Your Directors are pleased to present the Thirty Second Annual Report of the Companytogether with its Audited Financial Statements for the year ended 31st March2016.
1. FINANCIAL AND OPERATIONAL RESULTS:
A. Financial Results (Standalone):
Financial and Operational Results of the Company for the financial year ended 31stMarch 2016 as compared to the previous financial year is summarized below:
| || ||(Rs. in Lacs) |
|Particulars ||Current financial year ended on 31.03.2016 ||Previous financial year ended on 31.03.2015 |
|Gross Sales/ Income ||59425.15 ||67147.74 |
|Earnings before Finance Cost Tax Depreciation and Amortisation ||4000.63 ||2726.97 |
|Less: (i) Finance Cost ||1107.53 ||1357.53 |
|(ii) Depreciation and Amortisation (Net) ||554.48 ||501.32 |
|Profit before tax (PBT) ||2338.62 ||868.12 |
|Provision for tax including Deferred Tax ||669.84 ||328.20 |
|Net Profit after Tax (PAT) ||1668.78 ||539.92 |
| || ||(Rs. in Lacs) |
|Final Dividend ||165.91 ||165.91 |
|Dividend Tax ||33.17 ||33.17 |
|Transfer to General Reserve ||NIL ||NIL |
B. Financial Results (Consolidated):
The Consolidated Financial and Operational Results of the Company for the year ended 31stMarch 2016 as compared to the previous financial year is summarized below:
| || ||(Rs. in Lacs) |
|Particulars ||Current financial year ended on 31.03.2016 ||Previous financial year ended on 31.03.2015 |
|Gross Sales/ Income ||59425.15 ||67147.74 |
|Earnings before Finance Cost Tax Depreciation and Amortisation ||3951.71 ||2674.90 |
|Less: (i) Finance Cost ||1107.63 ||1357.78 |
|(ii) Depreciation and Amortisation (Net) ||555.30 ||502.06 |
|Profit before tax (PBT) ||2288.78 ||815.06 |
|Provision for tax including Deferred Tax ||669.84 ||328.20 |
|Net Profit after Tax (PAT) ||1618.94 ||486.86 |
|APPROPRIATION || || |
|(Rs. in Lacs) || || |
|Final Dividend ||165.91 ||165.91 |
|Dividend Tax ||33.17 ||33.17 |
|Transfer to General Reserve ||NIL ||NIL |
C. OPERATIONS AND FUTURE PLAN:
The operational results of the Company has been fairly better during financial year2015-16 as its Profit After Tax (PAT) witnessed an upsurge of 209.08 % in the financialyear 2015-16 (viz PAT of Rs. 16.69 Crore as against PAT of Rs. 5.40 Crore during lastfiscal) reflecting the consistent momentum of growth. The turnover of company stood at Rs.594.25 Crore as against Rs. 671.47 Crore during last fiscal witnessing a decline of 11.50%due to steep fall in crude oil prices which warranted the Company to reduce the prices ofits products and pass on the price decline effect to clients however the quantity ofsales during financial year 2015-16 recorded growth of 4.71% when compared with the salesquantity of financial year 2014-15. Despite such downfall in turnover the company wasable to retain its optimum margins which is evident from the fact that Net profit ratio toSales rose to 2.81% as compared to 0.80% during the previous year & the EBITDA tosales ratio rose to 6.73% as compared to 4.06% in the previous year.
The company had previously planned expansion in three phases. First phase to augmentproduction capacity from 51KtPa to 67kTpA Second phase from 67KTPA to 85KTPA and in Thirdphase from 85KTPA to 150KTPA. After thorough review capacity balancing in terms ofavailable SAN and HRG and economies of scale; the company revised the expansion strategyand accordingly company planned to enhance the production capacity from 51KTPA to 200KTPAin two phases only in lieu of Three phases as envisaged/ planned earlier. In the firstphase the expansion has been kept upto 80KTPA in place of 85KTPA and in the second phasecompany will expand its production capacity from 80KTPA to 200KTPA which is proposed totake place on port based location through establishment of a new plant.
The first phase of expansion of company has been completed in the month of March-2016with a slight delay of three months than the targeted period. This has augmented company'sinstalled capacity from previous 51 KTPA to 80KTPA.
Since the first phase of expansion upto 80KTPA has already been accomplishedsimultaneously the works related to automation and modernization has also been plannedwith a view to reduce overheads material handling losses improved housekeeping improvedreliability of operations by minimizing human intervention and dependability on manpowerand computerized management information system to enable the management for takingrequisite decisions and corrective actions in timely manner based on authentic andcomprehensive data base; which is targeted to be achieved by March 201 7. Upon completionof the aforesaid automation and modernization the company shall be able to positionitself at the level of other internationally operating establishments. The elements ofworks consisted in aforesaid modernization and automation activities are enumerated ashereunder:
1. Comprehensive automation of compounding operation which so far in the company wasconfined to basic polymer manufacturing i.e. for SAN and HRG. This encompasses completeoperation control monitoring and data logging of raw material conveying extruderscharging system mixing system etc. and monitoring and data logging of extrusion ABSconveying weighing bagging and printing system using scada and PLC for which theglobally recognized vendors viz. Coperion and ABB have been entrusted.
2. With a view to achieve operational efficiency and meet competitive challenges it isinevitable for the company to replace its decades old extruders. In this regard thecompany has placed order to JSW a globally renowned extruder manufacturer from Japan forextruders of latest technology embedded with Ultra high torque high performance andversatile capabilities this will help improve reliability enhance productivity and bringin energy efficiency.
3. Warehousing facility for the finished goods is being not only expanded but beingmodernized as well by deploying selective Pallet racking system in a 12M high storage areawith racks for storage of ABS upon Pallets and using the most advanced material handlingequipment to maneuver material into and out of the warehouse being procured from India'sleading material handling equipment supplier - Godrej and Boyce. This will not onlycontribute towards improving inventory management and control but also enable the companyto serve the customers in a more desirable and efficient manner.
4. In view of proposed level of operation at 200 KTPA; the company is in process ofestablishing state of the art research and development centre at Abu Road plant. Postoperationalization of the in-house R&D facility the company will be in a position toexpeditiously execute application development work which is the need of the hour due tonewer applications being envisaged resulting in fast growing demand of specialty ABS.
The next phase of expansion has been planned by company at port based location and isproposed to be completed by the end of March 2019 post which company's installedcapacity will be enhanced to 200 KTPA i.e. 80 KTPA pre-existing capacity at Abu Road plantand 120 KTPA expanded capacity at port based new plant as proposed to be established. Therequisite project work has already commenced in this regard. The decision of going portbased with the latest technology at par with other global players will render multifariousbenefits to the company in terms of minimal overheads; power saving by latest technologyadoption improved safety enhanced reliability due to complete automation and also thethreat to safety linked with the transportation of hazardous chemicals will be eliminated.The aforesaid benefits are vital for the survival of the company in the present businessscenario which is posing cut throat competition from company's Indian as well as overseascompetitors. The viability of company's operation will always be precarious until andunless it is able to compete with the international players in terms of their cost ofproduction and overheads which is having a large gap in the present scenario.
2. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
Pursuant to Section 129(3) of Companies Act 2013 read with Rule 5 of Companies(Accounts) Rules 2014 your Company does not have any subsidiary Company during F.Y.2015-16; however it has one Joint Venture/ Associate Company viz. Bhansali Nippon A&LPrivate Limited having its Registered Office at Unit No. 302 3rd Floor PalmCourt Commercial Complex 20/4 Sukhrali Chowk Sec-14 Opp. Huda Park Gurgaon Haryana- 122 001.
The Report on the performance and Statement containing salient feature of FinancialStatement of aforesaid Joint Venture Company is separately attached with this AnnualReport viz. in Form No. AOC-1.
In accordance with Section 136 of Companies Act 2013 the Audited Financial Statementsof the Company including the Consolidated Financial Statement related to its Joint Ventureentity are available at company's website (www.bhansaliabs.com).
Your Directors have recommended final dividend @ 10% on the nominal value of the totalpaid-up equity share capital of Company consisting of 165905640 equity shares of Re.1/- each for the financial year ended 31st March 2016 (viz. dividend of Tenpaise per equity share). The aforesaid dividend if approved by members in ensuing AnnualGeneral Meeting will be distributed out of the net profits of the company available fordistribution of dividends.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year under review as requiredpursuant to the provisions of Regulation 34(2)(e) read with Schedule V(B) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed herewith videAnnexure I and forms an integral part of this Annual Report.
5. INTERNAL FINANCIAL CONTROL SYSTEM OF COMPANY:
Adequate Internal Financial Control system commensurating with the nature of theCompany's business size and complexity of its operations are in place and has beenoperating satisfactorily and effectively.
During the year no material weaknesses in the design or operation of InternalFinancial Control system were reported.
6. PARTICULARS OF CONTRACT(S)/TRANSACTION(S)/ARRANGEMENT(S) WITH RELATED PARTIES:
All Related Party Contract(s)/Transaction(s)/Arrangement(s) entered by Company duringfinancial year 201516 were in its ordinary course of business and on arm's length basis.According to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 there were no materially significant related partycontract(s)/transaction(s)/arrangements entered by the Company with the Related Partieswhich may have a potential conflict with the interest of company. All related partytransaction(s) are first placed before Audit Committee for approval and thereafter suchtransactions are also placed before the Board for seeking their approval whereverrequired.
Since all the Related Party Transactions (RPTs) entered into by the Company were inordinary course of business and were on arm's length basis so Form AOC -2 is notapplicable. However the details of RPTs as required pursuant to respective AccountingStandards are stated at Note No. 26 of the Standalone Audited Financial Statements ofCompany forming part and parcel of this Annual Report.
The Policy on dealing with Related Party Transactions has been placed on the Company'swebsite and can be accessed through www.bhansaliabs.com.
7. PARTICULARS OF LOANS ADVANCES & GUARANTEES GIVEN INVESTMENTS MADE ORSECURITIES PROVIDED:
Particulars of loans advances and investments made by company during the financialyear 2015-16 are stated in Note No. 13 and 14 to Standalone Audited Financial Statementsof Company as annexed to this Annual Report. Company has neither given any guarantee norprovided any Security during the reporting period.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs):
Mr. B. M. Bhansali (DIN: 00102930) Director of Company shall retire by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
Also the tenure of appointment of Mr. B. M. Bhansali as Managing Director of theCompany expired on 31st March 2016; however the Nomination and RemunerationCommittee at its meeting convened on 14th February 2016 recommended for hisre-appointment and subsequently the Board also at its meeting held on 14thFebruary 2016 approved the re-appointment of Mr. B. M. Bhansali as Managing Director ofCompany for a further period of 3 years commencing from 1st April 2016 upto 31stMarch 2019 subject to approval of members in ensuing Annual General Meeting of Company.
a. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from all the Independent Directors of Companyconfirming that they meet with the criteria of Independence as prescribed pursuant to theprovisions of Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
In accordance with provisions of Companies Act 2013 none of the Independent Directorsare liable to retire by rotation.
b. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
The Company has set Familiarisation Programme for Independent Directors with regard totheir roles rights responsibilities in the Company nature of the industry in which theCompany operates the business model of the Company etc. The Familiarisation Programme asconducted by the Company alongwith details thereof are available on the website of theCompany (www.bhansaliabs.com).
9. DISCLOSURES RELATED TO BOARD AND CORPORATE GOVERNANCE REPORT ETC:
a. NUMBER OF MEETING OF BOARD:
The Board met Five times during financial year 2015-16 viz. 30th May 201513th August 2015 26th September 2015 17th October2015 and 14th February 2016. The detailed information with regard to thecomposition of Board and its Committee(s) and their meetings etc. are stated in theCorporate Governance Report of company for sake of brevity which forms part of thisAnnual Report.
b. CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of Corporate Governance andadheres to its requisites as set out by the respective authorities. The report onCorporate Governance as stipulated under Regulation 34 read with Schedule V(C) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed videAnnexure II and forms an integral part of this Board's Report.
Requisite certificate from the Practicing Company Secretary viz. Secretarial Auditorsof the Company M/s Rathi & Associates confirming compliance with the conditions ofCorporate Governance as stipulated in Part E of Schedule V to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is appended herewith videAnnexure II (A) and forms an integral part of this Board's Report.
Certificate issued by the Managing Director and Executive Director & CFO of Companywith regard to certification on Audited Financial Statement of Company for financial year2015-16 is also annexed herewith vide Annexure II (B) and forms an integral part of thisBoard's Report.
The Company has suitably laid down the Code of Conduct for all Board Members and SeniorManagement personnel of the Company in accordance with the provisions of Regulation 17(5)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the saidCode is also available on the website of the Company (www.bhansaliabs.com). Thedeclaration by CEO i.e. Managing Director of company related to the compliance ofaforesaid Code of Conduct is also attached herewith vide Annexure II (C) and forms anintegral part of this Board's Report.
10. COMPANY POLICIES:
Securities and Exchange Board of India ("SEBI") issued SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 on 02nd September2015 (operative w.e.f. 01st December 2015) and pursuant to the saidRegulations the Company has formulated following policies which were approved in theBoard meeting held on 14th February 2016. All the Policies of Company areavailable on Company's website (www.bhansaliabs.com) under the Policies and Proceduressub-caption of the Investor Caption. The policies are reviewed periodically by the Boardand updated based on need and requirements.
|Name of the Policy ||Brief description |
|Whistle Blower or Vigil Mechanism Policy ||The Company has adopted the Whistle Blower/ Vigil Mechanism for directors and employees to report their concerns about unethical behavior actual or suspected fraud or violation of the Company's code of conduct and ethics etc. |
|Policy for Related Party Transactions ||The policy regulates all transactions taking place between the Company and its related parties in accordance with the applicable provisions. |
|Policy for preservation of documents ||The policy deals with the retention of corporate records of Company. |
|Policy for determination of materiality of events ||This policy applies for determining and disclosures of material events taking place in the Company. |
|Archival policy ||The policy deals with the retention and archival of corporate records of Company for a particular period as may be applicable. |
|Code of conduct for Director(s) and Senior Management Personnel ||The Policy is aimed to formulate a Code of Conduct for the Directors and Senior Management Personnel to establish highest standard of their ethical moral and legal conduct in the business affairs. |
|Nomination and Remuneration Policy ||The policy formulates the criteria for determining qualifications competencies positive attributes and independence for the appointment of a Director (Executive / Non-Executive) and also the criteria for determining the remuneration of the Directors Key Managerial Personnel and other employees covered under the prescribed criteria if any. |
|Corporate Social Responsibility Policy ||The policy outlines the Company's strategy to bring about a positive impact on society through activities/ programs relating to Health Happy Childhood Education Employment Hunger eradication Environmental Sustainability Promoting Gender Equality Gender upliftment for deserving sections of society Sports Promotion etc. |
|Code of Conduct for Insider Trading ||The Policy provides framework for dealing with the securities of Company in mandated manner. |
11. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The Company is vigilant to its responsibility towards the society as a corporatecitizen. During the financial year 2015-16 Company was required to spend Rs. 7.79 Lacstowards its CSR activities out of which Rs. 3.19 Lacs has already been spent and remainingRs. 4.60 lacs will also be spent shortly not later than 31st May 2016 on theprojects/ activities as may be suitably identified. The details of CSR expenditure forfinancial year 2015-16 is annexed herewith vide Annexure III and forms an integral part ofthis Board Report.
12. COMMITTEES OF THE BOARD OF DIRECTORS:
The details with respect to the Committees of Board of Directors viz. Audit CommitteeNomination and Remuneration Committee Stakeholders' Relationship Committee and CorporateSocial Responsibility Committee of Company for the sake of brevity have been stated inthe aforesaid Corporate Governance Report of the Company forming part of this AnnualReport.
13. PERFORMANCE EVALUATION OF CHAIRMAN DIRECTOR(S) COMMITTEE(S) AND BOARD:
A statement indicating the manner in which the formal annual evaluation of performanceof the Board as a whole its Chairman Committee(s) and Directors was carried out as wellas the familiarization programme as conducted by Company are annexed herewith videAnnexure IV.
14. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Pursuant to the Provisions of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the requisite details are annexed herewith vide Annexure V and are also available at theRegistered Office of Company for inspection during its business hours upto the date of AGMand any member interested in obtaining such information may directly write to the CompanySecretary of Company and the same shall be provided on such request.
15. AUDITORS AND THEIR REPORT:
The matters related to Auditors and their Reports are as under:
a. STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s B. L. Dasharda & Associates CharteredAccountants Mumbai (F. R. No. 112615W) the Statutory Auditors of Company has beenrecommended by Board for their re-appointment as Statutory Auditors of Company to holdoffice upto the conclusion of the next Annual General Meeting. M/s B. L. Dasharda &Associates being their last term with the Company have confirmed their eligibility tothe effect that if their re-appointment is made by members in the ensuing Annual GeneralMeeting it shall be within the prescribed limits and they are not disqualified for suchre-appointment.
Necessary resolution for re-appointment of the said Auditors is included in the Noticeof AGM for seeking approval of members.
b. AUDIT REPORT:
The observations made by the Statutory Auditors in their Audit Report read with therelevant notes thereof as stated in the Notes to the Audited Financial Statement ofCompany for the Financial Year ended 31st March 2016 are self explanatory andbeing devoid of any reservation(s) qualification(s) or adverse remark(s) etc does notcall for any further information(s)/ explanation(s) or comments from the Board underSection 134(3)(f)(i) of the Companies Act 2013.
c. SECRETARIAL AUDITORS:
In terms of the provisions of Section 204 of Companies Act 2013 M/s Rathi andAssociates Practicing Company Secretaries Mumbai have been re-appointed by the Board asSecretarial Auditors of Company for the financial year 2016-17.
d. SECRETARIAL AUDIT REPORT:
Secretarial Audit Report as issued by the Secretarial Auditors in Form No. MR-3 forthe financial year 2015-16 is annexed herewith vide Annexure VI and forms part of thisBoard Report. The said Secretarial Audit Report being devoid of any reservation(s)adverse remark(s) and qualification(s) etc. does not call for any further explanation(s)/information or comment(s) from the Board under Section 134(3) (f)(ii) of the CompaniesAct 2013.
e. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act 2013 the Board hasapproved the reappointment of M/s Joshi Apte & Associates Cost Accountants Pune(Firm Registration No. 000240) as Cost Auditors of Company for Financial Year 2016-17 forcarrying out the audit of Cost Records of the Company for an Annual Audit Fee/Remuneration of ' 75000/-.
Necessary resolution for ratification of remuneration of Cost Auditors is included inthe Notice of AGM for seeking approval of members.
16. OTHER DISCLOSURES:
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) and 92(3) of the Companies Act 2013(read with Rule 12 of the Companies [Management and Administration] Rules 2014) theextracts of Annual Return is annexed herewith vide Annexure VII in Form No. MGT-9 andforms an integral part of this Board Report.
b. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The particulars as required pursuant to the provisions of Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 with respectto conservation of energy technology absorption foreign exchange earnings and outgo etc.are annexed herewith vide Annexure VIII and forms part of this Board Report.
17. GENERAL DISCLOSURES:
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were
no transactions/ activities pertaining to these matters during financial year 2015-16:
a. Details relating to deposits covered under Chapter V of the Companies Act 2013.
b. Issue of equity shares with differential rights as to dividend voting or otherwise.
c. Issue of shares (including sweat equity shares and ESOS) to employees of the Companyunder any scheme.
d. Instances with respect to voting rights not exercised directly by employees of theCompany.
Your Directors further state that:
e. Neither the Managing Director nor the Whole-time Director of the Company receive anyremuneration or commission from any other Company.
f. No significant or material orders were passed by the Regulators or Courts orTribunals which can impact the going concern status and Company's operations in future.
g. Except as disclosed elsewhere in this report viz. in-principal approval of Boardobtained for establishing a port based plant upto production capacity of 120 KTPA andaugmentation of installed production capacity of Company from 51 KTPA to 80 KTPA nomaterial changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and date of this AnnualReport.
h. There has been no change in the nature of business of company during F.Y. 2015-16.
i. Pursuant to the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 no case pertaining to sexual harassment at workplacehas been reported to company during F.Y. 2015-16.
j. There was no revision of the financial statements of company related to FinancialYear 2015-16.
k. Statement pursuant to rule 5(2) and 5(3) of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is not applicable to the Company as there were nosuch employee during financial year 2015-16 whose salary could trigger the threshold limitof 60 Lacs per annum or 5 Lacs per month.
18. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 ("the Act") and inrelation to the audited Annual
Financial Statement of Company for the year ended 31st March 2016 theBoard of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;
b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of Company as at 31st March 2016and of the profit of Company for that year;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets ofCompany and for preventing and detecting fraud and other irregularities;
d. the annual accounts of Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by Company and thatsuch internal financial controls are adequate and were operating effectively; and
f. proper systems have been devised to ensure compliance with the provisions of lawsapplicable to the company and that such systems were adequate and operating effectively
19. ACKNOWLEDGEMENT AND APPRECIATION:
Your Directors would like to place their heartfelt thanks and sincere appreciation forthe assistance coordination and cooperation received from the Banks GovernmentStatutory Authorities Customers Vendors and all Stakeholders who extended their constantpatronage and support to Company in its growth as ever.
Your Directors would like to express their sincere appreciation to Company's employeesfor their hard work dedication allegiance commitment sincerity and valuablecontribution etc. made in the growth and performance of Company which helped the Companyto achieve a growth of around 209% in its Profit after Tax (PAT) during financial year2015-16.
Your Directors further place on record their deep appreciation for the able stewardshipof MD of Company Mr. B. M. Bhansali in all sphere of activities of Company includingongoing expansion programmes etc. Your Directors place on record their deep appreciationfor Mr. Jayesh B. Bhansali Executive Director & CFO of Company also for his excellentefforts and contribution in the overall operational/ performance growth of Company andsteering ahead towards its outstanding success.
| ||For and on Behalf of the Board |
| ||M. C. Gupta |
|Place : Mumbai ||Chairman |
|Date : 28th May 2016 ||(DIN:01362556) |
|Registered Office Address: || |
|Bhansali House A-5 Off Veera Desai Road || |
|Andheri (West) Mumbai - 400 053 || |
|CIN : L27100MH1984PLC032637 || |
|Tel No : 022 - 2873 1779 - 84 || |
|Fax No : 022 - 2673 1796 || |
|Mail : email@example.com || |
|website : www.bhansaliabs.com || |
REPORT ON CSR ACTIVITIES UNDERTAKEN DURING F. Y. 2015-16
1. A brief outline of the Company's CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects and programs:
The Company has adopted CSR Policy which encompasses wide range of activitiesenumerated vide Schedule VII to the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 which is primarily comprised of:
2. Happy Childhood
5. Hunger eradication
6. Environmental Sustainability
7. Promoting Gender Equality
8. Gender upliftment for deserving sections of society
9. Sports Promotion etc.
The Company is inclined at present to undertake CSR activities pertaining to promotionof education art and culture imparting of vocational training and also to extend help todeserving and needy students and upgrade the educational standards in vicinity of its oneof the factory/ plant located in Satnoor Madhya Pradesh which enables the inhabitants ofneighboring areas to be immensely benefited by way of availing good education for theirchildren. Company's CSR policy is available athttp://bhansaliabs.com/investor/corporate-social-responsibilitv-csr-policv
2. The composition of the CSR Committee: 1. Mr. M. C. Gupta - Chairman
2. Mr. B. M. Bhansali - Member
3. Mr. Jayesh B. Bhansali - Member
3. Average Net Profit of the Company for last three financial years: ' 389.33 Lacs
4. Prescribed CSR Expenditure (2% of the amount as per item 3 above): ' 7.79 Lacs
5. Details of CSR spent during the financial year;
(a) Total amount to be spent for the financial year: ' 7.79 Lacs
(b) Amount unspent if any: The unspent CSR amount of ' 4.60 Lacs was determined to bespent not later than 31st May 2016 in any case in the projects/activitiessuitably identified related to education etc.
(c) Manner in which the amount spent during the financial year is detailed below:
|(1) ||(2) ||(3) ||(4) ||(5) ||(6) ||(7) ||(8) |
|Sr. No. ||CSR Project or activity identified ||Sector ||Location ||Amount outlay (budget) project or programs wise ||Amount spent on the projects or programs Sub heads: (1) Direct Expenditure on projects and programs (2) Overheads ||Cumulative expenditure upto the reporting period ||Amount spent: Direct or through implementing agency |
|1. ||Promotion of Art and Culture ||Art and Culture ||Agra ||' 1.00 Lac ||' 1.00 Lac ||' 1.00 Lac ||Direct |
|2. ||Educational activity ||Education ||Satnoor M.P ||' 6.79 Lacs ||' 2.19 Lacs ||' 2.19 Lacs ||Direct |
| ||TOTAL || || ||' 7.79 Lacs ||' 3.19 Lacs ||' 3.19 Lacs || |
6. Incase the company has failed to spend the two percent of the average net profit ofthe last three financial years or any part thereof the Company shall provide reasons fornot spending the amount in its Board Report:
The Company is vigilant of its responsibilities towards the society as a corporatecitizen. During the financial year 2015-16 Company was required to spend ' 7.79 Lacstowards its CSR activities out of which ' 3.19 Lacs stood already spent and remaining '4.60 lacs was determined to spend not later than 31st May 2016 in any case onthe projects/ activities as may be suitably identified related to education etc.
7. A responsibility statement of the CSR Committee that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and policy of the Company:
BEPL CSR Projects were designed implemented and periodically monitored based on needand CSR policy of the Company being in sync with the statutory requirements.
|B. M. Bhansali ||M. C. Gupta |
|(CSR Committee Member) ||(CSR Committee Chairman) |
|Place: Mumbai || |
|Date: 28th May 2016 || |
ANNEXURE - IV
STATEMENT ON MANNER OF PERFORMANCE EVALUATION
The Nomination and Remuneration Committee (NRC) has outlined the criteria forperformance evaluation of individual Director(s) Chairman Committee(s) and the Board asa whole. The aforesaid criteria of performance evaluation and the manner in which formalannual evaluation of individual Director(s) Chairman Committee(s) and the Board as awhole was carried out as stated hereunder:
I. Process of Performance Evaluation:
i. In the meeting of Independent Directors held on 18th March 2016 theIndependent Directors evaluated the performance of Non-Independent Directors i.e. ManagingDirector and Executive Director of Company and the Board as a whole including theChairman and Independent Directors of the Company taking into account the views of WholeTime Director(s) / Executive Director(s) wherever applicable/ needed and submitted theirEvaluation Report/ minutes to the NRC.
ii. Performance evaluation of the Committees of Board was done by the Board ofDirectors.
iii. The NRC reviewed the Evaluation Report/ minutes as received by the Board Membersand on the basis of same; it recommended the Board that the term of appointment ofIndependent Directors as well as Whole time Directors /Executive Directors were worthy tobe continued /extended.
II. Performance Evaluation Criteria:
While making the performance evaluations the following criteria were taken intoconsideration:
a. In case of Board:
Composition and Diversity Committees of Board Board and Committee Meetings InductionProgramme Team Work Board Procedures Performance of Company and its growth patternSuccession Planning quality of discussion at Board Meetings understanding of theBusiness Model of Company bringing quality decisions and suggestions related to theaffairs of Company and participation in its decision process kind of interaction takingplace amongst Board members strategy and growth driven discussions Risk Management andFinancial Controls etc.
b. In case of Independent Directors:
Experience and competencies positive attributes independence attendance at meetingsand kind of participation in discussions on the business(es) in order to bring outindependent judgment adherence with good Corporate Governance practices and Code ofConduct safeguarding of minority shareholders interest and suggestions/ guidance withregard to the operational performance of the Company performance of specific duties andobligations etc.
c. In case of Non Executive Directors and Chairman:
Attendance at various meetings held and meaningful participation and contribution inthe decisions of Board business planning/ policies and success rate processimprovements sincerity and dedication responsibility towards stakeholders adherencewith good Corporate Governance practices and Code of Conduct overall contribution inbusiness affairs of Company performance of specific duties and obligations etc.
d. In case of Committees:
Composition and balance of skill sets frequency of meetings overall contribution inthe respective affairs of committee flow of communication interaction with Board(whenever required) justification related to the role of Committee members and relatedprocedures etc.
The Board was satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company and propensity for steeringahead the overall activities in set direction for attaining consistent growth of Company.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
In the meeting of Board of Directors held on 17th October 2015 at Abu RoadPlant of Company a familiarization Programme was conducted for Independent Directors tofamiliarize them with the Company their roles rights responsibilities in the Companynature of the industry in which the Company operates business model of the Company etc.The detail of aforesaid familiarization Programme conducted and related matters are put upon the website of the Company at the link:http://bhansaliabs.com/investor/miscellaneous/familarisation-programme/.
ANNEXURE - V
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014.
(i) The percentage increase in remuneration of each Director Chief Financial Officer(CFO) and Company Secretary during the financial year 2015-16 ratio of the remunerationof each Director to the median remuneration of the employees of the Company for thefinancial year 2015-16 and the comparison of remuneration of each Key Managerial Personnel(KMP) against the performance of the Company are as under:
|SN ||Name of Director/ KMP and Designation ||Remuneration of Director/ KMPs for financial year 2015-16 (Rs. in Lacs) ||% increase in Remuneration in the Financial Year 2015-16 ||Ratio of remuneration of each Director to median remuneration of employees ||Comparison of the Remuneration of the KMPs against the performance of the Company |
|1. ||Mr. B. M. Bhansali (Managing Director) ||*117.28 ||170.67% (inclusive of 5% commission on Profit) ||50.31 ||Profit before Tax (PBT) increased by about 169.39% and Profit after Tax (PAT) increased by about 209.08% in Financial year 2015-16. |
|2. ||Mr. Jayesh B. Bhansali (Executive Director & CFO) ||60.00 ||67.04% ||25.74 || |
|3. ||Mr. D. N. Mishra [VP(Legal) & Company Secretary] ||34.78 ||8.21% ||Not Applicable || |
| ||TOTAL ||212.06 || || || |
* Includes ' 19.72 Lacs salary and ' 97.56 Lacs commission on profit of company (viz.5% commission on Net Profit) as per terms of his employment with company.
(ii) The median remuneration of employees of the Company (including KMPs) during thefinancial year 2015-16 was ' 233136.
(iii) In the financial year 2015-16 there was an increase of 10.14% in the medianremuneration of employees (including KMPs);
(iv) There were 466 permanent employees on the rolls of Company as on 31stMarch 2016;
(v) Relationship between average increase in remuneration of employees (including KMPs)and Company performance: -
The Profit before Tax (PBT) for the financial year ended 31st March 2016increased by about 169.39% (viz. from ' 8.68 Crores to ' 23.39 Crores) and Profit afterTax (PAT) increased by about 209.08% during the same period (viz. from ' 5.40 Crores to '16.69 Crores) whereas the increase in median remuneration was 10.14%. The averageincrease in median remuneration was in line with the performance of the Company marketdynamics and to keep the employees motivated for better performance in future to achieveorganization's growth objectives/ goals.
(vi) Variations in the market capitalization of the Company price earning ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer:
a. Market Capitalization and PE Ratio:
(Taken at closing price of respective Financial Years)
| ||As on 31st March 2016 (Current F.Y.) ||As on 31st March 2015 (Previous F.Y.) |
|Market Capitalization ||BSE: ' 298.63 Crores NSE: ' 296. 97 Crores ||BSE: ' 351.72 Crores NSE: ' 364.99 Crores |
|Price Earning Ratio ||BSE: 17.82 times NSE: 17.72 times ||BSE: 64.24 times NSE: 66.67 times |
b. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:
The Company's First Public Issue (IPO) came in 1989 and amount of ' 10/- per shareinvested in that IPO would be worth ' 180 and ' 179 at BSE and NSE respectively on 31stMarch 2016 indicating a Compounded Annual Growth Rate (CAGR) of 11.30% and 11.28% at BSEand NSE respectively. This is excluding the dividend accrued thereon and received by themembers whenever dividend declared by the Company.
(vii) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2015-16 was 3.56% whereas theincrease in the Managerial Personnel Remuneration for the same fiscal was 90.37%.Considering the outstanding performance as well as Key Responsibility Areas (KRAs) of theKMPs the increase in the remuneration of KMPs is considered appropriate.
(viii) Company does not have any variable component system of remuneration for itsEmployee(s)/ Director(s).
(ix) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but received remuneration in excess of the highest paiddirector during the F. Y. 2015-16:
(x) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyof the Company related to its Directors and Key Managerial Personnel.
| ||For and on behalf of the Board |
| ||M. C. Gupta |
|Place : Mumbai ||Chairman |
|Date : 28th May 2016 ||DIN:01362556 |
SECRETARIAL AUDIT REPORT
[Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
FOR THE FINANCIAL YEAR ENDED 31st MARCH 2016
BHANSALI ENGINEERING POLYMERS LIMITED
Bhansali House A-5 Off. Veera Desai Road
Andheri (West) Mumbai - 400 053
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Bhansali Engineering PolymersLimited (hereinafter called "the Company"). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.
Based on our verification of the Company's Books Papers Minute Books Forms andReturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the company hasduring the financial year ended on 31st March 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance mechanism in place to the extent in the manner and subject to thereporting made hereinafter:
1. We have examined the books papers minute books forms and returns filed and otherrecords maintained by Bhansali Engineering Polymers Limited ("the Company") asgiven in the Annexure - A for the financial year ended on 31st March 2016according to the provisions of:
(i) The Companies Act 2013 ('the Act') and the rules made there under to the extentapplicable;
(ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules made thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;
c. The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 which came into effect from 1st December 2015;
2. Provisions of the following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act 1992 ('SEBI Act') were not applicable to theCompany under the financial year under report:-
a. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
b. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009;
c. The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
d. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
e. The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014;
3. We further report that having regard to the compliance system prevailing in theCompany and on examination of the relevant documents and records in pursuance thereof ontest- check basis the Company has complied with other Acts Laws and Regulationsapplicable specifically to the Company as per the list given in Annexure - B.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards -1 and Secretarial Standards -2 issued by The Institute ofCompany Secretaries of India under the provisions of Companies Act 2013 and
(ii) The Listing Agreement entered into by the Company with the Stock Exchange(s)(effective from 1st December 2015).
During the financial period under report the Company has complied with the provisionsof the Act Rules Regulations Guidelines Standards etc. mentioned above.
We further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors NonExecutive Directors and Independent Directors. No changes in thecomposition of the Board of Directors took place during the financial year under report.
Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members' views if any arecaptured and recorded as part of the minutes.
Based on the records and process explained to us for compliances under the provisionsof other specific acts applicable to the Company we report that there are adequatesystems and processes commensurate with the size and operations of the Company to monitorand ensure compliance with applicable laws rules regulations and guidelines.
We further report that during the year under report the Company has not undertakenevent/action having a major bearing on the Company's affairs in pursuance of the abovereferred laws rules regulations guidelines standards etc.
| ||For RATH I & ASSOCIATES |
| ||COMPANY SECRETARIES |
| ||HIMANSHU S. KAMDAR |
|Place: Mumbai ||PARTNER |
|Dated: 19th May 2016 ||FCS 5171 |
List of documents verified
1. Memorandum & Articles of Association of the Company;
2. Annual Report for the financial year ended 31st March 2015;
3. Minutes of the meetings of the Board of Directors Audit Committee Nomination &Remuneration Committee Stakeholders' Relationship Committee and Corporate SocialResponsibility Committee held during the financial year along with Attendance Register;
4. Minutes of General Body Meetings held during the financial year under report;
5. Statutory Registers viz.
- Register of Directors & Key Managerial Personnel and their Shareholding
- Register of Contracts with Related Party and Contracts and Bodies etc. in whichDirectors' are interested
- Register of loans guarantees and security and acquisition made by the Company
- Register of Charges
- Register of Renewed and Duplicate Share Certificate.
6. Agenda papers submitted to all the Directors/members for the Board meeting and theCommittee Meetings;
7. Declarations received from the Directors of the Company pursuant to the provisionsof 164 184 and 149(7) of the Companies Act 2013 and respective provisions of SEBI (LODR)Regulations 2015;
8. Intimations received from Directors and Designated Employees under the Internal Codefor Prevention of Insider Trading;
9. E-Forms filed by the Company from time to time under applicable provisions of theCompanies Act 2013 and attachments thereof during the financial year under report.
10. Intimations/documents/reports/returns filed with the Stock Exchanges pursuant tothe provisions of Listing Agreements with the stock exchanges and the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 which came into effect from 1st December 2015 during the financial yearunder report.
11. Documents related to payments of dividend made to its shareholders during thefinancial year under report.
12. Various Policies made under the Companies Act 2013 Listing Agreements with thestock exchanges and the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 which came into effect from 1st December 2015.
13. Internal Code of Conduct for prevention of Insider Trading byEmployees/Directors/Designated Persons of the Company;
The list of other laws which are specifically applicable to the Company is as below:-
1. The Water (Prevention and Control of Pollution) Act and rules made thereunder;
2. The Air (Prevention and Control of Pollution) Act 1981 and rules made thereunder;
3. The Environment (Protection) Act 1986 and rules made thereunder;
4. The Water (Prevention and Control of Pollution) Cess Act 1977 and rules madethereunder;
5. The Public Liability Insurance Act 1991 and rules made thereunder;
6. Explosives Act 1884 and rules made thereunder;
7. The Petroleum Act 1934 and rules made thereunder; and
8. The Standards of Weights and Measures Act 1976 and rules made thereunder.
DISCLOSURE PURSUANT TO SECTION 134(3) (m) OF THE COMPANIES ACT 2013 READ WITH RULE 8OF THE COMPANIES (ACCOUNTS) RULES 2014 (A) Conservation of Energy:
|Steps taken or impact on conservation of energy ||1. Specific Fuel consumption has been reduced because of increased throughput of SAN plant from 40Kg/MT to 33Kg/MT |
| ||2. Energy efficient blowers have been provided for ABS conveying resulting in reduced energy consumption - 1.4KWH/MT (as compared to existing ones - 5KWH/MT) consequent upon this there is saving in energy cost of ' 8 Lac per year based on full capacity utilization. |
| ||3. The Energy cost of SAN conveying is reduced per MT by better capacity utilization of the SAN conveying system. |
| ||4. Energy cost of Vacuum System of extrusion has come down from 7.43KWH/MT to 4KWH/MT |
| ||5. Company's preventive maintenance programme was reviewed and strengthened to ensure uninterrupted production and thereby reducing utility consumption. |
| ||6. CT Fans which were always running on full load has been provided with VFD which enables optimum power consumption by the fan just fit to maintain the cooling water temperature. |
| ||7. Old Air Conditioners (16 Nos.) were replaced by advance technology inverter type Air Conditioners power consumption in which is automatically adjusted as load varies resulting in substantial saving in energy. |
| ||8. CFLs are being used in lighting system in Guest house & offices resulting saving in power consumption. |
| ||9. VFD Installed in FBC to reduce energy. |
| ||10. Automatic condensate recovery system is installed to utilize the energy of hot condensate and thereby saving in energy. |
| ||11. Cooling media changed from Chilled water to Cooling Water resulting in substantial energy saving. |
|Steps taken by the company for utilizing alternate resources of energy ||Maximum utilization of traded power was carried out to reduce cost of energy and REC certificate(s) were also purchased to encourage renewable sources of energy |
|Capital investment on energy conservation equipment ||N.A. |
(B) Technology absorption:
|Efforts made towards technology absorption || |
|Benefits derived like product improvement Cost reduction product development or import substitution ||1. Super high flow SAN 180MFR was developed which will enable auto industries to optimize the thicknesses of ABS components if design permits and reduce the overall pricing. |
| ||2. Average Electricity used during F.Y. 2014-15 was 675.56 KWH/MT HRG while in 2015-16 it was 659.97 KWH/MT HRG. Thus saving in electricity 15.59 KWH/MT HRG viz 2.30%. |
| ||3. HRG60I with 2 AO component system in place of 4 AO component system was executed. This resulted in saving of Rs.868/MT of HRG60I and Rs 382/MT of HRG30S |
| ||4. New products were introduced to cater to auto industry requirements. |
|In case of imported technology (imported during the last three years reckoned from beginning of the financial year): || |
|Details of technology imported ||NIL |
|Year of import ||N/A |
|Whether the technology has been fully absorbed ||N/A |
|If not fully absorbed areas where absorption has not taken place and the reasons thereof ||N/A |
|Expenditure incurred on Research and Development ||N/A |
Actual Foreign Exchange Earnings & outgo during F.Y. 2015-2016:
|Foreign Exchange earning ||: ' 47.64 Lacs |
|Foreign Exchange Outgo ||: ' 35160.61 Lacs |