Your Directors present the Fifty- Fourth Annual Report of the Company together with theAudited Financial Statements for the Financial Year ended 31st March 2017.
1. FINANCIAL HIGHLIGHTS
(Rs. in Lakhs)
|Particulars ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Total Income ||18387 ||26746 |
|EBIDTA ** ||1600 ||295 |
|Finance Costs ||5249 ||4990 |
|Depreciation & Amortization ||170 ||221 |
|Transfer from Business Re- organization Reserve (BRR) ||(5854) ||(9145) |
|Profit before Tax ||1430 ||1688 |
|Less: Tax Expense (Current Tax and Tax on Earlier Years) ||0 ||(21) |
|Less: Deferred Tax Charged / ( Credit ) ||362 ||(204) |
|Profit after Tax ||1067 ||1913 |
|Other Comprehensive Income ||(19) ||(1) |
|Total Comprehensive Income ||1049 ||1913 |
** After transfer of Rs. 605 lakhs and Rs.4155 lakhs to BRR respectivelyin the years 2017 and 2016.
* Previous year figures have been re-stated as per Indian Accounting Standards (IndAS).
2. REVIEW OF OPERATIONS
Your Company is engaged in the business of providing logistics solutions mediapublication services trading in shares and securities and trading and export of goods andmanagement support services and has also sub-licensed to its major subsidiaries for use ofits Intellectual Property Rights such as Brand Logo & Trade Mark etc. The Board ofDirectors of the Company ("Board") have not charged any fees for managementsupport services and royalty to all its subsidiaries during the current year.
For the year under review our Company earned a Total Income of Rs.18387 Lakhs asagainst Rs.26746 Lakhs in the previous year. Company's earning Profit Rs. 1067.33 Lakhs(including amount transferred before EBIDTA) as against Rs. 1913.29 Lakhs in the previousyear after transfer of sum of Rs.5854.02 Lakhs from Business Re-organization Reserve asagainst Rs. 9145.36 Lakhs last year.
In view of loss the Directors did not recommend any dividend on Preference and EquityShares of the Company for the Financial Year ended 31st March 2017. In terms of Section47(2) of Companies Act 2013 Triton Trading Company Private Limited (TTCPL) thepreference shareholder of the Company shall have a right to vote on all resolutions placedbefore the Company on account of non-payment of dividend on 12298000 - 0.01% Noncumulative Redeemable Preference Shares of Rs. 100/- each fully paid-up held by TTCPL inthe Company.
No amount is proposed to be transferred to Reserves.
5. SHARE CAPITAL
During the financial year under review additional capital of 1771600 shares havebeen allotted pursuant to the merger of Binani Metals Limited with the Company.Consequently there has been an increase in the paid up share capital from Rs. 2959.64lakhs to Rs. 3136.80 lakhs.
The Company has issued ten 0.01% Non-cumulative Redeemable Preference Shares of theCompany of Rs 100/- each fully paid up (Number of Shares 298000) for every one 8%Non-cumulative Redeemable Preference Shares of Rs. 1000/- each (Number of Shares 29800)held by preference shareholders in BML. Consequently there has been an increase inpreference share capital from Rs. 12000 lakhs to Rs. 12298 lakhs
6. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of sub-section (3) of section 129 of the CompaniesAct 2013 and the SEBI Listing Obligation and Disclosure Requirements Regulations2015 theConsolidated Audited Financial Statements of the Company including the financial detailsof all the subsidiary companies of the Company forms part of this Annual Report. TheConsolidated Financial Statements have been prepared in accordance with applicableAccounting Standards prescribed under Section 133 of the Companies Act 2013.
7. DIRECTORS'RESPONSIBILITY STATEMENT
Pursuant to the provisions of clause of sub-section (3) and subsection (5) section 134of the Companies Act 2013 (the Act') your Board of Directors state and confirmthat:-
a. In the preparation of the annual financial statements for the year ended March 312017 the applicable Accounting Standards read with requirements set out under ScheduleIII to the Act have been followed and proper explanation relating to material departuresif any has been furnished;
b. We have selected such accounting policies as listed in the Financial Statements andhave applied them consistently and prudent judgments & estimates that are reasonableand prudent have been made so as to give a true and fair view of the state of affairs ofthe Company as at 31st March 2017 and for the financial year ended on oftheprofits thatdate;
c. We have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act' for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d. We haveprepared the annual accounts for the financial year ended on March 31 2017 on a goingconcern basis. e. We have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and f. We have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
a. Exim Bank of India the Company's Lender has recalled the loan and discussions areunderway for a suitable resolution.
b. B T Composites Limited a subsidiary of the Company is in the process of voluntaryliquidation and has appointed Mrs. Sara Sancheti a Company Secretary in Whole Time forPractice as the liquidator of the Company. The voluntary liquidation is underway.
c. Royalvision Concrete Pvt Ltd. and Royalvision Infratech Pvt. Ltd. were struck offunder Section 560 of the Companies Act 1956. d. Binani Global Cement Holdings PrivateLimited Singapore has applied for closure of the Company under the strike off route. Theapproval is awaited.
e. Narsingh Management Services Private Limited a wholly owned Subsidiary of theCompany was transferred on 1st April 2017 to Triton Trading Company Pvt Ltd.and Sharvah Multitrade Company Pvt. Ltd (50% each).
9. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED
During the year under review the loans given investments made and Guarantees givenand securities provided under Section 186 of the Companies Act 2013 are given in the Notesto the Standalone Financial Statements.
10. CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES
All transactions entered into by the Company with related parties were in the ordinarycourse of business and at arm's length. The Audit Committee from time to time reviewed andapproved the said transactions. The details of existing Related PartyContracts/Arrangements modified during 2016-17 are disclosed in form AOC-2 in terms ofSection 134 of the Companies Act 2013 is provided as Annexure A and in the notes tothe Financial Statements.
The Company has not accepted any deposit from the public within the meaning ofsub-section (31) of section 2 and Section 73 of the Companies Act 2013 and Rules framedthereunder.
The year 2016-17 has been a year of mixed bag for the Group. BCL suffered set back asit awaits complete resolution from its lenders. The Company paid almost the entireprincipal demand to the Rajasthan VAT Authorities (RVAT) in connection with the past dueswhich were in dispute.
EZL operations were shut for the entire year and as explained below EZL is hopefulthat Creditors and Authorities will take measures stand to safeguard interest of allstakeholders by allowing EZL to revive under a suitable revival package.
The Group's Glass Fibre business both in India and abroad have shown considerableimprovement for the year under review. Improved business conditions in European Marketswith several measures undertaken to improve efficiency across different operating areasresulted in significantly improved top line as well as bottom-line.
BIL Infratech Limited another subsidiary of your Company continued to report fairlygood performance.
13. REPORT ON SUBSIDIARY COMPANIES
In accordance with Proviso to sub-section (3) of Section 129 of the Companies Act 2013("Act") the salient features of the Financial Statements of SubsidiaryCompanies are set out in the prescribed Form AOC 1 which forms part of this Report. Thesaid Financial Statements shall also be kept for inspection by the Members at theRegistered Office of the Company. The Company will provide free of cost a copy ofFinancial Statements in respect of its subsidiaries to any Member of the Company uponreceipt of a request for the same.
FINANCIAL HIGHLIGHTS AND BUSINESS OUTLOOK OF THE COMPANY'S SUBSIDIARY COMPANIES
The Financial Highlights and Business Outlook in respect of the Company's majorsubsidiaries are given below:-
Binani Cement Limited (BCL)
(Rs. in Lakhs)
|Particulars ||31st March 2017 ||31st March 2016* |
|Total Revenue (Including other income) ||153462 ||177081 |
|Profit before Depreciation Interest Taxation and Exceptional Items ||7699 ||6496 |
|Provision for Depreciation ||7570 ||7675 |
|Finance Cost ||42851 ||35857 |
|Profit / (Loss) before Tax & Exceptional items ||(42722) ||(37036) |
|Exceptional items ||- ||- |
|Profit/(Loss) before Tax ||(42722) ||(37036) |
|Less: Tax Expenses ||7962 ||13298 |
|Profit/(Loss) after Tax ||(34760) ||(23738) |
|Other comprehensive income after tax ||(19) ||(23) |
|Balance of Profit brought forward from previous year (after Ind AS adjustments)* ||51745 ||75506 |
|Balance carried forward to Balance Sheet ||16967 ||51745 |
* Previous year figures have been re-casted as per Indian Accounting Standards (IndAS).
Review of operations
During the financial year under review Binani Cement Limited ("BCL") asubsidiary of the Company has cement production and sales stood at 3.55 million MT and 3.0million MT respectively as compared to 4.33 million MT and 4.31 million MT in the previousyear. BCL's total income was lower at Rs.131519 lacs as against Rs.152536 lacs in theprevious year.
BCL's took several initiatives to improve the efficiency across different functionalareas in operations and sales. However due to increased input cost especially volume andlower sales realisation resulted into the profit before depreciation interest and andexceptional items was at Rs. 7699.lacs as compared to Rs 6496 lacs in the previous year.BCL has reported a net loss of Rs.34760 lacs as compared to net loss of Rs.23738 lacs inthe previous year.
In November 2016 Govt of India announced demonetization scheme as an important steptowards cashless economy. The move caused liquidity constrains affecting the economy ingeneral and the construction sector in particular during the 3rd and 4th quarter of theyear. BCL was not the exception to this and the turnover for these two quarters hasimpacted the overall turnover of the Company. Over and above the lower capacityutilisation has impacted profitability due to paucity of Working Capital support fromBankers.
Indian Cement Industry
The cement industry in India the second-largest in the world is a study in hope. Thesector which has been facing depressed demand is hoping that business fromgovernment-driven projects will get their engines back into high gear. Currently India'scement production capacity is about 390 million tons per annum (MTPA) accounting foraround 6.7% of world's output. The cement production capacity is estimated to touch 550MTPA by the end of 2020.
The Government of India is strongly focused on infrastructure development to boosteconomic growth and is aiming for 100 smart cities. It plans to increase investment ininfrastructure to US$ 1 trillion in the 12th Five Year Plan (2012 17) and it is expectedthat the investment figure will increase significantly in next Five Year Plan. Thegovernment also intends to expand the capacity of the railways and the facilities forhandling and storage to ease the transportation of cement and reduce transportation costs.These measures would lead to increased construction activity thereby boosting cementdemand.
The lion's share of cement demand is created by the housing market which is alsofacing a depressed future. The good news it that the RBI is expected to lower interestrates in 2018 which could create increased housing demand. Further government projectsinclude the Housing for All initiative (on which it plans to spend $50 billion) and thesmart city push which would help in boosting the muted growth of the cement industry. Thecement market in India is expected to grow at a Compounded annual growth rate (CAGR) of9.7% during 2006-2017.
With the positive sentiments prevailing consequent upon a stable Government at theCentre coupled with large planned investments in infrastructure and housing /real estatesectors the demand for cement is likely to get a boost in the coming years. Opportunitiesalso exist in terms of technology innovations for improving efficiency and installation ofWaste Heat Recovery System.
BCL has strategized to focus on the nearby markets to optimize its logistic costs andstreamline and strengthen its distribution network. In addition the Company continues tostreamline the processes with a view to bring all around efficiencies which willfacilitate yielding better margin.
With Indian Economy progressing towards the growth trajectory still economy might takesome time to stabilize completely. Intense competition over capacity situation in theregions where the Company operates coupled with expansion plans of global giants andincreasing small players will pose challenge and put pressure on the price realization.
Overall BCL is hopeful of reporting better performance in the years ahead barringunforeseen circumstances.
Edayar Zinc Limited (formerly Binani Zinc Limited)
(Rs. in lakhs)
|Particulars ||Year ended 31/03/2017 ||Year ended 31/03/2016 |
|Total Revenue ||201 ||1062 |
|Loss before Interest Depreciation & Tax ||(226) ||(575) |
|Interest and finance charges ||1 ||3640 |
|Provision for Depreciation ||389 ||401 |
|Loss before Tax ||(616) ||(4616) |
|Provision for Tax ||- ||- |
|Loss after Tax ||(616) ||(4616) |
Review of Operations
During the Financial Year 2016-17 the Company did not operate its plant and pursuant tothe repealing of Sick Industrial Companies (special Provisions) Act 1985 (SICA) thereference made to Board of Industrial and Financial Reconstruction (BIFR) got abated.
Lenders to the Edayar Zinc Limited ("EZL") a Subsidiary of the Company haveinitiated action under Section 13(4) of The Securitization and Reconstruction of FinancialAssets and Enforcement of Security Interest Act 2002 (SARFAESI Act 2002) for recovery oftheir dues and has issued notice for taking symbolic possession. EZL filed a stayapplication before DRT challenging Bankers action of taking symbolic possession and courtcommissioner's notice for taking physical possession of the property.
Lenders to EZL has filed Appeal under section 18 of the SARFAESI before Debts RecoveryAppellate Tribunal challenging DRT order allowing Amendment Application filed by Companyand Permitting Company to carry out amendments to the Securitization Application. Thematter is sub-judice
Ministry of Finance (MoF) vide notification no S.O. 3568(E) and 3569(E) has notified1st December 2016 (appointed date) as the date on which the provisions of Sick IndustrialCompanies (Special Provisions) Repeal Act 2003 (Repeal Act) shall come into force. TheRepeal Act provides for repeal of the Sick Industrial Companies (Special Provisions) Act1985 (SICA) and related matters with effect from 1st December 2016. The BIFR and AIFRstands dissolved with effect from that date and all proceedings before them standsabated.
Accordingly EZL's proceedings before BIFR also stands abated.
EZL where lenders have initialed Sarfaesi Action is hopeful that Lender Creditors andAuthorities will take a measured stand to safeguard interest of all stakeholders byallowing EZL to revive under a suitable revival package.
During FY 2017 ("the year under review") total revenue was Rs. 201lacs as against Rs.1062 lacs during corresponding previous FY 2016. The Company recordednegative EBIDTA of Rs. 226 lacs in FY 2017 vis-a-vis negative EBITDA of Rs. 575 lacs lastyear.
3B Binani Results Highlights 2017 (including Goa Glass Fibre Limited)
(figures in Million Euros)
|Particulars ||Year ended 31/03/2017 ||Year ended 31/03/2016 |
|Total Revenue ||199.70 ||194.76 |
|Loss before Interest Depreciation & Tax ||43.40 ||39.21 |
|Interest and finance charges ||20.90 ||18.58 |
|Provision for Depreciation ||18.89 ||17.88 |
|Loss before Tax and exceptional items ||(2.77) ||(0.32) |
|Provision for Tax ||- ||0.03 |
|Loss after Tax ||(7.53) ||(0.66) |
Review of Operations
3B Binani on a consolidated basis reported an improvement in its operatingperformance in the year 2016-2017. The total revenue increased by 2.5 % and operatingprofit increased by 10.7% versus last year mainly driven by solid market conditions whichenabled us to increase the sales volume while maintaining the prices. The implementationof the Profitability Improvement Plan covering all key financial drivers also stronglycontributed to the overall performance improvement. The improvement has been achieveddespite the cost impact of a scheduled cold repair in Goa India which has beenimplemented successfully and record production performances have been achieved post therepair. In Birkeland Norway record production levels have been achieved due to thesuccessful implementation of the first phase of a debottlenecking project. Production costdecrease has also been recorded in Battice mainly driven by the impact of the deflationand production performance improvements. At the end of the year flexible structuringscheme has been sanctioned by the main lender enabling investment to support the growth.
The European Market remained solid in 2016 with an average growth estimated at 4.3%versus last year. While the year started strong with an average growth of 8% for the firsthalf the second half was much slower with hardly any growth. Later on in the year it wasimpacted by demonetization reducing the growth forecast to 7.1% in 2016-2017. The glassfibre grown by 9%. While the market grew with a low double digit figure for the firsthalf the last quarter has been slow following the demonetization.
3B Binani will continue to focus on its core markets Automotive Wind and PerformanceComposites supplying these markets with high quality Chopped Strands and Direct Rovingproducts supported by high performance specialty products like HiPer-tex and CFM. 3BBinani continues with a strong focus on innovation to develop value-added products for itscustomers in order to deliver product differentiation to improve the profitability and tokeep ahead of competition. All 3B plants are focusing on improving their cost structure byoptimizing production.
Looking ahead overall demand growth is expected to continue in glassfibre in bothEurope and India with the economies gaining some momentum. The market growth forglassfibre in both automotive and wind applications continue to be encouraging and 3BBinani is well positioned to take advantage of this.
BIL Infratech Limited (BILIL)
BILIL is a wholly owned subsidiary of the Company. BILIL is engaged in execution of EPCcontracts for Industrial Civil Construction and Power & Renewable Energy Projects.
|Particulars ||2016-17 ||2015-16 |
|Total Revenue ||24574.40 ||32640.00 |
|Profit before Depreciation Interest and Tax and Exceptional Items ||1156.14 ||1565.04 |
|Provision for Depreciation ||140.52 ||263.92 |
|Interest and Financial Charges ||331.61 ||334.64 |
|Profit / (Loss) before Tax ||858.53 ||1189.12 |
|Provision for Tax ||305.31 ||470.23 |
|Profit / (Loss) after Tax ||553.22 ||718.88 |
BILIL reported the total income of Rs. 24574.40 lacs for the year under review asagainst Rs. 32640.00 lacs in the previous year. It reported a Profit after Tax ofRs.553.22 lacs as compared to Rs.718.88 lacs in the previous year.
The Year 2016-17 continued to be challenging for BILIL whereas India achieved 7.1% GDPgrowth as compared to 7.6% in previous year and was globally acknowledged as theworld's fastest growing economy. Plethora of opportunities predominantly inInfrastructure Rail Road and Power & Renewable Energy had been visible. The SmartCity Mission with assured budgetary support to create 100 Smart Cities across India hadalso bolstered the optimism significantly.
In spite of strong signs of economic revival with higher consumer in confidencegeneral till 3rd quarter of FY 2016-17. Though the optimism started seeinglight from middle of 3rd quarter with lot of construction tenders floating ininfrastructure fieldand BILIL is bidding for the qualifying ones new orders bookedtowards fag end of the year could hardly be converted into revenue for the FY 2016-17.However next financial year i.e. 2017-18 will reap the benefit of a healthy order bookposition and ongoing market recovery in real terms.
Stable and visionary Government policy reforms strong possibility of simplified taxregime and continuous efforts to improve Ease-of-doing-business have made India a brightspot in global investment map. Higher Govt. spending in key sectors such asInfrastructure Rail Road Port Power robust FDI in Manufacturing and defenceproduction will push up growth prospect tremendously.
On-going Policy reforms divestment of PSU stakes relaxed FDI norms to allow foreignplayers in Indian Infrastructure Sector and thrust towards clean Energy and Make-in-Indiawill create investment friendly environment and fuel growth momentum further. This likeCement Steel Mining and other Metals. Overall there will be high growth scenario in awide spectrum of industries.
However there is possibility of Govt. funding target not being met. At the same timehigh debt levels of private Infrastructure players cautious approach of Banks for newinvestment proposals due to mounting NPAs and land acquisition issues may hold back thepace of private investments and could be potential growth decelerators.
Opportunity and threats
Higher Govt. spending to build robust infrastructure single goods and services tax(GST) favorable Govt. approach towards PPP Model lower fiscal deficit and low interestregime are expected to boost long-term inbound investment actively.
However rising inflation and high debt levels of large scale Private infrastructuredevelopers may constrain investment in this sector. Inability of Govt. funding throughdivestment of PSUs may dampen investment scenario further.
Way forward for BILIL
In order to ensure growth we have to book more and more orders and in order to bookorders in this competitive market we have no other way but to accept minimum margin. Hencewe are looking for more volume and minimum margin in conventional item rate constructioncontracts.
The only available way of earning more margins is to focus on EPC or Design & Builtcontracts where there is less competition but it calls for strong credential in respectivefields which we are lacking but we have to gradually build it by engaging as JV partner orassociate or back to back sub contract.
BILIL's Growth Plan for next three years
FY 2017-18 ->Rs.350 Cr from target Order booking of Rs.800 Cr
FY 2018-19 ->Rs. 450 Cr from target Order booking of Rs. 950 Cr
FY 2019-20 ->Rs. 650 Cr from target Order booking of Rs. 1100 Cr
Global Composite Holdings Inc. formerly known as CPI Binani Inc. (CPI Binani)
| ||(In mn USD) |
|Particulars ||2016-17 ||2015-16 |
|Total Revenue ||0.90 ||- |
|Profit before Depreciation Interest and Tax and Exceptional Items ||- ||-0.21 |
|Provision for Depreciation ||- ||- |
|Interest and Financial Charges ||- ||- |
|Profit / (Loss) before Tax ||(24.92) ||-0.21 |
|Provision for Tax ||- ||- |
|Profit / (Loss) after Tax ||(24.92) ||-0.21 |
CPI has been incurring losses and in March 2015 it sold its assets to Core MouldingTechnologies Inc USA. The Company is looking out for new business opportunities.
B T COMPOSITES LIMITED (BTCL)
BTCL is wholly owned subsidiary of the Company and is under the process of Voluntarywinding- up.
a. Royalvision Projects Private Limited wholly owned Subsidiary which was incorporated2-3 years back is yet to commence any business activities. The Company incurred marginalloss for the financial year ended 31st March 2017. This was on account of certain routineadministrative expenses incurred by the Company.
b. Binani Global Cement Holdings Private Limited (Singapore) Wholly owned subsidiary ofthe Company is in the process of being closed under the strike off route.
14. AUDIT OBSERVATIONS
The Auditors in their Report have made observations in connection with creation ofBusiness Re-organization Reserve(BRR) and transfer of sums to offset certainexpenses/write-offs fair valuation of the Company's investments done by the Company andoutstanding guarantees issued by the Company to banks and financial institutions on behalfof subsidiaries including one step networth of down subsidiary which are significant theCompany
The Board wishes to state as follows:
a. Pursuant to a separate Scheme of Amalgamation approved by the Hon'ble High Court atCalcutta between WIEL and a step down wholly owned subsidiary of the Company on 18th March2014 being the Company as a successor to WIEL the Company has applied AS 30 theAccounting Standard on Financial Instruments: Recognition and Measurement issued by theInstitute of Chartered Accountants of India (ICAI) and pursuant thereto has as on March31 2014 being the date of conclusion of the first Accounting Year post the provisions ofAS 30 becoming applicable to the Company classified the investments as "availablefor sale financial assets" and has accordingly measured such investments at fairvalue as on that date. All amount required to be taken as per AS 30 to revenue reserve orto an appropriate equity account shall be aggregated and such aggregate shall be taken tothe Business Reorganisation Reserve (BRR). In the event of any conflict between theprovision of AS 30 and any other Accounting Standards the provision of AS 30 will beapplied in preference to any other Accounting standard. BRR shall constitute a reservearising as per this Scheme and shall not for any purpose be considered to be a Reservecreated by the Company. During the year the Institute of Chartered Accountants of India(ICAI) has withdrawn Accounting Standard 30 (Accounting Standard on Financial Instruments:Recognition and Measurement). Consequent to this the Company backed by legal opinionhas applied principles of notified Ind AS related to Financial Instruments being newaccounting standards applicable instead of AS 30. All equity investment includingInvestment in Subsidiaries are designated as fair value through profit & loss.Accordingly all amounts required to be taken as per the Financial Instruments Standardsunder Ind AS to revenue reserve or to an appropriate equity account / Other ComprehensiveIncome are aggregated and such aggregate is taken to Business Re-organization Reserve(BRR) in line with the afore-cited court order. This matter has the auditors.
b. In view of the amalgamation of erstwhile Binani Metals Limited (BML) with theCompany with effect from April 05 2016 with the appointed date of April 1 2015 for thepurpose of these results the figures disclosed as on April 01 2015 have been arrived onthe basis of an aggregation of such separate results of the Company and erstwhile BML.This Scheme of Amalgamation is accounted using The Method as per Accounting Standard(AS) 14 Accounting for Amalgamations' being accounting treatment as prescribed inScheme of Amalgamation approved by the Hon'ble High Court at Calcutta.
c. As per the DRT order on the Securitization Application Edayar Zinc Limited (EZL) haspaid Rs. 156 lacs by March 31 2017 and continues to pay Rs. 25000 per day. DRT vide itsorder dated 21st January 2017 allowed the amendment application filed by EZL contestinglegality of action initiated under SARFESI Act. EZL has not provided interest on banksloans for the year amounting to Rs.4092 lacs.
d. The Company had given guarantees to banks and financial institutions in the earlieryears on behalf of various subsidiaries for the purpose of expansion projects and workingcapital requirements. The outstanding aggregate balance of these guarantees is Rs 540927Lacs as on March 31 2017. The lenders of the Company's major subsidiaries have alreadyrestructured the loans. The Subsidiaries have sufficient assets to meet their borrowings.Considering the same in the opinion of the management these are not expected to resultinto any financial liability to the Company.
e. On 28th Nov.'16 Competition Appellate Tribunal (COMPAT) stayed CCI order on one ofthe conditions that the Company deposit Rs.1673 lacs being 10 per cent of the penaltyamount with the tribunal in the form of fixed deposit. Binani Cement Limited (BCL) filedan appeal seeking waiver. on grounds that it was facing severe financial hardship. On 9thJanuary 2017 COMPAT dismissed the appeal of BCL seeking waiver. The Company has againapproached COMPAT for review of its decision and allow time to deposit 10% of the penaltyamount. BCL backed by a legal opinion believes that it has a good case and accordingly noprovision has been made in the accounts. BCL has sales tax interest liability ofRs.37123.23 lakhs as on March 31 2017. BCL has filed writ petition / waiver applicationin the Hon'ble High Court / with concerned authority and has paid Rs. 3077.93 lakhs underprotest. BCL believes that it has a good case and accordingly no provision has been madein the accounts.
f. The Company was in the process of restructuring its bank borrowings with the Lender.However in the interim the said Lender has communicated to the Company that it isrecalling its borrowings and has also designated the foreign currency debt into INRdenominated debt with higher coupon rate and has demanded repayment of all out standingsincluding corresponding interest and penal interest immediately. Company has requested theLender to defer the recall The and has in the interim provided alternative mechanism forrepayment of its loans in due course. The Company is awaiting response from the Lender inthis behalf. Hopeful of a favorable consideration by the Lender of its alternativemechanism the Company continues to denominate such loans in Foreign currency and has notclassified the outstanding Loan as Current Liabilities. Further it has also not accrueddifferential and penal interest amounting to INR 1870.65 lakhs as at the reporting date.
g. During the quarter Binani Global Cement Holdings Private Limited Singapore WhollyOwned Subsidiary of the Company has approached Accounting and Corporate RegulatoryAuthority (ACRA) Singapore for closure of the Company under the strike off route. PostBalance sheet date Narsingh Management Services Private Limited subsidiary of the Companyhas been sold for Rs.1 lakh fair value as on March 31 2017 was Nil.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DIRECTORS:
Mr. Braj Binani retires by rotation and being eligible has offered himself forre-appointment.
The Board recommends the aforesaid appointment of the Directors. Brief profile of theDirectors proposed to be appointed / re-appointed is annexed to the Notice conveningensuing Annual of the Company during General Meeting.
KEY MANAGERIAL PERSONNEL (KMP)
The details of the Key Managerial Personnel of the Company appointed pursuant toSection 203 of the Companies Act 2013 are as follows:
|Sr. No. ||Name ||Designation ||With effect from ||To |
|1 ||Mrs. Visalakshi Sridhar ||Chief Financial Officer Manager ||1st April 2015 ||- |
| || || ||28th July 2015 ||- |
| || ||Company Secretary ||24th October 2015 ||- |
Board of Directors has formulated a Nomination and Remuneration Policy annexed heretoas Annexure B stating the criteria for determining qualifications positiveattributes and independence of a director and recommends to the Board a policy relatingto the remuneration for the directors key managerial personnel and other employees.
M/s. MSKA & Associates Chartered Accountants Mumbai (Firm RegistrationNo.105047W) were appointed as Statutory Auditors of the Company at the 52nd AGM held on19th December 2015 for a term from the conclusion of the 52nd Annual GeneralMeeting upto the conclusion of 57th Annual General Meeting subject to the ratification bythe Members at each of the Annual General Meetings. M/s. MSKA & Associates haveprovided a declaration to the effect that they continue to be eligible and independent interms of Section 141 of the Companies Act 2013 read with Rule 10 Companies (Audit &Auditors) Rules 2014.
Your Board recommends the ratification of appointment of M/s. MSKA & Associates asthe Statutory Auditors of the Company at the 54thAGM.
17. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said Rules.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
With regard to the provisions of Section 136(1) read with its relevant proviso of theCompanies Act 2013 the Annual Report excluding the aforesaid information is being sentto the Members of the Company. The said information is available for inspection at theRegistered Office and Corporate Office working hours on all working days upto the date ofAGM and any Member interested in obtaining such information may write to the CompanySecretary and the same will be furnished without any fee.
18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO.
The Company is not being engaged in manufacturing activities; hence the particulars inrespect of Conservation of Energy Technology Absorption are not applicable to theCompany.
The details of Foreign Exchange Earnings and Outgo for the Financial Year 2016-17 areas follows:
(Rs. in Lacs)
|Particulars ||31st March 2017 ||31st March 2016 |
|Expenditure || || |
|Foreign Travelling Expenses ||2.24 ||0.27 |
|Interest & Finance ||4813.82 ||4620.81 |
|Charges on Foreign || || |
|Currency Loan || || |
|Total ||4816.05 ||4621.08 |
|Earnings || || |
|Export Sales (FOB) ||- ||85.31 |
|Advertisement and ||- ||10.21 |
|Media Services || || |
|Total ||- ||95.52 |
19. TRANSFER OF UNCLAIMED DIVIDENDS TO INVESTORS EDUCATION AND PROTECTION FUNDS(IEPF).
During the year under review your Company has transferred a sum of Rs. 2900400/-tothe Investors Education and Protection Fund of Central Government in compliance withSection 125 of the Companies Act 2013. This amount represents dividends for the financialyear 2009-10 which had been lying unclaimed with the Company for a period of 7 years fromthe due date of the payment despite reminders sent to concerned shareholders for claimingthe amount.
Pursuant to the provisions of Section 124(6) of the Companies Act 2013 and theInvestor Education and Protection Fund Authority (Accounting Auditing Transfer andRefund) Rules 2016 which have come into effect from 7th September 2016 which stipulatesthat shares on which dividend has not been paid or claimed for seven consecutive years ormore then such shares are to be transferred to the IEPF a fund constituted by theGovernment of India under Section 125 of the Companies Act 2013. The Company has intimatedto all such shareholders vide letter dated 15th June 2016 about thenon-encashment of dividend and transfer of the shares to IEPF at the appropriate date.
Subsequently Ministry of Corporate Affairs vide General Circular (No. 11/06/2017-IEPF)No.05/2017 dated 16th May 2017 regarding transfer of shares to IEPF Authority has statedthat subject matter is being reviewed by the Ministry and that the Ministry shall issuefresh instructions on the matter in due course. The Company awaits instructions.
20 . MEETINGS OF THE BOARD
During the year under review 6 meetings of the Board of Directors were held. Thedetails such as the dates of meetings attendance of the Directors thereat etc. areprovided in Report on Corporate Governance which forms part of this Report.
21. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and LODR Regulations IndependentDirectors at their meeting without the participation of the Non-independent Directors andManagement considered/evaluated the Boards' performance Performance of the Chairman andother Non-independent Directors. The Board have undergone a formal review which comprisedBoard effectiveness survey 360 degree and review of materials. This resulted in a fullBoard effectiveness report and Directors' feedback. This is further supported by theChairman's Annual Director Performance Review. The Board subsequently evaluated its ownperformance the working of its Committees (Audit Nomination and Remuneration andStakeholders Relationship Committee) and Independent Directors (without participation ofthe relevant Director). The criteria for performance evaluation have been detailed in theCorporate Governance Report.
22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and LODR Regulations the Board ofDirectors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same washosted on the website of the Company. This Policy inter-alia provides a direct access tothe Chairman of the Audit Committee. Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee and that nocomplaints were received during the year. The said policy has been disclosed on thewebsite of the Company and can be accessed athttp://binaniindustries.com/investor-relations/binani-industries-ltd/company-policies-codes/
23. AUDIT COMMITTEE
The Audit Committee constituted by the Board complies with the requirements under theAct as well as LODR Regulations. The details with respect of the composition of the AuditCommittee are included in the Corporate Governance Report which forms part of thisReport.
There was no recommendation of the Audit Committee which were not accepted by theBoard.
24. SECRETARIAL AUDITORS
Pursuant to the provision of Section 204 of the Companies Act 2013 and Rules madethere under the Company had appointed M/s Uma Lodha & Co. Company Secretaries (CPNo.2593) to carry out Secretarial Audit of the Company for the Financial Year 2016-17. TheSecretarial Auditor Report is annexed to this Report as
25. EXTRACT OF ANNUAL RETURN
An extract of the Annual Return in the prescribed format MGT-9 as required underSection 92 of the Companies Act 2013 is appended as Annexure D to this Report.
26. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
Given the nature of business and size of operations your company's internal controlsystem has been designed to provide for
a. Accurate recording of transactions with internal checks and prompt reporting.
b. Adherence to applicable Accounting Standards and Policies.
c. Compliance with applicable statutes policies and management policies andprocedures.
d. Effective use of resources and safeguarding of assets.
The Internal Control Systems provides for well documented policies / guidelinesauthorisation and approval procedures. Your Company through a firm of CharteredAccountants carried out periodic audits on all functions based on the plan and brought outany deviation to the Internal Control Procedures. The observations arising out of theaudit are periodically reviewed and compliance ensured. The summary of Internal Auditobservations and status of implementation are submitted to the Audit Committee. The statusof implementation of the recommendations is reviewed by the Audit Committee on a regularbasis and concerns if any are reported to the Board.
27. RISK MANAGEMENT
The Company had identified certain risk areas with regard to the operations of theCompany which was facilitated by a renowned firm of consultants in Mumbai. The InternalAuditors review the steps taken for risk mitigation / minimization wherever ever possibleand the status of the same is reviewed by the Audit Committee periodically. The Company'sBoard is conscious of the need to periodically review the risks mitigation process.
28. POLICY FOR PREVENTION OF SEXUAL HARASSMENT
The Company has adopted a policy for prevention prohibition and redressal of Sexualharassment. Pursuant to the provisions of sexual Harassment of Women at Work Place(Preventions Prohibition &Redressal) Act 2013. The Policy has been placed on thewebsite of the Company www.binaniindustries.com.
During the year under review no complaints were received by the Company pursuant tothe aforesaid Act / Policy.
29. CORPORATE GOVERNANCE
Your Company is fully compliant with the Corporate Governance guidelines as laid outin applicable regulations of LODR Regulations. All the Directors (and also the members ofthe Senior Management) have affirmed in writing their compliance with and adherence to theCode of Conduct adopted by the Company. The Corporate Governance Report is attached as AnnexureE to this Report.
The Chief Financial Officer has given a certificate of compliance with the Code ofConduct which forms part of Corporate Governance Report as Annexure F requiredunder SEBI LODR Regulations.
M/s Uma Lodha & Co. Practising Company Secretary have certified compliance withCorporate Governance clauses of erstwhile Listing Agreement and LODR Regulations and theCertificate in this regard is attached as Annexure G to this Report.
The Chief Financial Officer (CFO) certification as required under erstwhile Clause41 of the Listing Agreement and Regulation 8(17) of LODR Regulations is attached and formspart of this Report (Annexure H). Related Party disclosures/transactions aredetailed in Notes to the financial statements
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Braj Binani Group through its operating Indian Subsidiaries undertake theactivities on an ongoing basis for upliftment of the weaker sections and welfare of thesociety.
Your Board has constituted a Corporate Social Responsibility Committee (CSR Committee)pursuant to the provisions of Section 135 of the Companies Act 2013 read with Rules madethere under. However your Company is not obliged to spend any amount on CSR activitiesunder the aforesaid provisions of the Act based on the criteria laid down therein.
|1 A Brief outline of the Company's CSR policy including overview of projects or programs proposed to be undertaken and a reference to the web- link to the CSR policy and project or programs. ||The Company by its CSR Activities has committed to participate in Social cause be it uplifting the weaker section of the society or communal developments. The key focus area of the Company's CSR activities are one or more from amongst the activities specified under schedule VII of the Companies Act 2013 and Rules made thereunder. The Company's CSR initiatives shall be integrated with its business practices with an overall objective of the growth and development of the society and the Country |
| ||The CSR Policy of the Company is available at the company's website |
|2 The Composition of the CSR Committee. ||Mr. Rahul Asthana - Chairman |
| ||Mr. S. Sridhar - Member |
| ||Dr. (Mrs.) Sangeeta Pandit -Member |
|3 Average net profit of the Company for last three financial years ||-ve (refer note 41 of the Audited Accounts) |
|4 Prescribed CSR Expenditure (two per cent of the amount as in item 3 above). ||-ve |
|5 Details of CSR spent during the financial year: ||Not applicable in view of point 3 above |
|a) Total amount to be spent for the financial year || |
|b) Amount unspent if any; || |
|c) Manner in which the amount spent during the financial year is detailed below or material orders were passed by the || |
|6 Reason for shortfall in spend ||Not applicable |
|7 Responsibility statement of the CSR Committee ||We hereby confirm that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and CSR policy of the Company |
BINANI CEMENT LIMITED (BCL)
The Braj Binani Group for several years amount on an ongoing basis through itsoperating companies for social cause and upliftment and welfare of the weaker section ofthe society and on education of the underprivileged children.
In accordance with the provisions of Section 135 read with Schedule VII of theCompanies Act 2013 the Company as a part of its initiative under the "CorporateSocial Responsibility" drive has adopted a CSR Policy outlining various CSRactivities to be undertaken by the Company in the area of preventive health care makingavailable safe drinking water promoting education ensuring environmental sustainabilityetc. The CSR policy of the Company can be accessed on the Company's weblinkhttp://www.binanicement.in/investor-relations.
EDAYAR ZINC LIMITED (EZL)
The Braj Binani Group through its operating Indian Subsidiaries undertakes theactivities on an ongoing basis for upliftment of the weaker sections and welfare of thesociety.
The mandatory provisions of Section 135 of the Act and Rules made there under withrespect to Corporate Social Responsibility are not applicable to EZL. The Company issocially conscious about its participative role in development of society. The Groupcontinues to undertake CSR activities in Binanipuram where the plant is situated and thesame are well appreciated by the local community at large.
GOA GLASS FIBRE LIMITED (GGFL)
Directors also wish to The provisions of Section 135 of the Companies Act 2013 andRules there under with respect to CSR are presently applicable to the Company. In 2016-17GGFL has spent Rs. 4.5 Lakhs being 2% of the average net profits of the last threefinancial years by undertaking free cataract operations distribution of free spectaclesand contribution to PM's National Relief Fund
31. OTHER DISCLOSURES
Your Directors state that no disclosures or reporting is required in respect of thefollowing items as the same is either not applicable to the Company or relevanttransactions / event have not taken place during the year under review.
a. Issue of Equity shares with differential rights as to dividend voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
c. There is no Managing Director for the Company.
d. No significant or Courts or Tribunals which impact the going concern status andCompany's operations in future.
32. HUMAN RESOURCES
Across the Companies in the Group Employee Relation continues to remain cordial. TheGroup's emphasis on safe work practices and productivity improvement is unrelenting.considerable As per Section 197 Rule 5 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the median remuneration of our employees as at March 312017 is Rs. 590769. The Company 31 2017. The Board places on record its sincereappreciation for the valuable contribution made by the employees across all levels in theorganization.
33. CAUTIONARY STATEMENT
Statements made in this Report describing the company's objectives projectionsexpectations and estimates regarding future performance may be "forward lookingstatements" within the meaning of applicable laws and regulations and are based oncurrently available information. The Management believes them to be true to the best ofits knowledge at the time of preparation of this Report. However these statements aresubject to future events and uncertainties which inter-alia include regulatory changestax laws economic developments within the Country and other incidental factors thatcould cause actual results to differ materially from those as may be indicated under suchstatements.
The Directors wish to express their appreciation for the continued co-operation of theCentral and State Governments bankers financial institutions customers dealers andsuppliers and also the valuable assistance and advice received from the joint venturepartners and all the shareholders. The all the employees for their contribution supportand continued cooperation throughout the year.
| ||For and on behalf of Board of Directors of |
| ||Binani Industries Ltd. |
|Date: 29th May 2017 ||Braj Binani |
|Place: Mumbai ||Chairman |