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Binny Ltd. (BINNY) - Director Report
Company director report
Your Directors hereby submit the Report on Business and Operations along with theAudited Financial Result of the Company for the year ended 31st March 2016
SAMMARY ON FINANCIAL RESULTS
(Rs. In Lakhs)
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year 2015-16 and the date ofthis report.
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 a proposal of theCompany for developing an integrated township in the CFS land area of 63.89 acres wherethe general warehousing activity was carried on. Consequently the Company discontinuedthe general warehousing operation with effect from 1st January 2015 and all the godownshave been completely vacated in the months of January/February 2015. Due to the totaldiscontinuance of general warehousing operations there is no rental income except ameager amount of Rs.4.53 lakhs as against Rs.718.61 lakhs earned in the previous year. Thesale of building material as Scrap amounting to Rs.162.78 lakhs mainly constitutesRevenue. The expenditure has gone up to Rs.1033.83 lakhs from Rs.527.06 lakhs mainly onaccount of increase in the financial cost to the tune of Rs.247.50 lakhs and write-off ofFixed Assets (Building) to the tune of Rs.199.81 lakhs.
As a result the Company has incurred a loss of Rs.871.20 lakhs during the year.
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 Pvt. Ltd. Chennai.
The integrated township is planned around a development of a wholesale marketecosystem
co-location of Residential Project development within the township in addition tobeing serviced by the finest brands in Healthcare Hospitality Education andEntertainment. The project also envisages construction of a Marriage Hall and a Mall. TheProject is expected to start by end of this year and shall be developed over a period of7-9 years in a phased manner wherein first phase is expected to be delivered in 36-42months from the start of the construction.
Due to its proximity to the Chennai railway station and Chennai Port Binny Ltd and SPRGroup believe that this project can create an opportunity from the current physical andsocial infrastructure problems and lack of availability of legal premises in Sowcarpet(South India's largest Wholesale Market) located at just 3 kms. away from the ProjectSite. Management believes that this property of 63.89 acres having road access from allfour sides is the only such large private land within close proximity thus presenting astrong opportunity for development of wholesale market as an extension / alternative /parallel to Sowcarpet market and also a fully integrated residential township with SchoolHospital Convention cum cultural Centre with 3500+ seating capacity and Retail Mall &Entertainment Area.
This development will be based on the concept of a smart city with a vision of"Where Business Meets Life". The expected size of development under current CMDAregulations would be based on 2.5 Basic FSI + 1 premium FSI (subject to approvals).Currently Ernst and Young is undertaking a study for analyzing social-cost benefit forcreating an alternative to Sowcarpet and suggesting measures to be pursued with GovernmentAuthorities to revitalize existing infrastructure and surrounding of the site.
The Company does not recommend any dividend for the year ended March 312016.
The Company did not invite or accept any fixed deposit during the year under review.
DIRECTOR AND KEY MANAGERIAL PERSONNEL
Retirement by rotation and subsequent re-appointment:
Shri. M. Nandagopal Executive Chairman is liable to retire by rotation at the ensuingAGM pursuant to the provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of the Company and being eligible have offered himself for reappointment.
Appropriate resolution for his re-appointment is being placed for approval at theensuing AGM. The brief resume of the Director and other related information has beendetailed in the Notice convening the 47th AGM of the Company.
PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of Remuneration during the Financial Year2015-16 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 regular intervals were conducted to review the Company's businessand to discuss its strategies and plans.
During the Year 7 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.
COMMITTEE 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. BOARD EVALUATION
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 Committees for the financial year ended 2015-16.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from all the independent directors underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure 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 http://www.binnyltd.in/images/policies/FAMILIARIZATION DIRECTORS.pdf
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 is
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 MGT-9 as a part of this Annual Report as ANNEXURE - I
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Policy provides for appropriate composition ofExecutive NonExecutive 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 Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is set out in Annexure-II
The Nomination and Remuneration policy is posted on the Company's website on the belowlink. http://binnyltd.in/images/policies/Nomination_Policy.pdf
AUDITORS AND AUDITORS REPORT:
A. Statutory Auditors:
The Auditors M/s.CNGSN& Associates LLP (Firm Registration No.004915S) CharteredAccountants who are the statutory auditors of the Company retire at the ensuing AnnualGeneral Meeting and being eligible offer themselves for reappointment from theconclusion of this Annual General Meeting [AGM] till the conclusion of next AGM.
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 Auditors:
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 Auditors of the Company.The report of the Secretarial Auditors is enclosed as Annexure to this report.
The Secretarial Auditors Report does not contain any qualification.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:
The Company has complied with requirements of Listing Regulations 2015. A report onthe Corporate Governance practices the Auditors' Certificate on compliance of mandatoryrequirements thereof is given as an annexure to the Corporate Governance Report.
Management's Discussion and Analysis Report as stipulated under Schedule V of theListing Regulations 2015 is presented in a separate section forming part of the AnnualReport.
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.
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.
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 polices 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 adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014. These are in accordancewith generally accepted accounting 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 furnished as below:
FORM 'A' Power & Fuel Consumption
Since the Mill is not functioning this is not applicable.
FORM "B" Technology Absorption
Since the Mill is not functioning this is not applicable.
Conservation of Energy - Not applicable
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 are not applicable.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act 2013 (including any statutorymodification(s) or
re-enactment(s) for the time being in force) the Directors of your Company confirmthat:
(a) in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable Accounting Standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
(b) the Directors have 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 2016 and of the profitand loss of the Company for the financial year ended 31st March 2016;
(c) the director 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 have 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.
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 to them.
The Directors also thank the shareholders employees and all other stakeholders of theCompany for
their continued support and cooperation.