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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