Binani Industries Ltd.
|BSE: 500059||Sector: Others|
|NSE: BINANIIND||ISIN Code: INE071A01013|
|BSE 00:00 | 26 May||Binani Industries Ltd|
|NSE 05:30 | 01 Jan||Binani Industries Ltd|
|BSE: 500059||Sector: Others|
|NSE: BINANIIND||ISIN Code: INE071A01013|
|BSE 00:00 | 26 May||Binani Industries Ltd|
|NSE 05:30 | 01 Jan||Binani Industries Ltd|
Your Directors present the Fifty- Seventh Annual Report of the Company together withthe Audited Financial Statements for the Financial Year ended 31st March 2020.
2. INDUSTRY STRUCTURE OPPORTUNITIES & THREATS
Your Company is engaged in the business of media publication services trading inshares and securities. Your Company has stopped providing management support services toits subsidiaries. "The Indian media industry is growing fast driven with increasingdigitisation and higher internet usage. Even though print media is no longer consideredthe first option for many users it is expected that print media will still manage to holdon to its own position in future. 'The growth of the logistics sector in India is backedby government reforms growth in retail sales and eCommerce. Even though there are risksof price wars and margin erosion due to multiple players operating in the same region itis expected that use of innovative models and new technological advancement will helpstimulate growth for this sector.
REVIEW OF OPERATIONS
For the year under review your Company earned a Total Income of Rs. 2013 Lakhs asagainst Rs. 1803 Lakhs in the previous year. Company's loss after Tax of Rs.10276 Lakhs asagainst loss of Rs. 1773 94 Lakhs in the previous year after transfer of Rs.80038 Lakhsfrom Business Re-organization Reserve as against Rs. 940 Lakhs in the last year. "Theexceptional item is on account of provision for diminution in value of investment insubsidiaries.
"The Company was providing Logistics Services to one of its Subsidiaries i.eBinani Cement Limited (till 24th July 2017). As per order of the Hon'ble NCLAT dated 14thNovember 2018 Binani Cement Limited (BCL) has been acquired by Ultratech Cement Limitedunder the CIRP process. Hence the logistics service to BCL has been discontinued and thishas adversely affected the earnings. "The Company is now in the process ofidentifying alternate business.
"The novel Coronavirus outbreak has widespread impact ranging from ecological toeconomic implications and hence there would not be much improvement in the media as wellas the logistics sector for the financial year 2020-21. "The availability of vaccineis expected by the end of the first quarter of 2021. "The might help the economy torecover significantly but it might take a longer time to reach its prepandemic stages.
In view of loss the Directors do not recommend any dividend on Preference and EquityShares of the Company for the Financial Year ended 31st March 2020.
In terms of Section 47(2) of Companies Act 2013 Triton Trading Company Private Limited(TTCPL) the preference shareholder of the Company shall have a right to vote on allresolutions placed before the Company on account of non-payment of dividend on 12298000- 0.01% Non -cumulative Redeemable Preference Shares of Rs. 100/- each fully paid-up heldby TTCPL in the Company. "These shares were allotted on March 312015.
No amount is proposed to be transferred to Reserves.
5. SHARE CAPITAL
During the financial year under review there have been no changes in the AuthorisedIssued subscribed and paid up share capital of the Company.
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.
Post the NCLAT order dated 14th November 2018 your Company in the financial year2018-19 has derecognised the assets and liabilities of Binani Cement Limited from itsconsolidated financial statements at their carrying amount (as of March 31 2017) andrecognised the resulting difference as gain associated with the loss of control in thestatement of profit and loss as exceptional items.
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 confirm that:-
a. In the preparation of the annual financial statements for the year ended March 312020 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 2020 and of the profits of the Company for the financialyear ended on that date;
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 of theCompany and for preventing and detecting fraud and other irregularities;
d. We have prepared the annual accounts for the financial year ended on March 312020on a going concern basis.
e. We have laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively and
f. We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
a. Your Company has settled with all the transporters. In accordance with the NCLATorder UNCL (erstwhile Binani Cement Limited) has paid the Lenders to the Company viz.Exim Bank of India and based on the opinion received by the Company the liabilities havebeen reversed in the Financial Year 2018-19. UNCL has recognised the expected credit losson the Inter corporate deposits with the company and the same has been recognised in thebooks of accounts.
b. "The Banks have taken over physical possession of the secured assets of EdayarZinc Limited (EZL) on 23rd July 2019 and EZL is in the process of paying under the OneTime Settlement arrived at with the Banks.
c. 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 TimePractice as the liquidator of the Company. "The company has sold all its assets andpaid off the liabilities and has filed an application for dissolution.
d. Binani Global Cement Holdings Private Limited Singapore has received approval inJuly 2017 from the Accounting and Corporate Regulatory Authority of Singapore for closureof the
Company and intimation to Reserve Bank of India through the Authorised Dealer has beenmade.
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.
In accordance with the NCLAT order UNCL (erstwhile Binani Cement Limited) aco-guarantor to the Loans availed by 3B Binani Glass Fibre Sarl Luxembourg from IDBIBank Dubai has paid the liabilities and based on the legal opinion received all theGuarantees given towards the said loan availed from IDBI Bank Dubai stands extinguished.
3B Binani Glass Fibre Sarl Luxembourg and its subsidiaries were severely affected bythe economic consequences of COVID 19 pandemic due to significant impact on its mainmarkets 3B serves and mainly the automotive. At 3b group level a binding term sheetinvolving refinancing proposal is being negotiated by the Company and / or other optionsinvolving optimisation of resources and reduction in loan liability is also being workedout. Conservatively your Company has made a provision upto 90% of the total investment in3B in the books of accounts for the year ended March 31 2020.
One of the customers of M/s BIL Infratech Limited invoked the Guarantee in June / July2019 of about Rs. 2715 lakhs. 'ffiough temporary solution by way of inter changeabilitywas provided by one of its Bankers for part of the amount application is pending with theBanks seeking long term resolution. Conservatively your Company has made a provision inthe investment made to the extent of guarantee invoked.
10. CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES
All transactions U/s 188 of Companies Act 2013 entered into by the Company withrelated parties were in the ordinary course of business and at arm's length. "TheAudit Committee from time to time reviewed and approved the said transactions. "Thedetails of existing Related Party Contracts/ Arrangements modified during the FinancialYear 2019-20 are disclosed in form AOC-2 in terms of Section 134 of the Companies Act 2013is provided as Annexure A and in the notes to the 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 2019-20 has been a very tough year for the Group.
"The operations of Edayar Zinc Limited (EZL) continue to remain shut for theentire year. "The Consortium of Banks led by Punjab National Bank took physicalpossession of the assets in July 2019. "The Consortium of Banks led by PunjabNational Bank have sanctioned One Time Settlement (OTS) at Rs. 175 crore payable over aperiod of one year and the Company has sought for extension of time owing to Covid-19pandemic after payment of 25% of the OTS amount. 'The balance payments under the OTS arepayable out of sale of plant and machinery as scrap and other mortgaged assets includingland. With the permission of the Bank the Company has entered into an agreement with abuyer for sale of plant and machinery and other current assets as scrap. 'The Company hassettled liabilities with the sales tax authorities under the amnesty scheme and paid 40%of crystallised amount. EZL has also settled liabilities with the Service tax and exciseauthorities under the SabKa Vishwas Scheme and paid the same. 'The liabilities to theworkers have been crystallized at Rs. 3303 lakhs. EZL is hopeful that Creditors andAuthorities will take measured stand to safeguard i nterest of all stakeholders.
"The Group's Glass Fibre business has been severely affected by the economicconsequences of COVID 19 pandemic due to significant impact on its main markets 3B servesand mainly the automotive. At 3B group level a binding term sheet involving refinancingproposal is being negotiated by the Company and / or other options involving optimisationof resources and reduction in loan liability is also being worked out.
BIL Infratech Limited another subsidiary of your Company continued to reportsatisfactory performance. One of the customers of M/s BIL Infratech Limited invoked theGuarantee in June / July 2019 of about Rs. 2715 lakhs. 'ffiough temporary solution by wayof inter changeability was provided by one of its Bankers for part of the amountapplication is pending with the Banks seeking long term resolution. "The managementis hopeful of completing all the projects in hand with the support of the working capitalbanks and also perform better in the coming years with the support of the Banks and otherstakeholders. Delay in receipt of working capital support from banks may jeopardiseoperation and the company may resort to take protection legal ly.
"The Company is a holding Company with interest in Glass Fibre Business andConstruction. "The industry structure swot analysis risks and concerns arediscussed under the relevant companies. 3B Glass Fibre Sarl Luxembourg and itssubsidiaries were severely affected by the economic consequences of the COVID 19 pandemicdue to significant impact on its main markets 3B serves and mainly the automotive. At a 3Bgroup level a binding term sheet involving refinancing proposal is being negotiated bythe Company and / or other options involving optimization of resources and reduction inloan liability is also being worked out. Considering the above it has been decided tomake a provision for dimiunition in value of investments upto 90% of the total investmentin 3B in the books of accounts for the year ended March 31 2020. "The Company hasalso provided for diminution in value of investments in BIL Infratech Limited anothersubsidiary to the extent of Rs.2715 crore equivalent to the invoked Bank Guarantees by acustomer.
"The Company had only one loan from Exim Bank of India which has been paid offunder the NCLAT order dated November 14 2018 in connection with the IBC process of BinaniCement Limited.
a. In accordance with the NCLAT order UNCL has paid off to EXIM Bank of India towardsthe loan taken by the Company being the guarantor for the said loan. "Theoutstanding balance payable to EXIM Bank as per books of the Company was Rs. 58061 Lakhs(including interest of Rs. 11504 Lakhs).
b. UNCL has recognised the expected credit loss on ICD balances amounting toRs.114857 Lakhs along with Interest of Rs. 9299 Lakhs as per the audited financialstatements for the year end March 312018.
Further the Company has obtained a legal opinion from a reputed legal firm confirmingthat the Company has been legally discharged from its obligation to repay the above statedamounts.
c. based on legal opinion obtained by the Company it has reversed the liabilitiesmentioned in note a and b above.
Based on the opinion received the Company has no loan outstanding.
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.Members desiring to inspect the said Financial Statements or requiring a copy thereof maysend an e-mail to the Company Secretary at firstname.lastname@example.org.
FINANCIAL HIGHLIGHTS AND BUSINESS OUTLOOK OF THE COMPANY'S SUBSIDIARY COMPANIES
Edayar Zinc Limited (formerly Binani Zinc Limited)
Review of Operations
During Financial Year 2019-20 (FY 2020) the Company did not operate its plant. DuringFY 2020 (the year under review) total revenue was Rs.0.88 lakhs (comprising of otherincome) as against Rs.3.61 lacs during corresponding previous FY 2019. "The Companyrecorded negative EBIDTA of Rs.2317.13 lacs in FY 2020 vis-a-vis negative EBITDA ofRs.111.66 lacs in the previous year. Lenders to the Company took physical possession ofthe assets for recovery of their dues on 23rd July 2019 under Section 13(4) of "TheSecuritization and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 (SARFAESI Act 2002). EZL has entered in to a One Time Settlement (OTS) with theLenders and payments are being made under the sanctioned OTS. Due to Covid-19 andconsequent lockdown your company has sought extension of time for payment under thesettlement. Settlement with the statutory authorities and government agencies is underway.EZL is hopeful that Lenders Creditors and Authorities will take a measured stand tosafeguard interest of all stakeholders
3B Binani Results Highlights 2020 Financial Highlights
3B Consolidated (inclusive of GGFLs performance)
There was no significant improvement in revenue in the previous year due to adversemarket conditions mainly in the wind / auto i ndustry.
"The future of the glass fiber market is promising with opportunities in thetransportation construction pipe and tank electrical and electronics consumer goodsand wind energy industry. Factors such as cost- efficiency corrosion-resistance andlightweight as well as wide-ranging applications of e-glass makes it preferable windenergy marine and electrical & electronics industries.
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 andCFM(Chopped Filament Mat) . Emerging trends which have a direct impact on the dynamics ofthe glass fiber industry include cost optimization and performance enhancement of glassfibers. As per market reports the European and Indian glass fiber market is expected todecline in 2020 due to global economic recession led by COVID-19. However market isexpected to witness recovery in subsequent years.
BIL Infratech Limited (BILIL)
BILIL is a wholly owned subsidiary of Binani Industries Ltd. (BIL) and a registeredMSME. BILIL is engaged in construction works on EPC Design & Build and BOQ Item ratecontracts in following fields in all relevant disciplines like Civil & StructureInterior works Electrical Building Automation Mechanical PHE Plumbing & SanitaryFirefighting HVAC STP/ETP/WTP Alternative Energy etc.
i. Industrial Units: Material Handling in Mines & Minerals and some processingunits.
ii. Infrastructure: Bridges Hospitals Institutions Disaster Management facilityIndustrial Park Tram track Border out posts etc.
iii. Real Estate : Both Commercial & Residential
BILIL reported the total income of Rs. 8899.17 lakhs for the year under review asagainst Rs. 24203.69 lakhs in the previous year. It reported a Profit after Tax of Rs.116.90 lakhs as compared to Rs. 216.16 lakhs in the previous year.
"The Year 2019-20 continued to be challenging for BILIL as one of the customershad invoked guarantee of Rs. 2715 lakhs. 'ffiough temporary solution by way of interchangeability was provided by one of its Bankers for part of the amount application ispending with the Banks seeking long term resolution. 'The management is hopeful ofcompleting all the projects in hand with the support of the working capital banks and alsoperforms better in the coming years with the support of the Banks and other stakeholders.
"The Indian construction market is expected to register a CAGR of 6% over theforecast period 2019 - 2024. Infrastructure sector plays and vital role in the growth anddevelopment of the Indian economy. Nearly 9% of India's GDP is spent on Infrastructureservices. It comprises of construction of power bridges dams roads and urbaninfrastructure development which also forms the base and supporting factor for otherservices sectors.
However due to Covid-19 pandemic there has been an unprecedented contraction of 50.3%in real terms in Q2 the Indian construction industry is expected to shrink by 14.9% in2020. However despite the prevailing gloomy situation the industry is expected to post asharp rebound and grow by 11.6% in 2021 owing to lower base and pent up demand.
Growth will also be driven by investments in the National Infrastructure Plan thenewly-announced Affordable Rental Housing Complex (ARHC) scheme and investments in theindustrial segment due to Indian government's push towards 'Atmanirbhar Bharat' whichaims to reduce imports and make the country self-reliant. "The industrialconstruction sector would also likely benefit from the global shifting of supply linesfrom China with the Indian market offering benefits such as large captive market and lowcost labour.
Moreover the lifting of lockdown has resulted in the virus outbreak spreading at arecord pace in the country with India now emerging as the latest epicenter for COVID-19.
As a result construction activities continue to remain disrupted with labor shortageat project sites exacerbating the situation for the private sector which are alreadygrappling with multiple problems such as liquidity crisis rising project costs and lowerdemands.
Growth signs of economic revival is expected from the beginning of FY- 2021-22 with lotof construction tenders floating in infrastructure field. Due to restrictions in BG limitwith Bankers and pending sanction / renewal of limits it could be challenging years forthe Company.
Infrastructure plays a huge role in propelling other industries and India's overalldevelopment. "The government therefore focuses on the development of infrastructureand construction services through focused policies such as open FDI norms large budgetallocation to infrastructure sector smart cities mission etc. Investment of about INR 2lakh cr has been proposed by 99 cities under the Smart City initiative. "Thegovernment's flagship mission Pradhan Mantri Awas Yojana (Urban) - PMAY (U) launched inJune 2015 aims to provide housing for all in urban areas by the year 2022. All these andAtmanirbhar Bharat will boost prospects.
Opportunity and treats
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 of the Company
In order to ensure growth the company has to book more and more orders and in order tobook orders in this competitive market we have no other way but to accept minimum margin.The company are looking for more volume and minimum margin in conventional item rateconstruction contracts.
"The only available way of earning more margins is to focus on EPC or Design &Built contracts where there is less competition but it calls for strong credential inrespective fields which we are lacking but have to gradually build it by engaging as JVpartner or associate or back to back sub contract.
Global Composite Holdings Inc. formerly known as CPI Binani Inc.(GCH)
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.
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 TimePractice as the liquidator of the Company. "The company has sold all its assets andpaid off the liabilities and has filed an application for dissolution.
a. Royalvision Projects Private Limited wholly owned Subsidiary which was incorporatedin the year 2013 is yet to commence any business activity. It is in the process ofidentifying areas and opportunities to be able to contribute substantially towards theobjectives of the Group. "The Company incurred marginal loss for the financial yearended 31st March 2020.
14. AUDIT OBSERVATIONS
"The Auditors in their Report have made observations in connection with creationof Business Re-organization Reserve (BRR) and transfer of sums to offset certain expenses/ write off fair valuation of the equity investments done by the Company and outstandingGuarantees issued by the Company to banks on behalf of subsidiaries including one stepdown subsidiary which are significant in relation to the networth of the Company
"The Board wishes to state as fol lows:-
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 Standards under Ind AS to revenue reserve or to an appropriateequity account / Other Comprehensive Income are aggregated and such aggregate is taken toBusiness Re-organization Reserve (BRR) in line with the afore-cited court order. TOsmatter has been referred to by the auditors.
b. EZL has entered in to a One Time Settlement (OTS) with the Lenders and payments arebeing made under the sanctioned OTS. Your company has paid about 25% of the OTS amounttill March 2020 and as per the OTS sanction the balance is payable out of sale of plantand machinery as scrap and other assets including land. Due to Covid-19 and consequentlockdown company has sought extension of time for payment under the settlement.Settlement with the statutory authorities and government agencies is underway. EZL ishopeful that Lenders Creditors and Authorities will take a measured stand to safeguardinterest of all stakeholders. BIL I nfratech Limited has sufficient assets to meet itsborrowings. Considering the same in the opinion of the management these are not expectedto result into any financial liability of the Company. "The Company has givencorporate guarantees aggregating to Rs. 22525.46 lakhs as at March 31 2020 to banks onbehalf of various subsidiaries.
c. 'The Company has settled / arrived at settlement with all its creditors
"The management is working towards finding a workable solution to resolve thefinancial position by discussions with the lenders and others and to continue its businessas going concern. Accordingly the management considers it appropriate to prepare thesefinancial statements on a going concern basis.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Mr. Braj Binani (DIN 00009165) Director of the Company retires by rotation and beingeligible has offered himselffor re-appointment.
"The Board recommends the aforesaid appointment of the Directors. Brief profile ofthe Directors proposed to be appointed / re-appointed is annexed to the Notice conveningensuing Annual General Meeting.
Mr. Souren Kumar Chatterjee (DIN - 08438486) Mr. Nilesh R. Doshi (DIN-00249715) andMr. Shardul Dilip Shah (DIN-02061996) Independent Directors have furnished Declaration ofIndependence stating that they meet the criteria of Independence as provided under Section149(6) of the Companies Act 2013 and the SEBI (LODR) Regulations 2015 including anyamendment thereof.
Mrs. Visalakshi Sridhar (DIN 07325198) has been appointed as the Managing Director ofthe Company at the 55th AGM held on 24th December 2018.
Key Managerial Personnel (KMP)
"The details of the Key Managerial Personnel of the Company appointed pursuant toSection 203 of the Companies Act 2013 areas follows:
Board of Directors has formulated a Nomination and Remuneration Policy annexed heretoas Annexure B stating the criteria for determining qualifications positive attributesand independence of a director and recommends to the Board a policy relating to theremuneration for the directors key managerial personnel and other employees.
M/s. V. P. Packer & Co. Chartered Accountants Mumbai (FRN:118696W) wereappointed as Statutory Auditors of the Company at the 56th AGM of the Company held lastyear on 27th December 2019 to fill the casual vacancy caused due to the resignation ofM/s. MSKA & Associates Chartered Accountants Mumbai (FRN No.10 5 047W) who wouldhave held office of Statutory Auditors up to the conclusion of the 57th AGM had they notresigned. "Therefore the term of M/s. V.P. Packer & Co would come to an end atthe conclusion of the ensuing 57th AGM of the Company.
Hence your Board proposes to reappoint M/s. V. P. Packer & Co. CharteredAccountants Mumbai (fRN:1 18696W) as the Statutory Auditors of the Company for a periodof five years from the conclusion of the ensuing 57th AGM up to the conclusion of the 62ndAGM of the Company at such remuneration plus applicable taxes and out of pocket expensesas may be determined and recommended by the Audit Committee in consultation with theAuditors and to be approved by the Board of Directors of the Company.
M/s. V P Packer & Co have conveyed their consent to be appointed as StatutoryAuditors and also provided a declaration to the effect that they continue to be eligibleand independent in terms of Section 141 of the Companies Act 2013 read with Rule 10Companies (Audit & Auditors) Rules 2014. A resolution recommending the appointment ofM/s. V P Packer & Co forms part of the notice to the Annual General Meeting.
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) Rules2014 there are no employees drawing remuneration in excess of the limitsset 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 forms part of this Report.
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 onlineinspection by members all working days upto the date of AGM. Any
Member interested in obtaining such information may send an email to email@example.com 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 theparticulars in respect of Conservation of Energy Technology Absorption are not applicableto the Company.
"The details of Foreign Exchange Earnings and Outgo for the Financial Year 2019-20are as follows:
19. TRANSFER OF UNCLAIMED DIVIDENDS AND SHARES TO INVESTORS EDUCATION AND PROTECTIONFUNDS (IEPF).
During the year under review your Company has transferred / is transferring a sum ofRs. 3929958/- to the Investors Education and Protection Fund of Central Government incompliance with Section 125 of the Companies Act 2013 being unpaid/ unclaimed. TOs amountrepresents dividends for the financial year 2012-13 which had been lying unclaimed for aperiod of 7 years from the due date of the payment despite reminders sent to concernedshareholders for claiming the amount.
In compliance with these provisions of Section 124(6) of the Companies Act 2013 readwith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 your Company is in the process of transferring the shares to theDemat Account of the IEPF Authority in respect of which dividend had remainedunpaid/unclaimed for a consecutive period of 7 years.
Details of shareholders unpaid/unclaimed dividend as well as shares transferred to IEPFhave been uploaded on to the Company's website.
"The shareholders can claim the said dividend/shares from IEPF authorities byfiling e- form No. IEPF-5 as prescribed under the Investor Education and Protection FundAuthority (Accounting Auditing Transfer and Refund) Rules 2016.
20. MEETINGS OF THE BOARD
During the year under review 5 meetings of the Board of Directors were held. "friedetails 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 whichcomprised Board effectiveness survey 360 degree and review of materials. "Theresulted in a full Board effectiveness report and Directors' feedback. "The isfurther supported by the Chairman's Annual Director Performance Review. "The Boardsubsequently evaluated its own performance the working of its Committees (AuditNomination and Remuneration and Stakeholders Relationship Committee) and IndependentDirectors (without participation of the relevant Director). "The criteria forperformance evaluation have been detailed in the Corporate 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. "The Policy inter-alia provides a direct accessto the 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 accessedathttp://binaniindustries.com/investor-relations/binani-industriesltd/company-policies-codes/
23. AUDIT COMMITTEE
"The Audit Committee constituted by the Board complies with the requirements underthe Act as well as LODR Regulations. "The details with respect of the composition ofthe Audit Committee are included in the Corporate Governance Report which forms part ofthis Report.
"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 carryout Secretarial Audit of the Company for the Financial Year 2019-20."The Secretarial Auditor Report is annexed to this Report as Annexure C.
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 ofthe audit 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
Except as disclosed in the Corporate Governance Report your Company is fully compliantwith the Corporate Governance guidelines as laid out in applicable regulations of LODRRegulations. All the Directors (and also the members of the Senior Management) haveaffirmed in writing their compliance with and adherence to the Code of Conduct adopted bythe Company. There has been delay in publishing the quarterly financial statements of theCompany due to delay in receipt of accounts of the subsidiary companies and also due toCovid-19 pandemic. The Company has sought for time for coming out with financial resultsfor the year ended March 2020 and financial year 2020-21 to the Stock Exchanges. TheMinistry of Company Affairs has permitted Companies to hold Annual General Meetings byDecember 31 2020 for the financial year 2019-20. The Corporate Governance Report isattached as Annexure E 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 required under SEBILODR 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 Clause 41of the Listing Agreement and Regulation 8 (17) of LODR Regulations is attached and formspart of this Report (Annexure H). Related Party disclosures/transactions are detailed inNotes 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 Section135 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.
Goa Glass Fibre Limited (GGFL)
During the year under review GGFL had spent Rs. 40.45 Lakhs on the CSR activities forDistribution of books school bags stationery items school uniform shoes and otherrelated activities including school infrastructural support and promoting of education.'The Company also conducted free health check-up and blood donation camps and undertookoperations and surgeries for the poor and needy. 'These were all focussed in the localareas of the factory. The Company also donated amounts for the Prime Ministers NationalRelief Fund and Chief Ministers Relief Fund including Contribution to Goa State COVID-19Relief Account.
BIL Infratech Limited
"The provisions of Section 135 of the Companies Act 2013 and Rules there underwith respect to CSR are presently applicable to the BIL Infratech Limited a Wholly Ownedsubsidiary of the Company. During the year under review BIL Infratech Limited had spentRs. 14 Lakhs on the CSR activities.
31. OTHER DISCLOSURES
Your Directors state that no disclosures or reporting is required in respect of thefollowing items as the same is not applicable to the Company or relevant transactions /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. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
d. "The Company has followed applicable Secretarial Standards
i.e. SS-1 and SS-2 relating to 'Meetings of the Board of Directors' and 'GeneralMeetings' respectively.
32. HUMAN RESOURCES
Across the Companies in the Group Employee Relation continues to remain cordial."The Group's emphasis on safe work practices and productivity improvement isunrelenting.
As per Section 197 Rule 5 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the median remuneration of our employees as at March 312020 is Rs.5.9 Lakhs.
"The Company had 19 permanent employees on its rolls as on March 31 2020."The Board places on record its sincere appreciation for the valuable contributionmade by the employees across all levels in the organization.
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 bestof its 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 cooperation ofthe Central and State Governments bankers financial institutions customers dealers andsuppliers and also the valuable assistance and advice received from the partners and allthe shareholders. "The Directors also wish to thank all the employees for theircontribution support and continued cooperation throughout the year.
For and on behalf of Board of Directors of of Binani Industries Limited