8th Annual Report 2014-2015 To the Members Your Directors have pleasure in presenting the Eighth Annual Report and the Audited Accounts of your company for the year ended 31st March 2015. OPERATIONS As the members may be aware, pursuant to the Demerger Scheme of Binny Ltd, the Agencies and Services Undertaking of Binny Ltd was transferred to and vested with the Company, with effect from 1st Jan 2010, the Appointed Date as per the Demerger Scheme. The company operates in 4 divisions viz., Warehousing, Showrooms, Agencies and Bintex. The Warehousing division has rented its warehouses and is deriving rental income from it. The Showrooms are engaged in retail selling of textile materials. The Agencies division is engaged in the business of selling Tarpaulin, rain coats and bags. The Bintex division is engaged in selling textile materials, particularly uniform materials, bed spreads, and other textile varieties. For the year 2014-15, the Rental income from Warehousing division was Rs.186.15 lakhs as against Rs. 173.91 lakhs in the previous year, an increase by about 7%. The sales made by the Showrooms division was Rs.20.95 lakhs as against Rs. 25.11 lakhs in the previous year, the Agencies division did not make any sale during the year as against Rs. 2.59 lakhs in the previous year and the Bintex division Rs.503.33 lakhs as against Rs. 495.89 lakhs in the previous year. The aggregate amount of revenue from Rent, Sales and operating income were Rs.717.73 lakhs as against Rs. 699.74 lakhs in the previous year. The Company has earned a Net Profit of Rs.63.56 lakhs as against a Net Profit of Rs. 8.59 lakhs in the previous year. PREFERENCE SHARES The 5,88,000 (9.75%) Cumulative Redeemable Preference Shares (CRPS) of Rs.5/- each, aggregating to Rs.29,40,000/- are redeemable on or before 30th June 2016. The 28,14,18,142 (9%) CRPS of Rs.5/- each aggregating to Rs.140,70,90,710/- are redeemable on or before 12th May 2015. The Board of directors, at their meeting held on 29th May 2015, after obtaining the consent of the 9% cumulative redeemable preference shareholders, has extended the date of redemption by five years to be redeemable on or before 12th May 2020. Preference dividend is payable on the CRPS from the date of original allotment of shares by Binny Ltd. The holders of the CRPS have preferential right to dividend over the equity share holders, as and when dividend is declared by the company. The Preference dividend in arrears for 9.75% CRPS, as at 31st March 2015, is Rs.25,08,188/- and for 9% CRPS it is Rs.102,44,59,710/-. Since the Company is in the sixth year of operation after the transfer and vesting of the Agencies and Services Undertaking of Binny Ltd in the Company, pursuant to the Demerger Scheme, the company could not find enough resources to pay dividend this year. Hence, the company is not recommending preference dividend this year. DIVIDEND ON EQUITY SHARES As stated for Preference Dividend, since the Company is in the sixth year of operation after the transfer and vesting of the Agencies and Services Undertaking of Binny Ltd in the Company, pursuant to the Demerger Scheme, the company could not find enough resources to pay dividend this year. Hence, the company is not recommending dividend on the equity shares this year. COMPANY'S PERFORMANCE Considering the difficult macro-economic conditions and challenging business environment, the Company's performance during the year under review was satisfactory. FUTURE PLANS The Company has plans to improve its sales performance in the Textile Division by focusing on whole sale customers while retaining the existing retail customers. The Company has plans to procure bulk orders for its Textile division in order to improve the sales and profit. The Company has plans to modernize its showrooms at Bangalore and Kolkata to attract new customers for its retail textile sale. ECONOMIC AND BUSINESS ENVIRONMENT While there are signs that economic growth is reviving, the concern is that investments are not as forthcoming as expected. During the last year or so, the Government has put in place a comprehensive set of measures to restore investor sentiments, ranging across the tax regime, ease of doing business, Foreign Direct Investment limits and administrative and environmental clearances. A number of large-scale initiatives have been introduced to act as magnets for investments, including Make in India, the Smart City mission and Clean Energy. Interest rates too, are on the down trend with strong expectations of further rate cuts and the macroeconomic environment has turned benign, despite moderation in global growth and trade. OUTLOOK AND OPPORTUNITIES Your directors expect that with stable government in the Centre, estimates of better GDP growth rate, the Company's strong business model, innovative fund management and marketing techniques, continued confidence and support of the customers and suppliers, your Company should achieve better performance in the year 2015-16. BOARD OF DIRECTORS Directors retiring by rotation: Shri S. Natarajan, Director, (DIN 00155988), retires by rotation at this Annual General Meeting and being eligible offers himself for reappointment. Re-appointment of Managing Director: The present term of appointment of Shri V. Rajasekaran as Managing Director of the Company is up to 12th May 2015. Board of directors, at their meeting held on 29th May 2015, reappointed Shri V. Rajasekaran as the Managing Director of the Company for a further term of 5 years up to 12th May 2020, subject to the approval of the shareholders of the company at the 8th Annual General Meeting of the Company. The details of their age, experience and directorship in other companies, as required under the listing agreement, is given in the Report on Corporate Governance which forms part of the Annual Report. DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014 Extract of Annual Return: The extract of Annual Return in the Form No. MGT 9 is annexed to the Directors' Report as Annexure I. Number of meetings of the Board: There were four Board meetings during the year. The details of the Board meetings and committee meetings are given in the Report on Corporate Governance which forms part of the Annual Report. Directors' Responsibility Statement: To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013. i) That in the preparation of the Annual Accounts, for the year ended 31st March 2015, the applicable Accounting Standards had been followed along with proper explanation for material departures, if any; ii) That the selected accounting policies were applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March 2015 and of the profit of the Company for that period; iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities; iv) That the annual accounts for the year ended 31st March 2015 had been prepared on a going concern basis. v) Internal financial controls had been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and; vi) Proper systems to ensure compliance with the provisions of all applicable laws had been devised and that such systems were adequate and operating effectively. Declaration by Independent Directors: The Board has received the declaration from all the Independent Directors as per the requirement of section 149(7) of the Companies Act, 2013 and the Board is satisfied that all the Independent Directors meet the criterion of independence as mentioned in section 149(6) of the Companies Act, 2013. Company's policy on Directors appointment and remuneration: Pursuant to clause 49 (IV) (B) of the Listing Agreement, the Nomination and Remuneration Committee has put in place the policy on board diversity for appointment of directors taking into consideration the qualification and wide experience of the directors in the fields of textiles trading, banking, finance, administration and legal apart from compliance of legal requirements of the Company. The policy on Board diversity is annexed to the Directors' Report as Annexure II and is also uploaded on the Company's website www.bmlindia.com The Nomination and Remuneration Committee has laid down remuneration criteria for the directors, key managerial personnel and other employees in the Nomination and Remuneration Policy. It has also laid down, in the Nomination and Remuneration Policy, the evaluation criteria for performance evaluation of the directors including independent directors. The Nomination and Remuneration Policy is annexed to the Directors' Report as Annexure III and is also uploaded on the Company's website www.bmlindia.com . Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made in the Auditors' Report and in the Secretarial Audit Report: The Auditors' Report to the Shareholders for the year under review does not contain any qualification, reservation, or adverse remark or disclaimer. The Secretarial Audit Report, given by a Company Secretary in practice, does not contain any qualification, observation, reservation, or adverse remark or disclaimer. Particulars of loans, guarantees or investments under section 186 of the Companies Act, 2013: There are no loans made, guarantees given or security provided or securities of any other body corporate acquired, during the year, under section 186 of the Companies Act, 2013. Particulars of contracts or arrangements with related parties: The Related Party Transactions (RPT's) entered into by the Company are given in Note No.32 of the Notes on Accounts attached to the Financial Statements. These transactions were entered into in the ordinary course of business and on an arm's length basis and were in compliance with the provisions of the Companies Act, 2013 and the Listing Agreement. There are no contracts or arrangements with Related Parties referred to in section 188 (1) of the Companies Act, 2013. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The statement of RPT's is placed before the Audit Committee and the Board on a quarterly basis. Omnibus approval was obtained for the transactions of repetitive nature. The Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website www.bmlindia.com None of the directors have any pecuniary relationships or transactions with the Company except for the payment of sitting fees. There are no particulars of RPT's to be disclosed in Form AOC-2. The state of the Company's affairs: The state of the Company's affairs is explained in the paragraph 'operations' in the Directors' Report. The amount, if any, carried to reserves: The Company has not transferred any amount to reserves. The amount, if any, which it recommends, should be paid by way of dividend: The Board is not recommending payment of any dividend on the Preference shares and the equity shares issued by the Company. Material changes and commitments, if any, 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 report: There are no material changes and commitments affecting the financial position of the Company, that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of report viz., for the period from 31st March 2015 to 31st July 2015. Conservation of energy, technology absorption, foreign exchange earnings and outgo: The information pursuant to section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as follows: a. The Company has no activity involving conservation of energy or technology absorption. b. The Company does not have any foreign exchange earnings and outgo. Risk Management Policy: Pursuant to Clause 49 (VI) (C) of the Listing Agreement, as amended, the Company has re-constituted the Risk Management Committee. The details of the Committee and its term of reference are set out in the Report on Corporate Governance. The Company has framed a Risk Management Policy to identify, communicate and manage material risks across the organisation. The policy also ensures that responsibilities have been appropriately delegated for risk management. Key Risk and mitigation measures are provided in the Management Discussion and Analysis Report annexed to the Directors' Report. The details about the policy developed and implemented by the Company on Corporate Social Responsibility initiatives taken during the year: The provisions of section 135 of the Companies Act, 2013 are not applicable to the Company. Hence, the Company has no Corporate Social Responsibility Policy. However, pursuant to good corporate governance practice, your company demands adherence of social responsibility coupled with creation of value in the larger interest of the society. Your company and its dedicated employees continue to contribute towards several worthwhile causes. Your company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility. Your Company and its employees have participated in welfare activities of the community. Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors: Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as the evaluation of the working of its various Committees in the manner laid down in the Nomination and Renumeration Policy of the Company. The financial summary or highlights: The financial summary is given in the Paragraph 'Financial Results' in the Directors' Report. The change in the nature of business, if any: There is no change in the nature of business. The details of directors or key managerial personnel who were appointed or have resigned during the year: Shri P. Laxmidhar Prusty, Company Secretary, has resigned during the year. The names of companies which have become or ceased to be Subsidiaries, joint ventures or associate companies during the year: There are no companies which have become or ceased to be Subsidiaries, joint ventures or associate companies during the year. The details relating to deposits, covered under Chapter V of the Companies Act, 2013 and details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013: The company has not accepted any deposits covered under Chapter V of the Companies Act, 2013. The 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 impacting the going concern status and Company's operations in future. The details in respect of adequacy of internal financial controls with reference to the Financial Statements: The Company's well defined organizational structure, documented policy guidelines, defined authority matrix and internal financial controls ensure efficiency of operations, protection of resources and compliance with the applicable laws and regulations. Moreover, the Company continuously upgrades its systems and undertakes review of policies. The internal financial control is supplemented by regular reviews by management and standard policies and guidelines to ensure reliability of financial data and all other records to prepare the financial statements and other data. The Audit Committee reviews the internal financial controls and also monitors the implemented suggestions. DISCLOSURES BY A LISTED COMPANY UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year: Since no director of the Company is in receipt of remuneration from the Company there are no particulars to be furnished. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: There is no increase in the remuneration to the aforesaid personnel in the financial year 2014-15. The percentage increase in the median remuneration of employees in the financial year: There is no increase in the median remuneration of employees in the financial year 2014-15. The number of permanent employees on the rolls of the Company: There are 17 permanent employees on the rolls of the Company as at 31st March 2015. The explanation on the relationship between average increase in remuneration and company performance: The increase in revenue from operations in the financial year 2014-15 is 2.57% whereas there is no increase in remuneration during the year. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: The revenue from operations of the company during the year is Rs.717.73 lakhs as against the remuneration of the Key Managerial Personnel of Rs.1.69 lakhs. Variations in the market capitalisation of the Company: a) The market capitalisation of the Company has decreased by 35.59% as on 31st March 2015 to Rs.108.53 crores from Rs.168.50 crores as at 31st March 2014. b) Price Earnings Ratio of the Company was 171.05 as at 31st March 2015 and was 1,957.22 as at 31st March 2014. c) Percent increase over / decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with the last public offer in the year: The Company has not made any public offer of equity shares. Pursuant to the Demerger Scheme of Binny Ltd, Binny Mills Ltd, as a resulting company, issued and allotted to the shareholders of Binny Ltd - the demerged company, one equity share of Rs.10/- each in Binny Mills Ltd, credited as fully paid-up, for every 7 equity shares of Rs.5/- each, fully paid up, held in Binny Ltd. (share entitlement ratio specified in the demerger scheme). Accordingly, 28th May 2010 was fixed as the record date. On 2nd June 2010, as per the share entitlement ratio, the company issued and allotted 31,88,474 equity shares of Rs.10/- each in Binny Mills Ltd, credited as fully paid up, aggregating to Rs.3,18,84,740/- to the shareholders of Binny Ltd. With effect from 28th May 2013, the aforesaid equity shares of Binny Mills Ltd (Scrip Code: 535620) were listed and admitted to dealings on the Bombay Stock Exchange in the list of 'T' Group Securities. An amount of Rs.10/- per share invested in the company, as per the aforesaid demerger scheme, has traded at the Bombay Stock Exchange at a market price of Rs.340.40 per share as on 31st March 2015. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year viz., 2014-15 and its comparison with the percentile increase in the managerial remuneration: There is no managerial remuneration paid during the financial year 2014-15. There was no increase in the salaries of employees during the financial year 2014-15. The key parameters for any variable component of remuneration availed by the directors: The directors were not paid any remuneration during the financial year 2014-15. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: The directors were not paid any remuneration during the financial year 2014-15. It is hereby affirmed that the remuneration is as per the remuneration policy of the Company. STATEMENT OF EMPLOYEES' PARTICULARS The particulars required to be furnished under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is as follows: During the year, there are no employees drawing remuneration of Rs.60 lakhs or more per annum or Rs.5 lakhs or more per month, or was in receipt of remuneration which, neither in the aggregate nor at a rate, which in the aggregate, is in excess of that drawn by the Managing Director or holding, either by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company. AUDITORS M/s T. Selvaraj & Co., Chartered Accountants, Chennai, (Firm Registration No. : 003703S) the Statutory Auditors of the company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment for the year 2015-2016. Certificate has been received from them to the effect that their re-appointment as statutory auditors of the Company, if made, would be within the limits prescribed under Sections 139 & 141 of the Companies Act, 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under clause 41(1) (h) of the Listing Agreement. The Directors recommend their reappointment. If reappointed they will hold office until the conclusion of the next Annual General Meeting of the company. SECRETARIAL AUDIT The Board had appointed Shri K. Elangovan, M/s Elangovan Associates, Company Secretaries in Practice, Chennai, (Certificate of Practice No.3552) Membership No. (FCS 1808) to carry out Secretarial Audit under the provisions of section 204 of the Companies Act, 2013 for the financial year 2014-15. The Secretarial Audit Report is annexed to this report as Annexure IV. WHISTLE BLOWER POLICY / VIGIL MECHANISM Pursuant to clause 49 (II) (F) of the Listing Agreement, the Company has framed a Whistle Blower Policy / Vigil Mechanism providing a mechanism under which an employee / director of the Company may report violation of personnel policies of the Company, unethical behavior, suspected or actual fraud, violation of Company's code of conduct or ethics policy. The Vigil Mechanism provides for adequate safeguards against victimization of directors / employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. It also ensures standards of professionalism, honesty, integrity and ethical behavior. The Whistle Blower Policy / Vigil Mechanism is uploaded on the Company's website www.bmlindia.com ATTACHMENTS The Management Discussion and Analysis Report The Management Discussion and Analysis Report, pursuant to clause 49 (VIII) (D) (1) of the listing agreement, is given as a separate Report and this report is part of the Directors' Report. The Report on Corporate Governance The Report on Corporate Governance, pursuant to clause 49 (X) (A) of the Listing Agreement, together with Auditors' Certificate on Corporate Governance, the certificate duly signed by the Managing Director on the Financial Statements of the Company for the year ended 31st March 2015 as submitted to the Board of Directors at their meeting held on 29th May 2015 and the declaration by the Managing Director regarding compliance by the Board members and senior management personnel with the Company's Code of Conduct is included as a separate section in the Annual Report. ACKNOWLEDGEMENT Your Directors place on record their appreciation for the continued co-operation and support extended by all concerned persons and authorities for the smooth and efficient functioning of the Company. For and on behalf of the Board V.R. Venkataachalam Chairman Registered Office: No.4, (Old No.10) Karpagambal Nagar, Mylapore, Chennai 600 004. Date: 31st July 2015 |