To the Members
Your Directors have pleasure in presenting the Ninth Annual Report and the AuditedAccounts of your company for the year ended 31st March 2016.
| ||31st March 2016 ||31st March 2015 |
| ||Rs. ||Rs. |
|Revenue from operations & other income ||79869541 ||71769409 |
|Profit / (Loss) before Depreciation ||10148167 ||9886524 |
|Depreciation ||316500 ||245946 |
|Profit / (Loss) before Tax ||9831667 ||9640578 |
|Provision for Tax (including Deferred tax) ||3685873 ||3283848 |
|Profit / (Loss) after Tax ||6145794 ||6356730 |
As the members may be aware pursuant to the Demerger Scheme of Binny Ltd the Agenciesand Services Undertaking of Binny Ltd was transferred to and vested in the Company witheffect from 1st Jan 2010 the Appointed Date as per the Demerger Scheme.
The company operates in 4 divisions viz. Warehousing Showrooms Agencies and Bintex.The Warehousing division has rented its warehouses and is deriving rental income from it.The Showrooms are engaged in retail selling of textile materials. The Agencies division isengaged in the business of selling Tarpaulin rain coats and bags. The Bintex division isengaged in selling textile materials particularly uniform materials bed spreads andother textile varieties.
For the year 2015-16 the Rental income from Warehousing division was Rs.208.36 lakhsas against Rs. 186.15 lakhs in the previous year an increase by about 12%. The sales madeby the Showrooms division was Rs.19.31 lakhs as against Rs. 22.63 lakhs in the previousyear the Agencies division did not make any sale during the year as also in the previousyear and the Bintex division Rs.470.89 lakhs as against Rs. 503.33 lakhs in the previousyear.
The aggregate amount of revenue from Rent Sales and operating income were Rs.798.70lakhs as against Rs. 717.70 lakhs in the previous year. The Company has earned a NetProfit (before tax) of Rs.98.31 lakhs as against Rs.96.40 lakhs in the previous and a NetProfit (after tax) of Rs.61.45 lakhs as against a Net Profit of Rs.63.56 lakhs in theprevious year.
The 588000 (9.75%) Cumulative Redeemable Preference Shares (CRPS) of Rs.5/- eachaggregating to Rs.2940000/- which are redeemable on or before 30th June 2016was redeemed on 25th July 2016 along with the arrears of cumulative preferenceshare dividend on those shares amounting to Rs. 2866500/-.
The 281418142 (9%) CRPS of Rs.5/- each aggregating to Rs.1407090710/- areredeemable on or before 12th May 2020.
Preference share dividend is payable on the CRPS from the date of original allotment ofshares by Binny Ltd. The holders of the CRPS have preferential right to dividend over theequity share holders as and when dividend is declared by the company. The Preferenceshare dividend in arrears for 9% CRPS as at 31st March 2016 isRs.1151097874/-.
Since the Company is in the process of consolidating its operations the company couldnot find enough resources to pay dividend this year. Hence the company is notrecommending preference dividend this year.
DIVIDEND ON EQUITY SHARES
As stated for Preference Dividend since the Company is in the process of consolidatingits operations the company could not find enough resources to pay dividend this year.Hence the company is not recommending dividend on the equity shares this year.
Considering the difficult macro-economic conditions and challenging businessenvironment the Company s performance during the year under review was satisfactory.
The Company has plans to improve its sales performance in the Textile Division byfocusing on whole sale customers while retaining the existing retail customers. TheCompany has plans to procure bulk orders for its Textile division in order to improve thesales and profit. The Company has plans to modernize its showrooms at Bangalore andKolkata to attract new customers for its retail textile sale. The Company also has plansto sell new varieties of textile materials to attract younger generation customers.
ECONOMIC AND BUSINESS ENVIRONMENT
The Indian economy is currently passing through a phase of relatively slow growth.However this should not cloud the fact that over the nine-year period beginning from theyear 2005-06 the average annual growth rate was 7.7 percent. A bleak global economicoutlook and the resultant export contraction are challenges to the Indian economy. Butgood monsoon rains that are forecast this year would provide an impetus to the economy.
The Indian economy has been the fastest growing among major economies at least for thepast three quarters in the financial year 2015-16.
The Central Government s flagship initiatives like Make in India Start-up India andthe national Intellectual Property Rights (IPR) Policy are likely to get a major filliplater this year in terms of additional Budgetary allocation. The Department of IndustrialPolicy and Promotion (DIPP) the nodal agency for industrial corridors and the abovementioned flagship initiatives has begun work on revamping its schemes. In the FinancialYear 2017 Budget the Make in India has an allocation of Rs.325.35 crores while theStart-up India initiative does not have any separate allocation. With these programmesgaining traction the business environment is expected to get the much needed boost.
OUTLOOK AND OPPORTUNITIES
The textiles industry has made a major contribution to the national economy in terms ofcontribution to the GDP and net foreign exchange. Its share in the nation s GDP is 6% and13% in exports. The textiles is the second largest provider of employment afteragriculture. Thus the growth and all round development of this industry has a directbearing on the improvement of India s economy.
The strengths of the textile industry are:
Availability of low cost and skilled manpower provides a competitive advantageto the industry.
Availability of large varieties of cotton fibre and has a fast growing syntheticfibre industry.
India is one of the largest exporters of yarn in international market.
Growing economy and potential domestic and international market.
Industry has large and diversified segments that provide a wide variety ofproducts.
The opportunities that exists for the textile industry are:
Emerging retail industry and malls.
Elimination of quota restriction leads to greater market.
Growth rate of domestic textile industry.
Shifting towards branded readymade garment.
Product development and diversification.
The vision of the industry is:
In the domestic market sustaining an annual growth rate of 12% should not bedifficult.
This implies that with a 12% Compound Annual Growth Rate in domestic sales theindustry should reach a production level of US $ 350 billion by the year 2024-25 from thecurrent level of about US $ 100 billion for the domestic market.
Your directors expect that with estimates of better GDP growth rate the Company sstrong business model innovative fund management and marketing techniques continuedconfidence and support of the suppliers and customers your Company should achieve betterperformance in the year 2016-17.
BOARD OF DIRECTORS
Shri V. Sengutuvan Director (DIN 00053629) retires by rotation at this AnnualGeneral Meeting and being eligible offers himself for reappointment.
The information required to be given to the shareholders pursuant to regulation 36 (3)of the Listing Regulations about the director being re-appointed is given in the Reporton Corporate Governance which forms part of the Annual Report.
Director resigned during the year:
Smt Nidhya R. Guhan Director (DIN 06969627) Independent director and woman directoron the Board resigned on 29th February 2016 citing personal reasons.
Present term of office of Managing Director:
The present term of appointment of Shri V. Rajasekaran as Managing Director of theCompany is up to 12th May 2020.
DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8(5) OF THECOMPANIES (ACCOUNTS) RULES 2014
Extract of Annual Return:
The extract of Annual Return in the Form No. MGT 9 is annexed to the Directors Reportas Annexure I.
Number of meetings of the Board:
There were four Board meetings held during the year. The details of the Board meetingsand the Committee meetings are given in the Report on Corporate Governance which formspart of the Annual Report.
Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the confirmation andexplanations obtained by them your Directors make the following statement in terms ofSection 134(5) of the Companies Act 2013.
i) That in the preparation of the Annual Accounts for the year ended 31stMarch 2016 the applicable Accounting Standards had been followed along with properexplanation for material departures if any;
ii) That the selected accounting policies were applied consistently and judgements andestimates that are reasonable and prudent were made so as to give a true and fair view ofthe state of affairs of the Company as at the end of the financial year ended 31stMarch 2016 and of the profit of the Company for that period;
iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities;
iv) That the annual accounts for the year ended 31st March 2016 had beenprepared on a going concern basis.
v) Internal financial controls had been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and;
vi) Proper systems to ensure compliance with the provisions of all applicable laws hadbeen devised and that such systems were adequate and operating effectively.
Declaration by Independent Directors:
The Board has received the declaration from all the Independent Directors as per therequirement of section 149(7) of the Companies Act 2013 and the Board is satisfied thatall the Independent Directors meet the criterion of independence as mentioned in section149(6) of the Companies Act 2013.
Company's policy on Directors appointment and remuneration:
In accordance with section 178(4) of the Companies Act 2013 and pursuant to Part D ofSchedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (henceforth referred to as the Listing regulations) the Nomination and RemunerationCommittee has put in place the policy on diversity of Board of directors for appointmentof directors taking into consideration the qualification and wide experience of thedirectors in the fields of textiles trading banking finance administration and legalapart from compliance of legal requirements of the Company. The policy on diversity ofBoard of directors is annexed to the Directors Report as Annexure II.
The Nomination and Remuneration Committee has laid down remuneration criteria for thedirectors key managerial personnel and other employees in the Nomination and RemunerationPolicy. It has also laid down in the Nomination and Remuneration Policy the evaluationcriteria for performance evaluation of the directors including independent directors. TheNomination and Remuneration Policy is annexed to the Directors Report as Annexure IIIpursuant to section 178(4) of the Companies Act 2013.
Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made in the Auditors' Report and in the Secretarial Audit Report:
The Auditors Report to the Shareholders for the year under review does not contain anyqualification reservation or adverse remark or disclaimer. The Secretarial Audit Reportgiven by a Company Secretary in practice states that the Company has to appoint KeyManagerial Personnel as prescribed under section 203 of the Companies Act 2013 and theRules made thereunder. The Company is advised to appoint one more independent Director andfill up the vacancy caused by the resignation of Women Director. The Company is taking alleffective steps to appoint the Key Managerial Personnel and a Woman Director who will alsobe an Independent Director.
Particulars of loans guarantees or investments under section 186 of the Companies Act2013:
There are no loans made guarantees given or security provided or securities of anyother body corporate acquired during the year under section 186 of the Companies Act2013.
Particulars of contracts or arrangements with related parties:
The Related Party Transactions (RPT s) entered into by the Company are given in NoteNo.35 of the Notes on Accounts attached to the Financial Statements forming part of thisAnnual Report. These transactions were entered into in the ordinary course of business andon an arm s length basis and were in compliance with the provisions of the Companies Act2013 and Regulation 23 of the Listing Regulations. There are no contracts or arrangementswith Related Parties referred to in section 188 (1) of the Companies Act 2013. There areno materially significant related party transactions made by the Company with thePromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. None of the directors haveany pecuniary relationships or transactions with the Company except for the payment ofsitting fees. There are no particulars of RPT s to be disclosed in Form AOC-2.
The statement of RPT s is placed before the Audit Committee and the Board on aquarterly basis. Omnibus approval was obtained for the transactions of repetitive nature.
The Policy on Materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board is uploaded on the Company s websitewww.bmlindia.com
The state of the Company's affairs:
The state of the Company s affairs is explained in the paragraph operations in theDirectors Report.
The amount if any carried to reserves:
The Company has not transferred any amount to reserves.
The amount if any which it recommends should be paid by way of dividend:
The Board is not recommending payment of any dividend on the Preference shares and theequity shares issued by the Company.
Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of report:
There are no material changes and commitments affecting the financial position of theCompany that have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of report viz. for the period from 31stMarch 2016 to 29th July 2016.
Conservation of energy technology absorption foreign exchange earnings and outgo:
The information pursuant to section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is as follows: a. The Company has noactivity involving conservation of energy or technology absorption.
b. The Company does not have any foreign exchange earnings and outgo.
Risk Management Policy:
The Company has framed a Risk Management Policy to identify communicate and managematerial risks across the organisation. The policy also ensures that responsibilities havebeen appropriately delegated for risk management. Key Risk and mitigation measures areprovided in the Management Discussion and Analysis Report annexed to the Directors Report.
The details about the policy developed and implemented by the Company on CorporateSocial Responsibility initiatives taken during the year:
The provisions of section 135 of the Companies Act 2013 are not applicable to theCompany. Hence the Company has no Corporate Social Responsibility Policy. Howeverpursuant to good corporate governance practice your company demands adherence of socialresponsibility coupled with creation of value in the larger interest of the society. Yourcompany and its dedicated employees continue to contribute towards several worthwhilecauses. Your company aims to enhance the quality of life of the community in general andhas a strong sense of social responsibility. Your Company and its employees haveparticipated in welfare activities of the community.
Statement indicating the manner in which formal annual evaluation has been made by theBoard of its own performance and that of its committees and individual directors:
Pursuant to the provisions of section 134(3)(P) of the Companies Act 2013 andregulation 17(10) of the Listing Regulations the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its various Committees. The manner in which the evaluationhas been carried out has been explained in the Report on Corporate Governance.
The financial summary or highlights:
The financial summary is given in the Paragraph Financial Results in the DirectorsReport.
The change in the nature of business if any:
There is no change in the nature of business.
The details of directors or key managerial personnel who were appointed or haveresigned during the year:
There were no directors or key managerial personnel who were appointed during the year.During the year Smt Nidhya R. Guhan Director (DIN 06969627) Independent director andwoman director on the Board resigned on 29th February 2016 citing personalreasons.
The names of companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year:
There are no companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year.
The details relating to deposits covered under Chapter V of the Companies Act 2013and details of deposits which are not in compliance with the requirements of Chapter V ofthe Companies Act 2013:
The company has not accepted any deposits covered under Chapter V of the Companies Act2013.
The 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 impacting the going concern status and Company s operations in future.
The details in respect of adequacy of internal financial controls with reference to theFinancial Statements:
The Company s well defined organizational structure documented policy guidelinesdefined authority matrix and internal financial controls ensure efficiency of operationsprotection of resources and compliance with the applicable laws and regulations. Moreoverthe Company continuously upgrades its systems and undertakes review of policies. Theinternal financial control is supplemented by regular reviews by management and standardpolicies and guidelines to ensure reliability of financial and all other records toprepare the financial statements and other data. The Audit Committee reviews the internalfinancial controls and also monitors the implemented suggestions.
Disclosure under section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
During the year under review there were no cases filed under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.
DISCLOSURES BY A LISTED COMPANY UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year:
Since no director of the Company is in receipt of remuneration from the Company thereare no particulars to be furnished.
The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
There is no increase in the remuneration to the aforesaid personnel in the financialyear 2015-16.
The percentage increase in the median remuneration of employees in the financial year:
There is no increase in the median remuneration of employees in the financial year2015-16.
The number of permanent employees on the rolls of the Company:
There are 14 permanent employees on the rolls of the Company as at 31stMarch 2016.
Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year viz. 2015-16 and its comparison with thepercentile increase in the managerial remuneration:
There is no managerial remuneration paid during the financial year 2015-16. There wasincrease in the salaries of employees during the financial year 2015-16 from July 2015onwards. The annual employee cost has increased during the year by 4%.
The key parameters for any variable component of remuneration availed by the directors:
The directors were not paid any remuneration during the financial year 2015-16.
STATEMENT OF EMPLOYEES' PARTICULARS
The particulars required to be furnished under Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is as follows:
During the year there are no employees drawing remuneration of Rs.60 lakhs or more perannum or Rs.5 lakhs or more per month or was in receipt of remuneration which neither inthe aggregate nor at a rate which in the aggregate is in excess of that drawn by theManaging Director or holding either by himself or along with his spouse and dependentchildren not less than 2% of the equity shares of the Company.
M/s T. Selvaraj & Co. Chartered Accountants Chennai the Statutory Auditors ofthe company retire at the conclusion of the ensuing Annual General Meeting and areeligible for re-appointment for the year 2016-2017. Certificate has been received fromthem to the effect that their re-appointment as statutory auditors of the Company ifmade would be within the limits prescribed under Sections 139 & 141 of the CompaniesAct 2013. They have also confirmed that they hold a valid peer review certificate asprescribed under regulation 33(1) (d) of the Listing Regulations. The Directors recommendtheir reappointment. Members are requested to consider their re- appointment. Ifreappointed they will hold office until the conclusion of the next Annual General Meetingof the company.
The Auditors Report to the Shareholders for the year under review does not contain anyqualification.
The Board had appointed Shri K. Elangovan M/s Elangovan Associates CompanySecretaries in Practice Chennai (Certificate of Practice No.3552) Membership No. (FCS1808) to carry out Secretarial Audit under the provisions of section 204 of the CompaniesAct 2013 for the financial year 2015-16. The Secretarial Audit Report is annexed to thisreport as Annexure IV.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
Pursuant to section 177 (9) and (10) of the Companies Act 2013 and regulation 22 ofthe Listing regulations the Company has formulated and established a Whistle BlowerPolicy / Vigil Mechanism providing a mechanism under which an employee and director of theCompany may report violation of personnel policies of the Company unethical behaviorsuspected or actual fraud violation of Company s code of conduct or ethics policy.
The Vigil Mechanism provides for adequate safeguards against victimization of directors/ employees who avail of the mechanism and also provide for direct access to the Chairmanof the Audit Committee in exceptional cases. It also ensures standards of professionalismhonesty integrity and ethical behavior. The Whistle Blower Policy / Vigil Mechanism isuploaded on the Company s website www.bmlindia.com
ANNEXURES TO THE DIRECTORS' REPORT
1. The Extract of Annual Return in Form MGT-9 Annexure I
2. The Policy on Board Diversity Annexure II
3. The Nomination and Remuneration Policy Annexure III
4. Secretarial Audit Report Annexure IV; and
5. Auditors Certificate on Corporate Governance Compliance Annexure V
ATTACHMENTS TO THE DIRECTORS' REPORT
The Management Discussion and Analysis Report
The Management Discussion and Analysis Report pursuant to regulation 34 (2) (e) andSchedule V of the Listing Regulations is given as a separate Report and this report ispart of the Directors Report.
The Report on Corporate Governance
The Report on Corporate Governance pursuant to regulation 34 (3) and Schedule V of thelisting regulations together with Auditors Certificate on Corporate Governance thecertificate duly signed by the Managing Director on the Financial Statements of theCompany for the year ended 31st March 2016 as submitted to the Board ofDirectors at their meeting held on 30th May 2016 and the declaration by theManaging Director regarding compliance by the Board members and senior managementpersonnel with the Company s Code of Conduct is included as a separate section in theAnnual Report.
Your Directors place on record their appreciation for the continued co-operation andsupport extended by all concerned persons and authorities for the smooth and efficientfunctioning of the Company.
| ||For and on behalf of the Board |
| ||V.R. Venkataachalam |
| ||Chairman |
|Registered Office: || |
|No.4 (Old No.10) Karpagambal Nagar || |
|Mylapore || |
|Chennai 600 004. || |
|Date: 29th July 2016 || |