DIRECTORS' REPORT Your Directors present the Forty Sixth Annual Report and Audited Accounts of the Company for the year ended 31st March 2015 REVIEW OF OPERATIONS The performance of the warehousing operation was satisfactory during the financial year 2014-15. As reported in the previous year's Director Report, the Company ceased the operation of Container Freight Station (CFS) with effect from May 2012 and since then, has been carrying on the general warehousing operation in the said CFS land with about 120 godowns. The Board has approved in its Board Meeting held on 1st December 2014 a proposal of the Company for developing an integrated township in the CFS land area of 63.89 acres, where the general warehousing activity was carried on. Consequently, the Company discontinued the general warehousing operation with effect from 1st January 2015 and all the godowns have been completely vacated in the months of January/February 2015. Due to the discontinuance of general warehousing operation during the last quarter for a partial period, the Company's total income has decreased from Rs.947.81 lakhs in the previous year to Rs.835.61 lakhs in the current year, registering a fall of 11.83% as compared to previous year. However, with the existing huge potential clientele base, the Company is exploring the feasibility of carrying on the general warehousing operation in its adjoining vacant lands. JOINT DEVELOPMENT AGREEMENT (JDA) WITH M/S.SPR CONSTRUCTION PVT. LTD. We are pleased to inform that the Company is embarked upon development of a World-class Integrated Township on Joint Development Model, in its main land area of 63.89 acres (previously used for CFS operations) at Perambur. For the same, the Company has entered into a Joint Development Agreement (JDA) on 26.6.2015 on revenue sharing model with, M/s.SPR Construction Pvt. Ltd., Chennai. The integrated township is planned around a development of a wholesale market ecosystem, co-location of Residential Project development within the township, in addition to being serviced by the finest brands in Healthcare, Hospitality, Education and Entertainment. The project also envisages construction of Marriage hall, and a Mall. The Project is expected to start by early next year and shall be developed over a period of 7-9 years in a phased manner wherein first phase is expected to be delivered in 36-42 months from the start of construction. Binny Ltd and SPR Group believes that it can leverage on the opportunity that arises from the current physical and social infrastructure bottlenecks and lack of availability of legal premises in the precinct to Sowcarpet (South India's largest Wholesale Market) which is located just 3 kms away from the Project Site. The Management believes that the property of 63.89 acres having road access from all four sides is the only such large private land within close proximity, and thus presents a strong opportunity for development of alternate wholesale market. The whole development will be based on concept of smart city with its vision of "Where Business Meets Life". Expected Size of development under current CMDA Regulations would be based on prevailing CMDA norms which are subject to approval. Presently, Ernst and Young is undertaking a study for analyzing socio-economic benefit for creating an alternative to Sowcarpet and suggesting measures to be pursued with Government Authorities to revitalize existing infrastructure and facilitate development of the area. Dividend The Company does not recommend any dividend for the year ended March 31, 2015. Fixed deposits The Company did not invite or accept any fixed deposit during the year under review. Directors and Key Managerial Personnel As per the provisions of Section 149(1), 161 and other applicable provisions under the Companies Act, 2013, the Board appointed Smt. T.Manisriram as an additional, Non-Executive, woman Director of the Company in the Board Meeting held on 14th November 2014, who holds Office up to the date of this Annual General Meeting of the Company. It is proposed to appoint Smt. T.Manisriram as Non-Executive Independent Director of the Company to hold office for a term of 5(five) years, up to 13th November 2019, not liable to retire by rotation. Further in accordance with the requirement of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company should have 50% of the total number of directors as Independent Directors. In compliance of the same, Dr.D.V.R.Prakash Rao and Shri. T.Radhakrishnan were appointed as additional, Non-Executive, Independent Directors of the Company in the Board Meeting held on 27th March 2015 and they hold Office up to the date of the Annual General Meeting of the company. It is proposed to appoint Dr.D.V.R.Prakash Rao and Shri T.Radhakrishnan as NonExecutive Independent Directors of the Company to hold office for a term of 5(five) years, up to 26th March 2020, not liable to retire by rotation. Further, Shri.Sadayavel Kailasam and Shri. Nate Nandha have resigned as Directors of the Company w.e.f. 08.08.2014 and 31.03.2015 respectively. Shri. M.Nandagopal was appointed as a Whole-time Director, designated as Executive Chairman, not liable to retire by rotation, for a period of 5 years with effect from 3rd October 2013. In order to comply with the provisions of Section 152 of the Companies Act, 2013, it is proposed to amend the appointment of Shri M.Nandagopal, Whole-time Director, designated as Executive Chairman as liable to retire by rotation. In accordance with the applicable provisions of the Companies Act, 2013, Shri. S. Natarajan, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. Also, Shri. PK Sundaresan, Chief Financial Officer and Company Secretary retired from the service with effect from 30.06.2014 and Shri. T.Krishnamurthy has been appointed as Chief Financial Officer and Company Secretary with effect from 13.10.2014. PARTICULARS OF EMPLOYEES : No employee of the Company was in receipt of remuneration during the Financial Year 2014-15 in excess of the sum prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW : The Board Meetings at regular intervals were conducted to review the Company's business and to discuss its strategies and plans. During the year, 10 Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The maximum interval between the meetings did not exceed the period prescribed under the companies Act, 2013 and the Listing Agreement. The details of the number of Board Meetings and Audit Committee Meetings of the Company are set out in the Corporate Governance Report, which is forming part of this report. COMMITTEES OF THE BOARD During the year, in accordance with the Companies Act, 2013 and Clause No.49 of the Listing Agreement, the Board has constituted or reconstituted its committees. Currently, the Board has the following Committees: 1) Audit Committee 2) Nomination and Remuneration Committee 3) Stakeholders Relationship Committee Details of the Committees along with their constitution and other details are provided in the report on Corporate Governance. During the year, all the recommendations of the Audit Committee were accepted by the Board. BOARD EVALUATION : Pursuant to the provisions of the Companies Act, 2013 read with rules issued thereunder and Clause 49 of the Listing Agreement, the Board has carried out a performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees for the financial year ended 2014-15. DECLARATION BY INDEPENDENT DIRECTORS : The Company has received necessary declaration from all the independent directors under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. FAMILIARISATION PROGRAMMES: The Company has a familiarisation programme for Independent Directors pursuant to Clause 49 of the Listing Agreement. The same is dealt with in the Annual Report. The Familiarisation Programme is available in the website of the Company. The link for the same is <http://www.binnyltd.in/images/> policies/FAMILIARIZATION_DIRECTORS.pdf VIGIL MECHANISM AND WHISTLE BLOWER POLICY: The Company has formulated and adopted a vigil mechanism for employees to report genuine concerns to the Chairman of the Audit Committee. The policy provides opportunity for employees to access in good faith, the Audit Committee, if they observe unethical and improper practices. The Whistle Blower Policy of the Company is available in the website of the Company. The link for the same is <http://www>. binnyltd.in/images/policies/Whistle_Blower_Policy_Vigil_Mechanism.pdf REMUNERATION POLICY : The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. AUDITORS AND AUDITORS REPORT : a. STATUTORY AUDITORS: The Auditors, M/s.CNGSN & Associates LLP (Firm Registration No.004915S), Chartered Accountants, who are the statutory auditors of the Company, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment for a period of one year from the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM. The Auditors' Report does not contain any qualification. b. COST AUDITORS: The Company is not required to appoint Cost Auditors under Section 148(2) of The Companies Act, 2013 read with the Companies (Cost records and Audit) Rules, 2014. c. SECRETARIAL AUDITORS: Pursuant to the provisions Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Shri. V.Suresh, Practicing Company Secretary have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure to this report. The Secretarial Auditors Report does not contain any qualification. Observation in their report is self-explanatory and does not call for any further comments. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS REPORT: The Company has complied with requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A report on the Corporate Governance practices, the Auditors' Certificate on compliance of mandatory requirements thereof is given as an annexure to this report. Management's Discussion and Analysis Report, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: The particulars of Loans, guarantees or investments made under Section 186 are furnished as notes to financial statements and are attached to this report. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY: There are no material changes or commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company, to which the financial statements relate and the date of the report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: There are no significant and material orders passed by the regulators or courts or tribunals that may have an impact for the Company as a going concern and/or company's operations. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2, as Annexure CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as below: FORM 'A' Power & Fuel Consumption Since the Mill is not functioning, this is not applicable. FORM "B" Technology Absorption Since the Mill is not functioning, this is not applicable. Conservation of Energy - Not applicable CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that— a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; and e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Acknowledgement The Directors acknowledge the cooperation and assistance extended by the Government of India and Government of Tamil Nadu and place on record their appreciation and gratitude to them. The Directors also thank the shareholders, employees and all other stakeholders of the Company for their continued support and cooperation. BY ORDER OF THE BOARD M. Nandagopal Executive Chairman Registered Office: No:1, Cooks Road Perambur, Chennai 600 012. Date:12th August 2015 |