The Board of Directors (“Board”) are pleased to present the Company's 37th (Thirty Seventh) Annual Report on the business and operations of your Company (“the Company” or “Butterfly”), along with the audited Financial Statements for the Financial Year ended March 31,2024.
1. State of the affairs of the Company
Various initiatives were taken to expand the market for the Company's products to new geographies, and for maximisation of efficiencies particularly in the area of cost reduction and working capital management.
The business contingency plans focused on digitalisation of sales process, innovative marketing strategies and careful optimisation of supplies to various channels as and when each channel became operational.
The performance of the business(es) of the Company are detailed out in the Management Discussion and Analysis Report (“MDA”), which forms part of this Annual Report.
2. Financial performance
The Company's financial performance for the year ended March 31, 2024, is summarised below:
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(Rs. in Lakhs)
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Particulars
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F.Y. ended on March 31, 2024
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F.Y. ended on March 31, 2023
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Revenue from Operations (Net)
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93,128.25
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1,05,655.24
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Other Income
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485.77
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659.03
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Operating Expenditure
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90,390.91
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96,003.09
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Operating Profit before Depreciation and Finance Cost
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2,737.34
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9,652.15
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Profit before Depreciation, Finance Cost and Exceptional Items
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3,223.11
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10,311.18
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Finance Cost
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642.44
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650.59
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Depreciation
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1,806.27
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1,615.26
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Profit before Exceptional Items and Tax
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774.40
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8,045.33
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Exceptional Items
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211.54
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-
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Profit before Tax
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562.86
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8,045.33
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Income Tax/ Deferred Tax
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(176.12)
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2,878.75
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Profit after Tax
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738.98
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5,166.58
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Other Comprehensive Income net of tax
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(84.50)
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(102.89)
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Total Comprehensive Income for the year
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654.48
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5,063.69
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Earnings Per Equity Share (Face Value of 110 (Rupees Ten Only)
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4.13
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28.90
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3. Performance at a glance
During the year under review, the Revenue from operations amounted to 193,128.25 Lakhs as against 11,05,655.24 Lakhs in the previous year.
EBITDA for the year stood at 13,223.11 Lakhs as against 110,311.18 Lakhs during the previous year.
Depreciation for the year stood at 11,806.27 Lakhs as against 11,615.26 Lakhs during the previous year.
I nterest expense for the year stood at 1642.44 Lakhs as against 1650.59 Lakhs during the previous year.
Profit before Tax stood at 1562.86 Lakhs as against 18,045.33 Lakhs, during the previous year.
No material changes or commitments have occurred between the end of the Financial Year and the date of this Report, which affects the Financial Statements of the Company with respect to the reporting year.
4. Dividend
The Board has not recommended any dividend for the Financial Year ended 2023-24.
In terms of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“the Listing Regulations”), the Company has formulated a Dividend Distribution Policy. The
policy is given as Annexure-1 to this Report. It is also available on the Company's website and can be accessed at https://www.butterflyindia.com/ wp-content/uploads/2021/04/Dividend-Distribution-Policv-20.10.2020.pdf
5. Transfer to reserves
Your Company does not propose to transfer any amount to the General Reserve.
6. Report on MDA
As required under Regulation 34 read with Schedule V(B) the Listing Regulations, report on MDA is presented in a separate section, forming part of this Annual Report and are restricted to the areas which are relevant to the current scenario of the Company and outlook.
7. Share capital
During the year under review, there was no change in the share capital of the Company.
The total paid-up equity share capital of the Company as on March 31,2024, stood at 11,787.96 Lakhs divided into 1,78,79,551 (One Crore Seventy Eight Lakhs Seventy Nine Thousand Five Hundred and Fifty One) equity shares of 110 (Rupees Ten Only) each.
8. Financial liquidity
Cash and cash equivalent as on March 31, 2024, stood at 14,091.10 Lakhs vis-a-vis 13,268.84 Lakhs in the previous year. The Company's working capital management is robust and involves a well-organised process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.
9. Credit Ratings
CRISIL, a Credit Rating Agency has provided the Company's credit rating for its bank facilities. During the year under review credit rating for the long-term facilities were upgraded from CRISIL AA/ Watch Positive to CRISIL AA/ Stable. The details of the ratings are as below:
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1. Long-Term Rating
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CRISIL AA/Stable
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2. Short-Term Rating
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CRISIL A1
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10. Public deposits
No public deposits have been accepted or renewed by your Company during the Financial Year under review pursuant to the provisions of Section 73 and 74 of the the Companies Act, 2013, (“the Act”) read together with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement with respect to furnishing of details relating to deposits covered under Chapter V of the Act or details of deposits which are not in compliance with the Chapter V of the Act is not applicable. The requisite return for F.Y. 2022-23 has been filed and the Company does not have any unclaimed deposits as of date.
11. Particulars of loans, guarantees or investments
During the year under review, the Company has not granted any Loans and/ or given any Guarantees and/ or provided any security and/ or made any investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014.
12. Internal control systems12.1 Internal controls and its adequacy
Your Company prioritises reinforcing financial and operational controls to enhance transparency, accountability and efficiency in its processes. Your Company adheres to an internal control framework that includes key process coverage that impacts the reliability of financial reporting, periodic control testing to assure design and operational effectiveness, implementation of remedial measures and regular monitoring by Senior Management and the Audit Committee of the Board. Internal audits are conducted periodically and any design deficiencies or operational inefficiencies, if any, are reported and improvement measures are recommended. The adequacy of controls is reviewed by the Audit Committee of the Board and specific processes are assessed for improvement in systems and outcomes.
During the Financial Year under review, trainings were conducted to keep the employees informed of the Company's Code of Conduct (“COC”), Prevention of Sexual Harassment and Whistle-Blower rights. This ensures compliance and a controlled environment, while achieving our objectives. A certificate from the Managing Director (“MD”) and Chief Financial Officer (“CFO”) forms part of this Annual Report on the adequacy of internal control systems and procedures.
12.2 Internal controls over financial reporting
The Company's internal financial controls commensurates with the scale and complexity of its operations. These systems are designed keeping in view the nature of activities carried out at each location and the various business operations. The Company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.
13. Vigil Mechanism/ Whistle-Blower Policy (“WB Policy”)
The Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behaviour. Your Company has formulated a Vigil Mechanism and WB Policy intending to provide a mechanism for employees to report violations. It also assures them of the process that will be observed to address the reported violation(s). The Vigil Mechanism and WB Policy also lays down the procedures to be followed for tracking compliant(s), giving feedback(s), conducting investigation(s), and taking disciplinary action(s), if required. It also provides assurance and guidelines on confidentiality of the reporting process and protection from reprisal to complainant(s). No personnel have been denied access to the Audit Committee of the Board. The Audit Committee oversees the functioning of the Vigil Mechanism and WB Policy. Protected disclosures can be made by a Whistle Blower through several channels to report actual or suspected fraud(s) and violation(s) under the Company's COC.
The Vigil Mechanism and WB Policy also provides a mechanism to encourage and protect genuine Whistle Blowing amongst the Vendors.
Any incident that is reported is investigated and suitable action, if any, is undertaken in line with the Vigil Mechanism and WB Policy.
The Vigil Mechanism and WB Policy of your Company is available on the website of the Company and can be accessed at the weblink https://www.butterflyindia. com/wp-content/uploads/2022/09/Whistle-Blower-Policy 28092022.pdf
Your Company received 2 (Two) Whistle-Blower complaints during the F.Y. 2023-24 and suitable action was taken in accordance with the WB Policy.
14. Holding Company
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electricals Limited (“Crompton”), the Holding Company incorporated on February 25, 2015, inter alia, is engaged in the business of manufacturing, trading, selling and distribution of fans, lighting, pumps and appliances. The equity shares of Crompton are listed on BSE Limited and National Stock Exchange of India Limited (“NSE”).
Total revenue of Crompton on a consolidated basis for the F.Y. ended March 31, 2024, was H7,380.20 Crore (including H67.39 Crore as other income). Profit after Tax was H441.78 Crore as compared to H476.40 in the previous year.
Pursuant to Section 2(87)(ii) of the Act, Crompton holds 75% of the equity share capital of the Company.
15. Subsidiaries, Associates and Joint Venture Companies
The Company does not have any Subsidiaries, Associates or Joint Venture during the Financial Year or at any time after the closure of the Financial Year and till the date of this report.
16. Board of Directors and Key Managerial Personnel
Your Company's Board comprises 13 (Thirteen) Members as on the date of this Report.
16.1 Directorate
a) Appointment(s)/ re-appointment(s) and Directors retiring by rotation
The appointment and remuneration of Directors are governed by a Policy devised by the Nomination and Remuneration Committee (“N&RC”) of your Company. The detailed Nomination and Remuneration Policy is available on the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
Further, there were following changes in the directorate during the year under review.
• Appointment/ Re-appointment
During the year under review, the Board of the Company at its Meeting held on November 09, 2023, and basis the recommendation of the N&RC of the Board considered and approved the appointment of Mr. Kaleeswaran Arunachalam (DIN:07625839) and Mr. Nithiyanandam Anandkumar (DIN:10381096) as Additional Directors (Non-Executive, Non-Independent) of the Company liable to retire by rotation w.e.f. November 09, 2023.
The resolutions pertaining to the above appointments were duly approved by the Members of the Company, on December 21, 2023, by means of Postal Ballot.
Mr. Promeet Ghosh (DIN:05307658) was appointed as an Additional Director by the Board basis the recommendation of N&RC w.e.f. May 12, 2023. The Members of the Company at their Annual General Meeting (“AGM”) held on July 19, 2023, approved the appointment of Mr. Promeet Ghosh as Non-Executive, Non-Independent Director of the Company liable to retire by rotation.
The Board of Directors of the Company at its meeting held on April 4, 2024, basis the recommendation of the N&RC of the Board and based on the evaluation of the balance of skills, knowledge, experience and expertise considered and approved the appointment
of Mr. Kunnawalkam Elayavalli Ranganathan (DIN:00058990) (“Mr. K E Ranganathan”) as Additional Director (Non-Executive, Independent) for a period of 5 (Five) consecutive years commencing from April 4, 2024, to April 3, 2029, not liable to retire by rotation.
• Re-appointment of the Managing Director
The Board of the Company, basis the recommendation of N&RC of the Board, re-appointed Mr. Rangarajan Sriram (DIN:09550640) as the Managing Director of the Company for a further term of 2 (Two) years commencing from March 30, 2024, liable to retire by rotation.
The aforesaid re-appointment of Mr. Sriram was subsequently approved by the Members on March 30, 2024, through postal ballot.
• Retirement by rotation and subsequent re-appointment
I n accordance with the provisions of Section 152 of the Act and the Company's Articles of Association, Mr. Shantanu Khosla (DIN:00059877), Non-Executive, Non-Independent Director, is liable to retire by rotation at the forthcoming AGM and being eligible has offered himself for re-appointment. The Board recommends re-appointment of Mr. Khosla for the consideration of the Members at the forthcoming AGM. The relevant details including profile of Mr. Khosla are disclosed under the Notice of AGM and Report on Corporate Governance forming part of this Annual Report.
• Cessation
During the year under review, Mr. Mathew Job (DIN:02922413), Non-Executive, Non-Independent Director, tendered his resignation from the Board w.e.f April 30, 2023 to pursue other career interests. Mr. Job had also confirmed that there were no other material reason other than those stated above. The Board expressed its appreciation towards Mr. Job for the valuable guidance and services rendered by him during his tenure as a Director of the Company.
16.2 Key Managerial Personnel (“KMP”)
I n accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) or re-enactment(s) thereof for the time being in force, the following are the KMPs of the Company as on the date of this Report:
1. Mr. Rangarajan Sriram, Managing Director
2. Mr. V A Joseph, Chief Financial Officer
During the year under review, Mr. R Nagarajan, Chief Financial Officer, resigned w.e.f. April 5, 2023. Ms. B Ananda Shalini was appointed as Chief Financial Officer w.e.f. April 6, 2023, and resigned w.e.f. October 20, 2023. Mr. V A Joseph was appointed as Chief Financial Officer w.e.f. November 9, 2023.
16.3 Independent Directors
The Company's Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct. The terms and conditions of appointment/ re-appointment of the Independent Directors are placed on the website of the Company and can be accessed at https://www. butterflyindia.com
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar (“IICA”) for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than 3 (Three) years on the Board of Listed Compan(ies) as on the date of inclusion of their names in the database, they were not required to undertake online proficiency self-assessment test conducted by IICA, except for Mr. K E Ranganathan who shall complete the online self assessment proficiency test within the designated timeline as stipulated in the Act.
As on the date of this Report, Mr. P M Murty, Ms. Smita Anand, Mr. A Balasubramanian, Mr. M Padmanabhan, Mr. G S Samuel, Mr. T R Srinivasan, Ms. Maheshwari Mohan and Mr. K E Ranganathan are the Non-Executive Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance which forms part of this Annual Report.
16.4 Non-Independent Directors
As on the date of this Report, Mr. Shantanu Khosla, Mr. Promeet Ghosh, Mr. Kaleeswaran Arunachalam, and Mr. Nithiyanandam Anandkumar are the Non-Executive, Non-Independent of the Company. Mr. Rangarajan Sriram, Managing Director is the only Executive Director on the Board.
13. Vigil Mechanism/ Whistle-Blower Policy (“WB Policy”)
The Company has established a reputation for doing business with integrity and maintained zero tolerance towards any form of unethical behaviour. Your Company has formulated a Vigil Mechanism and WB Policy intending to provide a mechanism for employees to report violations. It also assures them of the process that will be observed to address the reported violation(s). The Vigil Mechanism and WB Policy also lays down the procedures to be followed for tracking compliant(s), giving feedback(s), conducting investigation(s), and taking disciplinary action(s), if required. It also provides assurance and guidelines on confidentiality of the reporting process and protection from reprisal to complainant(s). No personnel have been denied access to the Audit Committee of the Board. The Audit Committee oversees the functioning of the Vigil Mechanism and WB Policy. Protected disclosures can be made by a Whistle Blower through several channels to report actual or suspected fraud(s) and violation(s) under the Company's COC.
The Vigil Mechanism and WB Policy also provides a mechanism to encourage and protect genuine Whistle Blowing amongst the Vendors.
Any incident that is reported is investigated and suitable action, if any, is undertaken in line with the Vigil Mechanism and WB Policy.
The Vigil Mechanism and WB Policy of your Company is available on the website of the Company and can be accessed at the weblink https://www.butterflyindia. com/wp-content/uploads/2022/09/Whistle-Blower-Policy 28092022.pdf
Your Company received 2 (Two) Whistle-Blower complaints during the F.Y. 2023-24 and suitable action was taken in accordance with the WB Policy.
14. Holding Company
Pursuant to Section 2(87)(ii) of the Act, Crompton Greaves Consumer Electricals Limited (“Crompton”), the Holding Company incorporated on February 25, 2015, inter alia, is engaged in the business of manufacturing, trading, selling and distribution of fans, lighting, pumps and appliances. The equity shares of Crompton are listed on BSE Limited and National Stock Exchange of India Limited (“NSE”).
Total revenue of Crompton on a consolidated basis for the F.Y. ended March 31, 2024, was H7,380.20 Crore (including H67.39 Crore as other income). Profit after Tax was H441.78 Crore as compared to H476.40 in the previous year.
Pursuant to Section 2(87)(ii) of the Act, Crompton holds 75% of the equity share capital of the Company.
15. Subsidiaries, Associates and Joint Venture Companies
The Company does not have any Subsidiaries, Associates or Joint Venture during the Financial Year or at any time after the closure of the Financial Year and till the date of this report.
16. Board of Directors and Key Managerial Personnel
Your Company's Board comprises 13 (Thirteen) Members as on the date of this Report.
16.1 Directorate
a) Appointment(s)/ re-appointment(s) and Directors retiring by rotation
The appointment and remuneration of Directors are governed by a Policy devised by the Nomination and Remuneration Committee (“N&RC”) of your Company. The detailed Nomination and Remuneration Policy is available on the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
Further, there were following changes in the directorate during the year under review.
• Appointment/ Re-appointment
During the year under review, the Board of the Company at its Meeting held on November 09, 2023, and basis the recommendation of the N&RC of the Board considered and approved the appointment of Mr. Kaleeswaran Arunachalam (DIN:07625839) and Mr. Nithiyanandam Anandkumar (DIN:10381096) as Additional Directors (Non-Executive, Non-Independent) of the Company liable to retire by rotation w.e.f. November 09, 2023.
The resolutions pertaining to the above appointments were duly approved by the Members of the Company, on December 21, 2023, by means of Postal Ballot.
Mr. Promeet Ghosh (DIN:05307658) was appointed as an Additional Director by the Board basis the recommendation of N&RC w.e.f. May 12, 2023. The Members of the Company at their Annual General Meeting (“AGM”) held on July 19, 2023, approved the appointment of Mr. Promeet Ghosh as Non-Executive, Non-Independent Director of the Company liable to retire by rotation.
The Board of Directors of the Company at its meeting held on April 4, 2024, basis the recommendation of the N&RC of the Board and based on the evaluation of the balance of skills, knowledge, experience and expertise considered and approved the appointment
of Mr. Kunnawalkam Elayavalli Ranganathan (DIN:00058990) (“Mr. K E Ranganathan”) as Additional Director (Non-Executive, Independent) for a period of 5 (Five) consecutive years commencing from April 4, 2024, to April 3, 2029, not liable to retire by rotation.
• Re-appointment of the Managing Director
The Board of the Company, basis the recommendation of N&RC of the Board, re-appointed Mr. Rangarajan Sriram (DIN:09550640) as the Managing Director of the Company for a further term of 2 (Two) years commencing from March 30, 2024, liable to retire by rotation.
The aforesaid re-appointment of Mr. Sriram was subsequently approved by the Members on March 30, 2024, through postal ballot.
• Retirement by rotation and subsequent re-appointment
I n accordance with the provisions of Section 152 of the Act and the Company's Articles of Association, Mr. Shantanu Khosla (DIN:00059877), Non-Executive, Non-Independent Director, is liable to retire by rotation at the forthcoming AGM and being eligible has offered himself for re-appointment. The Board recommends re-appointment of Mr. Khosla for the consideration of the Members at the forthcoming AGM. The relevant details including profile of Mr. Khosla are disclosed under the Notice of AGM and Report on Corporate Governance forming part of this Annual Report.
• Cessation
During the year under review, Mr. Mathew Job (DIN:02922413), Non-Executive, Non-Independent Director, tendered his resignation from the Board w.e.f April 30, 2023 to pursue other career interests. Mr. Job had also confirmed that there were no other material reason other than those stated above. The Board expressed its appreciation towards Mr. Job for the valuable guidance and services rendered by him during his tenure as a Director of the Company.
16.2 Key Managerial Personnel (“KMP”)
I n accordance with the provisions of Section 2(51) and Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) or re-enactment(s) thereof for the time being in force, the following are the KMPs of the Company as on the date of this Report:
1. Mr. Rangarajan Sriram, Managing Director
2. Mr. V A Joseph, Chief Financial Officer
During the year under review, Mr. R Nagarajan, Chief Financial Officer, resigned w.e.f. April 5, 2023. Ms. B Ananda Shalini was appointed as Chief Financial Officer w.e.f. April 6, 2023, and resigned w.e.f. October 20, 2023. Mr. V A Joseph was appointed as Chief Financial Officer w.e.f. November 9, 2023.
16.3 Independent Directors
The Company's Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct. The terms and conditions of appointment/ re-appointment of the Independent Directors are placed on the website of the Company and can be accessed at https://www. butterflyindia.com
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the varied fields and holds high standards of integrity.
All the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs, Manesar (“IICA”) for the inclusion of their names in the data bank maintained by IICA. In terms of Section 150 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, since all the Independent Directors of the Company have served as Directors for a period of not less than 3 (Three) years on the Board of Listed Compan(ies) as on the date of inclusion of their names in the database, they were not required to undertake online proficiency self-assessment test conducted by IICA, except for Mr. K E Ranganathan who shall complete the online self assessment proficiency test within the designated timeline as stipulated in the Act.
As on the date of this Report, Mr. P M Murty, Ms. Smita Anand, Mr. A Balasubramanian, Mr. M Padmanabhan, Mr. G S Samuel, Mr. T R Srinivasan, Ms. Maheshwari Mohan and Mr. K E Ranganathan are the Non-Executive Independent Directors of the Company. The details of the membership of committees and the qualifications and expertise of all the Directors is covered in the Report on Corporate Governance which forms part of this Annual Report.
16.4 Non-Independent Directors
As on the date of this Report, Mr. Shantanu Khosla, Mr. Promeet Ghosh, Mr. Kaleeswaran Arunachalam, and Mr. Nithiyanandam Anandkumar are the Non-Executive, Non-Independent of the Company. Mr. Rangarajan Sriram, Managing Director is the only Executive Director on the Board.
Familiarisation programme for Independent Directors
Your Company has in place a structured programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme of the Company provides information relating to the Company, operational activities, business model, geographies in which Company operates, etc. The Programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarisation Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Regular presentations and updates on relevant statutory changes encompassing economic outlook, market trends, peer trends, changes in laws where Company is operating were made to the Directors at regular Board Meetings of the Company.
The Managing Director along with senior leadership team delivers presentation(s) on the performance and strategic initiatives of the Company.
Evaluation of the Board’s performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board as a whole, its Committees and Individual and Independent Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. Criteria for Board evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairperson of the N&RC.
The process of Board evaluation is conducted through structured questionnaires for the Board as a whole, its Committees, Individual and Independent Directors.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, process of appointment of the Board, common understanding of the roles and responsibilities of the Board Members, timelines for circulating Board papers, content and quality of the information provided to the Board, attention to the Company's long-term strategic issues, evaluating strategic risks, overseeing and guiding acquisitions, strengths of Board Members and their contribution, governance etc.
Some of the performance indicators for the evaluation of the Committees inter al/aincludes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
The performance of Individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibilities towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors was evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest. Further, the evaluation process was based on the affirmation received from the Independent Directors that they meet the independence criteria as required under the Act and the Listing Regulations.
In addition to the questionnaires, detailed one-on-one in-sighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board Effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
• A separate Meeting of the Independent Directors was held, wherein performance of Non-Independent Directors including the MD, Chairman of the Board and of the Board as a whole was evaluated;
• The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the MD, the Board as a whole and all Committees of the Board; and
• As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committees such as structure, composition, meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board's functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board. They were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaire-based evaluations had been acted upon.
During the F.Y. 2023-24, the Company enacted the feedback from the Board evaluation process conducted in the F.Y. 2022-23. The Board noted the key
improvement areas that emerged from this exercise in the F.Y. 2023-24 and action plans to address the same were in progress.
Remuneration Policy and criteria for selection of candidates for appointment as Directors, KMPs and Senior Management
The Company has in place a policy for remuneration to Directors, KMPs and Senior Management as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the N&RC and the Board. The Policy on remuneration to Directors, KMPs and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
17. Number of Meetings of the Board and its Committees17.1 Board Meetings
Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/ Committee Meetings to be held in the forthcoming Financial Year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the Meetings. Due to business exigencies, the Board also approves several proposals via circular resolution from time to time.
Your Board of Directors met 8 (Eight) times during the F.Y. 2023-24. The details of the Meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
17.2 Board Committees
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
The Company has the following 6 (Six) Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee (“N&RC”)
3. Corporate Social Responsibility Committee (“CSR Committee”)
4. Stakeholder Relationship Committee (“SRC”)
5. Share Transfer Committee (“STC”)
6. Risk Management Committee (“RMC”)
The composition, terms of reference, number of Meetings held and business(es) transacted by the Committees are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committees of the Board are as follows:
17.2.1 Audit Committee
The Audit Committee comprises 6 (Six) Members out of which 5 (Five) are Non-Executive Independent Directors. The Committee is chaired by Mr. A Balasubramanian, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. M Padmanabhan, Mr. G S Samuel all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
17.2.2. Nomination & Remuneration Committee (“N&RC”)
The N&RC comprises 6 (Six) Members out of which 5 (Five) Members are Non-Executive Independent Directors. The Committee is chaired by Ms. Smita Anand, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Mr. A Balasubramanian, Mr. G S Samuel, Mr. M Padmanabhan, all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the N&RC were accepted by the Board. N&RC is responsible for, inter alia, recommendation and approval of remuneration of the Directors, KMPs and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board and KMPs.
Familiarisation programme for Independent Directors
Your Company has in place a structured programme for induction of new Directors as well as other initiatives to update the existing Directors on a continuous basis. The Familiarisation Programme of the Company provides information relating to the Company, operational activities, business model, geographies in which Company operates, etc. The Programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarisation Programme also provides information relating to the financial performance of the Company, budget and control process of the Company.
Regular presentations and updates on relevant statutory changes encompassing economic outlook, market trends, peer trends, changes in laws where Company is operating were made to the Directors at regular Board Meetings of the Company.
The Managing Director along with senior leadership team delivers presentation(s) on the performance and strategic initiatives of the Company.
Evaluation of the Board’s performance
In terms of requirements of the Act read with the Rules issued thereunder and the Listing Regulations, the Board carried out the annual performance evaluation of the Board as a whole, its Committees and Individual and Independent Directors. Your Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. Criteria for Board evaluation is duly approved by N&RC. Performance evaluation is facilitated by the Chairman of the Board who is supported by the Chairperson of the N&RC.
The process of Board evaluation is conducted through structured questionnaires for the Board as a whole, its Committees, Individual and Independent Directors.
The parameters for performance evaluation of the Board inter alia includes the composition of the Board, process of appointment of the Board, common understanding of the roles and responsibilities of the Board Members, timelines for circulating Board papers, content and quality of the information provided to the Board, attention to the Company's long-term strategic issues, evaluating strategic risks, overseeing and guiding acquisitions, strengths of Board Members and their contribution, governance etc.
Some of the performance indicators for the evaluation of the Committees inter al/aincludes understanding the terms of reference, the effectiveness of discussions at the Committee Meetings, the information provided to the Committee to discharge its duties/ obligations and performance of the Committee, support provided to the Board vis-a-vis its responsibilities.
The performance of Individual Directors was evaluated based on parameters such as attendance at the Meeting(s), contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge, and understanding of relevant areas, and responsibilities towards stakeholders. All the Directors were subject to self-evaluation and peer evaluation.
The performance of the Independent Directors was evaluated taking into account the above factors as well as independent decision-making and non-conflict of interest. Further, the evaluation process was based on the affirmation received from the Independent Directors that they meet the independence criteria as required under the Act and the Listing Regulations.
In addition to the questionnaires, detailed one-on-one in-sighting was carried out by the Chairperson of the N&RC with individual Board Members. A quantitative analysis and Board Effectiveness brief with in-sighting feedback and trends was shared by the Chairperson of the N&RC to all the Board Members. Thereafter, the following process was followed to assimilate and process the feedback:
• A separate Meeting of the Independent Directors was held, wherein performance of Non-Independent Directors including the MD, Chairman of the Board and of the Board as a whole was evaluated;
• The entire Board discussed the findings of the evaluation with the Independent Directors and also evaluated the performance of the Individual Directors including the MD, the Board as a whole and all Committees of the Board; and
• As an outcome of the above process, individual feedback was shared with each Director.
The Board Evaluation discussion was focused on how to make the Board more effective as a collective body in the context of the business and the external environment in which the Company functions. From time to time during the year, the Board was apprised of relevant business issues and related opportunities and risks. The Board discussed various aspects of its functioning and that of its Committees such as structure, composition, meetings, functions and interaction with management and what needs to be done to further augment the effectiveness of the Board's functioning.
The overall assessment of the Board was that it was functioning as a cohesive body including the Committees of the Board. They were functioning well with periodic reporting by the Committees to the Board on the work done and progress made during the reporting period. The Board also noted that the actions identified in the past questionnaire-based evaluations had been acted upon.
During the F.Y. 2023-24, the Company enacted the feedback from the Board evaluation process conducted in the F.Y. 2022-23. The Board noted the key
improvement areas that emerged from this exercise in the F.Y. 2023-24 and action plans to address the same were in progress.
Remuneration Policy and criteria for selection of candidates for appointment as Directors, KMPs and Senior Management
The Company has in place a policy for remuneration to Directors, KMPs and Senior Management as well as a well-defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management.
The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the N&RC and the Board. The Policy on remuneration to Directors, KMPs and Senior Management is given as an Annexure to Report on Corporate Governance and is also available at the website of the Company and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2021/04/policv-for-appointment-and-evaluation-of-BOD-20.10.2020.pdf
17. Number of Meetings of the Board and its Committees17.1 Board Meetings
Regular Meetings of the Board and its Committees are held to discuss and decide on various business policies, strategies, financial matters and other businesses. The schedule of the Board/ Committee Meetings to be held in the forthcoming Financial Year is circulated to the Directors in advance to enable them to plan their schedule for effective participation in the Meetings. Due to business exigencies, the Board also approves several proposals via circular resolution from time to time.
Your Board of Directors met 8 (Eight) times during the F.Y. 2023-24. The details of the Meetings and the attendance of the Directors are mentioned in the Report on Corporate Governance which forms part of this Annual Report.
17.2 Board Committees
The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Act and the Listing Regulations.
The Company has the following 6 (Six) Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:
1. Audit Committee
2. Nomination & Remuneration Committee (“N&RC”)
3. Corporate Social Responsibility Committee (“CSR Committee”)
4. Stakeholder Relationship Committee (“SRC”)
5. Share Transfer Committee (“STC”)
6. Risk Management Committee (“RMC”)
The composition, terms of reference, number of Meetings held and business(es) transacted by the Committees are given in the Report on Corporate Governance which forms part of this Annual Report.
The details of Composition of the Mandatory Committees of the Board are as follows:
17.2.1 Audit Committee
The Audit Committee comprises 6 (Six) Members out of which 5 (Five) are Non-Executive Independent Directors. The Committee is chaired by Mr. A Balasubramanian, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. M Padmanabhan, Mr. G S Samuel all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the Audit Committee, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.
17.2.2. Nomination & Remuneration Committee (“N&RC”)
The N&RC comprises 6 (Six) Members out of which 5 (Five) Members are Non-Executive Independent Directors. The Committee is chaired by Ms. Smita Anand, Non-Executive Independent Director. The other Members of the Committee are Mr. P M Murty, Mr. A Balasubramanian, Mr. G S Samuel, Mr. M Padmanabhan, all of whom are Non-Executive Independent Directors and Mr. Shantanu Khosla is a Non-Executive, Non-Independent Director. Details of the role and responsibilities of the N&RC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the N&RC were accepted by the Board. N&RC is responsible for, inter alia, recommendation and approval of remuneration of the Directors, KMPs and Senior Management. N&RC is also entrusted with the responsibility of framing the criteria for evaluation of the individual Directors, Chairman of the Board, the Board as a whole and its Committees. It also routinely evaluates the working and effectiveness of the Board and manages the succession planning for Board and KMPs.
17.2.3 Corporate Social Responsibility (“CSR”) Committee
The CSR Committee comprises 7 (Seven) Members out of which 5 (Five) are Non-Executive, Independent Directors. The Committee is chaired by Mr. Shantanu Khosla, Non-Executive, Non-Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. G S Samuel, Ms. Maheshwari Mohan, Mr. T R Srinivasan all of whom are NonExecutive Independent Directors and Mr. Rangarajan Sriram, Managing Director. Details of the roles and responsibilities of the CSR Committee, the particulars of the Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Company has set up CSR Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR activities forms part of this Report as Annexure-2. The CSR Policy as recommended by the CSR Committee and approved by the Board is available on the website of the Company and can be accessed at https://www. butterflyindia.com/wp-content/uploads/2021/04/CSR-POLICY-20.10.2020.pdf
17.2.4 Stakeholders’ Relationship Committee and Share Transfer Committee (“SRC” and “STC”)
Stakeholders’ Relationship Committee (“SRC”)
The SRC comprises 5 (Five) Members out of which 3 (Three) Members are Non-Executive Independent Directors. The Committee is chaired by Mr. Promeet Ghosh Ghosh, Non-Executive, Non-Independent Director. The other Members of the Committee are Ms. Smita Anand, Mr. M Padmanabhan, Mr. T R Srinivasan all of whom are Non-Executive Independent Directors and Mr. Rangarajan Sriram, who is the Managing Director.
Details of the roles and responsibilities of the SRC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the SRC were accepted by the Board.
Share Transfer Committee (“STC”)
The STC comprises 5 (Five) Members out of which 3 (Three) Members are Non-Executive Independent Directors. The Committee is chaired by Mr. Promeet Ghosh, Non-Executive, Non-Independent Director. The other Members of the Committee are Ms. Smita Anand, Mr. M Padmanabhan, Mr. T R Srinivasan all of
whom are Non-Executive, Independent Directors and Mr. Rangarajan Sriram who is the Managing Director.
Details of the roles and responsibilities of the STC the particulars of meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report.
SRC and STC are collectively responsible for inter alia various aspects of interest of the stakeholders, monitoring the performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement of the quality of investor services as and when the need arises, resolve the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends and issue of duplicate certificates, etc.
17.2.5 Risk Management Committee (“RMC”)
The RMC comprises 8 (Eight) Members out of which 6 (Six) are Non-Executive Independent Directors. The Committee is chaired by Mr. M Padmanabhan, NonExecutive Independent Director. The other Members of the Committee are Mr. P M Murty, Ms. Smita Anand, Mr. G S Samuel, Mr. A Balasubramanian, Ms. Maheshwari Mohan all of whom are Non-Executive Independent Directors, Mr. Rangarajan Sriram, the Managing Director and Mr. Shantanu Khosla who is a Non-Executive, Non-Independent Director. Details of the roles and responsibilities of the RMC, the particulars of Meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of this Annual Report. During the year under review, all the recommendations made by the RMC were accepted by the Board.
RMC assists the Board in monitoring and reviewing the risk management plan and implementation of the risk management and mitigation framework of the Company. The main objective of the RMC is to assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of risks including risks related to cyber security.
18. Risk Management Framework
The Board formulated the Company's Risk Management Policy identifying the elements of risk that the Company may face, such as strategic, financial, credit, market, liquidity, security, property, legal, regulatory and other risks, pursuant to the provisions of Section 134(3)(n) of the Act, which has been exhibited on the Company's website and can be accessed at https:// www.butterflyindia.com/wp-content/uploads/2022/04/ Risk-Management-Policv.pdf
19. Particulars of contracts or arrangements with related parties
I n accordance with the requirements of the Act and the Listing Regulations, your Company has a Policy on Related Party Transactions (“RPTs”) uploaded on the Company's website and can be accessed at https:// www.butterflyindia.com/wp-content/uploads/2022/06/ RPT-Policy 15.06.2022.pdf
Your Company did not enter into any RPTs during the year under review, which could be prejudicial to the interest of minority shareholders.
All the RPTs are placed before the Audit Committee for their review and approval and also before the Board, wherever required. An omnibus approval from the Audit Committee and the Board is obtained for all the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee for their noting/ approval every quarter.
All transactions with related parties entered into during the year under review were in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder, the Listing Regulations and your Company's Policy on RPTs.
During the Year under review, your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act.
However, the details pertaining to transactions which were not at arm's length basis is disclosed in Form No. AOC-2, along with details of all the RPTs entered into by the Company during the year under review, as a measure of adoption of good corporate governance practices and forms part of this report as Annexure-3.
None of the Directors and the KMPs has any pecuniary relationships or transactions vis-a-vis the Company.
Pursuant to the provisions of Regulation 23 of the Listing Regulations, your Company has filed half yearly disclosures with the stock exchanges on the date of publication of its financial results and the same is uploaded on the Company's website and can be accessed at https://www.butterflyindia.com/wp-content/uploads/2024/05/RPT 31.03.2024.pdf
Your Directors draw attention of the Members to the Notes in the financial statements that sets out the disclosure of RPTs.
20. Transfer of unpaid/ unclaimed amounts and shares to Investor Education and Protection Fund (“IEPF”)
Pursuant to the applicable provisions of the Section 125 and 124 of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), the dividend amount that remains unpaid or unclaimed for a period of 7 (Seven) years
or more is required to be transferred to the IEPF administered by the Central Government. Further, in accordance with the IEPF Rules, the shares on which dividend has not been paid or claimed by the Members for 7 (Seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority.
During the year under review and in terms of the applicable provisions of the Act read with IEPF Rules as amended from time to time, unclaimed dividend for the F.Y. 2015-16, aggregating to 15,82,689 (Rupees Five Lakhs Eighty Two Thousand Six Hundred Eighty Nine Only) was transferred to the IEPF Fund.
Further, during the year under review, in compliance with the requirements of the IEPF Rules, the Company had transferred 2,97,583 (Two Lakhs Ninety Seven Thousand Five Hundred Eighty Three) equity shares of 110 (Rupees Ten Only) each in respect of which dividend has not been claimed for a period of 7 (Seven) consecutive years to the demat account of the IEPF Authority.
The Members may note that both the said unclaimed dividend and corresponding shares transferred to the IEPF Authority including all the benefits accruing on such shares, if any, can be claimed by the Members from the IEPF Authority after following procedure prescribed in the Rule 7 of the said IEPF Rules for refund of shares/ dividend etc.
21. Significant and material orders passed by the Regulators, Courts, Tribunals, Statutory and Quasi-Judicial Body
No significant or material orders were passed by the Regulators, Courts, Tribunals, Statutory and QuasiJudicial Body that would impact the going concern status and Company's operations in the future.
During the year under review, the Board of the Company at their Meeting held on March 25, 2023, considered and approved the Scheme of Amalgamation of the Company with the Crompton Greaves Consumer Electricals Limited (“Transferee Company”) and their respective Members and creditors under Sections 230 to 232 and other applicable provisions of the Act read with rules made thereunder (“Scheme”). The Scheme was filed with BSE Limited and The National Stock Exchange of India Limited (“Stock Exchanges”) on April 07, 2023, and subsequently, it was approved by the stock exchanges on July 21, 2023 & July 24, 2023, respectively.
Further, the Company filed the Scheme Application with the Hon'ble National Company Law Tribunal, Chennai Bench (“NCLT”) on August 20, 2023, and pursuant to the order issued by NCLT on September 12, 2023, the Company had convened an Extra-Ordinary General Meeting for the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company on October 28, 2023. However, approval of the majority of the public shareholders of the Company was not
received in favor of the Scheme, and accordingly, the Scheme was not acted upon.
This does not have any impact on the Company's growth strategy and both the Companies continued to operate as separate entities and work towards fulfilling their mutual strengths, thereby creating value for all the stakeholders.
22. Risk arising out of litigation, claims and uncertain tax positions
The Company is exposed to a variety of laws, regulations, and interpretations, particularly in the areas of direct taxation and legal matters. In the normal course of business, provisions and contingencies may arise due to uncertain tax positions and legal issues.
Management uses significant judgment when evaluating risks and determining the amount to provide for potential exposures related to these matters. These estimates may change substantially over time as new facts emerge, so they are reviewed regularly. When expert opinions are needed, the Company consults with top legal counsel.
23. Auditors
a) Statutory Auditors
M/s. ASA & Associates LLP, Chartered Accountants (Firm Registration Number: 009571N/ N500006), were appointed as the Statutory Auditors of the Company by the Members at their 35th AGM held on July 14, 2022, to hold office as Statutory Auditors for a second term of 5 (Five) consecutive years, commencing from the conclusion of the 35th AGM till the conclusion of the 40th AGM.
The Board of Directors at their Meeting held on May 14, 2024, and basis the recommendation of the Audit Committee approved a remuneration of M/s. ASA & Associates at 131,50,000 (Rupees Thirty One Lakhs and Fifty Thousand Only) for the F.Y.2024-25.
The Auditors' Report for the F.Y. 2023-24 does not contain any reservation, qualification or adverse remark, on the Financial Statements of the Company. The Auditors' Report is self-explanatory and therefore, does not require further comments and explanation. The Auditors' Report on the Financial Statements of the Company forms part of this Annual Report.
Further, in terms of Section 143 of the Act read with the Companies (Audit and Auditors) Rules, 2014, as amended read with any notifications/ circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company not they have reason to believe that an offence involving fraud has been committed in the Company by its' officers or employees and therefore no details are
required to be disclosed under Section 134(3)(ca) of the Act.
The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process.
b) Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records as specified by the Central Government. Accordingly, the Company has maintained the requisite cost accounts and records in the prescribed manner and the same are audited by a Cost Accountant.
The Board at its Meeting held on May 14, 2024, based on the recommendation of the Audit Committee, approved the appointment of M/s. S. Mahadevan & Co., Cost Accountants (Firm Registration Number 000007) as the Cost Auditors of the Company to conduct audit of the cost records of the Company for the F.Y. 2024-25 at a remuneration of 11,75,000 (Rupees One Lakh and Seventy Five Thousand Only) plus applicable taxes and out-of-pocket expenses subject to the ratification of such fees by the Members at the ensuing AGM. Accordingly, the matter relating to the ratification of the remuneration payable to the Cost Auditors for the F.Y. 2024-25 will be placed at the ensuing AGM. Your Company has received consent, eligibility and status of independence certificate from M/s. S. Mahadevan & Co.
M/s. S. Mahadevan & Co., have confirmed that the cost records of the Company for the F.Y. 2023-24, are free from any disqualifications as specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.
c) Secretarial Auditors and Secretarial Audit Report
The Board at its Meeting held on May 12, 2023, appointed M/s. M. Alagar & Associates, Company Secretaries, as the Secretarial Auditors of the Company to conduct the Secretarial Audit for F.Y. 2023-24. The Secretarial Audit Report is annexed as Annexure-4 to this Report. There has been no qualification, reservation, or adverse remark given by the Secretarial Auditors in their Report.
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board at its Meeting held on May 14, 2024, based on recommendation of the Audit Committee approved the appointment of M/s. M. Alagar & Associates, Company Secretaries (ICSI Unique Code: P2011TN078800) as the Secretarial Auditors to conduct audit of the secretarial
records of the Company for the F.Y. 2024-25 at a remuneration of 11,40,000 (Rupees One Lakh and Forty Thousand Only).
d) Internal Auditors
Pursuant to the provisions of Section 138 of the Act, the Board, at its Meeting held on May 12, 2023, and based on the recommendation of the Audit Committee approved the appointment of M/s. Grant Thornton Bharat LLP (Identity number AAA-7677) to conduct the internal audit of your Company for the F.Y. 2023-24.
The Board of Directors at their Meeting held on May 14, 2024, had re-appointed M/s. Grant Thornton Bharat LLP as the Internal Auditors of your Company for the F.Y. 2024-25 a remuneration of 126,00,000 (Rupees Twenty Six Lakhs Only).
24. Material changes and commitments affecting financial position between the end of the Financial Year and date of the Report
There are no material changes and commitments affecting the financial position of your Company, which has occurred between the end of the Financial Year of the Company, i.e. March 31,2024, and the date of this Report, i.e. May 14, 2024.
25. Awards and recognitions
The detailed section on awards and recognitions forms part of this Annual Report.
26. Enhancing Stakeholders value
Your Company is committed to creating and returning value to its stakeholders. Accordingly, the Company is dedicated to achieving high levels of operating performance, cost competitiveness, and striving for excellence in all areas of operations. The Company firmly believes that its success in the marketplace and good reputation are among the primary determinants of its' stakeholders value. Its close relationship with customers and a deep understanding of their challenges and expectations drive the development of new products and services. Anticipating customer requirements early and being able to address them effectively requires a strong commercial backbone. Your Company continues to develop this strength by institutionalising sound commercial processes and building world-class commercial capabilities across its marketing and sales teams. The Company uses an innovative approach in the development of its products and services, as well as execution of growth opportunities. The Company is also committed to creating value for all its stakeholders by ensuring that its corporate actions positively impact the economic, societal and environmental dimensions of the triple bottom line.
27. Business Responsibility and Sustainability Report (“BRSR”)
Pursuant to the Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social, and governance (ESG) perspective are provided in the BRSR and forms part of this Annual Report.
28. Corporate Governance
The Board of Directors re-affirm their continued commitment to good corporate governance practices. During the year under review, the Company has complied with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report together with a certificate from the Company's Auditors' confirming compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the Listing Regulations is provided in the Report on Corporate Governance, which forms part of this Annual Report as Annexure-5.
29. Particulars of employees
There was 1 (One) employee who was in receipt of remuneration of not less than ' 1,02,00,000 (Rupees One Crore and Two Lakh Only), if employed for the full year and 2 (Two) employees who were in receipt of remuneration of not less than ' 8,50,000 (Rupees Eight Lakh and Fifty Thousand Only) per month, if employed for part of the year.
Disclosures concerning the remuneration of Directors, KMPs and Employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-6 to this Board's Report. Your Directors affirm that the remuneration is as per the remuneration policy of the Company.
Details of Employee remuneration as required under provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection by the Members at the Registered Office of your Company during working hours. The Annual Report along with Financial Statement are being sent to the Members excluding the aforesaid exhibit. Any Member interested in obtaining such information may write to the Company Secretary & Compliance Officer at butterflv.investorrelations@butterflvindia.com
30. Reporting of fraud by Auditors
During the year under review, neither the Statutory Auditors, the Secretarial Auditor, the Cost Auditors nor the Internal Auditors have reported to the Audit Committee of the Board, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.
31. Annual Return
As required under 92(3) and 134(3)(a) of the Act, the Annual Return of the Company is uploaded on the Company's website and can be accessed at https://www.butterflyindia.com/investor-relations/
32. Compliance with Secretarial Standards (“SS-1 and SS-2”)
Your Directors state that the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (“ICSI”) i.e. SS-1 and SS-2 relating to Meetings of the Board of Directors and General Meetings respectively have been duly followed by the Company.
33. Conservation of Energy, Technology, Absorption and Foreign Exchange Outgo
Information relating to Energy Conservation, Technology Absorption, Foreign Exchange earned and spent, and Research and Development activities undertaken by the Company during the year under review in accordance with Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are given in Annexure-7 of this Board's Report.
34. Mergers and acquisitions
During the year under review, the Board of the Company at their Meeting held on March 25, 2023, considered and approved the Scheme of Amalgamation of the Company (“Transferor Company”) with the Crompton Greaves Consumer Electricals Limited and their respective Members and creditors under Sections 230 to 232 and other applicable provisions of the Act read with rules made thereunder (“Scheme”). The Scheme was filed with the Stock Exchanges on April 07, 2023, and subsequently, it was approved by the stock exchanges on July 21, & July 24, 2023.
Further, the Company filed the Scheme Application with the Hon'ble NCLT on August 20, 2023, and pursuant to the order issued by NCLT on September 12, 2023, the Company had convened an Extra-Ordinary General Meeting for the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Company on October 28, 2023. However, approval of the majority of the public shareholders of the Company was not received in favor of the Scheme, and accordingly, the Scheme was not acted upon.
This does not have any impact on the Company's growth strategy and both entities continued to operate as separate entities and work towards fulfilling their mutual strengths, thereby creating value for all the stakeholders.
35. Disclosures pertaining to the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013
Your Company is an equal opportunity employer and is committed to creating a healthy working environment that enables employees to work without fear of prejudice and gender bias. Your Company is committed to ensure that every employee is treated with dignity and respect and works in a conducive work environment, which promotes professional growth of employee and encourages equality of opportunity. The Company has zero tolerance towards any act on the part of any executive, which may fall under the ambit of “Sexual Harassment” at workplace, and is fully committed to uphold and maintain the dignity of every woman executive working in the Company. Further, to provide an empowering and enabling atmosphere to women employees, the Company has continuously endeavoured to build the work culture, which promotes the respect and dignity of all women employees across the organisation.
The Company has formulated a comprehensive Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH”). The said Policy has been made available on the website of the Company. The Company has constituted Internal Complaints Committee (“ICC”) under POSH and has complied with the provision relating to the same. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The constitution of ICC includes an external member who is an independent POSH consultant with relevant experience. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality of complaints received, if any. During the year under review, no complaint was received.
Further, the employees are sensitised from time to time in respect of matters connected with prevention of sexual harassment. Training programmes on POSH were conducted at unit levels to ensure that employees uphold the dignity of their female colleagues at workplace.
36. Registrar & Share Transfer Agent (“RTA”)
M/s. GNSA Infotech Private Limited is the RTA of the Company. Their contact details are mentioned in the Report on Corporate Governance and same can be accessed at https://www.butterflyindia.com/investor-relations/
37. Listing with stock exchanges
The equity shares of your Company are listed on NSE and BSE Details of the Company in the Stock Exchanges are as follows:
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NSE Symbol
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BUTTERFLY
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BSE Scrip Code
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517421
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ISIN
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INE295F01017
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Your Company has paid the Annual Listing Fees for the F.Y. 2023-24 and F.Y. 2024-25 to both NSE and BSE, with whom the equity shares of the Company are listed within the statutory timeline(s).
38. Directors’ Responsibility Statement
Your Directors would like to assure the Members that the Financial Statements for the year under review confirm in their entirety to the requirements of the Act and guidelines issued by the SEBI. Pursuant to the provisions of Section 134(3)(c) of the Act, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:
(a) i n the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
(b) t he accounting policies selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024, and of the profit and loss of the Company for that year;
(c) sufficient care has been taken and that adequate accounting records have been maintained for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;
(d) t he annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by the Company and such internal financial controls are adequate and were operating effectively; and
(f) the systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.
39. Insider Trading
I n compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, your Company has instituted a comprehensive Code titled as “Policy on Determination of Legitimate Purpose for Sharing UPSI” which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company same can also be accessed at https://www.butterflyindia. com/wp-content/uploads/2021/04/14.Policy-on-Determination-of-Legitimate-Purpose-for-Sharing-UPSI-20-10-2020.pdf.
40. General
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the Financial Year under review:
(i) The Company has not resorted to any buy-back of the equity shares during the Financial Year under review;
(ii) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;
(iii) The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;
(iv) The Company has not issued sweat equity shares to the employees of the Company;
(v) There has been no change in the nature of business of the Company as on the date of this report;
(vi) There was no revision in the Financial Statements;
(vii) There were no proceedings, either filed by the Company or filed against the Company, pending under the Insolvency and Bankruptcy Code, 2016, as amended, before NCLT or other courts during the year under review;
(viii) No instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act;
(ix) Disclosure of reason for difference between valuation done at the time of taking loan from bank and at the time of one-time settlement. There was no instance of one-time settlement with any Bank or Financial Institution; and
(x) Suggested to be deleted as already stated under Statutory Auditors section and also under Fraud reported by Auditors.
41. Rights of Members
• right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes;
• opportunity to participate effectively and vote in General Meeting(s);
• being informed of the rules, including voting procedures that govern General Meeting(s);
• opportunity to ask questions to the Board at General Meeting(s);
• effective participation of the Members in key corporate governance decisions such as election of Members of the Board;
• exercise of ownership rights by all Members, including institutional investors;
• adequate mechanism to address the grievances of the Members;
• protection of minority Members from abusive actions by, or in the interest of, controlling Members acting either directly or indirectly, and effective means of redressal;
• to receive dividends and other corporate benefits like rights, bonus etc., if approved;
• to inspect statutory registers and documents, including minutes books of the General Meeting(s), as permitted under law; and
• any other rights as specified in the statutory enactments from time to time.
42. Acknowledgement
Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Company's performance. Your Directors would also like to thank the members, customers, dealers, suppliers, bankers, government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.
43. Cautionary statement
Statements in the Board's Report and the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company is not obliged to publicly amend, modify or revise any forwardlooking statement, on the basis of any subsequent development, information or events or otherwise.
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