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Butterfly Gandhimathi Appliances Directors Report, Butterfly Reports by Directors
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Butterfly Gandhimathi Appliances

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Directors Report Year End : Mar '18    Mar 17

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 Company’s 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 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.

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 ‘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.

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

- 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 Company’s 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 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 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 Auditors’ appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditors’ appointment is not included in the Notice of the ensuing Annual General Meeting.

The Auditors’ 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 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) (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 (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 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 31.03.2018 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

Source : Dion Global Solutions Limited
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