Auditors'' Report for the FY 2021-22 does not contain any qualification, reservation or adverse remark.
Statutory Auditors
M/s ASA & Associates LLP, Chartered Accountants were appointed as Statutory Auditors of the Company as per Section 139 of the Companies Act, 2013, for a period of 5 years from conclusion of the Thirtieth Annual General Meeting to Thirty Fifth Annual General Meeting. The current term of 5 years will be completed in the ensuing Annual General Meeting.
The Board, on the recommendation of the Audit Committee, had recommended for the approval of the Members, the appointment of M/s ASA & Associates LLP, Chartered Accountants, (Firm Registration Number: 009571N/ N500006) as the Auditors of the Company for a second term of five years from the conclusion of the ensuing 35th AGM till the conclusion of the 40th AGM. On the recommendation of the Audit Committee, the Board also recommended for the approval of the Members, the remuneration of M/s ASA & Associates LLR Chartered Accountants for the financial year 2022-23.
The Company has received a consent letter and eligibility certificate from M/s ASA & Associates LLR confirming that they are not disqualified from continuing as Statutory Auditors of the Company.
The Auditors have issued an unmodified opinion on audited financial statements of the Company for the year ended 31st March, 2022. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report.
During the year under review, there were no material or serious instances of fraud falling within the purview of Section 143 (12) of the Companies Act, 2013 and rules made thereunder, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit conducted and therefore no details are required to be disclosed under Section 134 (3)(ca) of the Act.
Your Company is required to maintain cost records as specified by the Central Government as per Section 148(1) of the Act and the rules framed thereunder, and accordingly, the Company has made and maintained such cost accounts and records. In terms of Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, the Board on recommendation of the Audit Committee, appointed M/s. S. Mahadevan & Co., (FRN000007), Chennai, being eligible, for conducting the audit of cost records of the
Company for the year 2022-23. The Company has received their written consent and confirmation that the appointment will be in accordance with the applicable provisions of the Act and the rules framed thereunder.
The remuneration payable to Cost Auditors was approved by the Board of Directors on the recommendation of the Audit Committee and in terms of the Act and Rules there under. The Members are therefore requested to ratify the remuneration payable to M/s. S. Mahadevan & Co., as set out in the Notice of the 35th AGM of the Company.
The Board on recommendation of the Audit Committee has appointed M/s. A. K. Jain & Associates, Company Secretaries, [CP No.3550], Chennai to conduct Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2021-22. The Secretarial Audit Report for the financial year ended 31st March, 2022 is annexed to this report as Annexure III. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark Your Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013.
INSIDER TRADING
In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, your Company has instituted a comprehensive Code titled as "Code of Conduct for Prevention of Insider Trading" which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company.
DISCLOSURES:Committees of the Board
As on 31st March, 2022, the Board has five committees: the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee, the Risk Management Committee, and the Shareholders Relationship Committee. During the year, all recommendations made by the committees were approved
by the Board. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.
Vigil Mechanism
The Company has established vigil mechanism for directors and employees to report genuine concerns pursuant to section 177(9) and (10) of the Act and Regulation 22 of the Listing Regulations, 2015.
The Vigil Mechanism of the Company also incorporates a Whistle Blower policy in terms of the Listing Regulations. The aggrieved person shall has direct access to the Chairman of the Audit Committee of the Company. The Company''s Whistle Blower policy may be accessed on its website at the link https://www.butterflyindia.com/investor-relations/#policies
During the year under review, your Company did not receive any complaints.
Meetings of the Board
The Board met thirteen (13) times during the financial year. The meeting details are provided in the Corporate Governance Report forming part of this Board''s Report.
Disclosures under Schedule V(F) of the SEBI (LODR) Regulation 2015
Your Company does not have shares in the demat suspense account or unclaimed suspense account.
Conservation of Energy, Technology, Absorption and Foreign Exchange out go
Information relating to energy conservation, technology absorption, foreign exchange earned and spent, and research and development activities undertaken by the Company in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014, are given in Annexure IV of the Directors'' Report.
As per the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company is available on our website at www.butterflyindia.com.
The information as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 is appended as Annexure V to the Board''s Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 are available for inspection at the Registered Office of your Company during working hours. The Annual Report and accounts are being sent to the shareholders excluding the aforesaid exhibit. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.
corporate social responsibility committee:
pursuant to the provisions of Section 135(1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee, consisting of four Independent Directors and the Chairman & Managing Director of the Company. The said Committee has formulated and recommended to the Board a Corporate Social Responsibility policy (CSR policy), indicating the activities to be undertaken by the Company, which has been approved by the Board.
Your Company is committed towards embracing responsibility for its corporate actions and achieve fruitful impact of its business actions not only on its stakeholders, but also the society at large. As per the provisions of the Companies Act, 2013 there was no amount required to be spent on CSR for the financial year 2021-22. Your Company has formed the CSR Committee and the CSR policy is available on the website of the Company. However, during the year under review, the Company continues to contribute to various initiative for the benefit of the community at large. The company initiated projects in the area of education, environment and community/social development having duration of more than one year. The Company regularly spends significant amounts of money on various activities aimed at serving communities around the factories.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34 of the SEBI Listing Regulations, a Business Responsibility Report is attached as Annexure VI of the Directors'' Report.
Significant and Material Orders passed by the Regulators or Courts or Tribunals which may impact the going concern status and company''s operations in future
There were no significant and material orders passed by the Regulators/Court which would impact the going concern status of the Company and the future operations.
Transfer to Investor Education and Protection Fund [IEPF]
During the year under review, there was no transfer of funds to Investor Education and Protection Fund since such transfer was not applicable for the FY 2021-22.
Listing with Stock Exchanges
The Company confirms that it has paid the Annual Listing Fees for the FY 2021-22 and FY 2022-23 to both National Stock Exchange of India Limited and BSE Limited, with whom the equity shares of the Company are listed.
SHARE Registrar & Transfer Agent (R&T)
M/s. GNSA Infotech private Limited the R&T Agent of the Company. Their contact details are mentioned in the Corporate Governance Report.
(i) The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India;
(ii) The Company has not resorted to any buy back of the equity shares during the year under review;
(iii) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
(iv) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees; and
(v) The Company has not issued Sweat Equity Shares to the employees of the Company;
The spirit of trust, transparency and teamwork has enabled the Company to build a tradition of partnership and harmonious industrial relations. Your Directors record their sincere appreciation of the dedication and commitment of the employees at all levels to achieve excellence in all areas of the business.
Your Directors take this opportunity to thank the employees at all level, suppliers, distributors, dealers, customers, shareholders, bankers, Government and all other business associates, consultants and all other stake holders for their strong support extended to the Company & the Management.
For and on behalf of the Board P.M. Murty
place: Chennai Chairman
Date: 11th May, 2022 DIN :00011179
Mar 31, 2018
The Directors have pleasure in presenting this Thirty First Annual Report together with the Audited Statement of Accounts for the financial year ended on 31st March 2018.
1. FINANCIAL RESULTS
The Companyâs financial performance for the year ended 31st March 2018 is summarised below:
(Rs. in lakhs)
|
Financial Year ended on 31.03.2018 |
Financial Year ended on 31.03.2017 |
|
|
Revenue from Operations (Gross) |
54931.07 |
44987.18 |
|
Less: Excise Duty |
875.45 |
4501.26 |
|
Revenue from Operations (Net) |
54055.62 |
40485.92 |
|
Other Income |
160.52 |
173.67 |
|
Operating Expenditure |
50586.07 |
42468.63 |
|
Operating Profit/(Loss) |
3469.55 |
(1982.71) |
|
Profit/(Loss) before Depreciation and Finance cost |
3630.07 |
(1809.04) |
|
Finance Costs |
1808.80 |
2345.96 |
|
Depreciation |
1237.78 |
1161.48 |
|
Profit/ (Loss) before Tax |
583.49 |
(5316.48) |
|
IT/Deferred Tax |
102.19 |
(139.58) |
|
Profit/ (Loss) after Tax |
481.30 |
(5176.90) |
|
Other comprehensive income net of tax |
23.62 |
28.14 |
|
Total comprehensive income/(Loss) for the year |
504.92 |
(5148.76) |
Implementation of Ind AS
The Ministry of Corporate Affairs (MCA) vide its notification dated 14th February 2015 notified the Indian Accounting Standard (Ind AS) applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribed under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounting) Rules 2014, with a transition date of 1st April 2016. The Ind AS is applied to the Company for the first time for the financial year ended 31st March 2018.
The reconciliation and description of the effect of the transition from IGAAP to Ind AS have been provided in Note 48 of the Notes on Accounts in the Financial Statement.
2. REVIEW OF OPERATIONS:
The Company registered a turnover of Rs.540.55 crores for the current financial year ended 31st March 2018 as against Rs.404.85 crores in the previous year ended on 31st March 2017. The Company achieved the above turnover through Branded sales like previous year. Your Company implemented Goods and Services Tax (GST) successfully and the benefit will be expected in coming years.
3. DIVIDEND
Considering the liquidity, cash flow position and previous year loss incurred by the Company, the Board of Directors did not recommend any dividend for the financial year under review.
4. DIRECTORS
Mr.V.M.Gangadharam (DIN: 00106466), Director retires by rotation from the Board, pursuant to the provisions of section 152(6) (c) of the Companies Act, 2013 and, being eligible, offers himself for reappointment.
Mr.K.J.Kumar, Independent Director (DIN: 00153606) resigned from the Board on 5.6.2018. Your Directors would like to place on record their appreciation for his contributions during his tenure.
5. MANAGEMENT DISCUSSION AND ANALYSIS
The Directorsâ comments on Management Discussion and Analysis, which forms a part of this report, are restricted to the areas which are relevant to the current scenario of the Company and outlook.
6. CREDIT RATING
The Company is retaining the following CRISILâs credit ratings.
|
Long Term Rating |
CRISIL BBB/Stable |
|
Short Term Rating |
CRISIL A3 |
7. DIRECTORS RESPONSIBILITY STATEMENT
In pursuance of Section 134(3) of the Act, the Directors hereby confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for that period;
c. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. The directors had prepared the annual accounts on a going concern basis;
e. The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
8. CORPORATE GOVERNANCE
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Compliance Report on Corporate Governance as per Schedule V of the Listing Regulations, along with a Certificate of Compliance from the Statutory Auditors forms part of this report.
9. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on âarmâs lengthâ basis. The Company had not entered into any contract/ arrangement/ transactions with related parties which could be considered material in accordance with the policy of the Company.
The Company enjoys distinct advantages in the form of competitive prices, product quality, economy in transportation cost and lower inventories by virtue of the existing related party transactions.
Particulars of contract or arrangements with related parties referred to in Section 188 (1) in Form AOC-2 has been annexed as Annexure - I.
10. RISK MANAGEMENT
The Board has formulated the Companyâs Risk Management Policy, identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134 (3) (n), which has been exhibited in the Companyâs website.
11. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate and effective internal financial control system commensurate with its size and operations.
12. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director under section 149 (7) of the Act that they meet with the criteria of their independence laid down in Section 149 (6).
13. APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
Pursuant to the provisions of Section 178 (3) read with Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 19(4) read with Schedule II Part -D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director and for evaluating performance of the Directors and Key Management Personnel, which can be viewed at the Companyâs website www.butterflyindia.com.
14. KEY MANAGERIAL PERSONNEL (KMP)
The following managerial personnel are Key Managerial Personnel (KMP):
- 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.Prakash Iyer, Chief Executive Officer
- Mr.K.S.Ramakrishnan, Company Secretary & General Manager-Legal
- Mr.R.Nagarajan, Chief Financial Officer
15. PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS
The details of programme for familiarization of independent directors of the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Companyâs website www. butterflyindia.com.
16. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Company has formulated and devised policies regarding qualifications, positive attributes and independence of a Director as also a policy relating to the remuneration for the Directors and Key Management Personnel. The Companyâs policy in this regard is exhibited in its website www.butterflyindia.com.
17. PERFORMANCE EVALUATION OF DIRECTORS
The Independent Directors of the Company held a separate meeting on 06.04.2018 without the attendance of non-independent Directors and members of management. At the said meeting, they reviewed the performance of non-independent Directors and the Board as a whole, including the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors. Similarly, at a meeting of the Board of Directors held on the same day, the Board evaluated the performance of each Independent Directors and the Committees represented by such Independent Directors in accordance with the parameters for such evaluation formulated by the Nomination and Remuneration Committee of the Company.
18. AUDITORS
i. Statutory Auditors and their Report:
The Members at the 30th Annual General Meeting of the Company held on 7th September 2017, had appointed M/s. ASA & Associates LLP, Chartered Accountants (Firm Registration No. 009571N/ N500006) as the Statutory Auditors of the Company to hold office for a term of five years i.e., from the conclusion of the said Annual General Meeting until the conclusion of 35th Annual General Meeting of the Company to be held in 2022, subject to ratification of their appointment by the shareholders, every year. The Ministry of Corporate Affairs vide its Notification dated 7th May, 2018, has dispensed with the requirement of ratification of Auditorsâ appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditorsâ appointment is not included in the Notice of the ensuing Annual General Meeting.
The Auditorsâ Report to the Shareholders on the financial statements for the year ended 31st March 2018 does not contain any qualification / reservations or adverse comments.
ii. Cost Auditor and Cost Audit Report:
The Board has reappointed M/s.S.Mahadevan & Co., Cost Auditors (FRN.000007), No.1, Lakshmi Nivas, K.V.Colony, Third Street, West Mambalam, Chennai - 600 033 for conducting the audit of cost records of the Company for the financial year 2018-19. Their report for financial year 2016-17 was filed on the MCA Portal on 19.09.2017.
iii. Secretarial Auditor and Secretarial Audit Report:
The Board has appointed M/s.A.K.Jain & Associates, Company Secretaries, [CP No.3550] No.2 (New No.3), Raja Annamalai Road, First Floor, Purasawalkam, Chennai - 600084 to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31.3.2018 is annexed to this report as Annexure II. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
19. DISCLOSURES
Audit Committee
The Audit Committee comprises Independent Directors, viz., Messrs.K.Ganesan (Chairman), M.Padmanabhan and A.Balasubramanian (Members) all qualified as Chartered Accountants and also V.M.Lakshminarayanan, Chairman & Managing Director of the Company as a Member. All the recommendations made by the Audit Committee were accepted by the Board.
Vigil Mechanism
The Company has established vigil mechanism for directors and employees to report genuine concerns pursuant to section 177 (9) and (10) of the Act and Regulation 22 of the Listing Regulations, 2015.
The Vigil Mechanism of the Company also incorporates a Whistle Blower Policy in terms of the Listing Regulations. Protected disclosures can be made by a Whistle Blower through anâ email or dedicated telephone line or a letter addressed to the Chairman of the Audit Committee/ Executive Director of the Company. The Companyâs Whistle Blower Policy may be accessed on its website at the link www.butterflyindia.com.
Meetings of the Board
The Board met seven times during the financial year. The meeting details are provided in the Corporate Governance Report forming part of this Boardâs Report.
Conservation of energy, technology, absorption and foreign exchange out go:
Information relating to energy conservation, technology absorption, foreign exchange earned and spent, and research and development activities undertaken by the Company in accordance with Section 134 (3) (m) of the Act read with Rule 8(3) (A) of Companies (Accounts) Rules, 2014, are given in Annexure - III of the Directorsâ Report.
Extract of Annual Return:
As required pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014, an extract of Annual Return in Form MGT-9 is given in Annexure - IV of the Directorsâ Report.
Statement pursuant to Rule 5 (1), (2) & (3) of Companies (Appointment and remuneration)
Rules 2014:
Information as per Section 197 (12) of the Companies Act 2013 read with Rules 5 (1), (2) & (3) of Companies (Appointment and Remuneration) Rules 2014 is annexed as Annexure V.
Payment of remuneration made to managerial personnel is in conformity with Schedule V Part II Section II (A) to the Companies Act 2013.
Corporate Social Responsibility Committee
Pursuant to the provisions of Section 135(1) of the Act, the Company has constituted a Corporate Social Responsibility Committee, consisting two Independent Directors and the Chairman & Managing Director of the Company. The said Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy), indicating the activities to be undertaken by the Company, which has been approved by the Board.
During the year under review, the Company created a plan to ensure that its CSR initiatives are truly beneficial to the community in the long run. The Company initiated CSR projects in the area of education, environment and community/social development having duration of more than one year. The Company regularly spends significant amounts of money on various activities aimed at serving communities around the factories. That our Company was always contributing to CSR activities much before it was even mandated for several years now. However, since the Company did not reach any one of the minimum threshold limits stipulated in Section 135 (1) of the Act, the Company is not liable for CSR expenses for the year under review.
During the financial year ended 31st March 2018, the Committee met three times on 7.4.2017, 15.11.2017 and 8.2.2018.
The CSR committee confirmed that the implementation and monitoring of CSR Policy is in compliances with CSR objectives and Policy of the Company.
Details of CSR Activities are annexed as Annexure VI.
Listing with Stock Exchanges
The Company confirms that it has paid the Annual Listing Fee for the year 2018-19 to both National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd., with whom the equity shares of the Company have been listed.
20. GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items, as they are not applicable for the financial year under review:
1. Details relating to deposits covered under chapter V of the Act;
2. Details regarding investment/loan/guarantee, attracting the provisions of section 186 of the Act;
3. Issue of equity shares with differential rights as to dividend, voting or otherwise;
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;
5. Material orders, if any, passed by the Regulators or Courts or Tribunals which may impact the going concern status and Companyâs operations in future;
6. Case, if any, filed under the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act 2013.
There are no material changes and commitments, affecting the financial position of the Company which have occurred between financial year ended 31.03.2018 and the date of this report.
21. PERSONNEL
The spirit of trust, transparency and team work has enabled the Company to build a tradition of partnership and harmonious industrial relations. Your Directors record their sincere appreciation of the dedication and commitment of the employees to achieve excellence in all areas of the business.
22. ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank, in particular State Bank of India and other Consortium Banks, Fullerton India Credit Company Limited, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. for the co-operation extended by them. Our thanks are also due to employees at all levels, suppliers, distributors, dealers and customers for their strong support.
Your Directors also thank the shareholders for their continued confidence and trust placed by them with the Company.
Navalur - 600 130 For and on behalf of the Board
Date - 07.07.2018 V.M.LAKSHMINARAYANAN
Chairman & Managing Director
Mar 31, 2017
REPORT BY BOARD OF DIRECTORS TO SHAREHOLDERS
The Directors have pleasure in presenting this thirtieth Annual Report together with the Audited Statement of Accounts for the financial year ended on 31st March 2017.
FINANCIAL RESULTS:
The Company''s financial performance for the year ended 31st March 2017 is summarized below:
(Rs. in lakhs)
|
Financial Year ended on 31 March 17 |
Financial Year ended on 31 March 16 |
|
|
Revenue from Operations (Gross) |
44,734.60 |
99,459.67 |
|
LESS: Excise Duty |
4,501.26 |
9,365.48 |
|
Revenue from Operations (Net) |
40,233.34 |
90,094.19 |
|
Other Income |
317.80 |
537.66 |
|
Operating Expenditure |
42,925.86 |
84,112.08 |
|
Operating Profit/(Loss) |
(2,692.52) |
5,982.11 |
|
Profit/(Loss) before Depreciation and Finance cost |
(2,374.52) |
6,519.77 |
|
Finance Cost |
2,124.64 |
3,447.75 |
|
Depreciation |
1,161.48 |
1,154.92 |
|
Profit/ (Loss) before Tax |
(5,560.84) |
1,917.10 |
|
IT/Deferred Tax for the current year |
(111.01) |
678.10 |
|
Profit/ (Loss) after Tax |
(5,549.83) |
1,239.00 |
2. REVIEW OF OPERATIONS:
The Company registered a gross turnover of Rs.447.35 crores for the period ended 31st March, 2017 against Rs.994.60 crores including Government Agencies sales of Rs.432.70 crores as compared to previous year ended on 31st March 2016. After completion of the Government supplies made to Tamil Nadu Government and Pondicherry Co-Operative Wholesales Stores Limited, the Company achieved the above turnover only through branded sales. The de-growth was mainly due to demonetization, volatility in raw material prices and continuous weak consumer sentiments during the festive season especially in southern states due to natural calamities.
3. DIVIDEND:
Considering the loss incurred by the Company, the Board of Directors does not recommend any dividend for the financial year under review on equity shares.
4. DIRECTORS:
Mr.V.M.Seshadri (DIN No.00106506), Director retires by rotation from the Board, pursuant to the provisions of section 152(6) (c) of the Companies Act, 2013 and, being eligible, offers himself for reappointment.
Consequent to the resignation of Mr.Prakash Iyer from M/s.Fairwind Private Equity (formerly Reliance Alternative Investment Fund - Private Equity Scheme-I), his nomination has been withdrawn and Mr.Anand Mundra was appointed as a Nominee Director by M/s. Fairwind Private Equity (formerly Reliance Alternative Investment Fund Private Equity Scheme -I), pursuant to the provisions of Article 112 of the Company''s Articles of Association and Section 161(3) of the Companies Act 2013 with effect from the close of 05.08.2016.
5. MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors'' comments on Management Discussion and Analysis, which forms a part of this report, are restricted to the areas which are relevant to the current scenario of the Company and outlook.
6. CREDIT RATING:
The Company is retaining the following CRISIL''s credit ratings for its bank facilities.
Long Term Rating CRISIL BBB
Short Term Rating CRISIL A2
7. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Act, the Directors hereby confirm that:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit & Loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis;
(e) The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
8. CORPORATE GOVERNANCE:
The Report on Corporate Governance along with a certificate from the Statutory Auditors as required under the various provisions of the Companies Act, 2013 and as stipulated under the SEBI (LODR) Regulations, 2015 is annexed to this Report.
9. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an ''arm''s length'' basis. The Company had not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The Company enjoys distinct advantages in the form of competitive prices, product quality, economy in transportation cost and lower inventories by virtue of the existing related party transactions.
Particulars of contract or arrangements with related parties referred to in Section 188 (1) in Form AOC-2 has been annexed as Annexure - I
10. RISK MANAGEMENT:
The Board has formulated the Company''s Risk Management Policy, identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134 (3) (n), which has been exhibited in the Company''s website.
11. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate and effective internal financial control system commensurate with its size and operations.
12. DECLARATION FROM INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director under section 149 (7) of the Act that they meet with the criteria of their independence laid down in Section 149 (6).
13. APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION:
Pursuant to the provisions of Section 178 (3) read with Companies (Meetings of Board and its Powers) Rules
2014 and Regulation 19(4) read with Schedule II Part -D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director and for evaluating performance of the Directors and Key Management Personnel, which can be viewed at the Company''s website www.butterflyindia.com.
14. KEY MANAGERIAL PERSONNEL (KMP):
The following managerial personnel are Key Managerial Personnel (KMP):
- 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.Prakash Iyer, Chief Executive Officer w.e.f.
5.8.2016.
- Mr.K.S.Ramakrishnan, Company Secretary & General Manager-Legal w.e.f.1.7.2016
- Mr.R.Nagarajan, Chief Financial Officer
15. PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS:
The details of programme for familiarization of independent directors of the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at its link www.butterflyindia.com.
16. NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee of the Company has formulated and devised policies regarding qualifications, positive attributes and independence of a Director as also a policy relating to the remuneration for the Directors and Key Management Personnel. The Company''s policy in this regard is exhibited in its website www.butterflyindia.com.
17. PERFORMANCE EVALUATION OF DIRECTORS:
The independent Directors of the Company held a separate meeting on 29.03.2017 without the attendance of non-independent Directors and members of management. At the said meeting, they reviewed the performance of non-independent Directors and the Board as a whole, including the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Director. Similarly, at a meeting of the Board of Directors held on 7.4.2017, the Board evaluated the performance of each Independent Directors and the Committees represented by such Independent Directors in accordance with the parameters for such evaluation formulated by the Nomination and Remuneration Committee of the Company.
18. AUDITORS AND AUDITORS REPORT: Statutory Auditors:
Under Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014, the term of M/s.Rudhrakumar Associates (FRN 007033 S), Chartered Accountants, Chennai as the Statutory Auditor of the Company expires at the conclusion of the ensuing Annual General Meeting of the Company. The Board wishes to place on record its appreciation for the valuable contribution/services made by them to the Company during their long tenure.
The Board of Directors of the Company at their meeting held on 5.7.2017 on the recommendation of the Audit Committee, have made its recommendation for the appointment of M/s.ASA Associates LLP, Chartered Accountants, (FRN 009571N/N500006) as Statutory Auditors of the Company by the Members at the Thirtieth Annual General Meeting of the Company for an initial term of five years. Accordingly, a resolution, proposing appointment of M/s.ASA Associates LLP, Chartered Accountants as a Statutory Auditors of the Company for a term of five consecutive years (i.e.) from the conclusion of Thirtieth Annual General Meeting of the Company till the conclusion of the thirty fifth Annual General Meeting of the Company, subject to ratification of the appointment by the Members at every Annual General Meeting.
Pursuant to Section 139 of the Companies Act 2013, forms part of the notice of the thirtieth Annual General Meeting of the Company.
19. COST AUDITORS:
The Board has reappointed M/s.S.Mahadevan & Co., Cost Auditors (FRN.000007), No.1, Lakshmi Nivas, K.V.Colony, Third Street, West Mambalam, Chennai - 600 033 for conducting the audit of cost records of the Company for the financial year 2017-18. Their report for financial year 2015-16 was filed on the MCA Portal on 27.08.2016.
20. SECRETARIAL AUDIT:
The Board has appointed Mr.T.Murugan, Company Secretary in Practice, [COP No.4393], M-22E, Sri Subah Colony, Munusamy Road, K.K.Nagar, Chennai - 600 078 to conduct Secretarial Audit for the financial year 2016
17. The Secretarial Audit Report for the financial year ended 31.3.2017 is annexed to this report as Annexure
II. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
21. DISCLOSURES:
Audit Committee:
The Audit Committee comprises Independent Directors, viz., Messrs.K.Ganesan (Chairman), M.Padmanabhan and A.Balasubramanian (Members) all Chartered Accountants and also V.M.Lakshminarayanan, Chairman & Managing Director of the Company as a Member. All the recommendations made by the Audit Committee were accepted by the Board.
Vigil Mechanism:
The Company has established vigil mechanism for directors and employees to report genuine concerns pursuant to section 177 (9) and (10) of the Act and Regulation 22 of the Listing Regulations, 2015.
The Vigil Mechanism of the Company also incorporates a Whistle Blower Policy in terms of the Listing Regulations. Protected disclosures can be made by a Whistle Blower through an email or dedicated telephone line or a letter addressed to the Chairman of the Audit Committee/ Executive Director of the Company. The Company''s Whistle Blower Policy may be accessed on its website at the link www.butterflyindia.com.
Meetings of the Board:
The Board met seven times during the financial year. The meeting details are provided in the Corporate Governance Report forming part of this Board''s Report.
Conservation of energy, technology, absorption and foreign exchange out go:
Information relating to energy conservation, technology absorption, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with Section 134 (3) (m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014, are given in Annexure - III of the Directors'' Report.
Extract of Annual Return:
As required pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014, an extract of Annual Return in Form MGT-9 is given in Annexure - IV of the Directors'' Report.
Statement pursuant to Rule 5 (1), (2) & (3) of Companies (Appointment and remuneration)
Rules 2014:
Information as per Section 197 (12) of the Companies Act 2013 read with Rules 5 (1), (2) & (3) of Companies (Appointment and Remuneration) Rules 2014 is annexed as Annexure V.
Payment of remuneration made to managerial personnel is in conformity with Schedule V Part II Section II (A) to the Companies Act 2013.
Corporate Social Responsibility Committee:
Pursuant to the provisions of Section 135(1) of the Act, the Company has constituted a Corporate Social Responsibility Committee, consisting two Independent Directors and the Chairman & Managing Director of the Company. The said Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy), indicating the activities to be undertaken by the Company, which has been approved by the Board.
During the year under review, the Company created a plan to ensure that its CSR initiatives are truly beneficial to the community in the long run. The company initiated CSR projects in the area of education, environment and community/social development having duration of more than one year. For this reasons, during the year, the Company''s spending on the CSR activities has been less than the prescribed limits. The Company regularly spends significant amounts of money on various activities aimed at serving communities around the factories. That our Company was always contributing to CSR activities much before it was even mandated for several years now. The Company will keep this momentum; despite spend on such social responsibility activities not qualifying as CSR expenses under the Companies Act 2013.
The CSR committee confirmed that the implementation and monitoring of CSR Policy is in compliances with CSR objectives and Policy of the Company.
Details of CSR Activities are annexed as Annexure VI.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fee for the year 2017-18 to both National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd., with whom the equity shares of the Company have been listed.
22. GENERAL:
Your Directors state that no disclosure or reporting is required in respect of the following items, as they are not applicable for the financial year under review:
1. Details relating to deposits covered under chapter V of the Act;
2. Details regarding investment/loan/guarantee, attracting the provisions of section 186 of the Act;
3. Issue of equity shares with differential rights as to dividend, voting or otherwise;
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;
5. Material orders, if any, passed by the Regulators or Courts or Tribunals which may impact the going concern status and Company''s operations in future;
6. Case, if any, filed under the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act 2013.
There are no material changes and commitments, affecting the financial position of the Company which have occurred between financial year ended 31.03.2017 and the date of this report.
23. PERSONNEL
The spirit of trust, transparency and team work has enabled the Company to build a tradition of partnership and harmonious industrial relations. Your Directors record their sincere appreciation of the dedication and commitment of the employees to achieve excellence in all areas of the business.
24. ACKNOWLEDGEMENTS:
Your Directors take this opportunity to thank, in particular State Bank of Travancore, Industrial Development Bank of India Ltd., Axis Bank, Kotak Mahindra Bank Ltd, State Bank of India, Fullerton India Credit Company Ltd, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. for the co-operation extended by them. Our thanks are also due to employees at all levels, suppliers, distributors, dealers and customers for their strong support.
Your Directors also thank the shareholders for their continued confidence and trust placed by them with the Company.
Navalur - 600 130 For and on behalf of the Board
Date - 05.07.2017 V.M.LAKSHMINARAYANAN
Chairman & Managing Director
Mar 31, 2015
Dear members,
The Directors have pleasure in presenting this twenty eighth Annual
Report together with the Audited Statement of Accounts for the
financial year ended on 31st March 2015.
FINANCIAL RESULTS:
The Company's financial performance for the year ended 31st March 2015
is summarised below:
Financial Year Financial Year
ended on ended on
31.03.2015 31.03.2014
Revenue from Operations (Gross) 57,719.28 83,886.82
LESS: Excise Duty 4,821.30 7,468.69
Revenue from Operations (Net) 52,897.98 76,418.13
Other Income 435.43 654.68
Operating Expenditure 53,751.77 78,388.68
Operating Profit 3,967.51 5,498.14
Profit before Depreciation and
Finance cost 4,402.94 6,152.83
Finance Cost 2,956.84 2,209.60
Depreciation 1,023.62 509.26
Profit before Tax 422.48 3,433.97
IT/Deferred Tax for the current year 139.19 1,192.55
Profit after Tax 283.29 2,241.42
Against Rs.303.2 crores (net) Tamil Nadu Government sale in financial
year 2013-14, the sale for financial year 2014-15 was only Rs.84.3
crores (net) due to late release of purchase order by the Government.
Added to this, due to sluggish market condition, the branded product
sales came down during the financial year 2014-15, as compared to the
previous year. The combined effect of these factors resulted in lower
revenue from operations and also lower profits for financial year
2014-15.
DIVIDEND:
Considering the marginal profit after tax earned by the Company, the
Board of Directors does not recommend any dividend for the financial
year under review.
CURRENT YEAR'S OPERATIONS:
In January 2015, the Company had bagged orders worth Rs.510 crore
(gross) from the Tamil Nadu Government for supply of Table Top Wet
Grinders during FY 2014-15/2015-16. Against this, purchase orders for
supply of materials worth Rs.255 crores have been released in the first
phase. After supply of Rs.92.12 crores made during financial year
2014-15, supply of balance materials worth Rs.162.88 crores is expected
to be completed by June 2015. The Company is expecting release of the
second phase Purchase Order of the Tamil Nadu Government shortly.
Company has initiated special steps for improving sale of branded
products from the second quarter of the current financial year. This
together with the economy measures adopted by the Company for cost
reduction should bring better performance results for the current
financial year.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors' comments on Management Discussion and Analysis, which
forms a part of this report, are restricted to the areas which are
relevant to the current scenario of the Company and outlook.
CREDIT RATING:
The Company's financial discipline and prudent is reflected in the
following CRISIL's credit ratings on the Company's bank facilities.
Long Term Rating CRISIL A-/Stable (Reaffirmed)
Short Term Rating CRISIL A2 (Reaffirmed)
DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Act, the Directors hereby confirm
that:
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) The directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and
loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern
basis; and
(e) The directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively.
(f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
CORPORATE GOVERNANCE:
The report on Corporate Governance as stipulated under the Listing
Agreement forms an integral part of this Report. Your Com- pany
conforms to the prescribed norms of Corporate Governance.
In accordance with the Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance along with a Certificate of
Compliance from the Auditors forms part of this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were in the ordinary course of
business and on an 'arm's length' basis. The Company had not entered
into any contract/arrangement/transactions with related parties which
could be considered material in accordance with the policy of the
Company on materiality of related party transactions.
The Company enjoys distinct advantages in the form of competitive
prices, product quality, economy in transportation cost and lower
inventories by virtue of the existing related party transactions.
Particulars of contract or arrangements with related parties referred
to in Section 188 (1) in Form AOC-2 has been annexed as Annexure - I
RISK MANAGEMENT:
The Board has formulated the Company's Risk Management Policy,
identifying the elements of risk that the Company may face, such as
strategic, financial, credit, market, liquidity, security, property,
legal, regulatory and other risks, pursuant to the provisions of
Section 134 (3) (n), which has been exhibited in the Company's website
www.butterflyindia.com.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls
commensurate with its size and operations.
DIRECTORS:
Mrs.Maheshwari Mohan (DIN 07156606) who was appointed as Additional
Director at the meeting of the Board held on 31.3.2015 will hold office
up to the conclusion of the ensuing Annual General Meeting of the
Company.
Keeping in view her vast experience as a Lawyer and knowledge in legal
matters, it will be in the interest of the Company that Mrs.
Maheshwari Mohan, who meets the criteria of independence as per the
relevant provisions and is independent of the management, your
Directors recommend her appointment as a Woman Independent Director of
the Company.
The present tenure of Mr.V.M.Kumaresan, Executive Director - Technical
(DIN 00835948) ends on 31.05.2016. The Nomination and Remuneration
Committee and the Board of Directors at their meetings held on
10.6.2015 have recommended his reappoint- ment without any change in
his existing remuneration for a further period of five years w.e.f.
01.06.2016 to 31.5.2021.
Messrs.V.M.Seshadri (DIN:00106506) and V.M.Gangadharam (DIN: 00106466),
Directors retire by rotation from the Board pursuant to the provisions
of Section 152 (6) (c) of the Companies Act 2013 and, being eligible,
offer themselves for reappointment.
DECLARATION FROM INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent
Director under section 149 (7) of the Act that they meet with the
criteria of their independence laid down in Section 149 (6) of the Act.
APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION:
Pursuant to the provisions of Section 178(3), read with Companies
(Meetings of Board and its Powers) Rules 2014 and Clause 49(II)(B)(5)
and Clause 49 (IV) of the Listing Agreement, the Nomination and
Remuneration Committee has formulated the crite- ria for determining
qualifications, positive attributes and independence of a Director and
for evaluating performance of the Directors and Key Management
Personnel, which can be viewed at the Company's website
www.butterflyindia.com.
PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS:
The details of programme for familiarization of independent directors
of the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company and related matters are put up on the website of the
Company at its link www.butterflyindia.com.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee of the Company has formulated
and devised policies regarding qualifications, pos- itive attributes
and independence of a Director as also a policy relating to the
remuneration for the Directors and Key Management Personnel. The
Company's policy in this regard is exhibited in its website
www.butterflyindia.com.
PERFORMANCE EVALUATION OF DIRECTORS:
The Nomination and Remuneration Committee of the Company has evaluated
performance of every Director of the Company for the financial year
under review.
The independent Directors of the Company held a separate meeting
without the attendance of non-independent Directors and members of
management. At the said meeting, they reviewed the performance of
non-independent Directors and the Board as a whole including the
Chairman of the Company, taking into account the views of Executive
Directors and Non-Executive Direc- tors. Similarly, at a meeting of the
Board of Directors, the Board evaluated the performance of each
Independent Directors and the Committees represented by such
Independent Directors in accordance with the parameters for such
evaluation formulated by the Nomination and Remuneration Committee of
the Company.
AUDITORS AND AUDITORS REPORT:
Provisions of Rule 6 (3), illustration 1, of the Companies (Audit and
Auditors) Rules 2014, explaining rotation in case of individual
auditor, restrict the maximum number of consecutive years for which the
Auditors, who were Statutory Auditors of the Company for more than five
years prior to commencement of provisions of Section 139(2) of the
Companies Act 2013 (the New Act) to three years. Considering that
M/s.Rudhrakumar Associates, Chartered Accountants (FRN.007033 S),
Chennai, were Auditors of the Company for more than five years prior to
commencement of the New Act, in partial modification of the resolution,
being resolution No.4, passed at the Annual General Meeting of the
Company held on 31st July 2014, appointing the above Auditors for a
consecutive period of five years, it is proposed to appoint them as
Statutory Auditors from the conclusion of this twenty eighth Annual
General Meeting, till the conclusion of the thirtieth Annual General
Meeting of the Company, they having been Auditors for the financial
year 2014-15. The Company has received a letter from M/s.Rudhrakumar
Associates, Chartered Accountants to the effect that their
reappointment, if made, would be in accordance with the conditions
prescribed under Section 139(2) of the New Act read with the applicable
rules and a certificate confirming that they are not disqualified for
such reappointment within the meaning of Section 141 of the New Act.
The Board of Directors commend passing of the resolution being Item
No.4 of the Notice convening this meeting.
The Notes on financial statement referred to in the Auditors' Report
are self-explanatory and do not call for any further comments. The
Auditors' Report does not contain any qualification, reservation or
adverse remark.
COST AUDITORS:
The Board has reappointed M/s.S.Mahadevan & Co., Cost Auditors
(FRN.000007), No.1, Lakshmi Nivas, K.V.Colony, Third Street, West
Mambalam, Chennai - 600 033 for conducting the audit of cost records of
the Company for the financial year 2015-16. Their report for financial
year 2013-14 was filed on the MCA Portal on 15.11.2014.
SECRETARIAL AUDIT:
The Board appointed Mr.TMurugan, Company Secretary in Practice, [COP
No.4393], M22E, Sri Subah Colony, Munusamy Road, K.K.Nagar, Chennai -
600 078 to conduct Secretarial Audit for the financial year 2014-15.
The Secretarial Audit Report for the financial year ended 31.3.2015 is
annexed to this report as Annexure II. The Secretarial Audit Report
does not contain any qualification, reservation or adverse remark.
DISCLOSURES:
Audit Committee:
The Audit Committee comprises Independent Directors, viz.,
Messrs.K.Ganesan (Chairman), V.R.Lakshminarayanan, M. Padmanabhan and
A.Balasubramanian (Members), and also V.M.Lakshminarayanan, Chairman &
Managing Director of the Company as a Member. All the recommendations
made by the Audit Committee were accepted by the Board.
Vigil Mechanism:
The Company has established vigil mechanism for directors and employees
to report genuine concerns pursuant to section 177 (9) and (10) of the
Act and Clause 49 (F) of the Listing Agreement.
The Vigil Mechanism of the Company also incorporates a Whistle Blower
Policy in terms of the Listing Agreement. Protected disclosures can be
made by a Whistle Blower through an email or dedicated telephone line
or a letter addressed to the Chairman of the Audit Committee/Executive
Director of the Company. The Company's Whistle Blower Policy may be
accessed on its website at the link www.butterflyindia.com.
Meetings of the Board:
Eight meetings of the Board of Directors were held during the financial
year. For further details please refer to Report on Corporate
Governance in this Annual Report.
Conservation of energy, technology, absorption and foreign exchange out
go:
Information relating to energy conservation, technology absorption,
foreign exchange earned and spent and research and develop- ment
activities undertaken by the Company in accordance with Section 134 (3)
(m) of the Act read with Rule 8(3) (A) of Companies (Accounts) Rules,
2014, are given in Annexure - III of the Directors' Report.
Extract of Annual Return:
As required pursuant to Section 92(3) of the Act and Rule 12(1) of the
Companies (Management and Administration) Rules 2014, an extract of
Annual Return in Form MGT-9 is given in Annexure - IV of the Directors'
Report.
Statement pursuant to Rule 5(2) & (3) of Companies (Appointment and
remuneration) Rules 2014:
Statement showing the details of employees pursuant to the provisions
of Rule 5(2) & (3) of Companies (Appointment and Remu- neration) Rules
2014 is annexed as Annexure - V
Details/disclosure of ratio of remuneration to each Director to the
median employee's remuneration, pursuant to provisions of Section 197
(12) read with Rule 5(1) of Companies (Appointment and Remuneration)
Rules 2014 are annexed as Annexure - VI
Payment of remuneration made to managerial personnel is in conformity
with Schedule V Part II Section II (A) to the Companies Act 2013.
Corporate Social Responsibility Committee:
Pursuant to the provisions of Section 135(1) of the Act, the Company
has constituted a Corporate Social Responsibility Committee, consisting
two Independent Directors and the Chairman & Managing Director of the
Company. The said Committee has formulat- ed and recommended to the
Board a Corporate Social Responsibility Policy (CSR Policy), indicating
the activities to be undertaken by the Company, which has been approved
by the Board. However, since the Company did not reach any one of the
minimum threshold limits stipulated in Section 135(1) of the Act, the
Company is not liable for CSR expenses for the year under review.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fee for the
year 2015-16 to both National Stock Exchange of India Ltd and Bombay
Stock Exchange Ltd., with whom the equity shares of the Company have
been listed.
GENERAL:
Your Directors state that no disclosure or reporting is required in
respect of the following items, as they are not applicable for the
financial year under review:
1. Details relating to deposits covered under chapter V of the Act.
2. Details regarding investment/loan/guarantee, attracting the
provisions of Section 186 of the Act.
3. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
4. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
5. Material orders, if any, passed by the Regulators or Courts or
Tribunals, which may impact the going concern status and Com- pany's
operations in future.
6. Case, if any, filed under the Sexual Harassment of Women at the
Work Place (Prevention, Prohibition and Redressal) Act 2013.
There are no material changes and commitments, affecting the financial
position of the Company which have occurred between financial year
ended on 31.3.2015 and the date of this report.
PERSONNEL
The spirit of trust, transparency and team work has enabled the Company
to build a tradition of partnership and harmonious industrial
relations. Your Directors record their sincere appreciation of the
dedication and commitment of the employees to achieve excellence in all
areas of the business.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to thank, in particular State Bank
of Travancore, Industrial Development Bank of India Ltd., Axis Bank,
Kotak Mahindra Bank Ltd, State Bank of India, Ratnakar Bank Ltd.,
Aditya Birla Finance Ltd., Fullerton India Credit Company Ltd, Tamil
Nadu Civil Supplies Corporation, Indian Oil Corporation Ltd., Bharat
Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd for
the co-operation extended by them. Our thanks are also due to employees
at all levels, suppliers, distributors, dealers and customers for their
continued support.
Your Directors also thank the shareholders for their continued
confidence and trust placed by them with the Company.
For and on behalf of the Board
Navalur - 600 130 V.M.LAKSHMINARAYANAN
Date : 10.06.2015 Chairman & Managing Director
Mar 31, 2013
The Directors have pleasure in presenting this Twenty Sixth Annual
Report together with the Audited Statement of Accounts, of the Company
for the financial year ended on 31st March, 2013.
FINANCIAL RESULTS (Rs. in Lakhs)
Financial
year Financial
year
ended on ended on
31.03.2013 31.03.2012
Sales 80699.66 64241.10
Operating Expenditure 73721.30 58483.59
Operating Profit 6978.36 5757.51
Other Income 513.76 563.75
Profit/(Loss) before
Depreciation and Finance cost 7492.12 6321.26
Finance Cost 2233.15 1754.89
Depreciation 400.59 167.01
Profit/floss) before Tax 4858.38 4399.36
Exceptional & Extraordinary items (87.17) 24.65
IT for the current period (1450.71) (1,327.55)
Excess Provision (Net Deferred Tax) 21.80 (55.55)
Profit/(Loss) after Tax 3342.30 3040.92
DIVIDEND
Taking into account that the Company has earned adequate net profits in
the financial year under review, your Directors are pleased to
recommend a dividend of Rs..2.50/- per equity share on 1,78,79,551 fully
paid up equity shares of Rs..10/- each, after transferring Rs..335.16 Lakhs
to General Reserve. The total cash outflow on account of this dividend,
including tax on dividend, is Rs..522.95 lakhs.
REVIEW OF OPERATIONS
During the period under review, sales turnover recorded impressive
growth of 25.62% and profit before interest and depreciation also
improved by 18.52% as compared to the previous financial year. After
providing for interest, depreciation and exceptional and extraordinary
items before tax, the Company earned a profit of Rs..47.71 Crores. The
Company is now focused on a growth curve, both in volume of sales and
areas of operation and the result achieved is to be viewed in this
perspective.
Supply of Table Top Wet Grinders and Mixer Grinders against the tender
of Tamil Nadu Civil Supplies Corporation largely contributed to the
improvement in its sales turnover.
AWARDS AND RECOGNITION
At the Non-Fuel Channel Partners'' Meet of IOCL held at Dharampur
(Kasuali), Himachal Pradesh on 04th May, 2013, the Company was awarded
a Certificate of Excellence for achieving on All India basis the
highest sales of LPG Stoves co-branded with Indane during the financial
year 2012-13.
CURRENT YEAR''S OPERATIONS
Taking into account the effective steps taken by the Company for
accomplishing PAN INDIA market for its products, both for branded and
institutional sales, and in anticipation of repeat orders from the
Government of Tamil Nadu for supply of Table Top Wet Grinders / Mixer
Grinders, your Company expects to sustain its growth rate.
The Company has recently introduced hard anodized Aluminium Pressure
Cookers, new Mixer Grinder and Glass-Top LPG Stove models. In addition,
new products like Hand Blenders and Chimneys have also been introduced.
A host of new products and new models of existing products are in the
pipeline.
The persistent inflationary trend in the country might affect the
disposable income of the individuals which, in turn, can affect the
Company''s turnover/margins. Also, in view of the continuing free
distribution programme of Table Top Wet Grinders and Mixer Grinders to
eligible category of people in Tamil Nadu, turnover of these products
through the regular distribution channel may be affected
OPENING OF BRANCH IN UNITED KINGDOM
With a view to establish regular exports of its products, the Company
incorporated its branch office in the United Kingdom on 30th October
2012. This overseas Branch Office will take care of the export business
of the Company in the UK and the neighbouring European Countries.
DIRECTORS
At the meeting of the Board of Directors of the Company held on 30th
May 2013, the Board appointed Mr.T.R.Srinivasan as an Independent
Additional Director with effect from 01.06.2013, who will hold office
up to the date of this Annual General Meeting. The Company has received
a Notice under Section 257 of the Companies Act 1956 proposing his
candidature as a Director of the Company. Mr.Srinivasan is also willing
to act as Director, if appointed.
At the same Board meeting, Mr.D.Krishnamurthy, Company Secretary was
appointed as additional Director and Executive Director-cum-Company
Secretary of the Company with effect from 01.06.2013, who will hold
office up to the date of this Annual General Meeting. The Company has
received a Notice under Section 257 of the Companies Act 1956 proposing
his candidature as a Director of the Company. Mr.Krishnamurthy is also
willing to act as Director, if appointed.
The present tenure of Messrs.V.M.Seshadri, Managing Director and
V.M.Gangadharam, Executive Director expires respectively on 31.5.2014
and 30.9.2013. The Remuneration Committee at its meeting held on
27.5.2013 and the Board of Directors at its meeting held on 30.5.2013
have recommended their reappointment without any change in their
existing remuneration package for a further term of three years
respectively w.e.f. 1.6.2014 and 1.10.2013.
Messrs.A.Balasubramanian, K.J.Kumar and GS.Samuel, Directors retire by
rotation from the Board under Company''s Articles of Association and
being eligible offer themselves for reappointment.
MANAGEMENT DISCUSSION AND ANALYSIS
The Directors'' comments on Management Discussion and Analysis are
restricted to the areas which are relevant to the current scenario of
the Company and outlook.
CORPORATE GOVERNANCE l
Your Company conforms to the norms of Corporate Governance. In
accordance with the Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance along with a Certificate of
compliance from the Auditors forms part of this report.
AUDITORS
Messrs.Rudhrakumar Associates, Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Meeting and being eligible
have expressed their willingness to continue in office, if reappointed.
FIXED DEPOSITS
The Company has not accepted any deposits from the public and, as such,
there are no outstanding in terms of the Companies (Acceptance of
Deposits) Rules 1975.
REPORT ON ENERGY CONSERVATION AND R&D ACTIVITIES
Information relating to energy conservation, foreign exchange earned
and spent and research and development activities undertaken by the
Company in accordance with the provisions of Section 217(1 )(e) of the
Companies Act, 1956 read with Companies (Disclosure of particulars in
the Report of Board of Directors) Rules 1988 are given in Annexure "A"
of the Directors'' Report.
PARTICULARS OF EMPLOYEES [SECTION 217 (2A)]
The particulars as required under Section 217(2A) of the Companies Act
1956 are given in Annexure "B" of the Directors'' Report
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956 your
Directors confirm:
In the preparation of the Annual Accounts:
i. the applicable accounting standards have been followed.
ii. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and the results of the
Company for the year.
iii. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities
iv. "Going concern" basis has been followed.
The financial statements have been audited by Messrs.Rudhrakumar
Associates, Chartered Accountants, the Statutory Auditors and their
report is attached to the Accounts.
PERSONNEL
The spirit of trust, transparency and team work has enabled the Company
to build a tradition of partnership and harmonious industrial
relations. Your Directors record their sincere appreciation of the
dedication and commitment of the employees to achieve excellence in all
areas of the business.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank, in particular,
Industrial Development Bank of India Ltd., State Bank of Travancore,
Bank of Baroda, The South Indian Bank Ltd, Axis Bank, ING Vysya Bank
Ltd, PEC Ltd, Religare Finvest Ltd, Fullerton India Credit Company Ltd,
Tamil Nadu Civil Supplies Corporation, Indian Oil Corporation Ltd.,
Bharat Petroleum Corporation Limited and Hindustan Petroleum
Corporation Limited for the co-operation extended by them. Our thanks
are also due to the suppliers, distributors, dealers and customers for
their continued support.
Your Directors also thank the shareholders for their continued
confidence and trust placed by them with the Company.
For and on behalf of the Board
V.M.LAKSHMINARAYANAN
Chairman & Managing Director
Navalur-603 103
Date: 30.5.2013
Mar 31, 2012
The Directors have pleasure in presenting this Twenty fifth Annual
Report together with the Audited Statement of Accounts, of the Company
for the financial year ended on 31 st March, 2012.
FINANCIAL RESULTS: Rs. In lakhs
Financial year Financial year
ended on of 9 months
31.03.2012 ended on
31.03.2011
Sales 64,241.10 22,070.48
Operating Expenditure 58,483.59 20,051.97
Operating Profit 5,757.51 2,018.51
Other income 563.75 272.28
Profit/(Loss) before
Depreciation and Finance Cost 6,321.26 2,290.79
Finance Cost 1,754.89 674.25
Depreciation 167.01 95.46
Profit/(loss) before Tax 4,399.36 1,521.08
Exceptional & Extraordinary items 24.65 117.79
IT for the current period (1,327.55) (549.29)
Excess Provision
(Net of Deferred Tax) (55.55) 429.55
Profit/(Loss) after Tax 3,040.91 1,519.13
DIVIDEND:
Taking into account that the Company has earned adequate net profits in
the financial year under review, your Directors are pleased to
recommend a dividend of Rs.2/- per equity share on 1,78,79,551 fully
paid up equity shares of Rs. 10/- each. The total cash outflow on
account of this dividend, including tax on dividend, is Rs.415.59 lakhs.
REVIEW OF OPERATIONS:
During the period under review, sales turnover on an annualized basis
recorded phenomenal growth of 141 % and profit before interest and
depreciation on an annualized basis also improved as compared to the
previous financial year. After providing for interest and depreciation,
the Company earned a profit of Rs.30.41 crores.
Supply of Table Top Wet Grinders and Mixer Grinders against the tender
of Tamilnadu Civil Supplies Corporation largely contributed to the
improvement in sales turnover.
AWARDS AND RECOGNITION:
Your Company won National Award-2010, First Prize, awarded by
Government of India, Ministry of Micro, Small and Medium Enterprises
for its LPG Operated Stoves/Appliances. Also, appreciating your
Company's performance and growth during the financial year 2011 -12,
M/s. Indian Oil Corporation Limited(IOCL) has presented a memento for
having stood first on All India basis in turnover, with respect to LPG
Stoves supplied through the LPG gas distributors of IOCL.
CURRENT YEAR'S OPERATIONS:
Taking into account the steps taken by the Company for establishing PAN
INDIA market for its products and in anticipation of repeat orders from
the Government of Tamilnadu for supply of Mixer Grinders and Table Top
Wet Grinders, your Company expects to sustain its growth rate. However,
the persistent inflationary trend in the country could have some effect
in the disposable income of the individuals which, in turn, can affect
the Company's turnover/margins. Also, in view of the free
distribution programme of Table Top Wet Grinders and Mixer Grinders to
eligible category of people in Tamilnadu, turnover of these products
through the regular distribution channel may be affected.
MERGER OF GANGADHARAM APPLIANCES LIMITED:
The Hon'ble Board for Industrial and Financial Reconstruction at its
Review Hearing of Case No. 279/98 of M/s.Gangadharam Appliances Limited
(GAL) held on 17-08-2011 sanctioned the Modified Rehabilitation cum
Merger Scheme (MS-11) submitted by GAL. The merger scheme envisaged
GAL's merger with the Company, as per scheme already approved by the
members at the Extraordinary General Meeting of the Company held on
09th September, 2010. After completing statutory requirements, we
merger became effective on 27th September 2011, with retrospective
effect from 01 st January, 2009. This merger will facilitate the
Company's stride along the road for its accelerated growth.
AUTHORISED SHARE CAPITAL
Taking into account the Company's future growth plans, members
approved enhancement of its Authorized Share Capital from Rs. 10 crores
to Rs.25 crores at the Annual General Meeting held on y ,-08-2011.
Added to this, in terms of the Rehabilitation-cum-Merger Scheme as
mentioned above, the Authorized Share Capital of the Company after the
said merger stood enhanced by a further amount of Rs. 15 crores (being
unabsorbed authorized share capital of GAL), i.e., from Rs.25 crores to
Rs.40 crores.
ISSUED AND PAID UP CAPITAL
In terms of the Rehabilitation - cum - Merger Scheme stated above,
57,93,950 Equity Shares of Rs. 10/- each of the Company were allotted
to the members of the erstwhile Gangadharam Appliances Limited on 14th
November, 2011. With this issue, the Company ' s issued and paid up
capital increased from 96,34,601 Equity Shares of Rs. 10/- each to
1,54,28,551 Equity Shares of Rs. 10/- each as on 31st March, 2012.
The newly issued shares will rank paripassu with the existing equity
shares of the Company in all respects, including for payment of
dividend for financial year ended on 31 -3-2012.
PREFERENTIAL ISSUE
At the Extraordinary General Meeting of the Company held on 16th April,
2012, members approved through a Special Resolution, Preferential Issue
of24,51,000 (Twenty four lakhs fifty one thousand) Equity Shares of Rs.
10/- each at apremium of Rs.398/- per equity share aggregating Rs.
100,00,08,000/*- (Rupees One hundred crores eight thousand) in favour
of M/s.Reliance Alternative Investments Fund- Private Equity Scheme-I
(acting through Reliance Alternative Investments Services Private
Limited). The subscription money was received from the said Private
Equity Investor on 11 th May, 2012 and the aforesaid Equity Shares were
issued in their favour. These shares will also rank paripassu with ihe
existing equity shares of the Company in all respects.
The Company proposes to utilize the above amount towards settlement of
its high cost term loans (Rs.30 crores), Capital expenditure for
creating additional capacity/backward integration (Rs.40 crores) and
future Working Capital margin requirements (Rs.30 crores).
DIRECTORS: w
At the Extraordinary General Meeting of the Company held on 24th
December, 2011, members through a Special Resolution approved the
appointment of Mr. V.M.Lakshminarayanan, who hitherto w|s Non-Executive
Chairman of the Company, as Managing Director of the Company for a
period of three years with effect from 01 st December, 2011.
Accordingly, Mr. V.M.Lakshminarayanan has become life Managing Director
of the Company, besides being Chairman.
Mr. V.R.Sivaraman, who was Director of the Company, resigned on 02nd
January, 2012 due to his old age. Your Directors place on record their
sincere appreciation of the valuable contribution of Mr. V.RSivaraman
during his long tenure as the Director of the Company. n
At the meeting of the Board of Directors of the Company held on 14th
November, 2011, the Boar$ appointed Mr. ABalasubramanian as an
Additional Director with effect from 14th November, 2011, when will hold
office up to the date of this Annual General Meeting.
The Company has received a Notice u/s.257 of the Companies Act, 1956
proposing his candidature as a Director of the Company.
Mr.Balasubramanian is also willing to act as Director, if appointed. t;
With a view to comply with the provisions of Clause 49 (1 A) of the
Listing Agreement, at the meeting of the Board of Directors held on 11
th May, 2012, Mr.K. J.Kumar was appointed as an Independent Director in
the casual vacancy created by the resignation of Mr. V.R.SiVaraman. At
the same meeting, Mr.G.S.Samuel was also appointed as an Additional
Director (Independent). Both Messrs.K. J.Kumgt and G.S.Samuel will hold
office upto the date of this Annual General Meeting. The Company has
received Notices under Section 257 of the Companies Act, 1956 proposing
their candidature as Directors of the Company .They are also willing to
act as Directors, if appointed.
In terms of Article 112 of the Articles of Association of the Company
amended through Special Resolution at the Extraordinary General Meeting
held on 16-04-2012, the Private Equity Investor has appointed
Mr.R.S.Prakash as their Nominee Director, who will be a Non-Executive
Director not liable to retire on a rotational basis and not required to
hold any qualification shares. In terms of the said Artiste Mr.Prakash
has to be elected as a Director at the ensuing Annual General Meeting
of the Company, who shall hold such office until the investor changes
or withdraws his nomination.
Pending approval of the Central Government for the increase in the
number of Directors beyond 12, it became necessary for one of the
non-independent Directors, viz. Mr.D.Krishnamurthy, to step down from
the Board. The Board, appreciating his service as Executive Director of
the Company, agreed that he could be made Executive Director of the
Company, as soon as the Central Government approval for increasing the
strength of the Board is received and one more independent Director is
appointed.
Messrs.M.Padmanabhan, K.Ganesan and V.R.Lakshminarayanan, Directors
retire by rotation from the Board under Company's Articles of
Association and being eligible, offer themselves for reappointment.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors comments on Management Discussion and Analysis are
restricted to the areas which are relevant to the current scenario of
the Company and outlook.
CORPORATE GOVERNANCE:
Your Company conforms to the norms of Corporate Governance. In
accordance with the Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance along with a Certificate of
compliance from the Auditors forms part of this report.
CHANGE OF ARTICLES OF ASSOCIATION:
# - At the Extraordinary General Meeting of the Company held on 16th
April, 2012, members have approved a new set of Articles of Association
in substitution of the previous Articles of Association of the Company,
which has come into force and effect from the said date of the meeting.
AUDITORS:
Messrs.Rudhrakumar Associates, Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Meeting and being eligible
have expressed their willingness to continue in office, if reappointed
COST AUDITOR :
Central Government has issued directives for the maintenance of Cost
Records for the Company's own manufactured products and the Cost
Audit thereof, which has been complied with by the Company.
FIXED DEPOSITS:
The Company has not accepted any deposits from the public and, as such,
there are no outstanding in terms of the Companies (Acceptance of
Deposits) Rules 1975.
PARTICULARS OF EMPLOYEES (SECTION 217 (2A)):
There was no employee covered by the provisions of Section 217(2A) of
the Companies Act, 1956.
REPORT ON ENERGY CONSERVATION AND R&D ACTIVITIES:
Information relating to energy conservation, foreign exchange earned
and spent and research and development activities undertaken by the
Company in accordance with the provisions of217(l)(e)of the Companies
Act, 1956 read with Companies (Disclosure of particulars in the Report
of Board of Directors) Rules 1988 are given in Annexure "A" of the
Directors' Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Statement under sub-section (2 AA) of Section 217 of the Companies Act,
1956 ("The Act").
In the preparation of the Annual Accounts: i the applicable accounting
standards have been followed.
ii. the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and the results of the
Company for the year.
iii proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities
iv. "Going concern" basis has been followed.
The financial statements have been audited by Messrs.Rudhrakumar
Associates, Chartered Accountants, the Statutory Auditors and their
report is attached to the Accounts.
GRATUITY/SUPERANNUATION FUND
Subject to approval of Commissioner of Income Tax, the Company has
formed separate Trusts for Gratuity and Superannuation Fund effective
from 01st March, 2012. Messrs.V.M.Lakshminarayanan, Chairman & Managing
Director, V.M.Balasubramaniam, Director and D.Krishnamurthy, Company
Secretary have been appointed as Trustees for both these Trust Funds.
PERSONNEL
The spirit of trust, transparency and team work has enabled the Company
to build a tradition of partnership and harmonious industrial
relations. Your Directors record their sincere appreciation of the
dedication and commitment of the employees to achieve excellence in all
areas of the business.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to thank, in particular,
Industrial Development Bank of India Ltd., State Bank of Travancore,
Bank of Baroda, The South Indian Bank Ltd, PEC Ltd,ReligareFinvest Ltd,
Tamilnadu Civil Supplies Corporation, Indian Oil Corporation Ltd.,
Bharat Petroleum Corporation Limited and Hindusan Petroleum Corporation
Limited for the co-operation extended by them. Our thanks are also due
to the suppliers, distributors, dealers and customers for their
continued support.
Your Directors also thank the shareholders for their continued
confidence and trust placed by them with the Company.
For and on behalf of the Board
V.M.LAKSHMINARAYANAN
Chairman & Managing Director
Chennai-600 018
Date: 20th July, 2012
Mar 31, 2011
REPORT TO SHAREHOLDERS
The Directors have pleasure in presenting this Twenty fourth Annual
Report together with the Audited Statement of Accounts, of the Company
for the financial year of nine months ended on 3181 March, 2011.
FINANCIAL RESULTS: (Rs. in lakhs)
Financial year Financial year
of 9 months of 18 months
ended on ended on
31.06.2011 30.06.2010
Sales 22070.48 27162.38
Operating Expenditure 20199.98 24320.83
Operating Profit 1870.50 2841.55
Other Income 272.28 182.50
Profit/(Loss) before
Depreciation and interest 2142.78 3024.05
Interest 526.24 665.11
Depreciation 95.46 130.15
Profit/(loss) before Tax 1521.08 2228.79
Fringe Benefit Tax -- (0.83)
Income Tax for the current
period (549.29) (1019.87)
Interest Reclaimed by Bank -- (132.00)
Deferred Tax Assets/
(Liability) (7.76) 482.14
^Profit/fLoss) after Tax 1519.13 1558.23
DIVIDEND:
Taking into account that the Company has earned net profits
consecutively in the last financial year and the current financial
year, wiping off the entire carry forward loss, your Directors are
pleased to recommend a dividend of Re.1/- per equity share on 96,34,601
equity shares of Rs.10/- each. The total cash outflow on account of
this dividend, including tax on dividend, is Rs. 112.35 lakhs.
REVIEW OF OPERATIONS:
During the period under review, sales turnover on an annualised basis
improved by 47% and profit before interest and ëBûpreciation on an
annualised basis also improved as compared to the previous financial
year. After providing for interest and depreciation, the Company earned
a profit of Rs. 15.21 crores.
In the early morning hours of 14th December 2010, an unfortunate fire
accident took place at our factory premises in the Pressure Cooker
Division. Inventories worth approximate Rs.1.18 crores got damaged in
the fire. The necessary claim with the Insurance Company has been made,
as indicated vide Note No.7 of Schedule 17, Notes on Accounts.
CURRENT YEAR'S OPERATIONS:
Taking into account the increasing trend of consumers and also in
anticipation of handsome orders from the Govern- ment of Tamil Nadu for
supply of Mixer Grinders and Table Top Wet Grinders as a part of its
election manifesto, your Company expects to sustain its growth rate.
However, the persisting inflationary trend in the country could have
some effect in the disposable income of the individuals, which to some
extent can affect the Company's turnover.
DIRECTORS:
A* the meeting of the Board of Directors.of the Company held on 12th
May, 2011, the Board appointed Mr.V.M.Seshadri as an Additional
Director with effect-from 1st June, 2011. He holds office upto the date
of this Annual General Meeting.
29
The Company has received a Notice u/s.257 of the Companies Act, 1956
proposing his candidature as a Director of the Company.
Messrs.V.M.Lakshminarayanan, K.Ganesan and V.R.Lakshminarayanan,
Directors retire by rotation from the Board under Company's Articles of
Association and being eligible offer themselves for reappointment.
MANAGING DIRECTOR:
Mr.V.M.Balasubramaniam, vide his letter dated 2.5.2011, expressed his
desire to resign as Managing Director of the Company and to continue as
a Non-Executive Director on the Board with effect from 1st June, 2011.
Your Directors place on record their sincere appreciation of the
valuable contribution of Mr. V.M. Balasubramaniam in turning around the
Company without seeking any Rehabilitation Scheme from the Hon'ble
BIFR.
The Remuneration Committee, at its meeting held on 7.5.2011 endorsed to
the Board the appointment of Mr.V.M.Seshadri, who is a technocrat
having 'hands on' experience of about four decades in the home
appliances industry, as Managing Director of the Company with effect
from 1st June, 2011 for a period of three years. The Committee also
approved payment of the same remuneration as Mr.V.M.Balasubramaniam to
Mr.Seshadri. The Board approved the appointment and remuneration
payable to him, subject to approval of the Shareholders.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors' comments on Management Discussion and Analysis are
restricted to the areas which are relevant to the current scenario of
the Company and outlook.
CORPORATE GOVERNANCE:
Your Company conforms to the norms of Corporate Governance. In
accordance with the Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance along with a Certificate of
compliance from the Auditors forms part of this report.
MERGER OF GANGADHARAM APPLIANCES LIMITED:
The proposal submitted by Gangadharam Appliances Ltd - (Transferor
Company) for its merger with the Company to the Hon'ble Board for
Industrial and Financial Reconstruction (BIFR) effective from 1st
January, 2009 has been circulated by Hon'ble BIFR to all Government
Departments from whom any reliefs/concessions have been sought. The
date for hearing the objections/suggestions, if any received, is fixed
on 17th August, 2011.
CHANGE OF OBJECTS CLAUSE OF MEMORANDUM OF ASSOCIATION :
In view of the merger of the sick Company Gangadharam Appliances Ltd.
(GAL) with the company in the near future, it has become necessary to
alter the main objects clause of Memorandum of Association of the
company incorporating the products manufactured by GAL and the product
range covered in the objects clause of its Memorandum of Association.
Accordingly, a Special Resolution for giving effect to the proposed
alteration has been sent to the Share- holders for being passed by the
Postal Ballot Process, as required by Section 192A of the Companies
Act, 1956 read with Companies (passing of Resolution by Postal Ballot)
Rules, 2011.
AUDITORS' REPORT:
The observations made by Auditors vide para 9 of the Annexure 'A' to
the Auditors' Report about slight delay in a few cases in respect of
deposit of undisputed statutory liabilities and with regard to
non-payment of Income Tax are self explanatory.
AUDITORS:
Messrs.Rudhrakumar Associates, Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Meeting and being
eligible, have expressed their willingness to continue in office
{,reappointed.
FIXED DEPOSITS:
The Company has not accepted any deposits from the public and, as such,
there are no outstanding in terms of the Companies (Acceptance of
Deposits) Rules 1975.
PARTICULARS OF EMPLOYEES (SECTION 217 (2A)):
There was no employee covered by the provisions of Section 217(2A) of
the Companies Act, 1956.
REPORT ON ENERGY CONSERVATION AND R&D ACTIVITIES:
Information relating to energy conservation, foreign exchange earned
and spent and research and development activities undertaken by the
Company in accordance with the provisions of 217(1)(e) of the Companies
Act, 1956 read with Companies (Disclosure of particulars in the Report
of Board of Directors) Rules 1988 are given in Annexure "A" of the
Directors' Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Statement under sub-section (2AA) of Section 217 of the Companies Act,
1956 ("The Act").
In the preparation of the Annual Accounts:
' i. the applicable accounting standards have been followed.
ii. the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and the results of the
Company for the year.
iii. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accor- dance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities
iv. "Going concern" basis has been followed.
The financial statements have been audited by Messrs.Rudhrakumar
Associates, Chartered Accountants, the Statu- tory Auditors and their
report is attached to the Accounts.
PERSONNEL
The spirit of trust, transparency and team work has enabled the Company
to build a tradition of partnership and harmonious industrial
relations. Your Directors record their sincere appreciation of the
dedication and commitment of the employees to achieve excellence in all
areas of the business.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to thank, in particular,
Industrial Development Bank of India Ltd., State Bank of Travancore,
Bank of Baroda, The South Indian Bank Ltd., The South Indian Bank Ltd.,
PEC Ltd., and Religare Finvest Ltd. for the co-operation extended by
them. Our thanks are also due to the suppliers, distributors, dealers
and customers for their continued support.
Your Directors also thank the shareholders for their continued
confidence and trust placed by them with the Company.
For and on behalf of the Board
V.M.LAKSHMINARAYANAN
Chairman
Chennai - 600 018.
Date:07.07.2011
Jun 30, 2010
The Directors have pleasure in presenting this Twenty Third Annual
Report together with the Audited Statement of Accounts of the Company
for the financial year of eighteen months ended on 30th June, 2010.
FINANCIAL RESULTS: (R inlakhs)
Financial year of Financial year of
18 months ended 18 months ended
on 30.06.2010 on 31.12.2008
Sales 27162.38 16055.57
Operating Expenditure 24371.76 14646.30
Operating Profit 2790.62 1409.27
Other Income 182.50 435.81
Profit/(Loss) before Depreciation
and interest 2973.12 1845.08
Interest 614.18 313.74
Depreciation 130.15 170.89
Profit/(loss) before Tax 2228.79 1360.45,
Prior period expenses - (5.49)
Fringe Benefit Tax (0.83) (6.40)
Income Tax for the current period (1019.87) (462.42)
Interest Reclaimed by Bank (132.00) -
Deferred Tax Assets/(Liability) 482.14 64.00
Profit/(Loss) after Tax 1558.23 950.14
DIVIDEND:
Taking into account the necessity to conserve working capital
requirements, your Directors regret their inability to recommend any
dividend forthe year.
REVIEW OF OPERATIONS:
During the period under review, despite constraints in bank finance for
working capital for major part of the period, sales turnover improved
by 69.18 % and profit before interest and depreciation also improved as
compared to the previous financial year. After providing for interest
and depreciation the Company earned a profit before tax of Rs.22.29
crores.
DEREGISTRATION FROM BIFR:
With the net worth of the Company having become positive as on
31.12.2008 at the request of the Company, the Honble BIFR at its
hearing held on 31.08.2009 deregistered the Companys name from the
list of sick companies.
CURRENT YEARS OPERATIONS:
Barring unforeseen circumstances your Directors are hopeful of
achieving improved performance in the current financial year.
DIRECTORS:
Messrs.V.R.Sivaraman, M.Padmanabhan and D.Krishnamurthy, Directors
retire by rotation from the Board under Companys Articles of
Association and bejng eligible offer themselves for reappointment.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors comments on Management Discussion and Analysis are
restricted to the areas which are relevant to the current scenario of
the Company and outlook.
CORPORATE GOVERNANCE:
Your Company conforms to the norms of Corporate Governance. In
accordance with the Listing Agreement with the Stock Exchanges, a
compliance report on Corporate Governance along with a certificate from
the Auditors forms part of this report.
MERGER OF GANGADHARAM APPLIANCES LIMITED:
Aproposal has been submitted by Gangadharam Appliances Ltd
(GAL-Transferor Company) for its merger with the Company to the Honble
Board for Industrial and Financial Reconstruction (BIFR) effective from
1st January, 2009. At the Extraordinary General Meeting of the Company
held on 9th September, 2010, the shareholders unanimously approved the
Scheme for the purpose of proposed merger, subject to approval of the
Honble BIFR.
AUDITORS:
Messrs.Rudhrakumar Associates, Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Meeting and being eligible
have expressed their willingness to continue in office, if reappointed.
FIXED DEPOSITS:
The Company has not accepted any deposits from the public and, as such,
there are no outstanding in terms of the Companies (Acceptance of
Deposits) Rules 1975.
PARTICULARS OF EMPLOYEES (SECTION 217 (2A)):
There was no employee covered by the provisions of Section 217(2A) of
the Companies Act, 1956.
REPORT ON ENERGY CONSERVATION AND R&D ACTIVITIES:
Information relating to energy conservation, foreign exchange earned
and spent and research and development activities undertaken by the
Company in accordance with the provisions of 217(1 )(e) of the
Companies Act, 1956 read with Companies (Disclosure of particulars in
the Report of Board of Directors) Rules 1988 are given in Annexure "A"
of the DirectorsReport.
DIRECTORS RESPONSIBILITY STATEMENT:
Statement under sub-section (2AA) of Section 217 of the Companies Act,
1956 ("The Act").
In the preparation of the Annual Accounts:
i. The applicable accounting standards have been followed.
ii. The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and the results of the
Company for the year.
iii. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities
iv. "Going concern" basis has been followed.
The financial statements have been audited by Messrs.Rudhrakumar
Associates, Chartered Accountants, the Statutory Auditors and their
report is appended to the Accounts.
PERSONNEL
The spirit of trust, transparency and team work has enabled the Company
to build a tradition of partnership and harmonious industrial
relations. Your Directors record their sincere appreciation of the
dedication and commitment of the employees to achieve excellence in all
areas of the business.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to thank, in particular Industrial
Development Bank of India Ltd., State Bank of Travancore, Bank of
Baroda, The South Indian Bank Ltd, PEC Ltd. and SBI Global Factors Ltd,
for the co-operation extended by them. Our thanks are also due to the
suppliers, distributors, dealers and customers for their continued
support.
Your Directors also thank the shareholders for their continued
confidence and trust placed by them with the Company.
For and on behalf of the Board
V.M.LAKSHMINARAYANAN
Chairman
Chennai-600018.
Date: 30.09.2010
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