Your Directors have pleasure in presenting this Thirty Fourth Annual Report togetherwith the Audited Statement of Accounts for the financial year ended on 31stMarch 2021.
1. FINANCIAL RESULTS:
The Company's financial performance for the year ended 31st March 2021 issummarised below:
(Rs. in lakhs)
| ||Financial Year ended on |
| ||31.03.2021 ||31.03.2020 |
|Revenue from Operations (Net) ||86963.81 ||67869.50 |
|Other Income ||158.05 ||145.68 |
|Operating Expenditure ||78994.53 ||63795.23 |
|Operating Profit before Depreciation and Finance Cost ||7969.28 ||4074.27 |
|Profit before Depreciation and Finance cost ||8127.33 ||4219.95 |
|Finance Cost ||1737.30 ||2413.41 |
|Depreciation ||1555.17 ||1393.74 |
|Profit before Tax ||4834.86 ||412.80 |
|Income Tax/Deferred Tax ||1219.05 ||14.90 |
|Profit after Tax ||3615.81 ||397.90 |
|Other Comprehensive Income net of tax ||51.98 ||(71.36) |
|Total Comprehensive Income for the year ||3667.79 ||326.54 |
Board of Directors at their meeting held on 4.1 1.2020 and 19.02.2021 had declaredinterim dividends of Rs. 1.50 per equity share of the face value of Rs. 10/- each (totaldividend Rs. 3/- per equity share) and has already paid the same. The Board of Directorshave recommended the same be confirmed as final dividend for financial year 2020-2021.
The Company has formulated a Dividend Distribution Policy in compliance with Regulation43A of SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015 copy ofwhich is available on the website of the Company.
3. REVIEW OF OPERATIONS:
The year began with the Pandemic induced lockdown disrupting operations and bringingthe market to a standstill. The adverse impact of the challenging business environment wasreflected in the less than targeted performance of the Company in the first quarter of theyear. However strategic measures were deployed to resume operations under a stringentsafety protocol to meet the burgeoning market demand from the second quarter onwards.Additionally various initiatives were taken to expand the market for Company's productsto new geographies and for maximasation of efficiencies particularly in the area of costreduction and working capital management.
In line with the Butterfly spirit of overcoming challengesthe Company ended the yearwith a creditable performance exceeding planned targets in performance and profitability.
During the year under review the total revenue amounted to Rs. 86963.81 Lakhs asagainst Rs. 67869.50 Lakhs in the previous year. Profit before Tax was Rs. 4834.86 Lakhscompared to '412.80 Lakhs in 2019-20 a significant increase of more than ten fold.
Mr. V.M. Gangadharam Director (DIN No.00106466) liable to retire by rotation at theensuring Annual General Meeting and being eligible offers himself for re-appointmentpursuant to the provisions of section 152(6) (c) of the Companies Act 2013.
The Board seeks the approval of the Members for re-appointment of Mr. V.M. Gangadharamas Whole Time Executive Director for a further term of 5 years with effect from 01.10.2021and Mr. V.M. Kumaresan as Whole Time Executive Director-Technical for a further term offive years with retrospective effect from 01.06.2021.
5. MANAGEMENT DISCUSSION AND ANALYSIS:
The Directors' comments under the head Management Discussion and Analysis which formsa part of this report are restricted to the areas which are relevant to the currentscenario of the Company and outlook as per Annexure I.
6. CREDIT RATING:
CRISIL has upgraded the Company's credit rating for its bank facilities as follows:
|Long Term ||CRISIL A -/Stable |
|Rating ||(upgraded from 'CRISIL BBB+/Stable') |
|Short Term ||CRISIL A2+ |
|Rating ||(upgraded from 'CRISIL A2') |
7. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act 2013 ("the Act") theDirectors hereby confirm that:
a In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 31stMarch 2021 and of the profit of the Company for that year;
c. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany 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 ofall applicable laws and that such systems were adequate and operating effectively.
8. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts/arrangements/transactions entered by the Company during the financialyear 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 withrelated parties which could be considered material in accordance with the policy of theCompany on materiality of related party transactions.
The Company enjoys distinct advantages in the form of competitive prices productquality economy in transportation cost and lower inventories by virtue of the existingrelated party transactions.
The Board of Directors of your Company on the recommendation of the Audit Committeeadopted a policy on Related Party Transactions to regulate the transactions between yourCompany and its Related parties in compliance with the provisions of the Companies Act2013 and the SEBI (LODR) Regulations 2015 the policy as approved by the Board is uploadedon the Company's website: www.butterflyindia.com.
Particulars of contract or arrangements with related parties referred to in Section 188in Form AOC-2 has been annexed as Annexure - II.
9. RISK MANAGEMENT:
The Board has formulated the Company's Risk Management Policy identifying the elementsof risk that the Company may face such as strategic financial credit marketliquidity security property legal regulatory and other risks pursuant to theprovisions of Section 134 (3) (n) of the Act which has been exhibited in the Company'swebsite: www.butterflyindia.com.
10. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate and effective internal financial control systemcommensurate with its size and operations.
11. STATEMENT ON DECLARATION BY THE INDEPENDENT DIRECTORS OF THE COMPANY:
The Company has received necessary declaration from each Independent Director undersection 149 (7) of the Companies Act 2013 that they meet with the criteria of theirindependence laid down in Section 149 (6) of the Act and Rules made thereunder and alsoRegulation 16(1) (b) of the SEBI (LODR) Regulations 2015. Further they have also confirmedthat they are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge the duties with anobjective independent judgement and without any external influence.
The terms and conditions of appointment of the Independent Directors are posted on theCompany's website: www. butterflyindia.com.
12. APPOINTMENT OF DIRECTORS AND MANAGERIAL PERSONS AND THEIR REMUNERATION:
Pursuant to the provisions of Section 178 (3) of the Act read with Companies (Meetingsof Board and its Powers) Rules 2014 and Regulation 19(4) read with Schedule II Part -D ofSEBI (LODR) Regulations 2015 the Nomination and Remuneration Committee has formulatedthe criteria for determining qualifications positive attributes and independence of aDirector and for evaluating performance of the Directors and Key Management Personnel aswell as other employees and which can be viewed at the Company's website:www.butterflyindia.com.
13. KEY MANAGERIAL PERSONNEL (KMP):
In terms of the provisions of Section 2(51) and 203 of the Act the followingmanagerial personnel are Key Managerial Personnel (KMP) of the Company:
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. K. S. Ramakrishnan Company Secretary & General Manager-Legal
Mr. R. Nagarajan Chief Financial Officer
14. PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS:
The details of programme for familiarization of independent directors of the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company at its link www.butterflyindia.com.
15. PERFORMANCE EVALUATION OF DIRECTORS:
The Independent Directors of the Company held a separate meeting on 05.04.2021 withoutthe attendance of non- i ndependent Directors and members of management. At the saidmeeting they reviewed the performance of nonindependent Directors and the Board as awhole including the Chairman of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors. Similarly at a meeting of the Board of Directorsheld on the same day the Board evaluated the performance of each Independent Directorsand of the Committees represented by such Independent Director in accordance with theparameters for such evaluation formulated by the Nomination and Remuneration Committee ofthe Company.
i. Statutory Auditors and their Report:
The Members at the 30th Annual General Meeting held on 7th August2017 had appointed M/s ASA & Associates LLP Chennai as the Statutory Auditors of theCompany to hold office for a term of five years i.e. from the conclusion of the saidAnnual General Meeting until the conclusion of 35th Annual General Meeting of the Companyto be held in 2022.
The Auditors' Report to the Shareholders on the financial statement for the year ended31st March 2021 does not contain any qualification observations or adversecomments.
ii. Cost Auditor and Cost Audit Report:
The Company is required to maintain cost records as specified by the Central Governmentas per Section 148(1) of the Act and the rules framed thereunder and accordingly theCompany has made and maintained such cost accounts and records. In terms of Section 148 ofthe Act read with Companies (Cost Records and Audits) Rules 2014 the Board onrecommendation 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 theyear 2021-2022. The Company has received their written consent and confirmation that theappointment will be in accordance with the applicable provisions of the Act and the rulesframed thereunder.
The remuneration payable to Cost Auditors has been approved by the Board of Directorson the recommendation of the Audit Committee and in terms of the Act and Rules thereunder. The Members are therefore requested to ratify the remuneration payable toM/s.S.Mahadevan & Co. as set out in the Notice of the 34th AGM of theCompany.
iii. Secretarial Auditor and Secretarial Audit Report:
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 underthe provisions of Section 204 of the Companies Act 2013 for the financial year 2020-21.The Secretarial Audit Report for the financial year ended 31.3.2021 is annexed to thisreport as Annexure III. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
Your Company complies with all applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India.
17. REPORTING OF FRAUDS BY AUDITORS:
During the year under review the Statutory Auditors Cost Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsOfficers or Employees to the Audit Committee under Section 143(12) of the Act details ofwhich needs to be mentioned in this Report.
The Audit Committee comprises of Independent Directors viz. Messrs. K. Ganesan(Chairman) M. Padmanabhan and
A. Balasubramanian (Members) all are qualified Chartered Accountants and also Mr. V.M.Lakshminarayanan Chairman & Managing Director of the Company as a Member. All therecommendations made by the Audit Committee were accepted by the Board. More details onthe committee are given in the Report on Corporate Governance.
The Company has established vigil mechanism for directors and employees to reportgenuine concerns pursuant to section 177 (9) and (10) of the Act and Regulation 22 of theListing Regulations 2015.
The Vigil Mechanism of the Company also incorporates a Whistle Blower Policy in termsof the Listing Regulations. Protected disclosures can be made by a Whistle Blower throughan' email or dedicated telephone line or a letter addressed to the Chairman of the AuditCommittee/ Executive Director of the Company. The Company's Whistle Blower Policy may beaccessed on its website at the link www.butterflyindia.com.
During the year under review your Company had not received any complaint.
Meetings of the Board:
The Board met eight times during the financial year. The meeting details are providedin 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 any unclaimed shares issued in physical form pursuant toPublic Issue/Right Issue.
Conservation of energy technology absorption and foreign exchange out go:
Information relating to energy conservation technology absorption foreign exchangeearned and spent and research and development activities undertaken by the Company inaccordance with Section 134 (3) (m) of the Act read with Rule 8(3) (A) of Companies(Accounts) Rules 2014 are given in Annexure - IV 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 isgiven in Annexure - V of the Directors' Report. The Company has also placed a copy of thedraft Annual Return for the Financial Year 2020-21 in accordance with the Companies Act2013 on our website at www.butterflyindia.com
Statement pursuant to Rule 5 (1) (2) & (3) of Companies (Appointment andRemuneration of Managerial Personnel) 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 of Managerial Personnel) Rules2014 is annexed as Annexure VI of the Directors' Report.
Payment of remuneration made to managerial personnel is in conformity with theprovisions of the Companies Act 2013 and the rules made thereunder.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
Pursuant to the provisions of Section 135(1) of the Act the Company has constituted aCorporate Social Responsibility Committee consisting of two Independent Directors and theChairman & Managing Director of the Company. The said Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe 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 CSRinitiatives are truly beneficial to the community in the long run. The company initiatedCSR projects in the area of education environment and community/social development havingduration of more than one year. The Company regularly spends significant amounts of moneyon various activities aimed at serving communities around the factories. Our Company hasbeen contributing to CSR activities much before it was even mandated. However since theCompany did not reach the minimum threshold limits as stipulated in Section 135 (1) of theAct the Company is not liable for CSR expenses for the year under review.
The CSR committee confirmed that the implementation and monitoring of CSR Policy is incompliance with CSR objectives and Policy of the Company.
Details of CSR Activities are annexed as Annexure VII of the Directors' Report.
BUSINESS RESPONSIBILITY REPORT:
As per Regulation 34 of the SEBI Listing Regulations a Business Responsibility Reportis attached as Annexure VIII of the Directors' Report.
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations) a Compliance Report on Corporate Governance as per Schedule Vof the Listing Regulations along with a Certificate of Compliance from the StatutoryAuditors and Practicing Company Secretary certificate on Director's eligibility forms partof this report as Annexure IX.
Details relating to deposits covered under chapter V of the Act;
The Company has not invited or accepted deposits from public or shareholders; there areno deposits outstanding or remaining unpaid as at the end of 31st March 2021.
Details regarding Loans Guarantees and Investment under Section 186 of the CompaniesAct:
During the year under review your Company has complied with provisions of section 186of the Companies Act 2013 in respect of Guarantee issued.
Significant and Material orders passed by the Regulators or Courts or Tribunals whichmay impact the going concern status and Company's operations in future:
There is no significant and material orders passed by the Regulators/Court which wouldimpact the going concern status of the Company and the future operations.
Obligation of your Company under the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013
Your Company firmly believes in providing a safe supportive and friendly workplaceenvironment. A workplace where our values come to life through the supporting behaviours.Positive workplace environment and great employee experience are an integral part of ourculture. Your Company believes in providing and ensuring workplace free fromdiscrimination and harassment based on gender.
Your Company educates its employees as to what may constitute sexual harassment and inthe event of any occurrence of an incident constituting sexual harassment; your Companyhas created the framework for individuals to seek recourse and redressal to instances ofsexual harassment.
In order to prevent sexual harassment of women at workplace legislation The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 wasnotified on 9th December 2013. Under the said Act every Company is required toset up an Internal compliance Committee and investigate complaints relating to sexualharassment at the workplace of any women employee. Further adequate awareness programmewas also conducted for the employee of your Company.
|S.No. Particulars ||Remarks |
|1 No. of complaints filed - FY 2020-2021 ||NIL |
|2 No. of complaints disposed off - FY 2020-2021 ||NIL |
|3 No. of complaints pending as on 31.3.2021 ||NIL |
Transfer to Investor Education and Protection Fund [IEPF] - Unclaimed dividends for theyear ended 31st March 2013:
Your Company has transferred a sum of '1115155 /- during the financial year 2020-2021to the Investor Education and Protection Fund established by the Central Government incompliance with Sections 123 - 125 of the Companies Act 2013. The said amount representsthe unclaimed dividends for the year ended 31st March 2013 which were lyingunclaimed with your Company for a period of seven years from due date of payment.
Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fee for the year 2021-2022 toboth National Stock Exchange of India Limited and BSE Limited. with whom the equityshares of the Company have been listed.
There were no material changes complaints and commitments affecting thefinancial position of the Company which have occurred between financial year ended31.03.2021 and the date of this report.
No equity shares were issued with differential rights as to dividend voting orotherwise.
The Company has not resorted to any buy back of the equity shares during theyear under review.
No equity shares (including sweat equity shares) were issued to employee of yourCompany under any Scheme.
The spirit of trust transparency and teamwork has enabled the Company to build atradition of partnership and harmonious industrial relations. Your Directors record theirsincere appreciation of the dedication and commitment of the employees at all levels toachieve excellence in all areas of the business.
Your Directors take this opportunity to thank in particular State Bank of India andother Consortium Banks Fullerton India Credit Company Limited Indian Oil CorporationLimited Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limitedfor the co-operation extended by them. Our thanks are also due to employees at all levelssuppliers distributors dealers and customers for their strong support.
Your Directors also thank the shareholders for their continued confidence and trustplaced by them with the Company.
| ||For and on behalf of the Board |
|Chennai ||V.M.LAKSHMINARAYANAN |
|Date: 17.05.2021 ||Chairman & Managing Director |