Your Directors hereby submit the report on Business and Operations along with theAudited Financial Results of the Company for the year ended 31st March 2017.
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED MARCH 31 2017:
(Rs. in Lakhs)
| ||For the Year |
|Particulars ||2016-17 ||2015-16 |
|Revenue ||45560.02 ||180.45 |
|Expenditure ||3318.98 ||1033.83 |
|Operating Profit / (Loss) ||42241.04 ||(853.38) |
|Profit / (Loss) before Depreciation & Tax ||42241.04 ||(853.38) |
|Depreciation ||19.63 ||17.82 |
|Profit / (Loss) before Tax ||42221.41 ||(871.20) |
|Tax ||13140.28 ||- |
|Profit / (Loss) after Tax ||29081.13 ||(871.20) |
|Exceptional items ||39.53 ||- |
|Profit / (Loss) for the year ||29041.60 ||(871.20) |
REVIEW OF OPERATIONS
As reported in the previous year's Director Report the Company ceased the operation ofContainer Freight Station (CFS) with effect from May 2012 and since then has beencarrying on the general warehousing operation in the said CFS land with about 120 godowns.
The Board has approved in its Board Meeting held on 1st December 2014 aproposal of the Company for developing an integrated township in the CFS land area of63.89 acres where the general warehousing activity was carried on. Consequently theCompany discontinued the general warehousing operation with effect from 1stJanuary 2015 and all the godowns have been completely vacated in the months ofJanuary/February 2015. Due to the total discontinuance of general warehousing operationsthere is no rental income except a meager amount of Rs.12.50 lakhs as against Rs.4.53lakhs earned in the previous year.
The sale of land amounting to Rs.45519.00 lakhs constitutes major revenue for the year.
On the sale of 14.06 acres of Perambur Barracks Road property for a consideration ofRs.37000 lakhs a reduction of Rs.1863.88 lakhs was allowed to the Purchaser towards landshortage value and a claim by the Purchaser towards compensation for delay in clearancewas settled at Rs.804.94 lakhs and the same have been grouped under "OtherExpenses" and the increase on "Other Expenses" is mainly on account ofthis.
Overall the Company has reported a profit of Rs.42221.41 lakhs before Tax andexceptional item during the year.
After adjusting the provision for tax to the tune of Rs.13124.00 lakhs and the DeferredTax of Rs.16.28 lakhs the net profit for the year is Rs.29041.60 lakhs (PAT).
JOINT DEVELOPMENT AGREEMENT (JDA) WITH M/S.SPR CONSTRUCTION PVT. LTD.
You are aware that the Company is embarked upon development of a World-class IntegratedTownship on Joint Development Model in its main land area of 63.89 acres (previously usedfor CFS operations) at Perambur. For the same the Company has entered into a JointDevelopment Agreement (JDA) on 26.6.2015 on revenue sharing model with M/s. SPRConstruction Private Ltd. Chennai.
The integrated township is planned around a Wholesale Market development co-existingwith a separate Residential Project development within the township serviced by thefinest brands in Hospitality Entertainment Convention Centre Retail Mall and HighStreet. The Project is expected to start by early next year and shall be developed over aperiod of 7-9 years in a phased manner wherein first phase is expected to be delivered in36-42 months from the start of construction.
Binny Ltd and SPR Group believe that it can leverage upon opportunity that arises fromthe current physical and social infrastructure problems and lack of availability of legalpremises in Sowcarpet (South India's largest Wholesale Market) located at just 3 kms awayfrom the Project Site. The Management believes that property of 63.89 acres having roadaccess from all four sides is only such large private land within close proximity thuspresenting a strong opportunity for development of wholesale market as an extension /alternative / parallel to Sowcarpet market and also a fully integrated residentialtownship with School Hospital Convention cum cultural Centre with 3500+ seating capacityand Retail Mall & Entertainment Area. The Wholesale Market is planned and designed tomeet the trading requirement of not only Chennai but entire South India and nearby AsianEconomies given the proximity that Chennai Port enjoys.
This development will be based on concept of smart city with its vision of adestination "Where Business Meets Life". Expected Size of development undercurrent CMDA Regulations would be based on 2.5 Basic FSI + 1 Premium FSI (subject toapprovals).
The Company does not recommend any dividend for the year ended March 31 2017
The Company did not invite or accept any deposit during the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. S. Natarajan (DIN: 00155988) Non-Executive Director is liable to retire byrotation at the ensuing Annual General Meeting (AGM) pursuant to the provisions of Section152 of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and the Articles of Association of the Company and being eligiblehas offered himself for reappointment. Appropriate resolution for his re-appointment isbeing placed for approval of the members at the ensuing AGM. The brief resume of theDirector and other related information has been detailed in the Notice convening the 48thAnnual General Meeting of the Company.
PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of Remuneration during the Financial Year2016-17 in excess of the sum prescribed under Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
NUMBER OF MEETINGS OF THE BOARD
The Board Meetings at regular intervals were conducted to review the Company's businessand to discuss its strategies and plans.
During the Year 6 Board Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The maximum interval between the meetings didnot exceed the period prescribed under the Companies Act 2013 and Listing Regulations2015.
COMMITTEES OF THE BOARD
The Board has the following Committees:
1) Audit Committee;
2) Nomination and Remuneration Committee; and
3) Stakeholders Relationship Committee.
The details on the number of Audit Committee Meetings and Stake Holders RelationshipCommittee meetings of the Company held during the year along with their constitution andother details are provided in the report on Corporate Governance.
During the year all the recommendations of the Audit Committee were accepted by theBoard.
Pursuant to the provisions of the Companies Act 2013 read with rules issued thereunderand Listing Regulations 2015 the Board has carried out a performance evaluation of itsown performance the directors individually as well as the evaluation of the working ofits various Committees for the financial year ended 2016-17.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from all the independent directorsunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The Company has a familiarisation programme for Independent Directors pursuant toListing Regulations 2015. The same is dealt with in the Annual Report. TheFamiliarisation Programme is available in the website of the Company. The link for thesame is given as http://www.binnyltd.in/ images/policies/FAMILIARIZATION_DIRECTORS.pdf
EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 forms part of the Annual Report as Annexure - I.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Policy provides for appropriate composition ofExecutive Non-Executive and Independent Directors on the Board of Directors of yourCompany along with criteria for appointment and remuneration including determination ofqualifications positive attributes independence of Directors and other matters asprovided under sub-section (3) of Section 178 of the Companies Act 2013.
The remuneration paid to the Directors is as per the terms laid out in the Nominationand Remuneration Policy and as per the recommendations of Nomination and RemunerationCommittee of the Company. Information required under Section 197 of the Companies Act2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is set out in ANNEXURE-II The Nomination and Remuneration policy is posted onthe Company's website on the below link.http://binnyltd.in/images/policies/Nomination_Policy.pdf
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions contained in Section 134(3)(c) of the Companies Act 2013the Board to the best of its knowledge and belief and according to the information andexplanations obtained by it confirms that:
(a) in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable Accounting Standards and Schedule III of the Companies Act2013 have been followed and there are no material departures from the same;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit of the Company for the financial year ended 31st March 2017;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern' basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY:
The Company has formulated and adopted a vigil mechanism for employees to reportgenuine concerns to the Chairman of the Audit Committee. The policy provides opportunityfor employees to access in good faith the Audit Committee if they observe unethical andimproper practices. The Whistle Blower Policy of the Company is available in the websiteof the Company. The link for the same ishttp://www.binnyltd.in/images/policies/Whistle_Blower_Policy_Vigil_Mechanism.pdf
AUDITORS AND AUDITORS REPORT:
A. Statutory Auditors:
M/s.CNGSN & Associates LLP (Firm Registration No. 004915S) the Statutory Auditorsof the Company have resigned from the office of Statutory Auditors effective from 1stday of September 2017 and thus there arose a casual vacancy in the office of StatutoryAuditors of the Company. M/s. Sagar & Associates (FRN.No:003510S) CharteredAccountants Hyderabad have signified their willingness to act as Statutory Auditors ofthe Company and to carry out audit for financial year 2016-17 and to hold the office asStatutory Auditors of the Company until the conclusion of the ensuing Annual GeneralMeeting of the Company.
The Board of Directors at their meeting held on 6th September 2017 approvedthe appointment of M/s. Sagar & Associates (FRN.No:003510S) Chartered AccountantsHyderabad as Statutory Auditors of the Company to carry out audit for the financial year2016-17 subject to the approval of the members of the Company.
Further the members at the Meeting conducted through Postal Ballot have approved theappointment of M/s. Sagar & Associates (FRN.No:003510S) Chartered AccountantsHyderabad as Statutory Auditors of the Company for the financial year 2016-17 who wouldhold the office as Statutory Auditors of the Company up to the ensuing Annual GeneralMeeting of the members of the Company. The Board recommends their appointment as StatutoryAuditors of the Company for a further period of three years.
The Auditors' Report does not contain any qualification.
B. Cost Auditors:
The Company is not required to appoint Cost Auditors under Section 148(2) of TheCompanies Act 2013 read with the Companies (Cost records and Audit) Rules 2014.
C. Secretarial Auditor:
Pursuant to the provisions Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Shri. V.SureshPracticing Company Secretary has been appointed as Secretarial Auditor of the Company toundertake the Secretarial Audit of the Company for the FY 2016-17. The report of theSecretarial Auditor is enclosed as ANNEXURE to this report. There are noqualifications reservations adverse remarks or disclaimers given by the SecretarialAuditor in the Report.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:
The Company has complied with requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A report on the Corporate Governance practices theAuditors' Certificate on compliance of mandatory requirements thereof is given as anannexure to the Corporate Governance Report.
Management's Discussion and Analysis Report is presented in a separate section formingpart of the Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013form part of the Notes to the Financial Statements provided in this Annual Report.
The company has formulated and laid down procedures about the risk assessment and riskmanagement procedures. These procedures are periodically reviewed to ensure that risks aremanaged / mitigated through a well-defined framework.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions with related parties were reviewed and approved by the AuditCommittee. The details of the related party transactions as per Accounting Standard 18 areset out in Notes to the Financial Statements forming part of this report.
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013is disclosed in Form No. AOC- 2 as ANNEXURE-III.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company is maintaining adequate and effective Internal Financial Control (IFC) overFinancial Reporting (FR) based on Guidance notes on Audit for Internal financial Controlover financial reporting for ensuring the orderly and efficient conduct of its businessincluding adherence to its policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information. The Company has adoptedaccounting policies which are in line with the Accounting Standards prescribed in theCompanies (Accounting Standards) Rules 2006 that continue to apply under Section 133 andother applicable provisions if any of the Companies Act 2013 read with Rule 7 of theCompanies (Accounts) Rules 2014. These are in accordance with generally acceptedaccounting principles in India.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is as follows:
Conservation of Energy
|1. The steps taken or impact on conservation of energy ||During the year |
|2. The steps taken by the Company for utilizing alternate sources of energy ||NIL |
|3. The capital investment on energy conservation equipment || |
|1. The efforts made towards technology absorption || |
|2. The benefits derived like product improvement cost reduction product development or import substitution || |
|3. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) (a) the details of technology imported (b) the year of import (c) whether the technology been fully absorbed (d) if not fully absorbed areas where absorption hasn't taken place and the reasons thereof ||During the year |
| ||NIL |
|4. The expenditure incurred on Research and Development || |
Foreign Exchange Earnings and Outgo Not applicable.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions aren't applicable
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There are no significant and material orders passed by the regulators or courts ortribunals that may have an impact for the Company as a going concern and/or company'soperations.
The Directors acknowledge the cooperation and assistance extended by the Government ofIndia and Government of Tamil Nadu and place on record their appreciation and gratitude tothem. The Directors also thank the shareholders employees and all other stakeholders ofthe Company for their continued support and cooperation.
| ||ON BEHALF OF THE BOARD |
|Chennai ||M. Nandagopal |
|Date: October 23 2017 ||Executive Chairman |
| ||DIN: 00058710 |