CORPORATE GOVERNANCE REPORT
The company recognizes the interests of all the stakeholders in the company and its functioning. It has accordingly adopted set of rules, procedures, practices and systems to align the interests of these stakeholders in line with the principles enunciated by the sebi under clause 49(i) of the listing agreement in letter and spirit.
The braj binani group aims to be a pioneer in all its endeavours and set benchmarks while focusing on sustainable growth. Our endeavours are directed at well-being of all our stakeholders. The braj binani group holds high regard for core values, such as honesty, transparency, and efficiency along with constant efforts to provide customer delight with the highest quality and dependable delivery of products. These core values are central to the business philosophy of binani industries ltd. And act as the guiding beacon for the day-to-day business operations. We strive to be a customer-first, quality-obsessed, socially-sensitive corporate entity.
Rights of shareholders
Your company protects and facilitates shareholders' rights, provides adequate and timely information, opportunity to participate effectively in general meeting and ensure equitable treatment to all shareholders.
Role of stakeholders in corporate governance
Your company recognizes the rights of stakeholders and encourages co-operation between the company and stakeholders to enable participation in corporate governance process.
Disclosures and transparency
Your company ensures timely and accurate disclosure on all material matters including the financial situation, performance, ownership and governance of the company.
Board of directors
The board of directors comprises of persons with adequate experience, qualifications, knowledge and diversified expertise relevant to the diversified business operations of the company and its subsidiaries.
As on 31st march, 2015, the board of directors comprised of six directors, out of which three were from the promoter group and remaining three were independent directors.
Mr. Braj binani is the promoter and non-executive chairman of the company. Ms. Nidhi binani singhania and ms. Shradha binani are other two non-executive directors from promoter group. Ms. Nidhi binani singhania and ms. Shradha binani are daughters of mr. Braj binani.
Mr. N. C. Singhal, mr. Rahul asthana and mr. S. Sridhar were independent directors of the company as on 31st march, 2015. Ms. Jayantika dave has been inducted into the board on 3rd july, 2015 as independent director all independent directors have given 'declaration of independence' to the effect of meeting the criteria specified under section 149(6) of the companies act, 2013 read with rules made thereunder and clause 49(ii)(b) of the listing agreement and, further confirmed that they continue to meet the said criteria as on the date of this report.
Mr. N. C. Singhal tendered his resignation on 15th october, 2015 and was considered by the board of directors at their meeting held on 24th october, 2015. The board of directors wish to place on record their sincere appreciation for the contribution made by mr. N. C. Singhal during his tenure with the company as director since 2008. Consequently, he also ceases to be member / chairman of the audit committee, nomination and remuneration committee, stakeholders' relationship committee and finance committee. These committees have been reconstituted with other directors as follows:-
The tenure of independent directors, number of directorship, committee membership and chairmanship held by directors are in compliance with the provisions of clause 49 of the listing agreement.
The company has issued formal appointment letters to the independent directors in terms of the provisions of the companies act, 2013 and terms and conditions of appointment have been disclosed on the website of the company.
Being apex management body of the company, the board discharges all its responsibilities, functions, duties and obligation in timely and effective manner in accordance with applicable laws, keeping close eye to the business operations of the company. The day-to-day affairs are managed by the manager of the company under overall supervision of the board.
The company follows a practice of deciding the dates of board meetings to be held during a financial year, right at the beginning of the year to facilitate attendance by all the directors at the meetings. Additional board meetings are held, as and when considered necessary.
During the year, the board met 10 times respectively on 30th may, 2014, 24th june, 2014, 30th june, 2014, 7th august, 2014, 21st august, 2014, 9th september, 2014, 22nd october, 2014, 10th december, 2014, 30th january, 2015 and 30th march, 2015.
Further, directors do not hold any convertible instruments in the company. The details of remuneration and sitting fees paid to directors are included elsewhere in this report. During the year under review, there were no material pecuniary transactions between the company and its non-executive directors, except for the royalty paid to mr. Braj binani, pursuant to the existing agreement.
Independent directors' meeting
The independent directors met on 17th february, 2015 in presence of all independent directors under the chairmanship of mr. N. C. Singhal. The independent directors inter-alia discussed-
• evaluation of performance of the non-independent directors and the board as a whole;
• evaluation of performance of the chairman of the company; and
• evaluation of quality, content and timelines of flow of information between the management and the board i.e. Necessary for the board to effectively discharge its responsibilities.
Mr. N. C. Singhal apprised the board of directors of the recommendations of independent directors.
Familiarization programme for board members
Upon induction of a director, the company undertakes orientation exercise to familiarize directors about the company's business operations, products, corporate objectives, financial performance, management structure, compliance etc. To facilitate such director to appreciate his/her role, responsibility, rights and duties. Periodically, the board members are provided with necessary documents/ literatures/ reports and policies to familiarize them with the company's business, procedures and practices. Periodic presentations are also made by the business heads of the major operating subsidiaries which include the updates on business and performance, business scenario, risks and actions plan for their mitigations. The board is also briefed regarding relevant regulatory changes concerning the business and their impact.
The board has adopted a familiarization programme for the independent directors and the same is also posted at the website of the company and can be accessed at <http://binaniindustries.com/investor-relations/binani-industries-ltd/familiarization-program-for->directors.
Performance evaluation of board
The board has carried out the annual evaluation of board, its committees and directors based on the criteria recommended by the nomination and remuneration committee. Evaluation of directors was carried out without the concerned director being present at the time of such evaluation. The broad outline of criteria of evaluation of directors was as below:
Role and accountability
• understanding the nature and role of independent directors' position.
• understanding of the risks, internal controls and mechanisms to assess compliance associated with the business.
• application of knowledge for rendering advice to the management for resolution of business issues.
• offer constructive challenge to management strategies and proposals.
• active engagement with the management and attentiveness to process of decisions taken.
• satisfy itself that succession planning for appointments to the board and to the senior management.
• non-partisan appraisal of issues
• own recommendations given professionally without tending to popular views.
Leadership & initiative
• heading board sub-committees.
• driving any function or identified initiative based on domain knowledge and experience.
• discusses all key issues in collegial, polite and constructive manner to a conclusion with clear directions.
• thrives to perform the duties as envisaged.
• proactive and lateral thinking.
Code of conduct
The company had adopted earlier a code of conduct ("code") applicable to the directors of the company including independent directors. The code provides guidance and support needed for ethical conduct of the business and compliance of the applicable laws.
The board has adopted an addendum to the code to define duties of independent directors of the company as outlined under schedule iv of the companies act, 2013.
A copy of the code together with the addendum as aforesaid, is posted on the company's website: www.binaniindustries.com Annually, an affirmation is received from the directors and senior management. A declaration signed by the manager of the company forms part of this report.
Senior managerial personnel are also required to disclose to the board relating to all material financial and commercial transactions, if any, where they have personal interest, that may have a potential conflict with the interest of the company at large. The company has received confirmation from senior managerial personnel to the same effect.
Committees of the board
The board has constituted following committees of the board and determined the terms of reference for each of such committees. These committees meet at such time, as may be considered necessary. The minutes of the committee meetings are placed at the board meetings.
The members of the committee possess relevant accounting or financial expertise.
The composition of the committee and its terms of reference are in compliance with the provisions of section 177 of the companies act, 2013 and rules made thereunder and clause 49 (iii) of the listing agreement.
The manager and chief financial officer of the company are permanent invitees of the committee. Representatives of statutory auditors, internal auditors are regularly invited to attend the meetings of the committee.
The company secretary attends the meetings as the secretary to the committee.
In discharge of its responsibilities, the committee is empowered to investigate any activity within its terms of reference and to seek necessary information from the management and also to seek opinion / advice from outside experts. The board has framed the terms of reference of the audit committee in accordance with that specified under clause 49 of the listing agreement and also the provisions of the companies act, 2013, which are as follows:
• oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• recommendation for appointment, remuneration and terms of appointment of auditors of the company;
• reviewing, with the management, the annual financial statements and auditors' report thereon, before submission to the board for approval, with particular reference to:
A. Matters required to be included in the directors' responsibility statement to be included in the board's report in terms of clause (c) of sub-section 3 of section 134 of the companies act, 2013
B. Changes, if any, in accounting policies and practices and reasons for the same
C. Major accounting entries involving estimates based on the exercise of judgment by the management
D. Significant adjustments made in the financial statements arising out of audit findings
E. Compliance with listing and other legal requirements relating to financial statements
F. Disclosure of related party transactions
G. Qualifications in the draft audit report
• monitoring the end use of funds raised through any issue of securities and matters related thereto;
• reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
• approval of any subsequent modification of transactions of the company with related parties;
• scrutiny of inter-corporate loans and investments;
• valuation of undertakings or assets of the company, wherever it is necessary;
• evaluation of internal financial controls and risk management systems;
• reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems;
• reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
• discussion with internal auditors, of any significant findings and follow-up thereon;
• reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
• discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
• to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors / lenders;
• to review the functioning of the whistle blower mechanism;
• approval of appointment of chief financial officer or any other person heading the finance functions in the company;
• to review of appointment, removal, terms and remuneration of the chief internal auditor, if any;
• to recommend to the board the appointment of cost auditor and their remuneration;
• to review the financial statements, in particular, the investments made by unlisted subsidiary companies;
• carrying out any other function as is mentioned in the terms of reference of the audit committee;
• additionally review of information as follows:-
I. Management discussion and analysis of financial condition and results of operations;
Ii. Statement of significant related party transactions (as defined by the audit committee), submitted by management;
Iii. Management letters / letters of internal control weaknesses issued by the statutory auditors;
Iv. Internal audit reports relating to internal control weaknesses;
V. Risk management report submitted by the internal auditor;
Vi. Draft auditors' report and qualifications, if any, therein;
Vii. Contingent liability;
Viii. Overseeing the company's financial reporting process and disclosure of the financial information
The audit committee met 7 (seven) times during the year under review i.e. On 30th may, 2014, 24th june, 2014, 6th august, 2014, 21s1 october, 2014, 20th december, 2014, 29th january, 2015 and 30th march, 2015. Mr. S.sridhar, chairman of the audit committee attended the last annual general meeting, besides other members
Nominations and remuneration committee (formerly, remuneration committee)
The constitution of the nomination and remuneration committee and its terms of reference are in conformity with the provisions of section 178 of the companies act, 2013 and clause 49 of the listing agreement.
As on 31st march, 2015, the nomination and remuneration committee (formerly, remuneration committee) comprised of independent directors viz., mr n.c.singhal (chairman of the committee), mr rahul asthana and mr. S.sridhar
The role and responsibilities assigned to the committee, which, inter-alia, include the following:
• to formulate the criteria for determining qualifications, positive attributes and independence of a director;
• to identify persons who are qualified to become directors and who may be appointed in senior management, in accordance with the criteria laid down, and recommend to the board their appointment or removal;
• to recommend to the board, the policy relating to the remuneration of the directors, key managerial personnel and other senior managerial personnel;
• to formulate the criteria for evaluation of independent directors and the board;
• to recommend criteria for evaluation of performance of the board, its committees and directors;
• to devise a framework for bringing diversity in the composition of the board;
• to formulate and recommend to the board remuneration policy.
Nomination and remuneration policy
Based on the recommendation of the nomination and remuneration committee, the board of directors has formulated a nomination and remuneration policy. The policy lays down the process for determination of remuneration for the directors, key managerial personnel and senior management personnel of the company and the same is annexed as annexure-b to the directors' report.
Remuneration to directors
Mr. Sunil sethy, executive vice chairman & managing director, retired on 31st may, 2015. He was paid the following remuneration and perquisites upto the date of his retirement
The above remuneration has been approved by the nomination and remuneration committee at its meeting held on 29th october, 2013 (basic Rs.14,00,000/- p.m.).
Tenure of office of the managing director is for a term of 3 years from 10th november, 2013 and can be terminated by either the company or the managing director by giving 3 months notice in advance or salary in lieu thereof.
The company has no employee stock option scheme in force. (pre-mature retirement effective 1st june, 2014)
Non-executive directors do not draw any remuneration. All non- executive directors (including independent directors) are paid sitting fees at uniform basis for attending the meetings of the board and committees, as decided by the board of directors of the company from time to time. The details of sitting fees paid to the non- executive directors for the financial year ended 31st march, 2015 are as follows:
Terms of reference
• oversee and review all the matters relating to the transfer and transmission of the company's securities;
• approve issue of the duplicate share certificates in lieu of the lost/misplaced share certificates;
• monitor redressal of investors'/shareholders' grievances;
• oversee the performance of the registrar & share transfer agents;
• recommend any measure to improve the services for the benefit of the investors;
• any other activities/functions, as may be referred by the board from time to time or on account of any statutory notification/ modification, as may be applicable.
In order to expedite process of share transfers and other services to the company's shareholders, the board delegated power of share transfer, transmission etc. To executive committee, comprising of senior executives of the company. It meets periodically to consider and approve transfer of shares, issue of new share certificates in place of mutilated and torn certificates (other than issue of duplicate share certificates) and deal in the matters related thereto. The executive committee met 25 times during the year under review.
The minutes of executive committee are placed at the periodic meeting of stakeholders' relationship committee.
Investor complaints / redressals
During the year 2014-15, 91 investors' complaints were received, which mainly related to non-receipt of annual reports, change of address and matters related to share transfers. All the complaints were resolved. As on 31st march, 2015, there were no complaints pending to be resolved.
Details of special resolution passed by postal ballot:
Postal ballot concluded on 22nd october, 2014: postal ballot process was conducted vide postal ballot notice dated 9th september, 2014 to pass special resolution to give authority to the board of directors to make loan(s) and/or give any guarantee(s)/provide any security(ies) in connection with loans(s) made to subsidiaries/step down subsidiaries/fellow subsidiaries and associate companies and/or acquire by way of subscription, purchase or otherwise the securities of subsidiaries/step down subsidiaries/fellow subsidiaries and associate companies up to a maximum limit not exceeding Rs. 9,000 crores in aggregate at any point of time notwithstanding the aggregate of the loans, guarantees or securities so far given or to be given to the above said bodies corporate and/or securities so far acquired or to be acquired in above said bodies corporate may exceed the limits prescribed under the said section
Postal ballot concluded on 20th march, 2015: postal ballot process was conducted vide postal ballot notice dated 30th january, 2015, to pass special resolutions:
A) to increase the authorized share capital of the company, with consequential amendment in the memorandum of association of the company;
B) to issue and offer up to 1,20,00,000, 0.01% non-cumulative redeemable preference shares of Rs. 100/- each on a private placement basis to the promoter company(ies);
C) issuance of corporate guarantees and providing securities to the lenders (banks/financial institutions) in respect of loans and credit facilities sanctioned to binani cement ltd., a subsidiary company.
Postal ballot concluded on 23rd june, 2015: postal ballot process was conducted vide postal ballot notice dated 11th may, 2015, for variation of terms of contract of mr. Sushil bhatter, manager of the company. Mr. Mohammad aabid, practising company secretary was the scrutinizer to conduct the said postal ballot process. The result was declared on 23rd june, 2015 on the basis of scrutinizer's report. Details of the voting pattern was as below:
Related party transactions
The disclosure of related party transaction in accordance with as-18 is provided as notes to the financial statements. In terms of clause 49 (vii)(c) of the listing agreement, the company has formulated a policy on material related party transactions. The policy has been disclosed on the website of the company and is available at <http://binaniindustries.com/investor-relations/binani-industries-ltd/> related-party-transactions-policy/
Materially significant related party transaction
The related party transactions have been disclosed in the annual accounts in accordance with the accounting standards (as18). There were no significant related party transactions during the year under review.
Details of non compliance by the company / penalties / strictures imposed on the company by the stock exchanges, or sebi or any statutory authority on any matter related to the capital markets during the last 3 years:
National stock exchange of india ltd. Vide its letter dated 16th june, 2014, imposed fine of Rs. 3.71 lacs for non-compliance during 201415 under clause 41 of the listing agreement. Bse ltd also imposed fine of Rs. 4.62 lacs for said non-compliance.
Whistle blower policy
The board has framed a whistle blower policy thereby establishing necessary vigil mechanism for employees and directors to report their concerns, if any, regarding unethical behavior, fraud or violation of company's code of conduct. Under the policy, any such concern can be reported to the chairman of the audit committee or any other member thereof. This mechanism also provides for adequate safeguards against victimization of employees, who avail of the mechanism. The said policy has been disclosed on the website of the company and can be accessed at <http://binaniindustries.com/investor-relations/binani-industries-ltd/whistle-blower-policy>
During the year ended 31st march, 2015, no concern/complaint/report was received under vigil mechanism. The company hereby affirms that no personnel have been denied access to the audit committee.
In compliance with the clause 49 (v), the board of directors had nominated mr. S. Sridhar and mr. Rahul asthana, independent directors on the board of directors of the company's subsidiaries, namely, binani cement ltd. And edayar zinc ltd. (formerly, binani zinc ltd.) Respectively. The audit committee of the company reviews periodically the financial statements of the subsidiaries.
The minutes of the meetings of the board of directors of the subsidiary companies are also regularly placed on the meeting of the board of directors of the company. A statement containing the significant individual transactions and arrangements of material unlisted subsidiaries are also placed at the meeting of the board of directors on quarterly basis.
The company has formulated a policy for determining material subsidiaries and the same is available at website of the company, <http://binaniindustries.com/investor-relations/binani-industries-ltd/material-subsidiary-policy/>.
Compliance with the corporate governance frame work
The company is in compliance with mandatory requirements under revised clause 49 of the listing agreement. The company shall make endeavour to adopt the non-mandatory requirements in entirety.
The company has obtained a certificate from practising company secretary, confirming compliance with all the conditions of corporate governance as stipulated under revised clause 49 of the listing agreement and the same is annexed hereto.
Means of communication
The quarterly, half yearly and annual financial results are usually published in financial express and aajkal (bengali daily) newspapers in Kolkata. The results, shareholding pattern and the corporate governance report are made available on the company's website, www.binaniindustries.com
General shareholders information
a) 52nd Annual General Meeting Saturday, 19th December, 2015 at 3.30 p.m. at Rotary Sadan, 94/2, Chowringhee Road, Kolkata -700 020
b) Financial Calendar
i) Financial Year.: 1st April to 31st March
ii) Unaudited Financial Results for the quarter ended 30th June,2015.: 28th July,2015
iii) Unaudited Financial Results for the quarterended 30th September, 2015.: 24th October 2015
iv) Unaudited Financial Results for the quarter ended 31st December, 2015.: On or before 15th February, 2016
v) Audited Annual Financial Results for the year 2015-16.: On or before 30th May, 2016
c) Date of Book Closure From Friday, 11th December, 2015 to Saturday, 19th December, 2015 (both days inclusive).
d) Listing on Stock Exchanges The Bombay Stock Exchange Ltd.,
The National Stock Exchange of India Ltd. and
The Calcutta Stock Exchange Ltd.
e) Listing Fees Company has paid before the due date, the Annual Listing
Fees for the year 2015-16 to all the Stock Exchanges where the Shares are listed.
f) Stock Code BSE-500059; NSE-BINANIIND; CSE-12026
g) The Company has submitted the Annual Audited Financial Results for the year ended 31st March, 2015, to the Stock Exchanges on 30th May, 2015.Binani cement ltd.
j) Registrar and Share Transfer Agents
M/s. Link Intime India Pvt.Ltd. C-13 Pannalal Silk Mills Compound, L B S Marg, Bhandup (W), Mumbai -400 078 E-mail: firstname.lastname@example.org Tel. No. 25946970 Fax: 022-25946969
k) Compliance Officer Mrs. Visalakshi Sridhar - CFO, Manager & Company Secretary Contact No & 022-30263000-02 E-mail Id: email@example.com
l) Registered Office 37/2, Chinar Park, New Town, Rajarhat Main Road, P.O. Hatiara, Kolkata - 700 157
Contact Person: Mumbai Office Mr. Rajesh Hegde Tel: 022-30263000-02 E-mail:firstname.lastname@example.org
Kolkata Office Mr. Sauvik Nayak Dy.Manager (Secretarial) Tel. 033-32626795 /96 E-mail: email@example.com
o) Dematerialization of shares and liquidity
Shares of the Company can be held and traded in electronic form. As per SEBI norms, the shares of the Company are accepted for delivery in demat form only. Entire promoter holding is in demat mode as per SEBI requirement. As on 31st March 2015, 91.57% of the total outstanding Shares were held in Dematerialized form. The Shares are actively traded at BSE/NSE.
p) Outstanding GDRs / ADRs/ Warrants or any Convertible instruments, conversion date and likely impact on equity.: NIL
q) Subsidiaries’ Plant Locations
1. Binani Cement Ltd.
a. Binanigram, Pindwara, Dist. Sirohi, Rajasthan- 307 031
b. Village Sirohi, Taluka Neem ka Thana, Dist-Sikar, Rajasthan - 332 714
2. Edayar Zinc Ltd (formerly known as Binani Zinc Ltd.) Binanipuram, Ernakulam, Kerala - 683 502
3. Goa Glass Fibre Ltd. Colvale, Bardez, Goa - 403 513
4. 3B Fibreglass SPRL
Route de Maestricht 67, 4651, Battice, Belgium.
5. 3B Fibreglass A/S
Tollenesveien 60, 4760, Birkeland, Norway.
6. CPI Binani Inc.
1700 Wilkie Drive Winona, MN-55987, USA
7. Shandong Binani Rong’An Cement Co. Ltd.
Fujiazhuang, Dongguan Town, Ju County of Rizhao Municipality, Shandong Province, People’s Republic of China.
8. Binani Cement Factory LLC.
Jebel Ali, Dubai, UAE
r) Address for correspondence Registered Office:
37/2, Chinar Park, New Town, Rajarhat Main Road, Kolkata-700157.
Corporate Office :
Mercantile Chambers, 12, J.N.Heredia Marg, Ballard Estate, Mumbai -400 001.
Mrs. Visalakshi Sridhar
CFO, Manager & Company Secretary
Date: 24th October, 2015