26 Apr 2017 | Livemint.com

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Bhansali Engineering Polymers Ltd.

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  • BSE Code: 500052
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  • NSE Code: BEPL
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Bhansali Engineering Polymers Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

The Board of Directors present the Company's Report on Corporate Governance for the Financial Year 2014-15 as hereunder, pursuant to the requirements of Clause 49 of the Listing Agreement as entered into with the Stock Exchange(s) and other regulations as may be applicable.

(A) Company's philosophy on Code of Corporate Governance:

The Company is fully committed to comply with the principles of Corporate Governance and continues to practice the same in its business practices. The Company believes that proper Corporate Governance generates goodwill and trust among the stakeholders of company viz. business partners, customers, investors etc. and facilitates effective management and control of business and generates optimum returns for the investors. In addition to the basic governance issues, the Company lays significant emphasis on the principles of trusteeship, transparency, empowerment, accountability and integrity.

During the year under review, the Board continued its pursuit by adopting appropriate corporate strategies and prudent business plans. Adequate monitoring system was followed to safeguard against major risk and to ensure implementation of policies and procedures to satisfy its social, legal and ethical responsibilities.

(B) Board of Directors:

In terms of the Company's Corporate Governance Policy, all Statutory and other significant and material information are placed before the Board from time to time, to enable them to discharge the responsibilities of closely monitoring the activities of the Company with sound and ethical business practices.

i) Composition of the Board:

The composition of the Board of Directors of the Company is in conformity with Clause 49 of the Listing Agreement. The total strength of the Company's Board is 6 (Six) Directors out of which 4 (Four) Directors are Non Executive - Independent Directors and the remaining two Directors are Managing Director and Executive Director. The Company also complied with the requirement of Section 149(1) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, by appointing a Woman Director on its Board.

The Chairman of the Board is a Non Executive - Independent Director. All the members of the Board are competent and have the expertise in their respective disciplines to deal with the management functions of the company.

Note:

a. The above Directorships exclude the Directorships held in Private Limited Companies, Foreign Companies and Companies under Section 8 of the Companies Act, 2013.

b. The above Committees of Directors comprise of the Audit Committee and Stakeholder's Relationship Committee only.

c. Mr. B. M. Bhansali (MD) is father of Mr. Jayesh B. Bhansali (ED & CFO).

d. All the Non-Executive Directors are Independent to each other.

e. *Mr. Dilip Kumar, Chief Commissioner of Income Tax (Retd.), was appointed by the Board as an Additional Director (Non Executive-Independent Category) of the Company w.e.f. 29th May, 2014 and thereafter the Shareholders appointed him as an Independent Director (Non-Executive) at Company's previous Annual General Meeting held on 27th September, 2014.

f. #Ms. Jasmine F. Batliwalla, General Counsel, HSBC (Retd.) was appointed by the Board as an Additional Director (Non Executive-Independent Category) of the Company w.e.f. 30th March, 2015.

g. The Independent Directors do not serve as Independent Director in more than 7 listed companies and the Whole time Director does not serve as the Whole time Director in more than 3 listed companies.

h. None of the Independent Director is a member of more than 10 Committees or act as the Chairman of more than 5 Committees across all companies in which he/ she is a member.

ii) Board Meetings and attendance of Directors:

The Board meeting is conducted at least once in every quarter to consider amongst other businesses, the performance of the Company and Quarterly Financial Results. The Board also meets to consider the other necessary matters from time to time. Agenda of the business to be transacted at the Board Meeting alongwith explanatory notes thereto are drafted and circulated well in advance to the Board of Directors of the Company. Every Board Member is free to suggest the inclusion of any item on the agenda.

(D) Committees of the Board:

There were following 4 (Four) existing Committees of the Board of Directors as at the end of F.Y. 2014-15. The Board is responsible for the constitution, co-opting and fixing the terms of reference for members of the Committee.

(i) Audit Committee.

(ii) Nomination and Remuneration Committee (earlier known as 'Remuneration Committee').

(iii) Stakeholders' Relationship Committee (earlier known as Shareholders/Investors Grievance Committee).

(iv) Corporate Social Responsibility (CSR) Committee.

The requirement to form a Risk Management Committee, being not applicable to the Company pursuant to SEBI Circular dated 17th April, 2014, as it did not fall in the category of top 100 listed companies by market capitalization as at the end of immediate previous Financial Year; the Risk Management Committee constituted earlier has been dissolved w.e.f. 31st March, 2015.

However other necessary disclosures with regard to risk management of Company have been made in its Board's Report as annexed to this Annual Report and forming part thereof.

All members of the Committee are Independent Directors except Mr. Jayesh B. Bhansali who is Promoter, Executive Director & Chief Financial Officer of the Company. Mr. M. C. Gupta is the Chairman of the Audit Committee. All the Members of the Audit Committee are capable of analyzing Financial Statements of company. The Statutory Auditors are generally invited to the Audit Committee Meetings.

In addition to the above, executives of Accounts Department, Finance Department, Corporate Secretarial Department and Internal Audit Department and representatives of internal auditors are invited in Audit Committee Meetings as and when required. The Committee members are free to invite any other concerned officer of the Company in the meeting.

Terms of Reference of Audit Committee:

Terms of reference of Audit Committee are wide enough covering all the matters specified for Audit Committee under Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013. The terms of reference of the Audit Committee inter alia include following:

A. Powers of Audit Committee

The Audit Committee shall have following powers:

i. To investigate any activity within its terms of reference.

ii. To seek information from any employee.

iii. To obtain outside legal or other professional advice.

iv. To secure attendance of outsiders with relevant expertise, if it considers necessary.

B. Role of Audit Committee The role of the Audit Committee shall include the following:

1) 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;

2) Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4) Reviewing, with the management, the annual financial statements and auditor's 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 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 any related party transactions; and g) Qualifications in the draft audit report.

5) Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

6) Reviewing, with the management, the statement of uses/ application of funds raised through an issue (public issue, rights issue, preferential issue, etc., if any), the statement of funds utilized for purposes other than those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

7) Review and monitor the auditor's independence and performance, and effectiveness of audit process;

8) Approval or any subsequent modification of transactions of the company with related parties;

9) Scrutiny of inter-corporate loans and investments, if any;

10) Valuation of undertakings or assets of the company, wherever it is necessary;

11) Evaluation of internal financial controls and risk management systems;

12) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13) 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, whenever required;

14) Discussion with internal auditors of any significant findings and follow up thereon;

15) 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;

16) Discussion with statutory auditors before the audit commences, whenever required, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17) 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 etc., if any;

18) To review the functioning of the Whistle Blower mechanism;

19) Approval of appointment of CFO (i.e. the Whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background etc. of the candidate;

20) Carry out any other function as is referred by the Board from time to time and/ or enforced by any statutory notification/ amendment or modification as may be applicable; and

21) Perform such other functions as may be necessary or appropriate for the performance of its duties.

C. Review of information by Audit Committee

The Audit Committee shall mandatorily review the following information:

1) Management discussion and analysis of financial condition and results of operations;

2) Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;

3) Management letters/letters of internal control weaknesses issued by the statutory auditors;

4) Internal audit reports relating to internal control weaknesses; and

5) The appointment, removal and terms of remuneration of the Internal Auditor shall be subject to review by the Audit Committee.

The Audit Committee acts as a link between the Management, Statutory Auditors, Internal Auditors and the Board of Directors and oversees the financial reporting process.

Mr. D. N. Mishra, Company Secretary, functions as Secretary to the Audit Committee.

(ii) Nomination and Remuneration Committee:

The name of the erstwhile Remuneration Committee of the Company was changed to Nomination and Remuneration Committee w.e.f. 29th May, 2014 pursuant to the requirement of the provision of Section 178 of the Companies Act, 2013.

The broad terms of reference of the Nomination and Remuneration Committee are as under:

• Recommend to the Board the set up and composition of the Board and its Committees including the "formulation of the criteria for determining qualifications, suitable experience, positive attributes and independence of a Director". The Committee will consider periodically reviewing the composition of the Board with the objective of achieving an optimum balance of size, skills, independence, knowledge, age, gender and experience;

• Recommend to the Board the appointment or reappointment of Directors.

• Devise a policy on Board diversity;

• Recommend to the Board appointment of Key Managerial Personnel ("KMP" as defined by the Act) and Senior Management Personnel of the Company, whenever required;

• Carry out evaluation of every Director's performance and support the Board and Independent Directors in evaluation of the performance of the Board, its Committees and Individual Directors. This shall include "formulation of criteria for evaluation of Independent Directors and the Board";

• Recommend to the Board the remuneration policy for Directors, Senior Management/ Key Managerial Personnel as may be deemed fit and suitable;

• Recommend to the Board the remuneration payable to the Directors and oversee the remuneration of Senior Management/ Key Managerial Personnel of the Company being reasonable and competitive, considering the prevalent compensation packages so as to enable the Company to recruit and retain suitable talent/ staff in such capacity motivating them for rendering their quality services to carry the business affairs of the Company at its optimum level;

• Oversee familiarization programme for Directors;

• Oversee the human resource matters including rewards and recognition etc.;

• Carry out any other function as is referred by the Board from time to time and/ or enforced by any statutory notification/ amendment or modification as may be applicable; and

• Perform such other functions as may be necessary or appropriate for the performance of its duties.

Remuneration Policy:

The Non-Executive Directors of the Company are paid sitting fees for each meeting of the Board attended by them @ Rs. 20,000/- and for each meeting of its Audit Committee @ Rs. 15,000/- and for other Committee(s), as may be required. The appointment/ re-appointment and remuneration payable to Executive Directors, Key Managerial Personnel(s) and Senior Management persons are formulated by the Nomination and Remuneration Committee considering parameters based on the Nomination and Remuneration Policy of the Company.

(iii) Stakeholders' Relationship Committee:

The name of the erstwhile Shareholders/ Investors Grievance Committee of the Company was changed to Stakeholders' Relationship Committee w.e.f. 29th May, 2014 pursuant to the requirement of the provision of Section 178(5) of the Companies Act, 2013.

The broad terms of reference of the Stakeholders' Relationship Committee are as under:

Dealing with various activities related to securities of Company pertaining to transfer/ transmission/ transposition of physical shares, non-receipt of Annual Report and Dividend, issue of duplicate share certificates, monitoring and resolving member's grievances, name deletion, Insider Trading Prohibitions as per respective regulation(s), attending demat/ remat requests etc. in co-ordination with its Registrar and Share Transfer Agent (RTA), M/s Link Intime India Private Limited. On basis of periodical reports received from RTA on aforesaid matters, as well as on its own instance, whenever required, the Committee reviews/ deals with such activities.

In addition to above, the scope of activities of Committee also includes following:

• Oversee the performance of the Company's Registrar and Share Transfer Agent.

• Carry out any other function as is referred by the Board from time to time and / or enforced by any statutory notification / amendment or modification as may be applicable

• Perform such other functions as may be necessary or appropriate for the performance of its duties

During the year under review, the Company had received 19 Investors' Grievances and all of these have been resolved. No grievances were pending as on 31st March, 2015.

(iv) Corporate Social Responsibility (CSR) Committee:

In compliance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors of the Company has constituted a Corporate Social Responsibility (CSR) Committee during the year under review.

The role of the Committee is to formulate and recommend to the Board a Corporate Social Responsibility Policy, recommend the amount of yearly CSR expenditure, monitor the CSR projects undertaken by the Company from time to time and ensure effective implementation and functioning of aforesaid Corporate Social Responsibility Policy.

However, no meeting of CSR Committee took place during the year, as the threshold limit prescribed for applicability of Section 135 did not trigger in the case of Company.

(E) Meeting of Independent Directors:

Pursuant to the requirement under Section 149 of the Companies Act, 2013 ("the Act") read with Schedule IV to the Act and Clause 49 II (B)(6) of the Listing Agreement entered into with the Stock Exchanges, the Meeting of Independent Directors of the Company was held on 7th February, 2015, inter-alia to review the performance of Non-Independent Directors and Board as a whole, the Chairperson of the Company and to assess the quality, quantity and flow of information between the Management and the Board. Further during familiarization programme, the Independent Directors were briefed on their roles, rights and responsibilities towards the Company, the nature of industry in which the Company operates and its business model etc.

(H) Disclosures:

(i) Related Party Transactions:

During the year under review, there was no materially significant related party transactions entered into by the company with its Promoters, Directors, Key Managerial Personnel(s) or management or relatives etc. which had potential conflict with the interest of company at large. Transactions entered into with the related parties, as per respective Accounting Standards, are disclosed vide Note No. 26 of the Audited Financial Statement of company forming part of this Annual Report.

(ii) Compliances by the Company:

The Company has made due compliances and no penalties/ strictures have been imposed by the Stock Exchange(s), SEBI or any other Statutory Authority on any matter related to capital markets, during the last three years/period.

(iii) Whistle Blower Policy and access to the Audit Committee:

The Company formulated Whistle Blower/ Vigil Mechanism Policy on 27th September, 2014. The Director(s) and employee(s) have open access to the Chairman of the Audit Committee, whenever exceptionally required, in connection with any grievance which is concerned with unethical behavior, frauds and other illegitimate activities in company. The Whistle Blower Policy/ Vigil Mechanism Policy adopted by the Company is available on the website of the Company i.e. www.bhansaliabs.com  Company did not receive any complaint from its Director(s)/ employee(s) under its aforesaid Whistle Blower/ Vigil Mechanism Policy during the financial year 2014-15.

(iv) Code for Prevention of Insider Trading Practices:

In compliance with SEBI's regulation on prohibition and prevention of Insider Trading, the Company has established comprehensive Code of Conduct for prohibition and prevention of Insider Trading for its designated employees/ Directors and other persons to whom the said regulations of SEBI is applicable. The said Code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with the shares of the Company.

The Company has also established the Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information (UPSI). The said Code adopted by the Company is available on the website of the Company i.e. www.bhansaliabs.com

(v) Compliance with the Mandatory requirements and Implementation of the Non-mandatory requirements:

The Company has complied with the mandatory requirements of the Corporate Governance -T331-

viz. Clause 49 of Listing Agreement. The Company has not implemented the non-mandatory requirements as prescribed pursuant to Annexure XIII to Clause 49 of the Listing Agreement except having separate post for its Chairman and MD/ CEO at present.

(I) Means of Communication:

Financial Results

(i) The Quarterly Un-Audited Financial Results and Annual Audited Financial Results were published in Business Standard (English), Mumbai and Mumbai Tarun Bharat/ Lakshwadeep (Marathi), Mumbai. These results are also placed on the Company's website www.bhansaliabs.com

(ii) No presentations were made to the Institutional Investors or to analysts during the Financial Year 2014-15.

(iii) The Management Discussion and Analysis Report is separately attached and forms integral part of this Annual Report.

(J) Certificate on Corporate Governance :

As required under Clause 49 of the Listing Agreement, a certificate on compliance of conditions of Corporate Governance Code by the company as issued by M/s. B. L. Dasharda & Associates, its Statutory Auditors, is attached to the Board Report vide Annexure (II) (A) and forms an integral part of this Annual Report.

(K) CEO/ CFO Certification:

As required under Clause 49(IX) of the Listing Agreement, the CEO i.e. the Managing Director and CFO certification related to true and fair presentation of Annual financial statements of Company for the F.Y. 2014-15 is attached to the Board Report vide Annexure (II) (B) and forms an integral part of this Annual Report.

(L) Declaration on Compliance with Code of Conduct:

The Company has adopted a Code of Conduct for the Members of the Board and the Senior Management in accordance with the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. All the members of the Board and the Senior Management have affirmed compliance with the Code of Conduct as on 31st March, 2015 and a declaration to that effect signed by the Managing Director is attached to the Board Report vide Annexure (II) (C) and forms an integral part of this Annual Report.

(M) GENERAL INFORMATION FOR SHAREHOLDER(S):

Day, Date, Time and Venue of Annual General Meeting (AGM)

Saturday, 26th September, 2015, 11:45 A.M.

Venue : Walchand Hirachand Hall, 4th Floor, Indian Merchants' Chamber, Veer Nariman Road, Churchgate, Mumbai - 400020

ii. Financial Year

1st April, 2014 to 31st March, 2015

iii. Book Closure period

Friday, 18th September, 2015 to Saturday, 26th September, 2015

iv. Dividend Payment Date

The final dividend as proposed @ 10% viz. 10 paise per equity share, if approved in the ensuing AGM scheduled on 26th September, 2015, will be paid from 1st October, 2015 onwards.

v. Listing on Stock Exchange(s)

BSE Limited (BSE)

National Stock Exchange of India Limited (NSE)

The Listing Fees for the Financial Year 2015-16 have been paid to the aforesaid Stock Exchanges.

vi. Stock Code

BSE : 500052 NSE : BEPL-EQ

vii. Registrar and Share Transfer Agent

M/s Link Intime India Private Limited Unit: Bhansali Engineering Polymers Limited Address: C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai - 400 078. Tel.: 022 - 2596 3838 Fax: 022 - 2594 6969 Website: www.linkintime.co.in E-mail: rnt.helpdesk@linkintime.co.in

(i) Share Transfer System:

Shares lodged for transfer at the address of Registrar and Share Transfer Agent viz. M/s Link Intime India Private Limited are normally processed within 15 days from the date of lodgment, subject to the condition that documents are complete in all respect. All requests for dematerialization of shares are processed and the confirmation is given to the depositories within 21 days of its lodgment. Stakeholders' Relationship Committee of the Company is empowered to approve transfer of shares and other investor related matters; however these activities have been delegated upon the aforesaid Registrar and Share Transfer Agent of Company who deals with such activities. The grievances received from investors/ members and other miscellaneous correspondence including but not limited to change of address, dividend or other allied mandates etc. are also processed by the Registrar and Share Transfer Agent within 15 days of its lodgment.

(ii) Investor Services - Queries/Complaints during the financial year 2014-15:

The correspondence received and identified as investor complaints from shareholder(s) and/ or through Statutory/ Regulatory bodies in relation to their shareholding in company including loss of shares, Court/ Consumer Forum matters and also other matters requiring to report under Clause 41 of the Listing Agreement are duly dealt with. The details of investor complaints received and attended during the financial year 2014-15 are as under:

(vii) Dematerialization of Shares:

The Company has established connectivity with Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) for dematerialization of shares and the same are available in electronic segment under ISIN - INE922A01025. As on 31st March, 2015, total 15,84,51,170 Equity Shares representing 95.51% were in electronic form.

(viii) Exchange of Equity Share Certificate(s) of the Company:

Some of the Shareholders of the Company are still holding the old Share Certificates of the Company. The Shareholder(s) holding Share certificate(s) of Rs. 10/- per share of the Company are requested to surrender such original Share certificate(s) to M/s Link Intime India Pvt. Ltd., Registrar and Share Transfer Agent of the Company to obtain new share certificate(s) of Rs. 1/-each (pursuant to the Sub-division of Equity Shares of the Company on 23rd February, 2004).

(ix) Unclaimed Shares lying with the Company or its Registrar and Share Transfer Agent:

Pursuant to the circular issued by the Securities and Exchange Board of India, bearing No. CIR/ CFD/ DIL/ 10/ 2010 dated 16th December, 2010, the details with respect to the unclaimed shares lying with the Company and/or its Registrar and Share Transfer Agent are as follows:

(x) E-Voting:

E-voting period will start from Monday, 21st September, 2015 at 9.00 a.m. and will end on Friday, 25th September, 2015 at 5.00 p.m. Shareholders as on 19th September, 2015 (being 'cut-off date') shall be entitled to vote on the matters provided in the Notice of Annual General Meeting forming part of this Annual Report.

(xi) Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, conversion date and likely impact on equity:

There are no GDR/ ADR/ Warrant or any Convertible Instruments pending conversion or any other instruments likely to impact the equity share capital of the Company.

(xii) Plant Locations:

(i) Satnoor Plant : Bhansali Nagar, Village: Satnoor, Taluka: Sausar, Dist. Chhindwara, Madhya Pradesh - 480 108.

(ii) Abu Road Plant : Plot No. SP-138-143, Ambaji Industrial Area,

Abu Road, Dist.: Sirohi, Rajasthan - 307 026.

(xiii) Address for Correspondence:

A. Company's Registrar and Share Transfer Agent Address:

M/s Link Intime India Private Limited  Unit: Bhansali Engineering Polymers Limited  Address: C-13, Pannalal Silk Mills Compound,  L. B. S. Marg, Bhandup (West), Mumbai - 400 078. Tel.: 022 - 2596 3838  Fax: 022 - 2594 6969  Website: www.linkintime.co.in  E-mail: rnt.helpdesk@linkintime.co.in

B. Company's Registered Office Address:

Bhansali Engineering Polymers Limited  Address: Bhansali House, A-5, Off Veera Desai Road,  Andheri (West), Mumbai - 400 053. Tel.: 022 - 2673 1779 - 85  Fax: 022 - 2673 1796  Website: www.bhansaliabs.com E-mail: investors@bhansaliabs.com

For and on behalf of the Board

M. C. Gupta

Chairman

(DIN: 01362556)

 Place: Mumbai

Date: 30th May, 2015