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Binani Industries

BSE: 500059|NSE: BINANIIND|ISIN: INE071A01013|SECTOR: Miscellaneous
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Directors Report Year End : Mar '16    Mar 15

Dear Members,

The Directors present the Fifty Third Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended 31st March, 2016

1. FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Particulars

31st March, 2016

31st March, 2015

Total Income

52513.62

5514.21

Finance Costs

4620.81

18459.17

Depreciation & Amortization

265.96

177.25

Transfer from Business Reorganization Reserve

(8841.05)

(19802.74)

Profit/(Loss) before Tax & Exceptional items

1647.68

1204.79

Less: Tax expense (current tax and tax on earlier years)

(21.20)

Less: Deferred tax Asset

34.43

-

Profit after Tax

1634.45

1204.79

Transfer to General Reserve

-

(121.00)

Reversal of undeclared dividend and Dividend Distribution tax of 2014-15

1068.65

Proposed Dividend

Nil

(887.90)

Dividend distribution Tax

Nil

(180.75)

*brought forward from last year

1922.52

(1988.65)

Transferred from General Reserve

-

121.00

Profit/(Loss) carried to balance sheet

1922.52

(1872.33)

*Includes Rs.1,091.75 Addition during the period pursuant to Scheme of Amalgamation

2. REVIEW OF OPERATIONS

Your Company is engaged in the business of providing logistics solutions, media, publication services, trading in shares and securities and trading and export of goods and management support services and has also sub-licensed to its major subsidiaries for use of its Intellectual Property Rights such as Brand, Logo & Trade Mark etc. The Board of Directors of the Company (“Board) has not charged any fees for management support services and royalty to all its subsidiaries during the current year.

For the year under review, your Company earned a Total Income of Rs.52514 Lacs as against Rs.5514 Lacs in the previous year. The Total Income for the year 2015-16 was significantly higher on account of Amalgamation of Binani Metals Limited with the Company effective April 01, 2015 (Appointed Date). This resulted in the Company earning Profit after Tax of Rs.1634 Lacs as against Rs.1205 Lacs in the previous year after transfer of sum of Rs.8841 Lacs from Business Re-organization Reserve as against Rs.19803 Lacs last year.

3. DIVIDEND

Considering the present financial position of the Company, the Board of Directors do not recommend dividend for the financial year 2015-16.

4. RESERVES

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 Authorized, Issued, Subscribed and Paid-up Share Capital of the Company.

6. SCHEME OF AMALGAMATION

Pursuant to the approval of Scheme of Amalgamation of Binani Metals Limited (BML) with the Company by the Hon''ble High Court of Judicature at Kolkata vide its order dated 21st January, 2016, the Scheme became effective on 5th April, 2016.

The Board of Directors at its meeting held on 21st April, 2016 approved issue of :-

- 17,71,600 Equity Shares of Rs.10/- each to the eligible shareholders of BML as on 22nd April, 2016 the record date fixed for the said purpose

- 2,98,000 0.01% Non-cumulative Redeemable Preference Shares of Rs.100/- each to Preference Share holders of BML

The Board at its above-mentioned meeting constituted Share Allotment Committee for the purpose of allotment of Equity and Preference Shares to Shareholders of BML.

Consequent upon allotment of following shares by the Allotment Committee at its meeting held on 29th April, 2016, the Authorized, Issued, Subscribed and Paid-up Capital of the Company stands increased as below:-

1

Authorized Share Capital

4,40,00,000 Equity Shares of Rs.10/- each

1,24,00,000 Preference Shares of Rs.100/- each

2

Issued Share Capital

3,13,68,025 Equity Shares of Rs.10/- each

1,22,98,000 Preference Shares of Rs.100/- each

3

Subscribed and Paid up Capital

3,13,66,175 Equity Shares of Rs.10/- each

1,22,98,000 Preference Shares of Rs.100/- each

7. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of sub-section (3) of section 129 of the Companies Act 2013 and the SEBI Listing Obligation Disclosure Requirements) Regulations, 2015, the Consolidated Audited Financial Statements of the Company including the financial details of all the subsidiary companies of the Company forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with applicable Accounting Standards prescribed under Section 133 of the Companies Act 2013.

8. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of clause of sub-section (3) and subsection (5) section 134 of 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 31, 2016, the applicable Accounting Standards read with requirements set out under Schedule III to the Act, have been followed and proper explanation relating to material departures, if any, has been furnished;

b. they have selected such accounting policies as listed in the Note 2 to the Financial Statements and have applied them consistently and prudent judgments & estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profits of the Company for the financial year ended on that date;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of ''the Act'' for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts for the financial year ended on March 31, 2016 on a going concern basis.

e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

1. Edayar Zinc Limited (EZL) subsidiary of the Company was referred to Board for Industrial and Financial Reconstruction (BIFR) for determination of sickness. During the year under review, the matter pending before BIFR for determination of sickness of the Company could not see much progress due to intermittent sitting of BIFR. EZL has already applied to BIFR seeking, inter alia, urgent listing of the main case and declaration of the Company as a sick company under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and appoint an operating agency for formulation of draft rehabilitation scheme.

Since the plant was not operational for sanction of suitable revival and rehabilitation package for a considerable length of time and there was no possibility of resumption of operation in the immediate future, the Company retrenched its management staff during June 2015 and applied to State Government of Kerala for closure of plant to facilitate revival of business. EZL has moved for adjudication.

During the third quarter of the year under review, the Secured Creditors initiated the action under Section 13(4) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act 2002) for recovery of their dues and has issued notice of taking symbolic possession. EZL is in the process of making an application to the Debt Recovery Tribunal seeking, inter alia, to set aside the notice under section 13(4) of SARFAESI Act, 2002. EZL has also challenged the notice received from the banks for declaration of the Company as a willful defaulter.

EZL is hopeful that Creditors and Authorities will take measured stand to safeguard interest of all stakeholders by allowing EZL to revive under a suitable revival package.

2. Your subsidiary B T Composites Limited is in the process of voluntary liquidation and has appointed Mrs. Sara Sancheti, a Company Secretary in Whole Time Practice as the liquidator of the Company. The procedure for voluntary liquidation is underway.

10. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

During the year under review, the loans given, investments made and Guarantees given and securities provided under Section 186 of the Companies Act 2013 are given in the Notes to the Standalone Financial Statements.

11. CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES

All transactions entered into by the Company with related parties were in the ordinary course of business and at arm''s length. The Audit Committee from time to time reviewed and approved the said transactions. Disclosures as required under AS- 18 have been made in Notes to the Financial Statements.

The Company has not entered into any fresh material contracts with any of the related parties during the year under review. The details of existing Related Party Contracts/Arrangements, modified during 2015-16, are provided as Annexure A to this report in Form AOC-2

12. DEPOSIT

The Company has not accepted any deposit from the public within the meaning of sub-section (31) of section 2 and Section 73 of the Companies Act, 2013 and Rules framed there under.

13. OUTLOOK

The year 2015-16 has been a year of mixed bag for the Group. BCL suffered set back as the industry continued to go through a phase of poor demand scenario. The Company paid almost the entire principal demand to the Rajasthan VAT Authorities (RVAT) in connection with the past dues which were in dispute. With improvements in demand, the year 2016-17 is expected to be a good year.

EZL operations were shut for the entire year and as explained above, EZL is hopeful that Creditors and Authorities will take measured stand to safeguard interest of all stakeholders by allowing EZL to revive under a suitable revival package.

The Group''s Glass Fibre business, both in India and abroad have shown considerable improvement for the year under review. Improved business conditions in European Markets with several measures undertaken to improve efficiency across different operating areas, resulted in significantly improved top line as well as bottom-line.

BIL Infratech Limited another subsidiary of your Company continued to report significantly improved performance though relatively smaller in volume.

14. 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 subsidiary Companies are set out in the prescribed Form AOC - 1 which forms part of this Report. The said Financial Statements shall also be kept for inspection by the Members at the Registered Office of the Company. The Company will provide free of cost, a copy of Financial Statements in respect of its subsidiaries to any Member of the Company, upon receipt of a request for the same.

FINANCIAL HIGHLIGHTS AND BUSINESS OUTLOOK OF The Company’s SUBSIDIARY COMPANIES

The Financial Highlights and Business Outlook in respect of the Company''s major subsidiaries are given below:-Binani Cement Limited (BCL)

Financial Highlights

Rs. in Lacs

Particulars

2015-16

2014-15

Total Revenue

152,425

183,998

Profit before Depreciation, Interest and Tax and Exceptional Items

8,751

29,347

Provision for Depreciation

6,807

7,471

Interest and Financial Charges

36,848

35,325

Profit / (Loss) before Tax and Exceptional Items

(34,904)

(13,449)

Exceptional Items

-

1,283

Provision for Tax (Deferred Tax)

(6,007)

(4,244)

Profit / (Loss) after Tax

(28,897)

(10,488)

Review of Operations

Demand for cement is highly correlated with cyclical activities like construction and infrastructure development. The sluggish demand of cement continued in 2015-16 and which has been further affected due to Cash Flow constraints owing to coercive measures initiated by the Rajasthan VAT Authorities, the Company could achieve production of 4.326 million MT as compared to 4.501 million MT in the Financial Year 2014-15; lower by about 4%.

Consequently, cement sales were also lower by 13% at 4.313 million MT as against 4.473 million MT in the previous year. Share of Portland Pozzolana Cement (PPC) as a percentage to total sales, reduced from 43% to 37% as per market scenario. The Cement industry has been passing through a difficult year. Due to sluggish demand, the gross sales realization (net of VAT/ CST & discount) of the Company has been lower to

Rs.4,084/ MT as compared to Rs.4,373/ MT in previous financial year. Because of the lower realization, the margins have been adversely affected.

The Hon''ble High Court at Calcutta has recalled its earlier order sanctioning the Scheme of Arrangement for hive-off of the BCL''s Power Undertaking to its wholly owned subsidiary namely Binani Energy Private Limited. and permitted to withdraw the Scheme vide its order dated 16th October, 2015.

Business Outlook Indian Cement Industry

The cement industry in India, the second-largest in the world, is a study in hope. The sector, which has been facing depressed demand, is hoping that business from government-driven projects will get their engines back into high gear. Currently, India''s cement production capacity is about 390 million tons per annum (MTPA) accounting for around 6.7% of world''s output. The cement production capacity is estimated to touch 550 MTPA by the end of 2020.

The Government of India is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities. It plans to increase investment in infrastructure to US$ 1 trillion in the 12th Five Year Plan (2012-17) and it is expected that the investment figure will increase significantly in next Five Year Plan. The government also intends to expand the capacity of the railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation costs. These measures would lead to increased construction activity thereby boosting cement demand.

The lion''s share of cement demand is created by the housing market, which is also facing a depressed future. The good news it that the RBI is expected to lower interest rates in 2016, which could create increased housing demand. Further, government projects include the Housing for All initiative (on which it plans to spend billion) and the smart city push which would help in boosting the muted growth of the cement industry. The cement market in India is expected to grow at a Compounded annual growth rate (CAGR) of 9.7% during 2006-2017.

With the positive sentiments prevailing, consequent upon a stable Government at the Centre, coupled with large planned investments in infrastructure and housing /real estate sectors, the demand for cement is likely to get a boost in the coming years. Opportunities also exist in terms of technology innovations for improving efficiency and installation of Waste Heat Recovery System.

BCL has strategized to focus on the nearby markets to optimize its logistic costs and streamline and strengthen its distribution network. In addition, the Company continues to streamline the processes with a view to bring all around efficiencies which will facilitate yielding better margin.

With Indian Economy progressing towards the growth trajectory, still economy might take some time to stabilize completely. Intense competition, over capacity situation in the regions where the Company operates coupled with expansion plans of global giants and increasing small players, will pose challenge and put pressure on the price realization.

Overall, BCL is hopeful of reporting better performance in the years ahead, barring unforeseen circumstances.

Edayar Zinc Limited (formerly Binani Zinc Limited)

Financial Highlights

Rs. in Lacs

Particulars

2015-16

2014-15

Total Revenue

9.04

113.15

Profit before Depreciation, Interest and Tax and Exceptional Items

(7.06)

(18.28)

Provision for Depreciation

4.01

8.14

Interest and Financial Charges

36.36

25.60

Profit / (Loss) before Tax and Exceptional Items

(47.44)

(52.03)

Exceptional Items

-

-

Provision for Tax

-

-

Profit / (Loss) after Tax

(47.44)

(52.03)

Balance carried forward

(145.54)

(98.10)

Review of Operations

During Financial Year 2015-16 (FY 2016), the Company did not operate its plant and the reference made to Board for Industrial and Financial Reconstruction (BIFR) in terms of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) was pending as at the end of financial year for determination of its sickness.

During FY 2016 (“the year under review), total revenue was Rs.9.04 lacs as against Rs.113.15 lacs during corresponding previous FY 2015. The Company recorded negative EBIDTA of Rs.7.06 lacs in FY 2016 vis-a-vis negative EBITDA of Rs.18.28 lacs last year.

3B Binani Glass Fibre S.a.r.l (3B Binani)

Financial Highlights

In Million Euros

Particulars

2015-16

2014-15

Total Revenue

194.76

195.72

Profit/(Loss) before Depreciation, Interest & Tax

39.21

26.71

Provision for Depreciation

17.88

12.67

Interest and Financial Charges

18.58

17.43

Loss before Tax

(0.62)

(28.81)

Provision for Tax

0.03

(00.40)

Loss after Tax

(0.66)

(28.41)

Review of Operations

3B Binani, on a consolidated basis, reported significant improvement in its operating performance in the year 2015-16. The strict implementation of the Profitability Improvement Plan covering all key financial drivers strongly contributed to the overall performance improvement. Solid market conditions enabled to stabilize the sales volume at a high level while recording price increases. The net loss has been reduced significantly also thanks to the impact of the unrealized foreign exchange gain (non-cash) on the IDBI debt associated with the weakening of the dollar versus last year against the Euro.

Industry Overview

The EU reinforcement market remains solid with decent growth across all segments and across the entire product line. The industry has been growing steadily above 5% over the last 3 years. In 2015, imports have reduced at the beginning of the year but then resumed with higher level later on and closed with a growing trend.

In 2016, Europe is starting with a reasonable level of shipments even if the optimism observed in 2015 has slowly transformed into more cautious expectations. Overall, the EU Wind market is still developing very well even if some OEM''s are doing better than others. China is also expected to be weaker due to a change in their support system. In Automotive, the number of cars produced is expected to grow by another 2% in 2016, which is lower than 2015 but still showing a certain level of optimism. The Indian reinforcement market remains strong and is expected to grow by another low double digit figure in 2016. The government''s push for wind energy will be the main driver for growth in the next few years. CSM is expected to grow by a high single digit figure in 2016, with railway coaches, bus body and Marine industry driving the growth.

Market outlook

3B Binani will continue to focus on its core markets Automotive, Wind and Performance Composites, supplying these markets with high quality Chopped Strands and Direct Roving products, supported by high performance specialty products like HiPer-tex™ and CFM. 3B Binani still shows a strong focus on innovation to develop value-added products for its customers in order to deliver product differentiation, to improve the profitability and to keep ahead of competition. All 3B plants are focusing on improving their cost structure by optimizing production to reach the best efficiencies within the industry. Looking ahead, overall demand growth is expected to continue in glassfibre in both Europe and India with the economies gaining some momentum. The market growth for glassfibre in both automotive and wind applications continue to be encouraging and 3B Binani is well positioned to take advantage of this BIL Infratech Limited (BILIL)

BILIL is a wholly owned subsidiary of the Company. BILIL is engaged in execution of EPC contracts for Industrial, Civil Construction, and Power & Renewable Energy Projects. Financial Highlights

Rs. in Lacs

Particulars

2015-16

2014-15

Total Revenue

32640

31689

Profit before Depreciation, Interest and Tax and Exceptional Items

1825

1293

Provision for Depreciation

264

132

Interest and Financial Charges

335

256

Profit / (Loss) before Tax

1227

905

Provision for Tax

484

341

Profit / (Loss) after Tax

711

553

Operations Review

BILIL reported the total revenue of Rs.32640 lacs for the year under review as against Rs.31689 lacs in the previous year. It earned a decent Profit after Tax of Rs.711 lacs as compared to Rs.553 lacs in the previous year.

Industry Overview

The Year 2015-16 continued to be challenging for BILIL even though India achieved robust 7.6% GDP growth and was globally acknowledged as the world''s fastest growing economy. Plethora of opportunities predominantly in Infrastructure, Rail and Power & Renewable Energy had been visible. The Smart City Mission with assured budgetary support to create 100 Smart Cities across India had also bolstered the optimism significantly.

In spite of strong signs of economic revival with higher consumer confidence Industry and Infrastructure sector remained sluggish in general. The optimism was not translated into realistic opportunity level as it was promising to be earlier.

Outlook

Stable and visionary Government, policy reforms, strong possibility of simplified Tax regime and continuous efforts to improve Ease-of-doing-business have made India a bright spot in global investment map. Higher Govt. spending in key sectors such as Infrastructure, Rail, Road, Port, Power, robust FDI in Manufacturing and Defense production will push up growth prospect tremendously.

On-going Policy reforms, divestment of PSU stakes, relaxed FDI norms to allow foreign players in Indian Infrastructure Sector and thrust towards clean Energy and Make-in-India will create investment friendly environment and fuel growth momentum further. This will significantly drive demand in key Industry sectors like Cement, Steel, Mining and other Metals. Overall there will be high growth scenario in a wide spectrum of industries.

However there is possibility of Govt. funding target not being met. At the same time high debt levels of private Infrastructure players, cautious approach of Banks for new investment due to mounting NPAs and land acquisition issues may discourage private investment and could be potential growth decelerators. Global Composite Holdings Inc. formerly known as CPI Binani Inc. (CPI Binani)

Financial Highlights

In Million USD

Particulars

2015-16

2014-15

Total Revenue

-

20.45

Profit before Depreciation, Interest and Tax and Exceptional Items

(0.21)

(0.25)

Provision for Depreciation

-

2.10

Interest and Financial Charges

-

1.03

Profit / (Loss) before Tax

(0.21)

(3.39)

Provision for Tax

-

2.40

Profit / (Loss) after Tax

(0.21)

(5.78)

CPI has been incurring losses and in March 2015, it sold its assets to Core Moulding Technologies Inc USA.

B T COMPOSITES LIMITED (BTCL)

BTCL is wholly owned subsidiary of the Company and is under the process of Voluntary winding- up.

OTHER SUBSIDIARIES

Following wholly owned Subsidiaries which were incorporated 1-2 years back, are yet to commence any business activities:

a. Royalvision Projects Private Limited

b. Binani Global Cement Holdings Private Limited (Singapore) The above companies incurred marginal loss for the financial year ended 31st March, 2016. This was on account of certain routine administrative expenses incurred by them.

M/s Royalvision Concrete Private Limited and Royalvision Infratech Private Limited have been closed under Section 560 of the Companies Act, 1956 (strike off) and the guidelines issued by the Ministry of Corporate Affairs under the Fast Track Exit mode.

15. AUDIT OBSERVATIONS

The Auditors, in their Report, have made observations in connection with fair valuation of the Company''s investments done by the Company, creation of Business Re-organization Reserve (BRR) and transfer of sums to offset certain expenses/ write-offs and outstanding guarantees issued by the Company to banks and financial institutions on behalf of subsidiaries including one step down subsidiary which are significant in relation to the networth of the Company.

The Board wishes to state as follows:

a. In accordance with the accounting policies applicable to erstwhile Wada Industrial Estate Limited (WIEL) and to the Company as a successor to WIEL, being accounting policies adopted as per the Scheme of Amalgamation approved by the Hon''ble High Court at Kolkata on 18th March 2014, the Company has applied AS 30, the Accounting Standard on Financial Instruments: Recognition and Measurement, issued by the Institute of Chartered Accountants of India (ICAI), and pursuant thereto has as on March 31, 2014, being the date of conclusion of the first Accounting Year, classified the investments as “available for sale financial assets and has accordingly, measured such investments at fair value as on that date (except for those investments whose fair value cannot be reliably measured, which investments in accordance with AS 30 are continued to be measured at cost and their cost is considered as the fair value). Similar treatment has been given in the current year ended March 31, 2016.

b. Similarly, in accordance with the aforesaid, the Company has withdrawn the amounts from BRR arising pursuant to the merger and adoption of AS 30 to meet the expenses like Interest and Financial Charges, Foreign Exchange Loss, Fixed Assets written-off, Value of Investments in subsidiaries written-off, expenses related to Scheme of Amalgamation and Advances to subsidiary written-off.

c. As explained above, the subsidiary companies are already working out a restructuring / resolution package with the banks and institutions and hence in the opinion of the management, the guarantees are not expected to result into any financial liability to the Company.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) DIRECTORS:

Pursuant to the provisions of Section 149 of the Act Mr. S. Sridhar and Mr. Rahul Asthana were appointed as Additional Director on May 30, 2014 and 28th September 2013 respectively and they held office until the date of the ensuing Annual General Meeting. In the 51st Annual General Meeting held on 29th September, 2014, their appointments were confirmed. They will hold office upto the conclusion of 53rd Annual General Meeting of the Company to be held in the calendar year 2016 and are not liable to retire by rotation. They have submitted a declaration that each of them continue to meet the criteria of independence as provided U/s 149(6) of the Act. The Company has received notices from a Member alongwith requisite deposit amounts proposing the appointment of Mr. S Sridhar and Mr. Rahul Asthana as Independent Directors of the Company at the ensuing Annual General Meeting. The Board has recommended the re appointment of Mr. S Sridhar and Mr. Rahul Asthana for a another period of 2 years up to the conclusion of 55th Annual General Meeting to be held in the calendar year 2018. (Refer Notice of AGM Resolution No. 5 & 6)

Mrs. Nidhi Binani Singhania retires by rotation and being eligible, has offered herself for re-appointment.

The Board of Directors appointed Dr. (Mrs.) Sangeeta Pandit as an Additional Director designated as Independent Director of the Company with effect from 21st April, 2016 in terms of provision of Section 161 of the Companies Act 2013 (''the Act''). Dr. Pandit aged about 56 years is a Chartered Accountant. She was a partner in P.D. Kunte & Co. and her work included audit, consultancy and representing clients at the Income Tax office and as counsel before the Commissioner of Income Tax and Income Tax Tribunal.

She is now in academics and obtained her PhD in Management. She is Head of Finance at Sydenham Institute of Management. She is visiting faculty in management institutes of repute in Mumbai like Jamnalal Bajaj Institute of Management Studies and Xavier''s Institute of Management Research and in US like University of Wisconsin and California State University. She was part of the start-up team of Unitedworld School of Management and BSE Management programme. She does consultancy in business strategy and involved in corporate training.

Dr. Pandit shall hold the office up to the date of ensuing Annual General Meeting. The Company has received a notice along with requisite deposit from a Member signifying its intention to propose the candidature of Dr. Pandit as an Independent Director. Your directors recommend appointment of Dr. (Mrs.) Sangeeta Pandit for a term of upto the conclusion of 55th AGM to be held in the calendar year 2018.

Dr. Pandit has given declaration that she meets the criteria of Independence laid down under Section 149(6) of the Companies Act 2013.

The Board recommends the aforesaid appointment / reappointment of the Directors. Brief profile of the Directors proposed to be appointed / re-appointed is annexed to the Notice convening ensuing Annual General Meeting.

Mrs. Jayantika Dave tendered her resignation vide her letter dated 10th March, 2016 which was received by the Company on 20th March, 2016 and was considered by the Board of Directors in their meeting held on 21st April, 2016.The Board of Directors wish to place on record their sincere appreciation for the contribution made by Mrs. Jayantika Dave during her tenure with the Company as Director. Consequently she also ceases to be member of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

Consequent to the resignation of Mrs. Jayantika Dave, there were two Independent Directors and three Promoter Directors; thereby having less than 50% representation of Independent Directors. The requirement of Independent Directors in Board of Directors has been fulfilled by filling the vacancy created by the resignation of Mrs. Dave by appointment of Dr. (Mrs.) Sangeeta Pandit at the meeting of the Board of Directors held on 21st April, 2016 in compliance of Regulation 25(6) of SEBI (LODR) Regulations, 2015.

KEY MANAGERIAL PERSONNEL (KMP)

The details of the Key Managerial Personnel of the Company appointed pursuant to Section 203 of the Companies Act, 2013, are as follows:

Sr.

No.

Name

Designation

With effect from

To

1

Mr. K K Saraf

Company

Secretary

1st August, 2012

30th September, 2015

2

Mr. Sushil Bhatter

Manager

1st June,2014

30th June,2015

3

Ms. Visalakshi Sridhar

Chief Financial

Officer,

Manager

Company

Secretary

1st April, 2015

28th July, 2015

24th October, 2015

-

Board of Directors has formulated a Nomination and Remuneration Policy, annexed hereto as Annexure B, stating the criteria for determining qualifications, positive attributes and independence of a director and recommends to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

17. AUDITORS

M/s. MZSK & Associates, Chartered Accountants, Mumbai (Firm Registration No.105047W) were appointed as Statutory Auditors of the Company at the 52nd AGM held on 19th December, 2015 for a term from the conclusion of the 52nd Annual General Meeting upto the conclusion of 57th Annual General Meeting, subject to the ratification by the Members at each of the Annual General Meetings. M/s. MZSK & Associates have provided a declaration to the effect that they continue to be eligible and independent in terms of Section 141 of the Companies Act, 2013 read with Rule 10 Companies (Audit & Auditors) Rules, 2014.

Your Board recommends the ratification of appointment of M/s. MZSK & Associates as the Statutory Auditors of the Company at the 53rd AGM.

18. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure forming part of the Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of this Report.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office and Corporate Office of the Company during working hours on all working days (except Saturdays) upto the date of AGM and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The Company is not being engaged in manufacturing activities, hence, the particulars in respect of Conservation of Energy, Technology Absorption are not applicable to the Company.

The details of Foreign Exchange Earnings and Outgo for the Financial Year 2015-16 are as follows:

Rs. in Lacs

Foreign Exchange Outgo

Amount

Foreign Travelling Expenses

0.27

Interest & Finance Charges on Foreign Currency Loan

4,460.63

TOTAL

4,460.90

Foreign Exchange Earning

Amount

Export Sales (FOB)

85.31

Advertisement and Media Services

10.21

TOTAL

95.52

20. TRANSFER OF UNCLAIMED DIVIDENDS TO INVESTORS EDUCATION AND PROTECTION FUNDS (IEPF).

During the year under review, your Company has transferred a sum of Rs.27,96,432 to the Investors Education and Protection Fund of Central Government, in compliance with Section 205C of the Companies Act, 1956. This amount represents dividends for the financial year 2008-09 which had been lying unclaimed with the Company for a period of 7 years from the due date of the payment, despite reminders sent to concerned shareholders for claiming the amount.

21. MEETINGS OF THE BOARD

During the year under review 6 meetings of the Board of Directors were held. The details such as the dates of meetings, attendance of the Directors thereat etc are provided in Report on Corporate Governance, which forms part of this Report.

22. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and LODR Regulations, Independent Directors at their meeting without the participation of the Non-Independent Directors and Management, considered/evaluated the Boards'' performance, Performance of the Chairman and other Non-independent Directors. The Board have undergone a formal review which comprised Board effectiveness survey, 360 degree and review of materials. This resulted in a full Board effectiveness report and Directors'' feedback. This is further supported by the Chairman''s Annual Director Performance Review. The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director). The criteria for performance evaluation have been detailed in the Corporate Governance Report.

23. 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 of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was hosted on the website of the Company. This Policy inter-alia provides a direct access to 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 no complaints were received during the year. The said policy has been disclosed on the website of the Company and can be accessed at http://binaniindustries. com/investor-relations/binani-industries-Limited/company-policies-codes/

24. AUDIT COMMITTEE

The Audit Committee constituted by the Board complies with the requirements under the Act as well as LODR Regulations. The details with respect of the composition of the Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

There was no recommendation of the Audit Committee which were not accepted by the Board.

25. SECRETARIAL AUDITORS

Pursuant to the provision of Section 204 of the Companies Act, 2013 and Rules made there under, the Company had appointed M/s Uma Lodha & Co., Company Secretaries (CP No.2593) to carry out Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial Auditor Report is annexed to this Report as Annexure C.

26. EXTRACT OF ANNUAL RETURN

An extract of the Annual Return in the prescribed format MGT-9 as required under Section 92 of the Companies Act, 2013 is appended as Annexure D to this Report.

27. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

Given the nature of business and size of operations, your company''s internal control system 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 and procedures.

d. Effective use of resources and safeguarding of assets.

The Internal Control Systems provides for well documented policies / guidelines, authorization and approval procedures. Your Company through a firm of Chartered Accountants carried out periodic audits on all functions based on the plan and brought out any deviation to the Internal Control Procedures. The observations arising out of the audit are periodically reviewed and compliance ensured. The summary of Internal Audit observations and status of implementation are submitted to the Audit Committee. The status of implementation of the recommendations is reviewed by the Audit Committee on a regular basis and concerns, if any, are reported to the Board.

28. RISK MANAGEMENT

The Company had identified certain risk areas with regard to the operations of the Company which was facilitated by a renowned firm of consultants in Mumbai. The Internal Auditors review the steps taken for risk mitigation/ minimization wherever ever possible and the status of the same is reviewed by the Audit Committee periodically. The Company''s Board is conscious of the need to periodically review the risks mitigation process.

29. ANTI SEXUAL HARASSMENT POLICY

The Company has adopted a an Anti Sexual Harassment Policy or a policy for prevention, prohibition and redressal of Sexual harassment. pursuant to the provisions of sexual harassment of women at work place (Preventions, Prohibition & Redressal) Act, 2013. The Policy has been placed on the website of the Company www.binaniindustries.com.

During the year under review, no complaints were received by the Company, pursuant to the aforesaid Act / Policy.

30. CORPORATE GOVERNANCE

Your Company is fully compliant with the Corporate Governance guidelines, as laid out in erstwhile Clause 49 of the Listing Agreement and applicable regulations of LODR Regulations. All the Directors (and also the members of the Senior Management) have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The Corporate Governance Report is attached as Annexure E to this Report.

The Chief Financial Officer has given a certificate of compliance with the Code of Conduct, which forms part of Corporate Governance Report as Annexure F required under SEBI LODR Regulations.

M/s Uma Lodha & Co., Practising Company Secretary have certified compliance with Corporate Governance clauses of erstwhile Listing Agreement and LODR Regulations and the Certificate in this regard is attached as Annexure G to this Report.

The Chief Financial Officer (CFO) certification as required under erstwhile Clause 41 of the Listing Agreement and Regulation 8)17) of LODR Regulations is attached and forms part of this Report (Annexure H). Related Party disclosures/transactions are detailed in Notes to the financial statements

31. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Braj Binani Group, through its operating Indian Subsidiaries, undertake the activities on an ongoing basis for upliftment of the weaker sections and welfare of the society.

Your Board has constituted a Corporate Social Responsibility Committee (CSR Committee) pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Rules made there under. However, your Company is not obliged to spend any amount on CSR activities under the aforesaid provisions of the Act based on the criteria laid down therein.

BINANI CEMENT LIMITED (BCL)

The Braj Binani Group, for several years, spends considerable amount on an ongoing basis through its operating companies, for social cause and upliftment and welfare of the weaker section of the society and on education of the underprivileged children.

In accordance with the provisions of Section 135 read with Schedule VII of the Companies Act, 2013, the Company, as a part of its initiative under the “Corporate Social Responsibility drive, has adopted a CSR Policy outlining various CSR activities to be undertaken by the Company in the area of preventive health care, making available safe drinking water, promoting education, ensuring environmental sustainability etc. The CSR policy of the Company can be accessed on the Company''s weblink http://www.binanicement.in/investor-relations.

Edayar Zinc Limited (EZL)

The Braj Binani Group, through its operating Indian Subsidiaries, undertakes the activities on an ongoing basis for upliftment of the weaker sections and welfare of the society.

The mandatory provisions of Section 135 of the Act, and Rules made there under, with respect to Corporate Social Responsibility, are not applicable to EZL. The Company is socially conscious about its participative role in development of society. The Group continues to undertake CSR activities in Binanipuram where the plant is situated and the same are well appreciated by the local community at large.

Goa Glass Fibre Limited (GGFL)

The provisions of Section 135 of the Companies Act, 2013 and Rules there under with respect to CSR are presently not applicable to the Company. However as a part of Corporate Social Responsibility, educational program with respect to safety, health and environment was organized in nearby village Colvale where the Company also conducted free medical camps.

32. OTHER DISCLOSURES

Your Directors state that no disclosures or reporting is required in respect of the following items, as the same is either 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 under any scheme.

c. The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

33. RECOGNITION AND REWARDS

The Company''s Subsidiaries both in India and abroad have been rewarded by prestigious Bodies / Government in recognition of various initiatives taken by them. Some of them are as follows:-Binani Cement Limited

During the year Binani Cement Limited was honoured to receive the following awards.

- Best Quality Excellence 2014-15

- Second Best Environmental Excellence in Limestone Mines 2014-15

- Second Best Environmental Excellence in Plant Operation 2014-15

- Best Environmental Excellence in Plant operation 2013-14

- Second Best Environmental Excellence in Limestone Mines 2013-14

- Second Best Quality Excellence 2013-14

34. 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 is unrelenting.

The Company had 33 permanent employees on its roll as on March 31, 2016. The Board places on record its sincere appreciation for the valuable contribution made by the employees across all levels in the organization.

35. CAUTIONARY STATEMENT

Statements made in this Report, describing the Company''s objectives, projections, expectations and estimates regarding future performance may be “forward looking statements within the meaning of applicable laws and regulations and are based on currently available information. The Management believes them to be true to the best of its knowledge at the time of preparation of this Report. However, these statements are subject to future events and uncertainties which inter-alia include regulatory changes, tax laws, economic developments within the Country and other incidental factors, that could cause actual results to differ materially from those as may be indicated under such statements.

36. ACKNOWLEDGEMENTS

The Directors wish to express their appreciation for the continued co-operation of the Central and State Governments, bankers, financial institutions, customers, dealers and suppliers and also the valuable assistance and advice received from the joint venture partners, and all the shareholders. The Directors also wish to thank all the employees for their contribution, support and continued co-operation throughout the year.

For and on behalf of Board of Directors of

Binani Industries Limited.

Braj Binani

Chairman

Date : 29th July, 2016

Place: Mumbai

Source : Dion Global Solutions Limited
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