Corporate Governance

Report on Corporate Governance

Company's philosophy on code of Corporate Governance:

The Company is fully committed to and continues to practice good Corporate Governance. The Company believes that proper Corporate Governance generates goodwill among business partners, customers and investors, facilitates effective management and control of business and generates competitive 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.

Board of Directors:

In terms of the Company’s Corporate Governance Policy, all statutory and other significant and material information is placed before the Board to enable it to discharge its responsibilities of closely monitoring the activities of the Company.

i)Composition of the Board:

As on 31st March, 2007 the Board consisted of 5 Non-Executive Independent Directors (including Chairman) and 2 Whole-Time Directors, who are professionals and/or have expertise in their respective functional areas and capable of bringing in a wide range of managerial skills and business acumen. The composition, category of Directors and their other Directorships and Membership/ Chairmanship of Committees as on 31st March, 2007 is as under.

Sr.No.	Name of the Directors	Category	Number of other Companies
Sr.No.	Name of the Directors	Category	Directorships	Committee Memberships	Committee Chairmanships
1	Mr. M. C. Gupta Chairman	Non-Executive, Independent Director	1	-	1
2	Mr. Babulal M. Bhansali Managing Director	Promoter, Executive	7	-	-
3	Mr. P. R. Bhansali	Non-Executive, Independent Director	2	-	-
4	Mr. C.S. Sastry	- do -	1	-	-
5	Dr. Pravin P. Shah	- do -	14	13	1
6	Mr. B. S. Bhesania	- do -	6	3	-
7	Mr. Jayesh B. Bhansali Whole-Time Director designated as Executive Director	Promoter, Executive	7	-	-

ii)Board Meetings and attendance of Directors :
The Board meets at least once in a quarter to consider amongst other business the performance of the Company and quarterly financial results. When necessary, additional meetings are held. Agenda for each meeting along with explanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggest the inclusion of items on the agenda.

During the year under review, 7 Board Meetings were held on 27th May 2006, 24th June 2006, 29th July 2006, 22nd September 2006, 29th October 2006, 9th December 2006 and 29th January 2007. The Twenty Second Annual General Meeting was held on 23rd September 2006.Attendance of each Director at Board Meetings and Annual General Meeting (AGM) was as follows:

Sr.No.	Name of the Directors	No. of Board Meetings Attended	Attendance at AGM held on 23.09.2006
1	Mr. M.C.Gupta	4	Yes
2	Mr.Babulal M.Bhansali	6	Yes
3	Mr. P.R. Bhansali	5	Yes
4	Mr. C.S. Sastry	5	Yes
5	Dr. Pravin P. Shah	2	No
6	* Dr. W.R. Correa	0	No
7	* Mr. Supriya Gupta	0	No
8	Mr. B.S. Bhesania	4	No
9	* Mr.Kenji Asakawa	3	No
10	Mr.Jayesh B. Bhansali	5	Yes

* Dr. W.R.Correa has resigned from the directorship of the Company w.e.f. 22.06.2006.
* Mr. Supriya Gupta has resigned from the directorship of the Company w.e.f. 14.11.2006.
* Mr. Kenji Asakawa has resigned from the directorship of the Company w.e.f. 22.09.2006..

Details of Remuneration paid to the Directors during the year ended 31st March 2007:

The Non-executive Directors are paid sitting fees for attending each meeting of the Board of Directors and Committees thereof. The details of the sitting fees paid during the year under review to the Non-executive Directors and the remuneration paid to the Executive Directors are given below:

Sr.No.	Name of the Directors	Sitting fees (including Committee Meetings)	Salaries & Allowances, etc.	Contributions to Provident and Superannuation Funds
1	Mr. M.C.Gupta	0.14	-	-
2	Mr. Babulal M. Bhansali	-	60.23	2.09
3	Mr. P.R. Bhansali	0.22	-	-
4	Mr. C.S. Sastry	0.10	-	-
5	Dr. Pravin P. Shah	0.06	-	-
6	* Dr. W.R. Correa	0.00	-	-
7	* Mrs. Supriya Gupta	0.00	-	-
8	Mr. B.S. Bhesania	0.20	-	-
9	* Mr. Kenji Asakawa	-	43.00	-
10	Mr. Jayesh B. Bhansali	-	16.90	1.56

* Dr. W.R.Correa has resigned from the directorship of the Company w.e.f. 22.06.2006.
* Mr. Supriya Gupta has resigned from the directorship of the Company w.e.f. 14.11.2006.
* Mr. Kenji Asakawa has resigned from the directorship of the Company w.e.f. 22.09.2006.

No. of Equity Shares held by Non-Executive Director as on 31st March 2007 :

Sr.No.	Name of the Directors	No. of Shares
1	Mr. M.C.Gupta	Nil
2	Mr. P.R. Bhansali	552690
3	Mr. C.S. Sastry	5000
4	Dr. Pravin P. Shah	161500
5	Dr. W.R. Correa	Nil
6	Mrs. Supriya Gupta	Nil
7	Mr. B.S. Bhesania	Nil
8	Mr. Kenji Asakawa	Nil

Committees of the Board :

Currently, the Board has three Committees – the Audit Committee, the Shareholders Grievance Committee and the Remuneration Committee. The Board is responsible for the constitution, co-opting and fixing the terms of reference for Committee members of the said Committees.

Audit Committee:

The following Directors are members of the Audit Committee:

Mr. M.C. Gupta	Chairman, Non-Executive, Independent Director
Dr. Pravin P. Shah	Non-Executive, Independent Director
Mr. P. R. Bhansali	Non-Executive, Independent Director
Mr. B.S. Bhesania	Non-Executive, Independent Director

All members of the Committee are Independent Directors. The Managing Director, Statutory Auditors and Internal Auditors are permanent invitee of the Audit Committee Meetings. The role, powers and functions of the Audit Committee are as stated in clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956. The Committee reviews the financial statements before they are placed before the Board.

During the year under review, five meetings of the Committee were held on 27th May 2006, 24th June 2006, 29th July 2006, 29th October 2006 and 29th January 2007. The details of attendance of the Audit Committee Members are as under:

Sr. No.	Name of the Directors	No. of meetings held	No. of Meetings Attended
1	Mr. M.C. Gupta	5	3
2	Dr. Pravin P. Shah	5	1
3	Mr. P.R. Bhansali	5	4
4	Mr. B.S. Bhesania	5	4

Remuneration Committee:

The following Directors are members of the Remuneration Committee:

Sr.No.	Name of the Directors
1	Mr. B.S.Bhesania	Chairman, Non-Executive, Independent Director
2	Dr. Pravin P. Shah	Non-Executive, Independent Director
3	Mr. P. R. Bhansali	Non-Executive, Independent Director

Mr. B.S. Bhesania is the Chairman of the Remuneration Committee and Dr. Pravin P. Shah and Mr. P. R. Bhansali are the members, all of them are Independent Directors. The broad terms of reference of the Remuneration Committee is to ensure that the remuneration practices of the Company in respect of the Senior Executives including the Executive Directors are competitive keeping in view prevalent compensation packages so as to recruit and retain suitable individual(s) in such capacity.

During the year under review, the Remuneration Committee met once on 24th June 2006 in which Mr. B.S. Bhesania and Mr. P.R.Bhansali were present.

Remuneration Policy:

Non-Executive Directors are paid sitting fees for each meeting of the Board and the Committee thereof . The appointment and remuneration of the Managing Director and Whole Time Directors is governed by resolutions passed by the Board of Directors and Shareholders of the Company, which covers terms of such appointments read with the service rules of the Company. Remunerations paid to the Managing Director and Whole Time Directors are recommended by the Remuneration Committee, approved by the Board and are within the limits set by the shareholders at the General Meetings.

Presently, the Company does not have any stock option plan or performance linked incentives for its Directors.

Shareholders Grievance Committee:

The following Directors are members of Shareholders Grievance Committee:

Sr. No.	Name of the Directors
1	Mr. P. R. Bhansali – Chairman, Non-Executive, Independent Director
2	Mr. Babulal M. Bhansali – Promoter, Executive

Mr. P. R. Bhansali is the Chairman of the Shareholders Grievance Committee. The Committee is authorised to approve the transfer of shares, review & records shareholders grievances, if any, and monitor the work of the Registrar and Transfer Agents. In total, 42 meetings of Shareholders Grievance Committee were held during the year under review.
Mr. Sadanand S. Lad is the Company Secretary of the Company.

General Body Meetings:

Details on last three Annual General Meetings are given hereunder:

AGM

For the year

Venue

Date

Time

22nd

2005 - 2006

Walchand Hirachand Hall,
Indian Merchants’ Chamber,
Veer Nariman Road, Mumbai- 400 020

23.09.2006

11.30 a.m.

21st

2004 - 2005

-do-

23.07.2005

11.30 a.m.

20th

2003 - 2004

-do-

16.10.2004

11.30 a.m.

Special Resolution:

At the 20th Annual General Meeting held on 16th October, 2004 the following Special Resolutions were passed:

For appointment of Mr. Kenji Asakawa as the Whole Time Director with as designation of “Executive Director”.

For obtaining consent of the members to delist the equity shares of the Company from (i) The Stock Exchange, Ahmedabad; (ii) The Delhi Stock Exchange Association Limited, New Delhi; (iii) The Calcutta Stock Exchange Association Limited, Kolkata; (iv) Madhya Pradesh Stock Exchange Limited, Indore.

No Special Resolution was passed at the 21st Annual General Meeting held on 23rd July 2005.

At the 22nd Annual General Meeting held on 23rd September 2006 the following Special Resolution was passed:

For appointment of Mr. Jayesh B. Bhansali as the Whole-Time Director designated as “Executive Director” of the Company.

Postal ballots:

No Special Resolution requiring postal ballot was placed before the last Annual General Meeting. No Special Resolution requiring postal ballot is being proposed at the ensuing Annual General Meeting.

Disclosures regarding appointment or re-appointment of Directors

	Pursuant to the provisions of Sections 255 and 256 of the Companies Act, 1956, Mr. C.S.Sastry and Mr. B.S.Bhesania, retire by rotation at the ensuing Annual General Meeting and offer themselves for re-appointment. The required details of Mr. C.S.Sastry and Mr. B.S.Bhesania, are provided alongwith Notice of the Annual General Meeting.

Disclosures :

Related Party Transactions:

There are no transactions of material nature with Directors/Promoters or any related entity, which will have any potential conflict with the interests of the Company at large

.
Compliances by the Company:

There is no non-compliance by the Company. Further, there is no penalties, strictures imposed by the Stock Exchange, SEBI or any other statutory authority on any matter related to capital markets, during the last three years/period.
Whistle Blower Policy and Access of personnel to the Audit Committee:

The Company has not established the non-mandatory requirement of Whistle Blower Policy. However, the Company’s personnel have access to the Chairman of the Audit Committee in cases such as concerns about unethical behaviour, frauds and other grievances. No personnel of the Company have been denied access to the Audit Committee.
Compliance with the Mandatory requirements and Implementation of the Non-mandatory requirements:

The Company has complied with the mandatory requirements of the Corporate Governance Clause of Listing Agreement. The Company has not implemented the non-mandatory requirements enlisted by way of annexure to Clause 49 of the listing agreement excepting the constitution of Remuneration Committee.

Means of Communication

Financial Results:

The quarterly unaudited financial results and annual audited financial results were published in Economic Times – All editions, Nav Bharat Times – All editions, Maharashtra Times – Mumbai,These results were also placed on the Company’s website www.bhansaliabs.com
Pursuant to clause 51 of the Listing Agreement, all data related to quarterly financial results, shareholding pattern, etc. have been hosted on the Electronic Data Information Filing and Retrieval System (EDIFAR) website at www.sebiedifar.nic.in within the time frame prescribed in this regard.
No presentations were made to the institutional investors or to analysts during the year under review.
The Management Discussion and Analysis Report forms a part of this Annual Report.

Certificate on Corporate Governance

	As required by Clause 49 of the Listing Agreement, a certificate issued by M/s. B. L. Dasharda & Associates, Chartered Accountants, regarding compliance of conditions of Corporate Governance Certificate is given as an annexure to the Directors’ Report.

CEO Certification

	As required by Clause 49 of the Listing Agreement, the CEO i.e. the Managing Director’s certification is provided elsewhere in the Annual Report.

General Shareholders Information

Annual General Meeting:

Day, Date and Time	Saturday, 22nd September, 2007 at 11.30 a.m.
Venue	Walchand Hirachand Hall, Indian Merchants’ Chamber, Veer Nariman Road, Churchgate, Mumbai – 400 020.

Financial Calendar:

Calendar of events for the year ending 31st March 2008:

Unaudited Financial Results for the quarter ending 30th June 2007	By 31st July 2007
Unaudited Financial Results for the quarter ending 30th September 2007	By 31st October 2007
Unaudited Financial Results for the quarter ending 31st December 2007	By 31st January 2008
Audited Financial Results for the year ending 31st March 2008	By 30th June 2008
Annual General Meeting for the year ending 31st March 2008	By 30th September 2008

Date of Book Closure:
The Company’s Register of Members and Share Transfer Books shall remain closed from Saturday, 15th September, 2007 to Saturday, 22nd September, 2007 (both days inclusive).
Payment of Dividend:

Payment of dividend, if any, declared at the Annual General Meeting, will be made to those shareholders whose names appear on the Company’s Register of Members as on 22nd September, 2007 or their nominees. In respect of shares in dematerialized form, dividend will be paid to the beneficial owners as at the end of business hours on 14th September, 2007 as per the details to be received from Depositories for the purpose. Dividend warrants shall be despatched within thirty days from the date of the Annual General Meeting.
Share Transfer System:

Shares lodged for transfer at the Registrar’s address are normally processed within 30 days from the date of lodgement, if the documents are clear in all respects. All requests for dematerialisation of shares are processed and the confirmation is given to the depositories within 21 days. Shareholders Grievance Committee of the Board of Directors of the Company is empowered to approve transfer of shares and other investor related matters. Grievances received from investors and other miscellaneous correspondence on change of address, mandates etc. are processed by the Registrars within 15 days.

Total number of shares transferred in physical form for the year from 1st April 2006 to 31st March 2007.

Number of Transfer Deed	261
Number of Shares Transferred	301710

Investor Services - queries/complaints during the year ended 31st March 2007:

The correspondence identified as Investor complaints are letters received through statutory/regulatory bodies and those related to loss of shares, court/ consumer forum matters and other matters identified as complaints for reporting under clause 41 of the Listing Agreement. The details of complaints received and attended during the year from 1st April 2006 to 31st March 2007 are as under:

Total no. of complaints received	154
Total no. of complaints attended	154

No complaints were unresolved at the end of the year under review.

Listing on Stock Exchanges:

The Shares of the Company have been listed at following stock exchanges:

Sr. No.	Name of the Stock Exchange
1.	Bombay Stock Exchange Limited (BSE)
2.	National Stock Exchange of India Limited (NSE)

The Listing Fees for the Stock Exchanges, where the Company’s equity shares are listed have been paid.

Stock Codes:

Name of the Stock Exchange	Codes
Bombay Stock Exchange Ltd. (BSE)	500052
National Stock Exchange of India Ltd. (NSE)	BEPL – EQ

Market Price Data (At BSE):

Month	As per BSE Quote		Volume in no. of shares
Month	High (Rs.)	Low (Rs.)	Volume in no. of shares
April – 2006	36.45	31.50	456972
May – 2006	34.20	24.05	1498136
June – 2006	34.00	21.25	1021919
July – 2006	30.85	25.20	357285
August – 2006	32.00	25.50	346189
September – 2006	31.00	23.75	1322283
October – 2006	30.50	24.05	1694384
November – 2006	28.70	26.00	1821425
December – 2006	33.90	25.75	230615
January – 2007	26.00	23.00	603111
February – 2007	26.00	20.00	794992
March – 2007	23.40	16.55	216942

Performance in comparison to BSE Sensex:

Market Price Data (At NSE Nifty):

Day	As per NSE Quote		Volume (in no. of shares)
Day	High (Rs.)	Low (Rs.)	Volume (in no. of shares)
April – 2006	36.30	31.00	264844
May – 2006	33.15	24.20	890481
June – 2006	34.60	22.60	1381706
July – 2006	30.90	25.95	148699
August – 2006	33.50	25.50	189531
September – 2006	30.55	24.00	579728
October – 2006	30.75	24.40	796749
November – 2006	29.90	26.00	221096
December – 2006	30.50	25.10	88780
January – 2007	26.50	23.55	255548
February – 2007	26.00	20.50	293889
March – 2007	24.10	18.00	124852

Performance in comparison to NSE Nifty:

Distribution of Shareholding as on 31st March 2007:

No. of Equity Shares held	Shareholders		Shares
No. of Equity Shares held	Number	% to total Shareholders	Number	% to total Capital
1 - 2500	12773	92.49	10117843	6.10
2501 - 5000	576	4.17	2224812	1.34
5001 - 10000	176	1.27	1360587	0.82
10001 - 20000	84	0.61	1242555	0.75
20001 - 30000	22	0.16	571482	0.34
30001 - 40000	21	0.15	747459	0.45
40001 - 50000	14	0.10	643998	0.39
50001 - 100000	45	0.33	3512935	2.12
100001 & above	99	0.72	145483969	87.69
Total	13810	100.00	165905640	100.00

Categories of Shareholding as on 31st March 2007:

Category	Shareholders		Shares
Category	Number	% to total Shareholders	Number	% to total Capital
Promoters	21	0.15	70918552	42.75
Banks,Financial Institutions ,FIIs,Mutual Funds,NRI,Insurance Companies	28	0.20	341078	0.21
Private Corporate Bodies	239	1.73	54304261	32.73
Indian Public	13522	97.92	40341749	24.31
Total	13810	100.00	165905640	100.00

Dematerialisation of Shares:

The Company has established connectivity with Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) for dematerialisation of shares and the same are available in electronic segment under ISIN No. INE922A01025. As on 31st March 2007, 156705430 Equity Shares representing 94.45% had been dematerialized.

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 instrument likely to impact the equity share capital of the Company.
Plant Locations:

(i) Works - Satnoor : Bhansali Nagar, Taluka Sausar, Dist.: Chhindwara, Madhya Pradesh-480108.

(ii) Works - Abu Road : SP-138-144, Ambaji Industrial Area, Abu Road, Dist.: Sirohi, Rajasthan-307026.

Address for Correspondence for Shareholders/Registrar & Share Transfer Agent:
Intime Spectrum Registry Limited
Unit: Bhansali Engineering Polymers Limited
C-13, Pannalal Silk Mills Compound, L.B.S.Marg,
Bhandup (West), Mumbai - 400 078.

Tel.: 022-2594 6970, Fax : 022-25946969
Web Site : www.linkintime.co.in
Email : rnt.helpdesk@linkintime.co.in

Investors of the Company shall also be attended from the following office of the Registrar & Share Transfer Agent:

Intime Spectrum Registry Limited
Unit: Bhansali Engineering Polymers Limited
203, Daver House, 197/199, D.N.Road,
Mumbai – 400 001.
Tel : 22694127

Email ID for Redressal of Investor Complaints:

06, dated 18th December 2006 has advised the listed companies to designate an exclusive e-mail ID for redressal of Investor Complaints and also to disseminate the same on the Company’s website.
According to the SEBI circular and Clause 47 (f) of The Listing Agreement, the Company has designated an e-mail ID of the grievance redressal division exclusively for the purpose of registering complaints by investors on its website as given below:

e-mail ID : investors@bhansaliabs.com