Annual Report 2006-2007 - bhansaliabs.combhansaliabs.com/download/annual_result/Bhansali_AR...

Annual Report2006-2007

bhansali engineering polymers limitedbhansali engineering polymers limitedAn ISO 9001:2000 Company

The BEPL at Abu Road, Rajasthan

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Annual Report 2006-07

bhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limited

BOARD OF DIRECTORSMr. M. C. Gupta - ChairmanMr. B. M. Bhansali - Managing DirectorMr. C. S. SastryDr. Pravin P. ShahMr. B. S. BhesaniaMr. P. R. BhansaliMr. Jayesh B. Bhansali - Executive Director

AUDITORSM/s. B.L.Dasharda & AssociatesChartered Accountants

SOLICITORSM/s. Mulla & Mulla & Craigie Blunt & Caroe

COMPANY SECRETARYMr. Sadanand S. Lad

BANKERSAllahabad BankUTI Bank Limited

REGISTERED OFFICE REGISTRAR & SHARE TRANSFER AGENTBhansali House, Intime Spectrum Registry LimitedA-5, Veera Desai Road, C-13, Pannalal Silk Mills Compound,Andheri (West), L.B.S.Marg, Bhandup (West),Mumbai - 400 053. Mumbai - 400 078.

WORKSSatnoor Abu RoadBhansali Nagar, SP-138-144,Taluka : Sausar, Ambaji Industrial Area,Dist.: Chhindwara, (M.P.) Abu Road, Dist.: Sirohi, (Rajasthan)Pin - 480 108. Pin - 307 026.

MANAGEMENT TEAMMr. B.M.Bhansali - Managing DirectorMr. Kiran Bhansali - Executive Director (Operations)Mr. Jayesh B. Bhansali - Executive Director (Corporate)Mr. Kenji Asawaka - Executive Director (Technical)Dr. S.S.Deshpande - Vice President (Operations, R & D - Satnoor)Mr. D.B.Shrigondekar - Vice President (Materials)Mr. C.B.Bhardwaj - Vice President (Operations - Abu Road)

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bhansali engineering polymers limited

NOTICE

NOTICE is hereby given that the Twenty Third Annual General Meeting of the Members of Bhansali EngineeringPolymers Limited will be held at Walchand Hirachand Hall, Indian Merchants’ Chamber, Veer Nariman Road, Churchgate,Mumbai - 400 020 on Saturday, 22nd day of September 2007, at 11.30 a.m. to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2007 and Profit and Loss Account forthe year ended on that date together with Reports of the Directors and Auditors thereon.

2. To Declare dividend on Equity Shares of the Company.

3. To appoint a Director in place of Mr. C.S.Sastry, who retires by rotation at this Annual General Meeting and beingeligible, offers himself for re-appointment.

4. To appoint a Director in place of Mr. B.S.Bhesania, who retires by rotation at this Annual General Meeting and beingeligible, offers himself for re-appointment.

5. To appoint Auditors of the Company to hold office from the conclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting and to authorise the Board to fix their remuneration.

By order of the BoardFor Bhansali Engineering Polymers Limited

Place : Mumbai B. M. BhansaliDated : 2nd July, 2007 Managing Director

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND ON A POLL, TO VOTE INSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE AMEMBER.

2. Proxies, in order to be effective, must be received at the Company’s Registered Office not later than 48 (fortyeight)hours before the time fixed for holding the meeting.

3. Members desirous of obtaining any information concerning the accounts and operations of the Company are requestedto send their queries to the Share Department, so as to reach the registered office of the Company at least sevendays before the date of the meeting, to enable the Company to make available the required information at the meeting,to the extent possible.

4. The Register of Members and Share Transfer Books will remain closed from Saturday, 15th September 2007 toSaturday, 22nd September 2007 (both days inclusive).

5. Payment of dividend, if any, declared at the Annual General Meeting, will be made to those shareholders whosenames appear on the Company’s Register of Members on 22nd September 2007 or their nominees. In respect ofshares in dematerialized form, dividend will be paid to the beneficial owners as at the end of business hours on14th September 2007 as per the details to be received from Depositories for the purpose. Dividend warrants shall bedispatched within thirty days from the date of the Annual General Meeting.

6. Members are requested to notify immediately any change in their address/bank mandate to their respective DepositoryParticipant (DP) in respect of their electronic share accounts and to the Company’s Registrar & Share Transfer Agent,Intime Spectrum Registry Limited, C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai-400 078 in respect of their physical share folios.

7. Members are requested to bring their copy of Annual Report to the Meeting.

8. Members are requested to bring the Attendance Slip sent herewith duly filled for attending the Meeting.

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9. Information pursuant to clause 49 of listing agreement with respect to profile of Directors seeking re-appointment isgiven herebelow:

ADDITIONAL INFORMATION:

Profile of Directors retiring by rotation and seeking re-appointment (pursuant to clause 49 of the Listing Agreement).

Particulars Mr. C.S.Sastry Mr. B.S.Bhesania

Date of Birth 23.12.1931 03.11.1933

Date of Appointment 14.06.1991 17.05.2003

No. of shares held 5000 Nil

Qualifications M.Sc., A.D.P.A.(Exeter-Devon-U.K.) B.Sc., L.L.M., Solicitor High Court, Mumbai,Solicitor Supreme Court of England & Wales,Solicitor Supreme Court of Hong Kong.

Expertise in specific He is an eminent Solicitor of High Court,functional areas Mumbai. He is a senior partner of M/s.Mulla

& Mulla & Craigie Blunt & Caroe, one of theleading law firms of the country havinginternational recognition.

Directorship of other Mahyco Research Foundation a) Trent Ltd.Companies b) D.G.P. Hinoday Industries Ltd.

c) Gilt Edge Finance & Investments Ltd.d) Bombay Rayon Fashions Ltd.e) Jamyad Investments Pvt. Ltd.f) India Overland Pvt. Ltd.

Chairman/Member of Nil a) Trent Ltd. - Member of Audit CommitteeCommittees of the Board & Remuneration Committee.of Companies of which b) Bombay Rayon Fashions Ltd. – Memberhe is a Director of Audit Committee.

By order of the BoardFor Bhansali Engineering Polymers Limited

Place : Mumbai B. M. BhansaliDated : 2nd July, 2007 Managing Director

REGISTERED OFFICE:

Bhansali House,A-5, Veera Desai Road,Andheri (West),Mumbai- 400 053.

He entered Indian Administrative Servicein 1956 and held key positions with TheGovernment of Andhra Pradesh and theUnion Government, specialising inManagement, Administration &Development in the areas of IndustrialPromotion, Defence & Agriculture. Retiredas Secretary-Agriculture to the Govt.ofIndia in 1989. Awarded with ‘Padmashri’ in1990.

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DIRECTORS’ REPORT

Dear Members,

Your Directors take pleasure in presenting the Twenty Third Annual Report and the Audited Accounts for the year ended31st March 2007.

FINANCIAL RESULTS:

(Rs. in lacs)

Accounting AccountingYear ended Year ended31.03.2007 31.03.2006

Gross Sales 27836.27 30696.67

Profit before interest, tax and depreciation 3681.05 3407.96

Profit before tax 1488.64 1546.71

Profit after tax & deferred tax 525.16 946.51

Balance brought forward 2362.67 1605.34

Amount available for appropriation 2887.83 2551.85

Proposed dividend including tax thereon 194.11 189.18

Balance carried to Balance Sheet 2693.72 2362.67

DIVIDEND:

The Directors have pleasure in recommending for the consideration of the Members at the Annual General Meeting,payment of Dividend @10% i.e. Re.0.10 per share for the year ended 31st March, 2007 (previous year @10%). The totaloutgo including tax thereon will be Rs. 194.11 lacs.

OPERATIONS:

The significant achievement during the year under review has been drastic reduction in overhead expenses which declinedfrom Rs. 3944.77 lacs in the year 2005-06 to Rs. 2798.45 lacs in the year 2006-07, i.e. by Rs. 1146.32 lacs – 29.06%.Yet another achievement is improvement in value addition by 5.06% when compared to the previous year.

However, due to reasons beyond control of the management, the top-line could not be maintained, as evident from thequantity sold during the year under review at 28034 MT against 34422 MT in the previous year. The Company shouldbe able to regain its market share in the current year by focusing on high growth market segments, viz. automobiles andtelecommunication. This is reflected from the fact that 5593 MT could be sold in 2 months in the current year showingincrease by 5.51% over the previous year. Inspite of not so impressive sales performance, bottom line could almost beprotected as earning before interest, tax and depreciation (EBITD) has been Rs. 3411.64 lacs when compared to Rs.3407.96 lacs in the previous year. Likewise, profit before tax (PBT) at Rs. 1488.64 lacs when compared to Rs. 1546.71lacs in the previous year and profit after tax (PAT- without considering deferred tax) stood at Rs. 989.67 lacs whencompared to Rs. 1054.83 lacs in the previous year. However, after considering deferred tax (provision with no cash outflow)the PAT in the year under review is Rs. 525.16 lacs against Rs. 946.51 lacs in the previous year. In the year underreview there was an extra ordinary income of Rs. 269.41 lacs on sale of land and building of Vadodara unit, which in thecomparative data of EBITD reflected hereinabove, has not been included.

FUTURE PLAN:

As reported in the previous year, the Company was involved in intensive study for firming up the expansion plan withnovel scheme of establishing a co-generation plant, to achieve globally cost competitive structure with minimal utilitygeneration cost. Now, since the study has been completed, a plan has been firmed up to install requisite productionfacility adopting state of the art technology viz. (1) agglomeration process for manufacture of PB Latex, (2) HRG withhigh percentage of grafted rubber content, (3) high capacity SAN plant (6 TPH) on adopting full liquid reactor system

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with catalyst process involving minimal energy consumption, (4) dewatering compounding system to use wet HRG anddry SAN, and (5) co-generation plant to produce electricity and steam for the process and chilled water as well as chilledbrine production. On implementation of the expansion program to establish 200 KTPA ABS plant in the 3rd quarter of2009 -10, the Company would be in a position to achieve cost and quality leadership in the domestic market and becomeinternationally competitive player. Thereafter, your company will diversify the existing HRG plant at Satnoor (M.P) tomanufacture Styrene Butadiene latex and other similar lattices catering to various industries viz. paper, textile andconstruction etc. Considering all these the total production facility of your Company by the year 2010 will be (a) 200KTPA ABS, (b) 35 KLPA SB Latex, and (3) 7 KTPA saleable SAN. Your Company is endeavoring to work out anappropriate financing strategy for the aforesaid expansion plan.

SAFETY AND ENVIRONMENT PROTECTION:

Your Company continues to accord high priority to the areas of Safety and Environment Protection. Compliance withsafety norms and regular training programs for employees for various safety measures and to increase the safety standardsand awareness are an integral part of the Company’s operating system.

FIXED DEPOSITS:

There were no deposits remaining unpaid/unclaimed in terms of Section 58A of the Companies Act, 1956 read with theCompanies (Acceptance of Deposit) Rules, 1975 at the end of the year.

DIRECTORS:

During the year under review, Mr. Kenji Asakawa and Mr. Supriya Gupta, Directors of the Company resigned from theBoard. The Board of Directors wish to place on record their sincere appreciation to the professional guidance and supportextended by Mr. Kenji Asakawa and Mr. Supriya Gupta to the Company during their respective tenure as Director of theCompany.

Mr. C. S. Sastry and Mr. B. S. Bhesania, Directors of the Company are retiring by rotation at the ensuing Annual GeneralMeeting of the Company and are eligible for re-appointment.

A brief profile of Mr. C. S. Sastry and Mr. B. S. Bhesania as required by Clause 49(IV)(G) of the Listing Agreement withthe Stock Exchanges is given in the Notice of the ensuing Annual General Meeting.

DELISTING OF SHARES :

Pursuant to the applications for delisting made by the Company, following two stock exchanges have delisted theCompany’s equity shares during the year under review:

1) The Calcutta Stock Exchange Association Limited, Kolkata.

2) Madhya Pradesh Stock Exchange Limited, Indore.

PARTICULARS OF EMPLOYEES:

A statement containing details of employees in receipt of remuneration equal to or exceeding the limits prescribed underSection 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is attachedhereto vide Annexure-D and forms part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, your Directors confirm the followings:

� In the preparation of the annual accounts, the applicable accounting standards have been followed;

� That the Directors have selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Companyas at 31st March, 2007 and of the profit of the Company for that year;

� That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

� That the annual accounts for the year ended 31st March, 2007 have been prepared on a going concern basis.

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CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance and Management Discussion andAnalysis and Certificate from M/s. B. L. Dasharda & Associates, Chartered Accountants on compliance thereof is givenin the Annexure-B and Annexure-C respectively, which form an integral part of this Report.

AUDITORS:

M/s. B. L. Dasharda & Associates, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuingAnnual General Meeting and being eligible, offer themselves for re-appointment. Members are requested to appointauditors for the current year and to authorize the Board to fix their remuneration.

AUDITORS’ REPORT:

The observations made by the Auditors in their Report read with the relevant notes as given in the Notes on Accountsfor the year ended 31st March, 2007 are self explanatory and therefore do not call for any further comments under Section217(3) of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The relevant data pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988 is annexed hereto vide Annexure-A which forms part of thisreport.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to express their gratitude for the support and co-operation from the Banks, StatutoryAuthorities, Customers, Suppliers and all the Stakeholders. Your Directors express their deep appreciation to theCompany’s employees at all levels for their onerous efforts and valuable contributions during the year.

For and on behalf of the Board

B.S.BhesaniaDirector

Place : Mumbai B.M.BhansaliDated : 2nd July, 2007 Managing Director

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ANNEXURE – A

PARTICULARS AS REQUIRED UNDER THECOMPANIES (DISCLOSURE OF PARTICULARS IN THEREPORT OF BOARD OF DIRECTORS) RULES,1988.

A) Conservation of Energy :

Inspite of adopting several power conservationmeasures, as outlined hereinafter, during the yearunder review power consumption per unit of ABS &SAN increased due to lower production.

(i) Power conservation measures which were adoptedare as follows:

a) Increasing SAN-1 production capacity from 3.2TPH to 3.65 TPH during last quarter of the year.This eventually resulted in reduction in per tonpower consumption of captive SAN Production.

b) Use of single ejector system for both Devo’s inplace of two ejector system.

c) Increasing power factor from 0.95 to 0.99 throughcommissioning new capacitor banks and regularmonitoring.

d) Adding of new energy efficient drives for higherrating motors.

(ii) Over all LDO Consumption was reduced byoptimizing heating/cooling reactor cycle as well asimproving TPA-15 Unit efficiency.

B) Technology Absorption :

Details of the efforts made in Technology Absorptionare given in the prescribed Form ‘B’ hereunder.

C) Foreign Exchange Earnings and Outgo :

a) Activities relating to exports, initiatives taken toincrease export, development of new export marketfor products and services and export plans:

Total export during the year under review was 851MT valued at US$ 1.55 millions i.e. Rs.699.96 lacs.

b) Total foreign exchange used and earned:

(Rs.in lacs)

Total foreign exchange used 13337.95

Total foreign exchange earned 699.96(FOB Value)

FORM – A

(See Rule – 2)

FORM FOR DISCLOSURE OF PARTICULARS WITHRESPECT TO CONSERVATION OF ENERGY.

Year Ended Year Ended31.03.2007 31.03.2006

A) Power and Fuel Consumption :

1) Electricity

a) Purchased :

Units (KWH) in lacs 187.98 215.51

Total Amount (Rs. in lacs) 837.14 966.94

Rate per KWH (Rs.) 4.45 4.49

b) Own Generation :Through Diesel GeneratorUnits (KWH) in lacs 2.53 5.97Unit per litre of diesel oil 2.92 3.15Cost per unit (Rs.) 11.36 8.57

2) Coal used in Boiler :Quantity (MT) 4678 5318Total cost (Rs.in lacs) 97.73 118.81Rate per MT (Rs.) 2089.14 2234.11

3) L.D.O. :Quantity (Ltrs.) 856766 967352Total Amount (Rs.in lacs) 258.21 267.26Average Rate (per Ltr.) 30.14 27.63

B) Consumption per unit of Production :Electricity (KWH/MT ofABS & SAN Resins) 689.08 642.55Coal (MT/MT of ABS Resin) 0.18 0.16L.D.O.(Ltrs/MT of SAN Resins) 43.33 46.09

FORM – B(See Rule – 2)

Form for disclosure of particulars with respect totechnology absorption.A) RESEARCH AND DEVELOPMENT (R & D) :1) Specific areas in which R & D has been carried out by

the Company and benefits derived as a result of theabove R & D.a. SPS PBDE process and agglomeration PBDE

process have been revamped to reduce the cycletime and in turn to increase the productivity byminimum of 20% thus enabling to reduce the costof operations at Satnoor Unit.

b. Developed special blends for a cost effectivesubstitution that can fetch challenge and High EndPolymers for special application in the pump industry.

c. Recipe & technology for carboxylated Styrene-Butadiene Latex has been developed and establishedinto market for paper coating applications.

d. Developed recipe for High Rubber Graft with 65parts of rubber contents and to have one singlerubber domain for ABS compounding.

e. New formulations developed for higher impactgrade for automobile applications in two wheelerand four wheeler industries.

2) Expenditure on R & D :(Rs.in lacs)

a. Capital 1.43b. Recurring 5.11c. Total 6.54d. Total R & D Expenditure as a

percentage of total turnovers. 0.02%B) TECHNOLOGY ABSORPTION, ADAPTATION AND

INNOVATION :1) Efforts, in brief, made towards technology absorption,

adaptation, innovation and benefits derived : N.A.2) Information regarding technology imported during the

last five years: N.A.

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ANNEXURE – B

REPORT ON CORPORATE GOVERNANCE

(A) Company’s philosophy on code of Corporate Governance:

The Company is fully committed to and continues to practice good Corporate Governance. The Company believesthat proper Corporate Governance generates goodwill among business partners, customers and investors, facilitateseffective management and control of business and generates competitive returns for the investors. In addition to thebasic 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 prudentbusiness plans. Adequate monitoring system was followed to safeguard against major risk and to ensureimplementation 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 informationis placed before the Board to enable it to discharge its responsibilities of closely monitoring the activities of theCompany.

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 areasand 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 Committeesas on 31st March, 2007 is as under:

Number of other Companies

Sr. Name of Directors Category Director- Committee CommitteeNo. ships Member- Chairman-

ships ships

1 Mr. M. C. Gupta Non-Executive, 1 - 1Chairman Independent Director

2 Mr. Babulal M. Bhansali Promoter, Executive 7 - -Managing Director

3 Mr. P. R. Bhansali Non-Executive, 2 - -Independent Director

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 Promoter, Executive 7 - -Whole-Time Directordesignated as“Executive Director”

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 Companyand quarterly financial results. When necessary, additional meetings are held. Agenda for each meeting along withexplanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggestthe 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 GeneralMeeting was held on 23rd September 2006.

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Attendance of each Director at Board Meetings and Annual General Meeting (AGM) was as follows:

Sr. Name of the Directors No. of Board Meetings Attendance at AGMNo. Attended 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.

(C) 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 Committeesthereof. The details of the sitting fees paid during the year under review to the Non-executive Directors and theremuneration paid to the Executive Directors are given below: (Rs. in lacs)

Sr. Name of the Directors Sitting fees Salaries & Contributions toNo. (including Allowances, Provident and

Committee etc. SuperannuationMeetings) 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 * Mr. 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.

Number of Equity Shares held by Non-Executive Directors 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 Mr. Supriya Gupta Nil

7 Mr. B.S. Bhesania Nil

8 Mr. Kenji Asakawa Nil

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(D) Committees of the Board:

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

(i) Audit Committee:

The following Directors are members of the Audit Committee:

Sr. No. Name of the Directors

1 Mr. M. C. Gupta Chairman, Non-Executive, Independent Director

2 Dr. Pravin P. Shah Non-Executive, Independent Director

3 Mr. P. R. Bhansali Non-Executive, Independent Director

4 Mr. B. S. Bhesania Non-Executive, Independent Director

All members of the Committee are Independent Directors. The Managing Director, Statutory Auditors and InternalAuditors are permanent invitees of the Audit Committee Meetings.

The role, powers and function of the Audit Committee are as stated in clause 49 of the Listing Agreement andSection 292A of the Companies Act, 1956. The Committee reviews the financial statements before they areplaced 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 Membersare 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

(ii) Remuneration Committee:

The following Directors are members of the Remuneration Committee:


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. Bhansaliare the members, all of them are Independent Directors.

The broad terms of reference of the Remuneration Committee is to ensure that the remuneration practices ofthe Company in respect of the Senior Executives including the Executive Directors are competitive keeping inview 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. Theappointment and remuneration of the Managing Director and Whole-Time Director is governed by resolutionspassed by the Board of Directors and Shareholders of the Company, which covers terms of such appointmentsread with the service rules of the Company. Remunerations paid to the Managing Director and Whole-TimeDirector are recommended by the Remuneration Committee, approved by the Board and are within the limitsset by the shareholders at the General Meetings.

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

(iii) Shareholders Grievance Committee:

The following Directors are members of Shareholders Grievance Committee:


1 Mr. P. R. Bhansali – Chairman, Non-Executive, Independent Director

2 Mr. Babulal M. Bhansali – Promoter, Executive

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Mr. P. R. Bhansali is the Chairman of the Shareholders Grievance Committee. The Committee is authorised toapprove the transfer of shares, review & records shareholders grievances, if any, and monitor the work of theRegistrar and Transfer Agents. In total, 42 meetings of Shareholders Grievance Committee were held duringthe year under review.

Mr. Sadanand S. Lad is the Company Secretary of the Company.

(E) General Body Meetings:

Details of last three Annual General Meetings are given hereunder:

AGM For the year Venue Date Time

22nd 2005 - 2006 Walchand Hirachand Hall, 23.09.2006 11.30 a.m.Indian Merchants’ Chamber,Veer Nariman Road,Mumbai- 400 020.

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 ExchangeAssociation 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” ofthe Company.

Postal ballots:

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

(F) 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 detailsof Mr. C.S.Sastry and Mr. B.S.Bhesania, are provided alongwith Notice of the Annual General Meeting.

(G) Disclosures:

(i) Related Party Transactions:

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

(ii) Compliances by the Company:

There is no non-compliance by the Company. Further, there is no penalties, strictures imposed by the StockExchange, SEBI or any other statutory authority on any matter related to capital markets, during the last threeyears/period.

(iii) 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, theCompany’s personnel have access to the Chairman of the Audit Committee in cases such as concerns aboutunethical behaviour, frauds and other grievances. No personnel of the Company have been denied access tothe Audit Committee.

(iv) 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 ListingAgreement. The Company has not implemented the non-mandatory requirements enlisted by way of annexureto Clause 49 of the listing agreement excepting the constitution of Remuneration Committee.

12


(H) Means of Communication:

Financial Results

(i) The quarterly unaudited financial results and annual audited financial results were published in The EconomicTimes – All editions, Nav Bharat Times – All editions, Maharashtra Times – Mumbai. These results were alsoplaced on the Company’s website www.bhansaliabs.com

(ii) Pursuant to Clause 51 of the Listing Agreement, all data related to quarterly financial results, shareholding patternetc. have been hosted on the Electronic Data Information Filing and Retrieval System (EDIFAR) website atwww.sebiedifar.nic.in within the time frame prescribed in this regard.

(iii) No presentations were made to the institutional investors or to analysts during the year under review.

(iv) The Management Discussion and Analysis Report forms a part of this Annual Report.

(I) Certificate on Corporate Governance :

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

(J) CEO Certification :

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

(K) General Shareholders Information:

(i) 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.

(ii) 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

(iii) 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).

(iv) Payment of Dividend:

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

(v) Share Transfer System:

Shares lodged for transfer at the Registrar’s address are normally processed within 30 days from the date oflodgement, if the documents are clear in all respects. All requests for dematerialisation of shares are processedand the confirmation is given to the depositories within 21 days. Shareholders Grievance Committee of the Boardof 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, mandatesetc. are processed by the Registrars within 15 days.

13


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

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

The correspondence identified as Investor complaints are letters received through statutory/regulatory bodiesand those related to loss of shares, court/consumer forum matters and other matters identified as complaints forreporting under clause 41 of the Listing Agreement. The details of complaints received and attended during theyear 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.

(vii)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

viii) Market Price Data (At BSE):

Month As per BSE Quote Volume

High (Rs.) Low (Rs.) (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

15


(xii)Distribution of Shareholding as on 31st March 2007:

Shareholders SharesNo. of Equity Shares held Number % to total Number % to total

Shareholders 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

(xiii)Categories of Shareholding as on 31st March 2007:

Shareholders SharesCategory Number % to total Number % to total

Shareholders 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

(xiv) Dematerialisation of Shares:

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

(xv) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impacton equity:

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

(xvi) 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.

(xvii) Address for Correspondence for Shareholders/Registrar & Share Transfer Agent:

Intime Spectrum Registry LimitedUnit: Bhansali Engineering Polymers LimitedC-13, Pannalal Silk Mills Compound, L.B.S.Marg,Bhandup (West), Mumbai - 400 078.

Tel. No. : 25963838, Fax : 2594 6969Web Site : www.intimespectrum.comEmail : [email protected]

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

Intime Spectrum Registry LimitedUnit: Bhansali Engineering Polymers Limited203, Daver House, 197/199, D.N.Road,Mumbai – 400 001.Tel. No. : 22694127

16


(xviii) Email ID for Redressal of Investor Complaints:

SEBI vide circular no.MRD/DOP/SE/CIR-22/06, dated 18th December 2006 has advised the listed companies todesignate an exclusive e-mail ID for redressal of Investor Complaints and also to disseminate the same on theCompany’s website.

According to the SEBI circular and Clause 47 (f) of The Listing Agreement, the Company has designated ane-mail ID of the grievance redressal division exclusively for the purpose of registering complaints by investorson its website as given below:

e-mail ID : [email protected]

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :-

(a) Industry structure

ABS consumption in India has grown from 12362 MT during 1992-93 to about 1,00,000 MT during 2006-07 depictingan increase of about 750% in a span of 14 years - CARG about 17%. ABS exhibits wide range of properties, whichallows the use of ABS for diverse applications, viz. Home Appliances, Automobiles, Telecom Industry, Electrical,Electronics goods, Business machines, Luggage, Bus body and lots of other applications such as helmets, novelties,stationery items, etc. In a special study report on “Demand Forecast for Polymers in India till 2009-10”, published byPetrochemicals Data Service, Vadodara reflect demand for ABS is expected to continue it’s growth @ 17% CARGin future too. The choice of ABS polymer for a particular application is dictated by the quality/performance requirementas varied range of composition is available with wide spectrum of properties.

(b) Industry development

In India your Company and another manufacturer both are no doubt growing but not comparable to Chinese players.So far none has dared to establish a plant at internationally competitive capacity level, i.e. 200 KTPA. However,your Company is endeavouring utmost to commission a mega expansion project of 200 KTPA capacity in the 3rdquarter of 2009-10. This will enable your company to become internationally cost & quantity wise competitive. Indiapresents tremendous growth opportunity because consuming segments of ABS from automobile andtelecommunication industries are likely to phenomenally grow. This is because (a) telecommunication revolution inthe domestic market and (b) India in the next 10 years period may become global hub for automobile manufacturing.In these two market segments, India can boast of higher growth rate than China. With continuity of GDP growth rate@ 8% to 9% per annum in the next 5/7 years (as achieved during last 3 years), robust foreign exchange reserveand massive investment in infrastructure development, will result in increased number of people, with high disposableincome, will keep growing. Therefore, market for consumer durable & lifestyle goods will depict exponential growthpicture. Obviously, as a fallout, consumption of ABS is likely to surpass the present growth rate at 15% to 17%.

(c) Outlook & Opportunities:

The opportunity scene has already been presented in the foregoing. Realization has dawned upon your Companythat there is no survival without growth. The growth in a highly competitive environment, especially when internationalplayers have entered Indian market, is indeed a formidable challenge. Hence, it is imperative to achieve excellencein technology and management practices to produce the best at a least cost. Therefore, your Company has revampedits technology with which it is confident to manufacture internationally comparable quality at competitive cost uponimplementation of proposed expansion programme to 200 KTPA.

(d) Segment-wise or product-wise performance

The Company has only one business segment covering ABS and SAN polymers. The figures of production and salesfor both ABS and SAN are furnished in the Notes of Accounts.

(e) Risks and concerns

The Company is gearing up to implement capacity expansion programme to 200 KTPA. The major threat is delaythat may occur for Indian ABS market to grow and in the intervening period, the Company will have to focus ontransnational markets. With the unpredictable and widely fluctuating monomer market, selling ABS in the internationalspot market many a times presents risk of poor EVA (Economic Value Addition). Challenge, therefore, is to withstanduncertainty, since relationship between ABS prices and monomer prices on standard EVA basis does not exist.Therefore, with economics of scale, your Company’s growth strategy would also be focused on accentuating thegrowth of ABS market in India by directing relentless efforts towards application research and development.

(f) Internal Control Systems and their adequacy

The Company has an elaborate system of internal controls to ensure optimal utilization of Company’s resourcesand protection thereof, facilitating accurate and speedy compilation of accounts, management information reports

17


and compliance with statutes, laws and regulations. The Company has a well defined organization structure, authoritylevels and internal guidelines and rules for conducting business. The Internal Auditors conduct regular audits to ensureadequacy of internal control systems, adherence to management instructions and compliance with laws and regulationsof the country.

(g) Discussions on financial performance with respect to operational performance

The Company’s sales performance could have been better but despite lowering of top line (sales), the bottom line(profitability) could be almost protected.

(h) Human Resources

The Company is conscious of the fact that it has to step up its efforts to foster human resource development work inthe manner befitting the requirement which may arise out of implementing mega expansion project. It is working inthe direction of reducing multiplicity of supervision layer and developing a flat structure following Japanese philosophyof building manufacturing business organization. This is being well facilitated by your Company having implementedERP program - mySAP.

In order to remain competitive the entire human resource policy, plan and development strategy is being focused onstaying slim, effective and dynamic. By empowering its employees much more with matching accountability, greaterstress is being laid on skill formation through on the job training for enhancing performance at all levels.

Annexure ‘C’

CHARTERED ACCOUNTANTS’ CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members of

Bhansali Engineering Polymers Limited

We have examined the compliance of conditions of Corporate Governance by Bhansali Engineering Polymers Limited(the Company) for the year ended March 31, 2007, as stipulated in Clause 49 of the Listing Agreement of the said Companywith the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examinations werelimited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditionsof Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

As per the records of the Company, there were no investor grievances remaining unattended for a period exceeding onemonth against the Company.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For and on behalf ofB.L.Dasharda & Associates

Chartered Accountants

Place : Mumbai B.L.DashardaDated : 2nd July, 2007 Partner

Membership no. : 13708

CODE OF CONDUCT DECLARATION

Pursuant to Clause 49 (I) (D) of the Listing Agreement entered into with the Stock Exchanges, I hereby declare that allthe board members and senior management personnel of the Company have affirmed compliances with the Code ofConduct for the current year.

For Bhansali Engineering Polymers Limited


18


Annexure - D

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules 1975 and forming part of the Directors’ Report for the year ended 31st March 2007.

Sr. Name of the Designation / Gross Qualification Age Total Date of Last employment

No. Employee Nature of Duties Remune- (Years) Experience commen- and Designation

ration (Years) cement of

(Rupees) employment

Employed for full financial year mm/dd/yyyy

1 Mr. Suryakant Ladi Executive Director 2,573,938 B. Tech (IIT), 50 24 06/01/2000 Perstorp Aegis

(Commercial) MBA - IIM(A) Chemicals Ltd.

Vice President

(Marketing)

2 Mr. Kiran Bhansali Executive Director 2,402,967 B.E. 31 8 08/01/2004 Bhansali Bright Bars

(Operations) (Mechanical), Pvt. Ltd.

DBM Executive Director

(Operations)

3 Mr. Jayesh B. Bhansali Executive Director 1,854,120 B.Com 24 4 08/01/2003 –

(Corporate)

Employed for part of the financial year

4 Mr. Kenji Asakawa Executive Director 4,867,742 B.E., M.E 61 36 11/06/2003 Nippon A & L Co. Ltd.

(Technical) (Chemical Manager Technology

Engineering)

Notes

1 Gross remuneration includes Salary, House Rent Allowance, Special Allowance, Company’s contribution to Providentfund, Leave encashment, Leave Travel Concession, Medical Reimbursement and Taxable value of perquisites.

2 All appointments are contractual. Other terms & conditions are as per the Company Rules.


B.S.BhesaniaDirector


19


AUDITORS’ REPORT

To,

The Members of

Bhansali Engineering Polymers Limited

1 We have audited the attached Balance Sheet of Bhansali Engineering Polymers Limited as at 31st March, 2007 andalso the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto.These financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2 We conducted our audit in accordance with auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosuresin the financial statement. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3 As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms ofSection 227(4A) of the Companies Act, 1956 (hereinafter referred to as the Act), we enclose in the Annexure astatement on the matters specified in paragraphs 4 & 5 of the said Order.

4 Further to our comments in the Annexure referred to in paragraph 3 above, we report that: -

a) We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appearsfrom our examination of those books;

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books ofaccount;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this reportare in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on 31st March, 2007 and taken on recordby the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2007 from beingappointed as a Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accountsread together with notes thereon, give the information required by the Companies Act, 1956 in the manner sorequired and give a true and fair view in conformity with the accounting principles generally accepted in India;

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2007;

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

iii. in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For and on behalf ofB. L Dasharda & Associates


B. L. DashardaPlace : Mumbai PartnerDated : 2nd July, 2007 Membership No. : 13708

20


ANNEXURE TO THE AUDITORS’ REPORT

Statement referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2007 ofBhansali Engineering Polymers Limited.

1 a) The Company has maintained proper records showing full particulars including quantitative details and situationof fixed assets.

b) Fixed assets have been physically verified by the management according to the regular programme of periodicalverification in a phased manner which in our opinion is reasonable having regards to the size of the companyand the nature of its fixed assets. The discrepancies noticed on such physical verification were not material.

c) No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concernassumption.

2 a) The stocks of finished goods, raw materials, work-in-process, stores and spare parts of the Company have beenphysically verified by the management during the year.

b) The procedures of physical verification of the above stocks followed by the management are reasonable andadequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies between the physical stocks andthe book stocks were not material and have been properly dealt with in the books of account.

3 a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed inthe register maintained under Section 301 of the Companies Act, 1956.

b) The Company had taken an interest free unsecured loan from Managing Director listed in the register maintainedunder Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 20.00lacs and the same has been repaid during the year.

c) The terms and conditions of the loan taken were not prima facie prejudicial to the interests of the Company.

4 In our opinion and according to the information and explanations given to us, there are adequate internal controlsystems commensurate with the size of the Company and the nature of its business with regard to purchase ofinventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in internal control systems.

5 a) According to the information and explanations given to us, we are of the opinion that the particulars of contractsor arrangements that needs to be entered in the register maintained under section 301 of the Companies Act,1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, having regard to the explanationthat many of the items are of a special nature and their prices cannot be compared with alternative quotations,the transactions made in pursuance of contract or arrangement entered in the register maintained under section301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during theyear have been reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has complied with thedirectives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevantprovisions of the Companies Act, 1956 and the rules framed there under to the extent applicable with regards to thedeposit accepted from the public.

7 In our opinion, the Company has an internal audit system commensurate with its size and nature of business.

8 On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribedby the Central Government u/s 209(1) (d) of the Companies Act,1956 have been maintained by the Company.However, we are not required to carry out and have not carried out any detailed examination of such accounts andrecords.

9 a) In our opinion and according to the information and explanations given to us, undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax,Wealth Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues have been generallyregularly deposited in time with the appropriate authorities and there are no undisputed statutory dues payableat the year end for a period of more than six months from the date they became payable.

21


b) In our opinion and according to the information and explanations given to us, there are no dues outstanding inrespect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Service Tax on account of anydispute other than the following:-

Name of the Statute Nature of the Dues Amount Year to which Forum where Dispute(Rs in lacs) the amount relates is Pending

The Central Excise Classification of 77.62 1996-1997 & Supreme CourtAct, 1944 ABS polymers 1998-2000

The Central Excise Cenvat Credit on 4.80 1997-1998 Assistant CommissionerAct, 1944 Material dispatched (Chhindwara)

u/s.173 H

The Central Excise Reprocessed 33.92 1999-2000 Assistant CommissionerAct, 1944 Granules cleared (Chhindwara)

under notification.

The Central Excise Short payment of 0.68 2002-2003 Assistant CommissionerAct, 1944 duty on Input (Chhindwara)

material

The Central Excise Service Tax. 33.33 2004-2005 & Joint CommissionerAct, 1944 2005-2006 (Bhopal)

The Central Excise Penalty of SAN 5.00 2005-2006 Appellate TribunalAct, 1944 Polymers transferred (New Delhi)

to Satnoor.

10 The Company does not have accumulated losses as at the end of the financial year and has not incurred cashlosses in the current financial year and in the immediately preceding financial year.

11 The Company has not defaulted in repayment of any dues to financial institutions or banks.

12 According to the information and explanations given to us, the Company has not granted any loans and advanceson the basis of security by way of pledge of shares, debentures and other securities.

13 The Company is not a chit fund or a nidhi/mutual benefit fund/society, therefore, the clause 4 (xiii) of the Order is notapplicable to the Company.

14 In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15 In our opinion and according to the information and explanations given to us, the Company has not given anyguarantees for loans taken by others from banks or financial institutions.

16 In our opinion, on the basis of information and explanations given to us, the Company has not raised any term loansduring the year.

17 On the basis of an overall examination of the Balance Sheet of the Company, we report that the Company has notutilised funds raised on short term basis for long term investment.

18 The Company has not made any preferential allotment of shares during the year to any parties or companies coveredin the register maintained under Section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year.

20 The Company has not raised any money through a public issue during the year.

21 Based upon the audit procedures performed and on the basis of information and explanations provided by theManagement, we report that no fraud on or by the Company has been noticed or reported during the course of ouraudit.

For and on behalf ofB. L. Dasharda & Associates


B. L. DashardaPlace : Mumbai PartnerDated : 2nd July, 2007 Membership No. : 13708

22


BALANCE SHEET AS AT 31ST MARCH 2007

As At As At31.03.2007 31.03.2006

Schedule (Rs.in lacs) (Rs.in lacs)

I SOURCES OF FUNDS

Shareholders’ Funds :

Share Capital A 1659.06 1659.06

Reserves and Surplus B 20976.25 22635.31 21877.57 23536.63

Loan Funds:

Secured Loans C 6426.23 7905.62

Unsecured Loans D 100.00 6526.23 2000.00 9905.62

Deferred Tax Liability 780.94 316.43

TOTAL 29942.48 33758.68

II APPLICATION OF FUNDS

Fixed Assets :

Gross Block E 30735.57 30828.22

Less: Depreciation 9615.28 7963.93

Net Block 21120.29 22864.29

Add : Capital-Work-In-Progress 473.98 376.26

21594.27 23240.55

Current Assets,Loans & Advances:

Inventories F 4012.17 4158.59

Sundry Debtors G 15795.11 13255.32

Cash & Bank Balances H 610.28 1046.35

Loans & Advances I 1150.03 21567.59 1222.61 19682.87

Less: Current Liabilities & Provisions : J

Current Liabilities 11846.83 8262.41

Provisions 1372.55 13219.38 902.33 9164.74

Net Current Assets 8348.21 10518.13

TOTAL 29942.48 33758.68

Notes on Accounts O

As per our report of even date attached For and on behalf of the Board

For and on behalf ofB. L. Dasharda & AssociatesChartered Accountants B. S. Bhesania Director

B.L. Dasharda P. R. Bhansali DirectorPartnerM. No. 13708 B. M. Bhansali Managing Director

Place : MumbaiDated : 2nd July, 2007

23


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007

Year Ended Year EndedSchedule 31.03.2007 31.03.2006

(Rs.in lacs) (Rs.in lacs)

I INCOMESales 27836.27 30696.67Less : Excise Duty 3810.17 24026.10 4135.80 26560.87

Increase/(Decrease) in Stocks K (139.61) (1094.67)Other Income L 106.10 219.52

23992.59 25685.72

II EXPENDITURERaw Materials Consumed 17782.50 18332.99Manufacturing, Administrative &Selling Expenses M 2798.45 3944.77Interest N 1573.81 1222.60Depreciation 1711.23 1884.57Less: Transferred from Revaluation Reserve 1092.63 618.60 1245.92 638.65

22773.36 24139.01

III Profit before Taxes and Extraordinary Item 1219.23 1546.71Extra ordinary Item (Sale of Land & Building ofVadodara unit) 269.41 0.00

Profit before Taxes 1488.64 1546.71Provision for Taxation- Fringe Benefit 10.12 25.98- Current Year 488.85 498.97 465.90 491.88

Profit after Tax 989.67 1054.83Less: Deferred Tax (464.51) (108.32)

IV Profit after Deferred Tax 525.16 946.51Add:Profit brought forward from Previous year 2362.67 1605.34

2887.83 2551.85

V AppropriationsProposed Dividend 165.91 165.91Tax on Proposed Dividend 28.20 194.11 23.27 189.18

Balance carried to Balance Sheet 2693.72 2362.67

2887.83 2551.85

VI Earning Per Share (Basic & Diluted) 0.32 0.57Face Value Re.1/-per share

Notes on Accounts O





24


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2007

Year Ended Year Ended31.03.2007 31.03.2006

(Rs in lacs) (Rs in lacs)

Cash flow from operating activities :Net profit before tax and Extraordinary Items: 1219.23 1546.71

Adjustment for :Depreciation 618.60 638.65Interest paid 1573.81 1222.60Interest received from bank (50.61) (48.20)(Profit) / Loss on sale of Assets (261.30) 11.50

Operating profit before working capital changes,taxes and 3099.73 3371.26Extraordinary ItemsAdjustment for :

Trade and other receivables (3098.84) (8158.45)Inventories 146.42 739.39Trade payables 4208.03 2521.77

Cash Generated from Operations before taxes 4355.34 (1526.03)Taxes paidIncome Tax Paid (12.57) (135.54)Fringe Benefit Tax Paid (13.10) (23.00)

Net cash from operating activities A 4329.67 (1684.57)

Cash flow from investing activitiesPurchase of Fixed Assets (325.05) (803.20)Interest paid 50.61 48.20Sale of Fixed Assets 651.07 13.33

Net cash used in investing activities B 376.63 (741.67)

Cash flow from Financing ActivitiesProceeds from borrowings (3379.39) 3917.11Interest paid (1573.81) (1222.60)Dividend paid including dividend tax thereon (189.18) (189.18)

Net cash used in financing activities C (5142.38) 2505.33

Net increase/(decrease) in cash (436.08) 79.09and cash equivalents (A+B+C)Cash and Cash equivalents (Opening Balance) 1046.35 967.26

Cash and Cash equivalents (Closing Balance) 610.28 1046.35

Notes:(1) The above Cash Flow Statement has been prepared under the “Indirect Method”as set out in the Accounting Standard -3 on Cash

Flow Statement issued by The Institute of Chartered Accountants of India.(2) Cash and Cash equivalents as at the end of March 31,2007 include Bank Deposit of Rs 596.54 lacs with a maturity period exceeding

three months.(3) Previous year figures have been regrouped and rearranged wherever necessary.





25


SCHEDULES FROM ‘A’ TO ‘O’ FORMING PART OF THE ACCOUNTS

As At As At31.03.2007 31.03.2006

(Rs.in lacs) (Rs.in lacs)

SCHEDULE ‘A’ - SHARE CAPITAL

Authorised:

20,00,00,000 Equity Shares of Re.1/- each 2000.00 2000.00

Issued, Subscribed and Paid-up:

16,59,05,640 Equity Shares of Re.1/- each fully paid up 1659.06 1659.06

SCHEDULE ‘B’ - RESERVES & SURPLUS

Revaluation Reserve :

Opening Balance 16268.00 17530.53

Less : Adjustment towards assetssold / discarded 139.74 16.61

Less: Transferred to Depreciation Account 1092.63 15035.63 1245.92 16268.00

Capital Reserve: Capital Subsidy 44.90 44.90

Share Premium Account 2977.00 2977.00

General Reserve 225.00 225.00

Balance as per Profit & Loss Account 2693.72 2362.67

20976.25 21877.57

SCHEDULE ‘C’ - SECURED LOANS

Cash Credit Limit from Bank 6391.56 6302.54

Corporate Loan from Bank 0.00 1517.84

(The above Cash Credit Limit & Corporate Loansince paid are secured by a first charge on all theimmovable assets of the Company and hypothecationof all movable properties, both present and future)

Finance Lease Liability 8.00 18.82

(Secured by an exclusive charge on the assets

acquired)

Loan against purchase of Vehicles

From Corporate Bodies 1.50 7.17

From Banks 25.17 26.67 59.25 66.42

(Secured by hypothecation of vehicles)

6426.23 7905.62

SCHEDULE ‘D’ - UNSECURED LOANS

Inter Corporate Deposits 100.00 1900.00

Others 0.00 100.00

100.00 2000.00

26


SCHEDULE ‘E’ - FIXED ASSETS (Rs in lacs)

D E S C R I P T I O N GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK

As at Additions Deductions As at As at For the on Adjustment in As at As at As at01.04.06 31.03.07 01.04.06 year Revalued respect of 31.03.07 31.03.07 31.03.06

Assets assets sold /discarded

Land [Free hold] 125.80 0.00 0.00 125.80 0.00 0.00 0.00 0.00 0.00 125.80 125.80

Land [Lease hold] 133.62 43.44 36.07 140.99 0.00 0.00 0.00 0.00 0.00 140.99 133.62

Buildings 3050.09 71.19 238.51 2882.77 307.38 35.90 53.25 33.29 363.23 2519.54 2742.71

Plant & Machinery 26366.31 99.84 16.17 26449.98 7215.95 456.62 1039.38 9.51 8702.44 17747.54 19150.36

Furniture, Fixtures &

Office Equipments* 871.43 8.93 11.37 868.99 360.89 99.72 0.00 7.38 453.23 415.76 510.53

Vehicles 280.97 3.93 17.86 267.04 79.70 26.36 0.00 9.68 96.38 170.67 201.26

TOTAL 30828.22 227.33 319.98 30735.57 7963.93 618.60 1092.63 59.86 9615.28 21120.30 22864.28

PREVIOUS YEAR 30473.96 426.95 72.69 30828.22 6110.58 638.66 1246.43 31.73 7963.93 22864.28

* includes Computer Equipments costing Rs. 31.65 lacs (previous year Rs.31.65 lacs) acquired under finance lease.

Note : Refer note no 1(C) of schedule “O”.

As At As At31.03.2007 31.03.2006(Rs.in lacs) (Rs.in lacs)

SCHEDULE ‘F’ - INVENTORIES(As certified and valued by the Management)Finished Goods 144.01 482.14Work-in-Process 1870.46 1671.94Raw Materials (including Goods in Transit) 1719.22 1747.85Packing Materials 16.20 12.79Stores & Spares 262.28 243.87

(Refer note no 1 (d) of schedule “O”) 4012.17 4158.59

SCHEDULE ‘G’ - SUNDRY DEBTORS(Unsecured, Considered Good)Over six months 683.07 42.03Others 15112.04 13213.29

15795.11 13255.32

SCHEDULE ‘H’ - CASH & BANK BALANCESCash in Hand 6.23 9.85Balances with Scheduled Banks:On Current Accounts 0.47 205.57On Margin Accounts 596.54 827.32Unclaimed Dividend Account 7.04 3.61

610.28 1046.35

SCHEDULE ‘I’ - LOANS & ADVANCES(Unsecured, Considered Good)Deposits 180.04 168.11Advances Recoverable in Cash or in Kindor for value to be received 516.21 722.75Balances with Customs & Excise 220.20 110.74Advance Income Tax 233.58 221.01

1150.03 1222.61

27



SCHEDULE ‘J’ - CURRENT LIABILITIES & PROVISIONS

Current Liabilities:

Sundry Creditors

- Small Scale Industries/ Undertakings 10.17 6.35

- Others 11796.88 8188.78

Unclaimed Dividend* 7.04 3.61

Advance from Customers 0.45 0.25

Other Liabilities 32.29 11846.83 63.42 8262.41

Provisions for:

Gratuity 90.75 104.14

Leave Encashment 19.66 26.86

Taxation 1068.03 579.17

Fringe Benefit Tax 0.00 2.98

Proposed Dividend 165.91 165.91

Tax on Proposed Dividend 28.20 1372.55 23.27 902.33

13219.38 9164.74

* There is no amount due and outstanding to be creditedto Investor Education and Protection Fund

SCHEDULE ‘K’ - INCREASE/(DECREASE) IN STOCKS

Closing Stocks:

Finished Goods 144.01 482.14

Work-in-Process 1870.46 2014.47 1671.94 2154.08

Less: Opening Stocks:

Finished Goods 482.14 429.24

Work-in-Process 1671.94 2154.08 2819.51 3248.75

(139.61) (1094.67)

SCHEDULE ‘L’ - OTHER INCOME

Interest Income

From Debtors 0.00 48.14(T.D.S. Rs. Nil Previous Year Rs.0.14 lacs)

From Banks 50.61 48.20(T.D.S. Rs.11.73 lacs Previous Year Rs.8.68 lacs)

Others 7.70 58.31 7.99 104.33(T.D.S. Rs.1.35 Lacs Previous Year Rs.1.42 lacs)

Miscellaneous Income 35.12 115.19(T.D.S. Rs.0.36 lacs Previous Year Rs. Nil)

Bad debts Recovered 12.67 0.00

106.10 219.52

28



SCHEDULE ‘M’ - MANUFACTURING,ADMINISTRATIVE & SELLING EXPENSES

Salaries, Wages & Bonus 538.35 823.34

Contributions to Provident Fund etc. 42.12 51.27

Employees Welfare Expenses 34.72 58.74615.19 933.35

Stores and Spares Consumed 95.59 217.22

Packing Materials Consumed 172.88 205.71

Power & Fuel 1223.64 1404.18

Rent, Rates & Taxes 38.25 29.27

Insurance 56.81 88.01

Travelling & Conveyance 81.86 173.19

Repairs & Maintenance :

Buildings 0.70 14.59

Machinery 37.24 95.63

Others 36.71 48.5074.65 158.72

Printing & Stationery 8.56 17.25

Postage, Telephone, Fax etc. 35.83 58.49

Miscellaneous Expenses 183.14 237.34

Legal & Professional Charges 16.31 50.03

Auditors’ Remuneration :

Audit Fees 2.20 2.00

Tax Audit Fees 0.30 0.25

Taxation Matters 1.35 0.18

Review Audit Fees and Certifications 0.29 0.29

Out of Pocket Expenses 0.00 0.064.14 2.78

Directors’ Sitting Fees 0.72 0.68

Managerial Remuneration 80.77 22.42

Loss on Sale of Assets 8.11 11.50

Commission 12.56 27.72

Freight & Forwarding 56.78 265.73

Cash discount 32.66 41.18

2798.45 3944.77

SCHEDULE ‘N’ - INTEREST

On Corporate Loan to Bank 87.31 154.02

On Cash Credit Limits to Bank 914.49 616.46

On Others 572.01 452.12

1573.81 1222.60

29


SCHEDULE ‘O’

NOTES FORMING PART OF THE ACCOUNTS

1. Significant Accounting Policies:

(a) Basis of Accounting

The financial statements are prepared under historical cost convention modified by revaluation of fixed assetsand in accordance with the requirements of the Companies Act, 1956 and comply with the Accounting Standardsissued by the Institute of Chartered Accountants of India to the extent applicable. For recognition of Income andExpenses, mercantile system of accounting is followed.

(b) Revenue Recognition

(i) The Company recognises sale at the point of despatch of goods to the customers.

(ii) Customs duty benefits in the form of advance license entitlements are recognised on export of goods andare set off from material costs.

(c) Fixed Assets & Depreciation

(i) The Fixed Assets are stated at cost of acquisition/construction and includes amounts added on revaluationless accumulated depreciation. All cost including financing cost attributable to the fixed assets to bring theassets to their intended use are capitalised.

(ii) Depreciation on plant and machinery (other than continuous process plant) has been calculated on the writtendown value method at the rates specified in schedule XIV to the Companies Act, 1956.

(iii) Depreciation on all other assets, other than leasehold land including continuous process plant, has beencalculated on the straight line method at the rates specified in schedule XIV to the Companies Act, 1956.

(iv) Cost of leasehold land is not amortised over the lease period.

(v) Depreciation on the assets purchased/sold during the year has been provided on a pro-rata basis.

(d) Valuation of Inventories

(i) Inventories are valued at cost except for finished goods which are valued at lower of cost or net estimatedrealisable value.

(ii) Cost of inventories is computed on Weighted Average basis.

(iii) Finished goods and work in progress include cost of conversion and other costs incurred in bringing theinventories to their present location and condition.

(e) Retirement benefits

(i) The Company’s contributions to Provident Fund and Superannuation Fund are charged to the Profit & LossAccount.

(ii) The liability for Gratuity and Leave encashment has been provided on the basis of actuarial valuation thereofas at the year end.

(f) Foreign Currency Transactions

(i) Foreign currency transactions are recorded at the exchange rate prevailing at the time of the transactionand exchange difference, if any, on settlement of transaction is recognised in the Profit & Loss Account.

(ii) Amounts of foreign currency transactions remaining pending at the year end are recorded at the exchangerate prevailing at that time.

(iii) All exchange differences arising on settlement/conversion on foreign currency transactions are included inthe Profit and Loss Account.

(iv) In respect of transactions covered by forward exchange contracts, the difference between the forward rateand the exchange rate at the date of transaction is recognized as income or expense over the life of thecontract.

(g) Borrowing Cost

Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part ofthe cost of these capitalised assets, upto the date when such assets is ready for its intended use. Borrowingcosts on working capital is charged to Profit and Loss Account for the year.

(h) Excise Duty

Cenvat is accounted as per exclusive method of accounting in terms of Accounting Standard – 2 on Valuationof Inventories, issued by the Institute of Chartered Accountants of India.

30


(i) Taxation

(i) The provision for taxation is made at the current rate of tax as applicable for the income of the relevant yearas per Income Tax Act, 1961.

(ii) Deferred tax is recognised, subject to consideration of prudence on timing difference, being the differencebetween the taxable and accounting income/expenditure that originate in one year and are capable of reversalin one or more subsequent year(s). Deferred tax assets are not recognised unless there is virtual certaintythat sufficient future taxable income will be available, against which such deferred tax asset will realise.

(j) Leased Assets

Assets acquired under finance lease, which effectively transfer to the Company all the risks and benefits aredisclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of thelease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

(k) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a presentobligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilitiesare not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in thefinancial statements.

2. The Freehold Land, Building and Plant & Machinery of the Company as on 30th June 2002 and as on 30th June 2004were revalued by the approved valuer and the surplus arising thereon has been transferred to Revaluation Reserve.Depreciation on revalued assets, amounting to Rs.1092.63 lacs (Previous Year Rs. 1245.92 lacs) has beenappropriated from the Revaluation Reserve.

3. Sundry Creditors include amounts due to small scale industrial undertakings Rs. 10.17 lacs (Previous Year Rs. 6.35lacs). Party to whom the amounts are outstanding for more than 30 days is as per attached annexure.

4. Managerial Remuneration:

Current Year Previous Year(Rs. in lacs) (Rs. in lacs)

(a) Remuneration to Managing Director:

(i) Salaries & Allowances etc 21.01 21.00

(ii) Contributions to Provident Fund andSuperannuation Fund 2.09 1.42

(iii) Commission 39.22 0.00

Total 62.32 22.42

(b) Computation of Net profit in accordance with Section 349read with Section 309(5) of the Companies Act, 1956.

Particulars Amount(Rs. In lacs)

Profit before taxes as per Profit & Loss Account 1488.64

Add: Directors sitting fees 0.72

Managerial Remuneration (including Commission) 80.77

Loss on sale of Fixed Assets 8.11 89.60

1578.24

Less: Profit on sale of Fixed Assets 269.41

Net Profit in accordance with Section 349 readwith Section 309(5) of the Companies Act,1956. 1308.83

Maximum Remuneration @ 5% of Net Profit(in accordance with Section 349 read withSection 309(3) of the Companies Act,1956) 65.44

Remuneration paid 62.32

31



(c) Remuneration to Executive Director:Salaries 61.45 72.00Less: Capitalised 43.00 72.00

18.45 Nil

(d) Directors’ Sitting Fees 0.72 0.68

5. As required by Accounting Standard 22 “Accounting for Taxes on Income” issued by the Institute of CharteredAccountants of India, which is mandatory in nature, the Company has recognised Deferred Taxes, which result fromthe timing difference between the Book Profits and Tax Profits, for the year aggregating to Rs.464.51 lacs (PreviousYear 108.32 lacs) in the Profit and Loss Account.

The major components of deferred tax assets and liabilities arising on account of timing difference are:

Particulars Current Year Previous Year

Deferred Tax Assets/ Liability (Rs. in lacs) (Rs. in lacs)consists of

Deferred Tax AssetsProvisions 47.49 68.07

47.49 68.07

Deferred Tax LiabilityDepreciation 828.42 384.49

828.42 384.49

Net Deferred Tax Liability 780.94 316.43

6. Related party disclosures and transactions with related party:

Name of the related party and Nature of transactions Current Year Previous Yearnature of relationship (Rs. in lacs) (Rs. in lacs)

Transaction Outstanding Transaction OutstandingValue amounts Value amounts

carried in the carried in theBalance Sheet Balance Sheet

(i) Associates:Bhansali Ferromet Pvt. Ltd. Unsecured Loan taken 90.00 Nil 50.00 Nil

Bhansali Bright Bars Pvt. Ltd Unsecured Loan taken 25.00 Nil Nil Nil

(ii) Relative of Key ManagerialPerson:Mrs. D. B. Bhansali Rent Deposit Nil 18.00 Nil 18.00

Rent paid 12.24 Nil 12.24 Nil

Mr. Jayesh Bhansali Salary 18.45 2.27 1.20 0.10

Mr. Vimal Bhansali Salary Nil Nil 1.08 Nil

(iii) Key Managerial PersonnelMr. B.M. Bhansali Managerial(Managing Director) Remuneration 62.32 31.42 22.42 3.28

Unsecured Loan Taken 20.00 0.00 20.00 0.00

Mr. Kenji Asakawa(Executive Director - Technical Remuneration 43.00 0.00 72.00 4.03Upto 22/09/2006)

Mr. Sunil Tandon Remuneration &(C.E.O.) Perquisites 0.00 Nil 123.08 Nil

Mr. Kiran Bhansali Remuneration &(Executive Director - Operations) Perquisites 22.91 7.68 24.13 1.14

32


7. The Company has only one reportable business segment and geographical segment and hence no further disclosureis required under Accounting Standard – 17 on Segment Reporting.

8. Earning per share is calculated as shown below:


Net profit / (Loss) as per Profit & Loss Accountafter tax available for equity shareholders 525.16 946.51

Weighted Average Number of Equity Shares (Nos.) 16,59,05,640 16,59,05,640

Earning per share (Rs.)

Basic & Diluted 0.32 0.57(Face Value Re 1/- per share)

9. Lease Commitments:

The Company had acquired certain items of computer equipments on finance lease amounting to Rs. 31.65 lacsduring the financial year 2004-05. The minimum future lease rental outstanding as on 31st March 2007 in respect ofthese assets is as follows:

Rs. in lacs

Due Total Minimum Future Interest on Present value ofLease Payments Lease payments Minimum Lease

Outstandings Outstandings Payments

As on As on As on As on As on As on31.03.2007 31.03.2006 31.03.2007 31.03.2006 31.03.2007 31.03.2006

Within one year 8.43 12.27 0.43 1.45 8.00 10.82

Later than one year butnot later then five years Nil 8.43 Nil 0.43 Nil 8.00

Later than five years Nil Nil Nil Nil Nil Nil

Total 8.43 20.70 0.43 1.88 8.00 18.82

Lease payments recognised during the year in the profit and loss account is Rs 1.23 lacs (Previous Year Rs. 2.36lacs).

10. Borrowing cost capitalised during the year is Rs. 73.40 lacs (Previous Year Rs. 56.47 lacs).

11. Details of foreign currency exposures that are not hedged by derivative instruments or otherwise.

Current Year Previous Year

Particulars Amount in Currency Equivalent Amount in Currency Equivalentforeign Indian foreign Indian

Currency Currency Currency Currency(Rs in Lacs) (Rs in Lacs)

Liabilities Payable 9026.00 EURO 5.22 17475 EURO 9.53

24956283.73 USD 10212.34 15186330.82 USD 6812.59

Assets Receivable 32580.00 USD 13.32 83348.59 USD 37.39

12. Information given under Clause 3(i) (a), 3(ii), 4-C, 4-D of Part II of Schedule VI to the Companies Act, 1956.

Current Year Previous Year

(a) Installed Capacity:

Acrylonitrile Butadiene Styrene (ABS) Resins /Styrene Acrylonitrile (SAN) Resins 48000 TPA 48000 TPA(As certified by the Management & relied uponby the auditors, being a technical matter)

33


Qty Value Qty Value(MT) (Rs. In lacs) (MT) (Rs. in lacs)

(b) Actual Production(i) For Captive Consumption

SAN Resins 18055 - 19350 -

(ii) Meant for SaleABS Resins 25953 - 32830 -SAN Resins 1718 - 1639 -

27671 - 34469 -

(c) SalesABS Resins 26316 26347.82 32783 29692.52SAN Resins 1718 1488.45 1639 1004.15

28034 27836.27 34422 30696.67

(d) Opening Stock of Finished GoodsABS Resins 490 482.14 443 429.24

(e) Closing Stock of Finished GoodsABS Resins 127 144.01 490 482.14

(f) Value of Import on CIF BasisComponents & Spare Parts 4.20 18.70Capital Goods - -Raw Materials 13333.75 13837.75

(g) Expenditure in Foreign currency –(i) Interest and Finance Charges 335.13 159.92(ii) Commission on Sales 0.35 0.08(iii) Others 8.95 10.83

(h) Earnings in Foreign ExchangeExports on F.O.B. Basis 699.96 1440.21

Current Year Previous YearQty Value Qty Value

(MT) (Rs. in lacs) (MT) (Rs. in lacs)

(i) Raw Material ConsumedAcrylonitrile 6295 4376.68 6616 4100.03Butadiene 3353 2403.42 4295 2584.93Styrene 16911 9216.64 18025 9901.98Sub-Raw Material 1785.76 1746.05

17782.50 18332.99

(Rs.in lacs) % (Rs.in lacs) %

(j) Value of Raw Materials, Stores & Sparesand Components consumed(i) Raw materials:

Imported 13654.00 76.78 14841.05 80.95Indigenous 4128.50 23.22 3491.94 19.05

17782.50 100.00 18332.99 100.00

(ii) Stores & Spare parts & ComponentsImported 5.48 5.73 18.70 8.61Indigenous 90.11 94.27 198.52 91.39

95.59 100.00 217.22 100.00

34


As at As at31.03.2007 31.03.2006

(Rs. in lacs) (Rs. in lacs)

13. Contingent Liabilities in respect of:

(a) Bills Discounted. 58.25 113.75

(b) Estimated amount of contracts remainingto be executed on capital accounts andnot provided for (net of advances). 0.86 20.32

(c) Show Cause Notices issued in respect ofpayment of Excise Duty.The matters aresubjudice and not provided for: 67.93 33.92

(d) Demand raised by Excise Authoritiesagainst which Appeals have beenfiled for which for which the companyhas been legally advised that theseare good cases and the demand islikely to be deleted. 87.42 82.42

14. Figures for the Previous Year have been regrouped & rearranged wherever necessary to conform to the CurrentYear’s classification.

SIGNATURES TO SCHEDULES ‘A’ TO ‘O’


For and on behalf ofB.L.DASHARDA & ASSOCIATES B.S.Bhesania DirectorChartered Accountants

B.L.Dasharda P.R.Bhansali DirectorPartnerM. No. 13708

Place : Mumbai B. M. Bhansali Managing DirectorDated : 2nd July, 2007

Annexure to “Schedule ‘O’ – Notes to Accounts”

Name of Small Scale Industrial undertakings to whom the Company owes amounts which are outstanding formore than 30 days as on 31.03.2007.

– Sunshine Organics Pvt. Ltd.

35


SCHEDULE - VI

PART - IV

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE(Inserted by Notification No.GSR 388 (E), dated 15.05.1995)

I. Registration Details

Registration No. 3 2 6 3 7 State Code 1 1(Refer Code List)

Balance Sheet Date 3 1 0 3 2 0 0 7

Date Month Year

II. Capital raised during the year(Amount in Rs. Thousands)

Public Issue Right Issue

- - - - - - - - - - - - - - - - - -

Bonus Issue Private Placement

- - - - - - - - - - - - - - - - - -

III. Position of Mobilisation and Deployment of Funds

(Amount in Rs. Thousands)

Total Liabilities Total Assets

- - 2 9 9 4 2 4 8 - - 2 9 9 4 2 4 8

Source of Funds

Paid-up Capital Reserves & Surplus

- - - 1 6 5 9 0 6 - - 2 0 9 7 6 2 5

Secured Loans Unsecured Loans

- - - 6 4 2 6 2 3 - - - - 1 0 0 0 0

Deferred Tax Liability

- - - - 7 8 0 9 4

Application of Funds

Net Fixed Assets Investments

- - 2 1 5 9 4 2 7 - - - - - - - - -

Net Current Assets Misc. Expenditure

- - - 8 3 4 8 2 1 - - - - - - - - -

Accumulated Losses

- - - - - - - - -

IV. Performance of Company (Amount in Rs. Thousands)

Turnover & Other Income Total Expenditure

2 7 9 4 2 3 7 2 6 5 8 3 5 3

Profit/Loss before tax Profit/Loss after tax

1 4 8 8 6 4 5 2 5 1 6

Earning per Share in Rs. Dividend rate %

0 . 3 2 1 0

V. Generic Names of Three Principal Products/Services of Company(As per monetary terms)

Item Code No.

(ITC Code)

3 9 0 3 3 0 . 0 0

Product Description

A C R Y L O N I T R I L E B U T A D I E N E

S T Y R E N E R E S I N S - - - - - - - - -

Item Code No.

(ITC Code)

3 9 0 3 2 0 . 0 0

Product Description

S T Y R E N E A C R Y L O N I T R I L E

R E S I N S - - - - - - - - - - - - - - -

Item Code No.

(ITC Code)

4 0 0 2 1 9 . 0 2

Product Description

S T Y R E N E B U T A D I E N E

R U B B E R L A T E X - - - - -


B.S.Bhesania Director

P.R.Bhansali Director

Place : Mumbai

Dated : 2nd July, 2007 B.M.Bhansali Managing Director

36


PERFORMANCE HIGHLIGHTS (10 Years)

Financial Installed Sales Sales Profit/ Net BookYear / Capacity Volume (Loss) worth ValuePeriod (12 months after per

basis) Tax Share

(MT) (MT) Rs. In lacs Rs. In lacs Rs. In lacs Rs.

1997-98 15000 8669 5756 146.58 2648.34 19.85

1998-99 15000 11307 6710 244.92 2893.26 21.69

1999-00 15000 12147 8435 198.49 3056.55 22.91

2000-01 15000 12159 9197 (442.66) 2477.71 18.62

2001-02(15 Months) 27000 20048 12638 326.80 2558.06 (*) 19.18 (*)

2002-03(9 Months) 30000 10221 8386 207.33 2765.39 (*) 20.73 (*)

2003-04(15 Months) 48000 11443 9379 (282.14) 5733.25 (*) 3.46 (**)

2004-05(9 Months) 48000 17313(#) 17399(#) 967.23 6511.30(*) 3.92(**)

2005-06(12 Months) 48000 34422 30655.49 946.51 7269.57(*) 4.38(**)

2006-07(12 Months) 48000 28034 27836.27 525.16 7599.68(*) 4.58(**)

(*) Excluding Revaluation Reserve.

(**) Face Value of Shares sub-divided from Rs.10/- to Re.1/- w.e.f. 23.02.2004.

(#) Excluding Trading Sales.

The BEPL at Satnoor, Madhya Pradesh

Printed at : 2218 3544 / 2939Onlooker Press ✆

Book - Post

Regd.Office : Bhansali House, A-5, Veera Desai Road, Andheri (West), Mumbai - 400 053.Tel : 2673 1779 - 85 Fax : 2673 1796 E-mail : [email protected]

Works - Satnoor : Bhansali Nagar, Taluka Sausar, Dist.: Chhindwara, (M.P.) - 480 108.Tel : (07165) 226376-79 Fax : (07165) 226381 E-mail : [email protected]

Works - Abu Road : Plot no. SP-138-144, Ambaji Industrial Area, Abu Road, Dist.: Sirohi, (Raj.) - 307026.Tel : (02974) 226781-82, 226862, 226213 Fax : (02974) 226783 E-mail : [email protected]

MARKETING OFFICES

NORTH BRANCH SOUTH BRANCHES

WEST BRANCH

EAST BRANCH

Plot no.217, Nangloi Suite no.310, Tel: 080-26621143

NEW DELHI 110 041 BANGALORE 560 004.E-mail: [email protected] E-mail: [email protected]

Bhansali House,

Andheri (West),MUMBAI 400 053.E-mail: [email protected]

6/8A/1, Mob:09831021245 No.54/15, Radial House Tel/Fax:044-26545637Netaji Nagar, Anna Nagar West Extn.,KOLKATA 700 092. Near Jeevan Bima Nagar Gate no.2,

CHENNAI 600 101.E-mail: [email protected] E-mail: [email protected]

Extn., Tel: 011-32417182-852C, Najafgarh Road, 'Shreshtha Bumi', Fax:080-26624083Near Water Tank, Nangloi, Bldg.no.87/1, K.R.Road,

Tel: 022-26731779-85 4-B, Balasundaram Road, Tel/Fax:0422-2214119A-5, Veera Desai Road, Fax:022-26731796 (R.T.O.Office),

Pappanaicken Palayam,COIMBATORE 641 037.E-mail: [email protected]

Visit us on www.bhansaliabs.com


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bhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedRegistered Office : Bhansali House, A-5, Veera Desai Road, Andheri (West), Mumbai-400 053.

ATTENDANCE SLIP

(Please complete the attendance slip and hand it over at the entrance of the meeting hall.Members/Representatives of Corporate Members or Proxies are allowed to attened the meeting.)

Folio No. * DP ID

No. of Shares held Client ID

I hereby record my presence at the 23rd Annual General Meeting to be held on 22nd day of September2007 at 11.30 a.m. at Walchand Hirachand Hall, Indian Merchants’ Chamber, Veer Nariman Road,Churchgate, Mumbai – 400 020.

Name of Member(s)/Proxy (in block letters) Signature of Member(s)/Proxy* Applicable for investors holding shares in Physical Form.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TEAR HERE - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

bhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedbhansali engineering polymers limitedRegistered Office : Bhansali House, A-5, Veera Desai Road, Andheri (West), Mumbai-400 053.

PROXY FORM

Folio No. * DP ID

No. of Shares held Client ID

Name(s) in Full Father/Husband’s Name Registered Address

1.

2.

3.

being a Member / Members of BHANSALI ENGINEERING POLYMERS LIMITED, hereby appoint

Shri/Smt. .......................................................................................of ..................................................……..

(or failing him/her) ........................................................................ of ...................................................…….

(or failing him/her) ........................................................................ of ....................................................…...

as my/our proxy to attend and vote for me/us on my/our behalf at the 23rd Annual General Meeting of theCompany to be held on 22nd day of September 2007 and at any adjournment thereof.

AS WITNESS my hand / our hands this .......................................... day of ......................... 2007.

Signed by the said

* Applicable for investors holding shares in Physical Form.

NOTE : The proxy must be deposited at the Registered Office of the Company not less than 48 hoursbefore the time for holding the meeting. Proxy need not be a member of the Company.

Affix aRe.1/-

RevenueStamp

Annual Report 2006-2007 - bhansaliabs.combhansaliabs.com/download/annual_result/Bhansali_AR...

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