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Directors Report of Balmer Lawrie Investments Ltd.

Mar 31, 2015

Dear Members,

The Directors have the pleasure in presenting their 14th Annual Report along with the audited Balance Sheet and Profit & Loss Account for the financial year ended 31st March 2015 and other allied statements/disclosures as required as per the applicable statute.

Overview on the State of Company's Affairs

Your Company's performance is greatly dependent upon two factors, one, being the dividend received from its subsidiary, Balmer Lawrie & Co. Ltd. (BL) and the other being the interest received from deployment of surplus funds with scheduled commercial banks.

Though during the year under review, i.e., 2014-15, the bank interest rates decreased but due to increase in the amount of dividend, received from BL, the total income of your Company increased as compared to the last fiscal, i.e., 2013-14.

Comparative annual financial results for the year under review, i.e., 2014-15, and the immediately preceding year, i.e., 2013-14, has been furnished below:

Financial Results

(Rs. in Lacs)

Year ended on Year ended on 31st March 2015 31st March 2014

Profit before Tax 3769.47 3608.63

Less: Provision for Tax 200.00 170.00

Net Profit 3569.47 3438.63

Dividend

Your Directors are pleased to recommend for declaration at the ensuing 14th Annual General Meeting of your company a dividend of 125%, i.e., Rs. 12.50/- (Rupees twelve and paise fifty only) per Equity share of the face value Rs. 10/- each (fully paid-up), for the financial year ended 31st March 2015 [as against dividend @ 120%, i.e., Rs. 12/- (Rupees twelve only) per Equity share of the face value of Rs. 10/- each (fully paid-up) recommended and declared in the immediately preceding year, i.e., 2013-14]. Upon declaration by the members, dividend will be paid either by way of warrant, demand draft or NECS mode and will be paid to those Shareholders who would be holding shares in the Company as on the date of commencement of the book closing period i.e., as on 4 September 2015 (End of Day). In respect of shares held electronically, dividend will be paid to the beneficial owners, as per details to be furnished by their respective Depositories, i.e., either Central Depository Services (India) Ltd. or National Securities Depository Ltd.

Appropriation

The amount available for appropriation is the sum total of Profit after Tax (PAT) and the balance Profit brought forward from the previous financial year(s). The amount available for appropriations for the financial year 2014- 15 as compared to the immediately preceding financial year 2013-14, are given hereunder:

(Rs. in Lacs)

2014-15 2013-14

PAT 3569.47 3438.63

Add: Balance Profit brought 341.39 254.15

forward from the preceeding financial year

Amount Available for 3910.86 3692.78

appropriations

The aforesaid amount available for appropriation for the financial year 2014-15 and 2013-14 has been/was appropriated in the following manner:

(Rs. in Lacs)

2014-15 2013-14

Dividend 2774.65 2663.67

(Rate in % ) (125%) (120%)

Corporate Tax on Dividend NIL NIL

Transfer to Reserve Fund 713.90 687.72

Surplus carried forward 422.32 341.39 to the next year

Deposits with Bank

Surplus funds of the Company have been deployed in various Fixed Deposit Schemes of the scheduled commercial Banks. As on 31st March 2015, the total amount of deployments in the Fixed Deposit Schemes stood at Rs. 7418 lacs, which in turn has yielded an interest income of Rs. 640.61 lacs.

Management Discussion and Analysis Report

Your Company is not engaged in any other business activity, except, to hold the equity shares of Balmer Lawrie & Co. Ltd. and accordingly matters to be covered under 'Management Discussion and Analysis Report' are not applicable to your Company.

Report on Subsidiary Companies

In terms of Section 2(87) of Companies Act, 2013 ('the Act') your Company has three subsidiary companies, namely, Balmer Lawrie & Co. Ltd., Balmer Lawrie (UK) Ltd. ('BLUK') and Visakhapatnam Port Logistics Park Limited (VPLPL). By virtue of shareholding in BL (61.8%), your Company is the holding Company of BL. BL in turn has 2 subsidiaries BLUK and VPLPL.

Since the control in BL is intended to be temporary and there is no change of such intension, Consolidated financial statements of the Company with BL has not been prepared in terms of para 11(a) of Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India. Statement containing salient features of Financial Statement of subsidiaries as per first proviso to section 129 (3) in FORM AOC-1 is attached to the Financial Statement. However, separate audited accounts in respect of each of its subsidiary are placed on the website of the Company - www.blinv.com. Further, a copy of separate audited financial statements in respect of each of the subsidiary shall be provided to any shareholder of the company who asks for it. Since Financial Statements of the company have not been consolidated with subsidiaries/associates /joint ventures, report on performance and financial position of each of them as per Rule 8(1) of companies (Accounts) Rules 2014 is not required.

The Company has adopted policy for determining 'Material Subsidiaries' w.e.f 28 March 2015. The said policy is uploaded on the website of the Company- www.blinv.com.

Compliance of Right to Information Act, 2005

Information, which are mandatorily required to be disclosed under the RTI Act 2005, have been disclosed on the website of your Company. No applications seeking information under the Right to Information Act, 2005 (RTI Act), has been received during the year.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Since the Company does not have any business other than to hold shares of Balmer Lawrie & Co. Ltd. the reporting of Conservation of Energy, Technology Absorption as per Rule 8(3) of Companies(Accounts) Rules 2014 is not applicable for your Company.

The details pertaining to Foreign Exchange Earnings and Outgo are enumerated as under:

NIL

Risk Management Policy

The Company does not have any business apart from holding the shares of Balmer Lawrie & Co. Ltd. offloaded by IBP Ltd. and is a Special Purpose Vehicle formed for temporary purpose. Hence, the requirement of laying down procedures for risk assessment and minimization is not applicable. Further, as per Para 4.1 of the Circular of SEBI bearing No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014, the requirement of 49(VI)(C) is not applicable to the Company as it does not fall within top 100 listed Companies by market capitalization.

Corporate Social Responsibility (CSR)

Your Company has not made expenditure in CSR projects as per Section 135 of the Companies Act 2013 and applicable Rules and DPE Guidelines. It may be pertinent to mention in this regard that:

* The Company being a Special Purpose Vehicle was formed for a temporary purpose to hold the shares of Balmer Lawrie & Co. Ltd. (BL) offloaded by IBP Ltd. and does not carry on any business, other than holding 61.80% equity shares of BL and receiving dividend from BL.

* The Company does not have any employees of its own. The services of inter-alia Company Secretary who has been placed on secondment by BL is pursuant to a Service Agreement between the Company and BL.

* The Company does not have any functional directors as all the Directors are part-time non-executive directors. Further, the income of the Company is primarily the dividend received from BL which is a Company governed by Section 135 of Companies Act 2013 on CSR and makes the required expenditure on the same as per the applicable provisions.

* In the given constraints, it is not feasible to draft a Corporate Social Responsibility Policy or Action Plan or to oversee its implementation as the status and nature of the Company does not gel with concept of CSR

Directors' Responsibility Statement

Your Directors acknowledges and confirm that:

(i) In the preparation of the annual accounts, the applicable Accounting Standards had been followed and there was no material departures;

(ii) The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the said financial year;

(iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors had prepared the annual accounts on a going concern basis.

(v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) The Directors had devised proper systems to ensure, compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

Your Company has been consistently complying with the various regulations of the Securities & Exchange Board of India (SEBI), including regulations on Corporate Governance, which is enumerated under Clause 49 of the Listing Agreement. Pursuant to the said SEBI regulations, a separate section titled 'Corporate Governance Report' is being furnished and marked as Annexure 1.

Your Company being a Government Company is also complying with the corporate governance norms of the Department of Public Enterprise (DPE), to the extent which is not included and does not contradict with SEBI guidelines.

Further, your Company's Statutory Auditors have examined compliance of the aforesaid SEBI Corporate Governance guidelines and issued a certificate, which is annexed to this Report and marked as Annexure 2.

Directors and meetings during the year

There has been considerable change in composition of the Board of Directors during the financial year under review. The details of the meetings of the Board during the year have been enumerated in the Corporate Governance Report Annexure 1.

Directors retired during the year

Shri P Kalyanasundaram had been long associated with the Company since 2008 as Non-Executive, Government Nominee Director. He was acting as the Chairman of the Board Meetings. The Company had received letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that the nomination of Shri P Kalyanasundaram, [the then Joint Secretary in MoP&NG, who had earlier attained the superannuation age on 31st December, 2014 was withdrawn with immediate effect. Accordingly the cessation of Shri P Kalyanasundaram from the Board of Directors of the Company with effect from 5th March, 2015 due to withdrawal of nomination by MoP&NG was taken on record.

Shri Sukhvir Singh had also been long associated with the Company since 2010 as Non-Executive, Government Nominee Director of the Company. Shri Singh was acting as the Chairman of the Stakeholders Relationship Committee. The Company had received letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that the nomination of Shri Sukhvir Singh [the then Director (E&S Division) in MoP&NG who had earlier attained the superannuation age on 30th November, 2014] was withdrawn with immediate effect. Accordingly the cessation of Shri Sukhvir Singh from the Board of Directors of the Company with effect from 5th March, 2015 due to withdrawal of nomination by MoP&NG, was taken on record.

Directors Appointed during the year

Shri Alok Chandra had been appointed Government Nominee Director of the Company with effect from 5th March, 2015 pursuant to the letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated to the Company that Shri Alok Chandra who is acting as Adviser (Finance), MoP&NG had been nominated as Government Director on the Board of the Company with immediate effect on co-terminus basis or until further order, whichever is earlier. The brief profile of Shri Chandra has been provided with the notice of the Annual General Meeting and explanatory statement thereof.

Smt Mary Jacob had been appointed as the Government Nominee Director of the Company with effect from 24th June, 2015 pursuant to the letter bearing reference no. C-31034/6/2015-CA-FTS:37868 dated 14th May, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that Smt. Mary Jacob, Deputy Secretary, MoP&NG having DIN NO. 07208084 had been nominated as Government Director on the Board of the Company with immediate effect or until further order. The brief profile of Smt. Jacob has been provided with the notice of the Annual General Meeting and explanatory statement thereof.

Shri Prabal Basu shall retire by rotation at the ensuing 14th Annual General Meeting of your Company. Your Company has received a communication from Shri Prabal Basu wherein he has expressed his willingness to continue as Director, if re-appointed by the shareholders. Therefore the proposal of re-appointment of Shri Basu on the Board has been included under Ordinary business of the Notice convening the ensuing 14th Annual General Meeting of your Company. Your Directors recommends passing of the requisite resolutions.

Related Party Transactions

The Company had adopted policy on "Materiality of Related Party Transactions and dealing with Related Party Transactions" w.e.f. 28th March, 2015. The said policy has been uploaded on the website of the Company www.blinv.com.

Particulars of contracts and arrangements with related parties referred under section 188 (1)

The particulars of contracts and arrangements with related parties referred under section 188 (1) in the prescribed form as per section 134 (3) (h) of Companies Act, 2013 is as under:

Form No. AOC 2

1. Details of contracts and arrangements or transactions not at arm's length basis - NIL

(all the contracts and arrangements or transactions with Related Parties were on arm's length basis)

2. Details of material contracts or arrangement or transactions at arm's length basis - NIL (None of the transactions with related party can be considered as "material" as per the policy on - Materiality of Related Party Transactions and dealing with Related Party Transactions adopted by the Company.

All contracts or arrangement entered into under Section 188(1) has been enumerated in details in Note no. 23 forming part of the financial statement as on 31th March, 2015.

Justification on the Related Party Transactions entered -

* In the year 2002, the Company for the purpose of infrastructure and management support entered into a service contract with its subsidiary Balmer Lawrie & Co. Ltd. (BL), since the Company does not have any infrastructure arrangement or any employee. The said agreement is renewed from time to time pursuant to which the Company receives services in nature of administration, finance, taxation, legal, secretarial, etc from BL.

* The Company was formed as a Special Purpose Vehicle with no regular business activity on 20th September, 2001, with the sole objective of holding the Equity shares of BL, transferred / de-merged from IBP Co. Ltd. (under the scheme of Arrangement & Reconstruction).

* The major source of income of your Company is dividend earned from its subsidiary, BL.

Particulars of loans, guarantees or investments under section 186

Details of investments made by Company in other Company is enumerated in Note 7 & 18 of the Financial statement.

Auditors

The Statutory Auditors of your Company (being a 'Government Company'), are appointed/ re-appointed by the Comptroller & Auditor General of India ('CAG'), Section 139 and other applicable provisions of the Companies Act 2013.

Pursuant to Section 142 and other applicable provisions of the Companies Act 2013, the remuneration of the Statutory Auditors for the year 2014-15 is to be determined by the members at the ensuing 14th Annual General Meeting.

Reports of the Auditors

The Report of the Statutory Auditors on Annual Accounts of your Company for financial year ended 31st March 2015 does not have any reservation, qualification or adverse remark.

The office of the Comptroller & Auditor General of India ('CAG') had conducted a supplementary audit of the financial statements of the Company for the year ended 31st March, 2015. On the basis of the audit, CAG states nothing significant has come to its knowledge which would give rise to any comment upon or supplement to statutory auditors' report.

Report of the Statutory Auditors is attached with the Financial Statement. The comments of CAG is annexed and marked as Annexure 3.

The Company also appointed Secretarial Auditors in compliance with the provisions of Section 204 of Companies Act, 2013. The Report of Secretarial Auditors is annexed and marked as Annexure 4. The response of management to qualification, observations or remarks of the Secretarial Auditors is as under :

Serial Observation / Comment / Qualification of the No. Secretarial Auditors

1. During the year the company has filed some forms after the due date. Where these forms are filed late fees before expiry of period specified under Section 403 of the Companies Act, 2013, this should be reported as compliance by reference of payment of additional fees.

2. The Board of Directors of the Company is not duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. As on 31.03.2015, the Company had only two Directors on its Board.

3. The Company has not appointed Managing Director/ Whole time Director/Manager/CEO. The Company has not appointed a CFO for the reasons it does not have any Whole-time employee.

4. The company has not appointed Independent Director on its Board.

5. The Company has delayed in appointment of Internal

Auditor for 2014-15 after a period of six months from the close of financial year 2013-14.

6. The Company has not filed the resolution in Form MGT-14 with the Registrar of Company in respect of resolution passed for taking note of the disclosure of director's interest and shareholding in Board Meeting held on 29.05.2014 and 13.11.2015, as required under the provisions of the Section 179(3) (k) of the Companies Act, 2013.

7. The Company has not filed the resolution in Form MGT-14 with the Registrar of Company in respect of the Adoption of accounts and Boards Report for the Financial Year 2013-14, as required under the provisions of the Section 179(3) (g) of the Companies Act, 2013.

8. The Company has no Woman Director on its Board.

9. The Company has constituted Audit Committee and Nomination and Remuneration Committee but

the composition of both the committees are not as per Companies Act, 2013 and Clause 49 of Listing agreement.

10. The Company has not established Vigil Mechanism/ Whistle Blower as required under Section 177 of the Companies Act, 2013 and Clause 49 of Listing Agreement.

11. The Company has neither constituted CSR Committee nor has framed any CSR policy as required under Section 135 of the Companies Act, 2013.

12. The Company does not have any policy for prevention of Insider Trading as required under prevention of Insider Trading Regulation, 1992 except as mentioned under Code no. IV of Code of Conduct.

13. No separate meeting of Independent Directors was held as the company has no Independent Director

on its Board during the year under audit.

14. The Company has violated the provision of clause 49 of listing agreement relating to holding of Audit committee meetings as the company has exceeded the gap of four months between two Audit Committee meetings due to absence of quorum.

15. The company has made delay in approval of quarterly result for the quarter ended 31.12.2014.

16. The company has not filed form DIR-12 for cessation of Mr. Pandian Kalyanasundaram and Mr. Sukhvir Singh as the MCA has not accepted lesser number of directors below the prescribed limit of the Act.

17. The Company has not framed Remuneration Nomination and Evaluation policy and Risk Management policy.

Seri Clarification from the No. Management

1. The Management always endeavor to file the e-forms with within the due date. The cases of delay were mostly for the E-forms introduced by the new companies law wherein the position was not clear as to the requirement of filing such form.

2. We are a Government Company and as is evident from our shareholding pattern, President of India has a majority shareholding in our Company.

As per the Articles of Association of the Company so long as the Company remains a Government Company,

the President of India shall be entitled to appoint one or more person(s) to hold office as Director(s) on the Board and also to appoint one or more such Director(s) as Managing or Whole-time Director(s) of the Company. Accordingly, Ministry of Petroleum & Natural Gas, being the administrative Ministry directs us every time there is a change in appointment of Directors is required.

BLIL has no employee of its own except, the Company Secretary whose services have been seconded from its subsidiary pursuant to a Service Agreement between the Company and Balmer Lawrie & Co. Ltd.

It may be pertinent to mention that MCA vide GSR dated 5 June 2015 has exempted that : The provisions of sub-sections (1), (2), (3) and (4) of section 203 of the Companies Act 2013 shall not apply to a Managing Director or Chief Executive Officer or Manager and in their absence, a wholetime director of the Government Company."

3. Explained in Serial 2 above

4. We are a Government Company and as is evident from our shareholding pattern, President of India has a

majority shareholding in our Company.

As per the Articles of Association of the Company so long as the Company remains a Government Company, the President of India shall be entitled to appoint one or more person(s) to hold office as Director(s) on the Board and also to appoint one or more such Director(s) as Managing or Whole-time Director(s) of the Company. Accordingly, Ministry of Petroleum & Natural Gas, being the administrative Ministry directs us every time there is a change in appointment of Directors is required. The direction of the administrative Ministry is still awaited.

It may be pertinent to mention that MCA vide GSR dated 5th June, 2015 has changed the definition of the term "Independent Directors" as per Section 149 (6).

5. The appointment of the Internal Auditor was done in

Board meeting dated 28th March, 2015 after restoration of quorum on the Board.

6. This being a new requirement as per the new companies law, while it was not clear whether MGT-14 was required to be filed in such cases, subsequently MCA, vide notification dated 18th March, 2015, has omitted the aforesaid requirement from the Rules and hence now it is not required to file the declaration of interest resolution.

7. The approval of financial statement done by the Board was 2013-14. Ministry vide General Circular No. 08/2014 dated 4.4.2014 clarified matters pertaining to "Commencement of provisions of the Companies Act 2013 with regard to maintenance of books of accounts and preparations/ adoption/ filing of financial statements,auditors report, Board's report and attachments to such statements and reports- Applicability with regard to relevant financial Year." - where the Ministry stated that "although the position in this behalf is quite clear, to make things absolutely clear it is hereby notified that the financial statements (and documents required to be attached thereto), auditors report and Board's report in respect of financial years that commenced earlier than 1st April, 2014 shall be governed by the relevant provisions/ Schedules/ rules of the Companies Act, 1956 and that in respect of financial years commencing on or after 1st April, 2014, the provisions of the new Act shall apply."

Hence we were under the impression that the approval of account of FY 2013-14 shall not require filing of MGT-14 as per provisions of Companies Act 2013.

8. We are a Government Company and as is evident from

our shareholding pattern, President of India has a majority shareholding in our Company.

As per the Articles of Association of the Company so long as the Company remains a Government Company, the President of India shall be entitled to appoint one or more person(s) to hold office as Director(s) on the Board and also to appoint one or more such Director(s) as Managing or Whole-time Director(s) of the Company. Accordingly, Ministry of Petroleum & Natural Gas, being the administrative Ministry directs us every time there is a change in appointment of Directors is required. The direction of the administrative Ministry is still awaited. The Ministry has recently in FY 2015-16 nominated a woman director on the Board of the Company.

9. The Composition of the Committee is a fall out of Serial (1) and (2) above explanation to which has been given.

Fall in the number of members in the Audit Committee was due to vacancy of Government Nominee Directors on the Board of the Company. The same has been filled

up upon appointment of one woman director as per direction of the Ministry.

10. The Company does not have any employee and is a SPV and shell company hence the said mechanism does not seem to be practical and hence not established.

11. The Company does not have any employee and is a SPV and shell company and the income drawn by the same is through dividend paid to it by Balmer Lawrie Investments Limited to which Section 135 (CSR provisions) are applicable and interest income by depositing those funds in the bank for short term before distributing it to shareholders (major shareholder being President of India). Considering the definition of "Net profits" as per Rule 2 of Co.s (CSR Policy) Rules 2014, the requirement of CSR expenditure seems to be not applicable to the Company. Further, the Company being a SPV and having no employee monitoring the expenditure on CSR activities has its own practical difficulties.

12. The provisions regarding Insider Trading was covered under Code of conduct applicable to directors and senior management. The Company has also formulated separate policies in compliance of the new insider trading code.

13. Explained in Serial 1, 2 & 4.

14. Due to fall in the number of members in the Board below 2 owing to vacancy of Government Nominee Directors on the Board of the Company, the gap exceeded 4 months at once instance during the year under review,

15. Due to fall in the number of members in the Board below 2 owing to vacancy of Government Nominee Directors on the Board of the Company, the Board & Audit Committee meeting could not be held and hence the quarterly results of the 3rd Quarter could not be approved with 45 days from the end of the quarter.

16. The MCA system did not acceptied DIR12 of cessation of the two directors as it would lead to fall of directors below statutory minimum the same shall be tried to be filed after appointment of one more director.

17. The Company has, vide resolution dated 28th March, 2015 formed a nomination and remuneration Committee. However, Ministry of Petroleum Natural Gas determines all the appointment of the Directors on the Board of the Company. Further, none of the Directors receive any remuneration / compensation from the Company. The Company being a Special Purpose Vehicle formed only to hold the shares of Balmer Lawrie & Co. Ltd. offloaded by IBP Ltd. does not have any employees of its own. The services of inter-alia Company Secretary who has been placed on secondment by Balmer Lawrie & Co. Ltd. (BLCL) is pursuant to a Service Agreement between the Company and BLCL.

In the given situation the role of Nomination and Remuneration Committee is expected to be limited but is still recommended to be formed to comply with the provisions of the Companies Act 2013 and Listing Agreement with Stock Exchanges.

Consideration may also be given to exemption given to Govt Co.s by the MCA vide notification dated 5th June, 2015 that Section 178(2), (3) and (4) shall not apply to Government company except with regard to appointment of senior management and other employees.

Adequacy of Internal financial controls

The Company has inter-alia taken the following measures to ensure that an adequate internal financial control exists :

* Appointment of internal auditor as per Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014.

* The Company has adopted the following policies apart from the Code of Conduct applicable to Directors and Senior Management:

* "Materiality of Related Party Transactions and dealing with Related Party Transactions",

* Policy for determining 'Material subsidiaries',

* "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" and

* "Code of Conduct to Regulate, Monitor and Report Trading by Insider".

Appreciation

Your Directors wish to place on record their appreciation for the continued guidance and support extended by the Ministry of Petroleum & Natural Gas & and other Ministries. Your Directors also acknowledge the valuable support and services provided by BL. Your Directors appreciate and value the trust imposed upon them by the members of the Company.

On behalf of Board of: Balmer Lawrie Investments Ltd.

Registered Office: 21, Netaji Subhas Road, Kolkata-700 001 Prabal Basu Mary Jacob Chairman Director






Mar 31, 2014

Dear Members,

The Directors have the pleasure in presenting their 13th Report along with the audited Balance Sheet and Profit & Loss Account for the financial year ended 31st March 2014.

Indian Economy

India''s services sector that remained resilient even during and immediately after the global financial crisis buckled under the pressure of continued global and domestic slowdown, resulting in sub-normal growth in the last two years. However, early shoots of revival are visible in 2014-15 with signs of improvement in world GDP growth and trade also reflected in pick-up in some key services like IT, aviation, transport logistics, and retail trading.

In 2014-15, the Indian economy is poised to overcome the sub-5 per cent growth of gross domestic product (GDP) witnessed over the last two years. The growth slowdown in the last two years was broad based, affecting in particular the industry sector. Yet, the developments on the macro stabilization front, particularly the dramatic improvement in the external economic situation with the current account deficit (CAD) declining to manageable levels after two years of worryingly high level was the redeeming feature of 2013-14. Moderation in inflation would help ease the monetary policy stance and revive the confidence of investors, and with the global economy expected to recover moderately, particularly on account of performance in some advanced economies, the economy can look forward to better growth prospects in 2014-15 and beyond.

Performance of the Company

Your Company''s performance is greatly dependent upon two factors, one, being the dividend received from its subsidiary, Balmer Lawrie & Co. Ltd. (BL) and the other being the interest received from deployment of surplus funds with scheduled commercial banks.

Though during the year under review, i.e., 2013-14, the bank interest rates decreased but due to increase in the amount of dividend, received from BL, the total income of your Company increased as compared to the last fiscal, i.e., 2012-13.

Comparative annual financial results for the year under review, i.e., 2013-14, and the immediately preceding year, i.e., 2012-13, has been furnished below:

Financial Results (Rs. in lakhs) Year ended on 31st March

2014 2013

Profit before Tax 3608.63 3260.83

Provision for Tax 170.00 149.00

Net Profit 3438.63 3111.83

Dividend

Your Directors are pleased to recommend for declaration at the ensuing 13th Annual General Meeting of your company a dividend of 120%, i.e., Rs. 12/- (Rupees twelve only) per Equity share of the face value Rs. 10/- each (fully paid-up), for the financial year ended 31st March 2014 [as against dividend @ 110%, i.e., Rs. 11/- (Rupees eleven only) per Equity share of the face value of Rs. 10/- each (fully paid- up) recommended and declared in the immediately preceding year, i.e., 2012-13]. Upon declaration by the members, dividend will be paid either by way of warrant, demand draft or NECS mode and will be paid to those Shareholders who would be holding shares in the Company as on 17th September 2014, EOD. In respect of shares held electronically, dividend will be paid to the beneficial owners, as per details to be furnished by their respective Depositories, i.e., either Central Depository Services (India) Ltd. or National Securities Depository Ltd.

Appropriation

The amount available for appropriation is the sum total of Profit after Tax (PAT) and the balance Profit brought forward from the previous financial year(s).

The amount available for appropriations for the financial year 2013-14 as compared to the immediately preceeding financial year 2012-13, are given hereunder: (Rs. in lakhs) 2013-14 2012-13

PAT 3438.63 3,111.83

Add: Balance Profit brought forward from the preceeding financial year 254.15 206.39

Amount Available for appropriations 3692.78 3318.22

The aforesaid amount available for appropriation for the financial year 2013-14 and 2012-13 has been/was appropriated in the following manner:

(Rs. in lakhs) 2013-14 2012-13

Dividend 2663.67 2441.70

(Rate in % ) (120%) (110%)

Corporate Tax on Dividend NIL Nil

Transfer to Reserve Fund 687.72 622.37 Surplus carried forward

to the next year 341.39 254.15

Deposits with Bank

Surplus funds of the Company have been deployed in various Fixed Deposit Schemes of the scheduled commercial Banks. As on 31st March 2014, the total amount of deployments in the Fixed Deposit Schemes stood at Rs. 6500.00 lacs, which in turn has yielded an interest income of Rs. 556.78 lacs.

Management Discussion and Analysis Report

Your Company is not engaged in any other business activity, except, to hold the equity shares of Balmer Lawrie & Co. Ltd. and accordingly matters to be covered under ''Management Discussion and Analysis Report'' are not applicable to your Company.

Report on Subsidiary Companies

In terms of Sections 4(1)(b)(ii) and 4(1)(c) of the Companies Act, 1956 (''the Act'') your Company has three subsidiary companies, namely, Balmer Lawrie & Co. Ltd., Balmer Lawrie (UK) Ltd. (''BLUK'') and Vizag Logistics Park Limited (''VLPL''). By virtue of shareholding in BL (61.8%), your Company is the holding Company of BL. BL in turn has 2 subsidiaries BLUK and VLPL.

Pursuant to General Circular No. 2/2011 (Ref. no. 5/12/2007 - CL III) of the Ministry of Corporate Affairs, Government of India, the provisions of attachment of certain documents in respect of the subsidiary/ies shall not apply to a holding company, if the holding company fulfills the conditions stipulated in the aforesaid circular, including obtaining consent of its Board of Directors. Your Company is not required to consolidate its accounts with the accounts of its subsidiaries, which is one of the conditions needs to be fulfilled to avail the aforesaid exemption. Therefore your Company is not entitled to avail the aforesaid exemption. We understand that BL has complied with the conditions, including obtaining consent from its Board of Directors for non-attachment of its subsidiary''s accounts. However, such accounts have been duly consolidated in terms of the applicable accounting standards and have been shown translated into Indian Rupee.

Compliance of Right to Information Act,2005

The Right to Information Act, 2005 (''the RTI Act'') is applicable to your Company. Information, which are mandatorily required to be disclosed under the RTI Act, have been disclosed in the website of your Company. Your Company submits RTI returns within the prescribed time line to the Ministry of Petroleum & Natural Gas, Government of India. Your Company has received NIL applications seeking information under the Right to Information Act, 2005 (RTI Act), and there was no such instance of appeal before the RTI Appellate Authority.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, dealing with the aforesaid disclosures, are not applicable to your Company.

Particulars of Employees

Your Company has no employee in the category to report under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Your Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 217 (2AA) of the Companies Act, 1956, in preparation of the Annual Accounts of your Company for the financial year ended 31st March 2014 and confirm that:

(i) In the preparation of the accounts for the financial year ended 31st March 2014, the applicable Accounting Standards have been followed and there was no material departure from such standards;

(ii) The Directors have selected such Accounting Policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year on 31st March 2014 and of the Profit of the Company for the said financial year;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the Accounts for the financial year ended on 31st March 2014, on a ''Going Concern Basis''.

Consolidated Financial statement

Your Company''s investment in the Equity share capital of its subsidiary, namely, Balmer Lawrie & Co. Ltd. (''BL''), is intended to be temporary and as of now there is no change in such intention. Thus, in terms of paragraph 11(a) of the Accounting Standard - 21, issued by the Institute of Chartered Accountants of India (''ICAI'') the annual financial statement of your Company has not been consolidated with the financial statement of its subsidiary, i.e., BL and group companies of BL, i.e., subsidiaries and joint ventures of BL, which in turn fall under the same group that of your Company.

Unlike your Company, the investments of BL, in the equity share capital of its subsidiary and joint venture companies are not temporary and therefore BL, in terms of the Accounting Standards 21 and 27 issued by ICAI read with Clause 32 of the Listing Agreement with the Stock Exchanges, has consolidated its financial statement with that of its subsidiary and joint venture companies, which has been duly audited by BL''s Statutory Auditors. In order to provide an insight about the group''s financial performance, such Consolidated Financial Statement of BL together with the Report of the Auditors, is annexed hereto.

Corporate Governance

Your Company has been consistently complying with the various regulations of the Securities & Exchange Board of India (SEBI), including regulations on Corporate Governance, which is enumerated under Clause 49 of the Listing Agreement. Pursuant to the said SEBI regulations, a separate section titled ''Report on Corporate Governance'' is being furnished and marked as annexure 1.

Your Company being a Government Company is also complying with the corporate governance norms of the Department of Public Enterprise (DPE), to the extent which is not included and does not contradict with SEBI guidelines.

Further, your Company''s Statutory Auditors have examined compliance of the aforesaid SEBI corporate governance guidelines and issued a certificate, which is annexed to this Report and marked as Annexure 2.

Your Directors in respect of Independent Directors would like to clarify and confirm that the Administrative Ministry of your Company, namely. Ministry of Petroleum & Natural Gas (MOP&NG) has initiated steps to induct Independent Directors, on the Board of Directors and Audit Committee of your Company, which the Statutory Auditors have already covered in its aforesaid report.

Directors

There has been no change in composition of the Board of Directors.

Shri Sukhvir Singh shall retire by rotation at the ensuing 13th Annual General Meeting of your Company. Your Company has received a communication from Shri Sukhvir Singh wherein he has expressed his willingness to continue as Director, if re-appointed by the shareholders. Therefore the proposal of re- appointment of Shri Singh on the Board has been included under Ordinary business of the Notice convening the ensuing 13th Annual General Meeting of your Company. Your Directors recommends passing of the requisite resolution.

Auditors

The Statutory Auditors of your Company (being a ''Government Company''), are appointed/ re-appointed by the Comptroller & Auditor General of India (''CAG''), Section 619 read with Section 224(8)(aa) of the Companies Act, 1956 and Section 139 and other applicable provisions of the Companies Act 2013.

Pursuant to Section 224(8)(aa) read with Section 619 of the Companies Act, 1956 and Section 142 and other applicable provisions of the Companies Act 2013, the remuneration of the Auditors for the year 2014-15 is to be determined by the members at the ensuing 13th Annual General Meeting.

Reports of the Auditors

The Report of the Statutory Auditors on Annual Accounts of your Company for financial year ended 31st March 2014 does not have any reservation, qualification or adverse remark.

The office of the Comptroller & Auditor General of India (''CAG'') had conducted a supplementary audit under Section 619(3) (b) of the Companies Act, 1956 of the financial statements of the Company for the year ended 31 March 2014. On the basis of the audit, CAG states that nothing significant has come to its knowledge which would give rise to any comment upon or supplement to statutory auditor''s report under section 619(4) of the Companies Act, 1956.

Reports of the Statutory Auditors and comments of CAG is annexed as Annexure 3.

Appreciation

Your Directors wish to place on record their appreciation for the continued guidance and support extended by the Ministry of Petroleum & Natural Gas & and other Ministries. Your Directors also acknowledge the valuable support and services provided by BL. Your Directors appreciate and value the trust imposed upon them by the members of the Company.

On behalf of Board of: Balmer Lawrie Investments Ltd.

[P.Kalyanasundaram] [Sukhvir Singh] [Prabal Basu] Chairman Director Director

Registered Office: 21, Netaji Subhas Road, Kolkata-700 001


Mar 31, 2013

To the Members,

The Directors have the pleasure in presenting their 12th Report along with the audited Balance Sheet and Profit & Loss Account for the financial year ended 31st March 2013.

Indian Economy

India economy is the 9th largest economy in the world by nominal GDP and the third largest economy by Purchasing Power Parity (PPP). India is the 19th largest exporter and 10th largest importer of the world and is one of the G-20 major economies and a member of BRICS nations.

The year under review, i.e., 2012-13, had been a difficult year for the Indian economy. The economy of the country slowed down further and registered a GDP growth of 5.0% as compared to 6.2% in the previous fiscal, i.e., 2011-12. All the sectors of the economy, i.e., manufacturing, agricultural and service sectors, witnessed a slowdown.

However, the Indian economy is expected to have brighter prospects during the current fiscal, 2013-14. During the current fiscal, i.e., 2013-14, the Government of India is expecting a GDP growth of 6.1% to 6.7%.

Performance of the Company

Your Company''s performance is greatly dependent upon two factors, one, being the dividend received from its subsidiary, Balmer Lawrie & Co. Ltd. (BL) and the other being the interest received from deployment of surplus funds with scheduled commercial banks.

Though during the year under review, i.e., 2012-13, the bank interest rates declined but due to increase in the amount of dividend, received from BL, the total income of your Company increased as compared to the last fiscal, i.e., 2011-12.

Comparative annual financial results for the year under review, i.e., 2012-13, and the immediately preceding year, i.e., 2011-12, has been furnished below:

Financial Results

(Rs. in lakhs)

Year ended on 31st March

2013 2012

Profit before Tax 3260.83 2998.28

Provision for Tax 149.00 155.00

Net Profit 3111.83 2843.28

Dividend

Your Directors are pleased to recommend for declaration at the ensuing 12th Annual General Meeting (‘AGM'') of your Company a dividend of 110%, i.e., Rs. 11/- (Rupees Eleven only) per Equity Share of the face value of Rs. 10/- each (fully paid-up), for the financial year ended 31st March 2013 [as against dividend @ 100%, i.e., Rs. 10/- (Rupees Ten only) per Equity share of the face value of Rs. 10/- each (fully paid-up) recommended and declared in the immediately preceeding financial year, i.e., 2011-12]. Upon declaration by the members, dividend will be paid either by way of warrant, demand draft or NECS mode and will be paid to those Shareholders who would be holding shares in the Company as on the date of commencement of the book closing period i.e., as on 17th September 2013. In respect of shares held electronically, dividend will be paid to the beneficial owners, as per details to be furnished by their respective Depositories, i.e., either, Central Depository Services (India) Ltd. or National Securities Depository Ltd.

Appropriation

The amount available for appropriation is the sum total of Profit after Tax (PAT) and the balance Profit brought forward from the previous financial year(s).

The amount available for appropriation for the financial year 2012-13 as compared to the immediately preceeding financial year 2011-12, are given hereunder:

(Rs. in lakhs) 2012-13 2011-12

PAT 3111.83 2843.28 Add: Balance Profit brought forward from the preceeding financial year 206.39 169.50

Amount Available for appropriations 3318.22 3012.78

The aforesaid amount available for appropriation for the financial year 2012-13 and 2011-12 has been/was appropriated in the following manner:

(Rs. in lakhs)

2012-13 2011-12

Dividend 2441.70 2219.73

(Rate in %) (110%) (100%)

Corporate Tax on Dividend Nil Nil

Transfer to Reserve Fund 622.37 586.66

Surplus carried forward 254.15 206.39 to the next year

Deposits with Bank

Surplus funds of the Company have been deployed in various Fixed Deposit Schemes of the scheduled commercial Banks. As on 31st March 2013, the total amount of deployments in the Fixed Deposit Schemes stood at Rs. 5549.90 lacs, which in turn has yielded an interest income of Rs. 484.45 lacs.

Management Discussion & Analysis Report

Your Company is not engaged in any other business activity, except, to hold the Equity Shares of its subsidiaries i.e., BL and accordingly matters to be covered under ‘Management Discussion & Analysis Report'' are not applicable to your Company.

Report on Subsidiary Companies

In terms of Sections 4(1)(b)(ii) and 4(1)(c) of the Companies Act, 1956 (‘the Act'') your Company has two subsidiary companies, viz., Balmer Lawrie & Co. Ltd. (‘BL'') and Balmer Lawrie (UK) Ltd. (‘BLUK''). By virtue of shareholding in BL (61.8%), your Company is the holding Company of the former. BL at present has one foreign subsidiary, namely BLUK, which in turn under Section 4(1)(c) of the Act is also the subsidiary of your Company.

Pursuant to General Circular No. 2/2011 (Ref. no. 5/12/2007 – CL III) of the Ministry of Corporate Affairs, Government of India, the provisions of attachment of the Reports & Accounts of the subsidiary/ies shall not apply to a holding company, if the holding company fulfills the conditions stipulated in the aforesaid circular, including obtaining consent of its Board of Directors. Since your Company is not required to consolidate its accounts with the accounts of its subsidiaries (which is one of the conditions needs to be fulfilled to avail the aforesaid exemption) therefore your Company is not entitled to avail the aforesaid exemption. We understand that BL has complied with the conditions, including obtaining consent from its Board of Directors for non-attachment of its subsidiary''s accounts. However, such accounts have been duly consolidated in terms of the applicable accounting standards and have been shown translated into Indian Rupee.

Compliance of Right to Information Act, 2005

The Right to Information Act, 2005 (‘the RTI Act'') is applicable to your Company. Information, which are mandatorily required to be disclosed under the RTI Act, have been disclosed in the website of your Company. Your Company submits monthly as well as annual RTI returns within the prescribed time line to the Ministry of Petroleum & Natural Gas, Government of India. Your Company during the fiscal under review had received two applications under the RTI Act, which were duly catered to within the statutory timeline.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Section 217 (1) (e) of the Act read with Rule 2 of the

Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, dealing with the aforesaid disclosures, are not applicable to your Company.

Particulars of Employees

Your Company has no employee in the category to report under Section 217 (2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975.

Directors'' Responsibility Statement

Your Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 217 (2AA) of the Act, in preparation of the Annual Accounts of your Company for the financial year ended 31st March 2013 and confirm that:

(i) In the preparation of the Accounts for the financial year ended 31st March 2013, the applicable Accounting Standards have been followed and there was no material departure from such standards;

(ii) The Directors have selected such Accounting Policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year on 31st March 2013 and of the Profit of the Company for the said financial year;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv)The Directors have prepared the Accounts for the financial year ended 31st March 2013, on a ‘Going Concern Basis''.

Consolidated Financial Statement

Your Company''s investment in the Equity Share capital of its subsidiary, i.e., BL, is intended to be temporary and as of now there is no change in such intention. Thus, in terms of Paragraph 11(a) of the Accounting Standard 21, issued by the ‘Institute of Chartered Accountants of India'' (‘ICAI'') the annual financial statement of your Company has not been consolidated with the financial statement of its subsidiary, i.e., BL and group companies of BL, i.e., subsidiaries and joint ventures of BL, which in turn fall under the same group that of your Company.

Unlike your Company, the investments of BL, in the Equity Share capital of its subsidiary and joint venture companies are not temporary and therefore BL, in terms of the Accounting Standards 21 and 27 issued by ICAI read with Clause 32 of the Listing Agreement with the Stock Exchanges, has consolidated its financial statement with that of its subsidiary and joint venture companies, which has been duly audited by BL''s Statutory Auditors. In order to provide an insight about the group''s financial performance, such Consolidated Financial Statement of BL together with the Report of the Auditors, is annexed hereto.

Corporate Governance

Your Company has been consistently complying with the various regulations of the Securities & Exchange Board of India (SEBI), including regulations on Corporate Governance, which is enumerated under Clause 49 of the Listing Agreement. Pursuant to the said SEBI regulations, a separate section titled ‘Corporate Governance Report'' is being furnished and marked Annexure 1.

Your Company being a Government Company is also complying with the Corporate Governance Norms of the Department of Public Enterprise (DPE), to the extent which is not included and does not contradict with SEBI Guidelines.

Further, your Company''s Statutory Auditors have examined compliance of the aforesaid SEBI Corporate Governance Guidelines and issued a Certificate, which is annexed to this Report and marked Annexure 2.

Your Directors in respect of the independent directors, would like to clarify and confirm that the Administrative Ministry of your Company, namely. Ministry of Petroleum & Natural Gas, Government of India (MOP&NG) has initiated steps to induct independent Directors, on the Board of Directors and Audit Committee of your Company, which the Statutory Auditors have already covered in its aforesaid report.

Directors

There has been a change in composition of the Board of Directors.

Shri K. Subramanyan, an ex-officio member, upon retirement from the services of BL on attaining the age of superannuation [was the Director (Finance) of BL] resigned from the Board with effect from the close of business hour on 30th November 2012. Your Directors record its appreciation for the valuable services rendered by Shri Subramanyan during his tenure.

Shri Prabal Basu [taking over the charge as Director (Finance) of BL], in terms of the letter no. P-21014/1/ 2006-Mkt. dated 16th October 2010 of MOP&NG was appointed an Additional Director of your Company with effect from 1st December 2012. Shri Basu in terms of Section 260 of the Act, shall hold office till the ensuing AGM of the Company. A Notice together with a deposit of Rs. 500/- has been received from a shareholder under Section 257 of the Act, proposing the appointment of Shri Basu as a Director of the Company whose period of office shall be subject to retirement of Directors by rotation. The said proposal shall need to be approved by the shareholders and therefore the same has been included under Special business of the Notice convening the ensuing 12th AGM of your Company. Your Directors recommend passing of the requisite resolution by ordinary majority.

Shri P. Kalyanasundaram shall retire by rotation at the ensuing 12th AGM of your Company. Your Company has received a communication from Shri P Kalyanasundaram wherein he has expressed his willingness to continue as Director, if re-appointed by the shareholders. Therefore, the proposal of re-appointment of Shri Kalyanasundaram on the Board has been included under ordinary business of the Notice convening the ensuing 12th AGM of your Company. Your Directors recommend passing of the requisite resolution by ordinary majority.

Auditors

Pursuant to Section 619(2) of the Act, the Statutory Auditors of your Company are appointed/re-appointed by the Comptroller & Auditor General of India (‘CAG''). Further, pursuant to Section 619(2) read with Section 224(8)(aa) of the Act, though the appointment/re-appointment of the Statutory Auditors shall be done by CAG but the remuneration shall be fixed by the shareholders at the General Meeting. Therefore, the remuneration payable to the Statutory Auditors appointed/re-appointed by CAG for the financial year 2013- 14 is to be fixed by the shareholders at the ensuing 12th AGM of your Company.

Reports of the Auditors

The Report of the Statutory Auditors on Annual Accounts of your Company for financial year ended 31st March 2013 does not have any reservation, qualification or adverse remark.

The office of the Comptroller & Auditor General of India (‘CAG'') has decided not to review the report of the Statutory Auditors on Annual Accounts of your Company for the financial year ended 31st March 2013 and therefore has no comment to make under Section 619(4) of the Companies Act, 1956.

Reports of the Statutory Auditors and CAG are annexed hereto.

Appreciation

Your Directors wish to place on record their appreciation for the continued guidance and support extended by MOP&NG and other Ministries. Your Directors also acknowledge the valuable support and services provided by BL. Your Directors appreciate and value the trust imposed upon them by the members of the Company.

On behalf of Board of:

Balmer Lawrie Investments Ltd.

Registered Office: P. Kalyanasundaram

21, Netaji Subhas Road, Chairman

Kolkata-700 001 Sukhvir Singh Prabal Basu

14th August 2013 Directors


Mar 31, 2012

The Directors have the pleasure in presenting their 11th Annual Report together with the audited Balance Sheet and Profit & Loss Account (together with Notes thereon) for the financial year ended 31st March 2012.

Indian Economy

India economy is the eleventh largest economy in the world by nominal GDP and the third largest economy by purchasing power parity (PPP).The country is one of the G-20 major economies and a member of BRICS nations.

India recorded its highest growth in mid-2000s, and is one of the fastest-growing economies in the world. In terms of per capita income, India since its independence has recorded a growth of over 200 times. The growth was primarily due to huge increase in the size of the middle class consumer, large labour force and considerable foreign investments. India is the nineteenth largest exporter and tenth largest importer in the world.

During the fiscal 2011-12, economic growth rate declined and stood at around 6.5%. The fall is mainly because of poor performance of secondary sector which grew by a mere 2.8%. However, service sector was unaffected by the global slowdown and grew by 9.4%.

Company's Performance

You may agree to the fact that performance of your Company is greatly dependent upon two issues, one being, amount of dividend received from its subsidiary, viz., Balmer Lawrie & Co. Ltd. ('BL') and the other, being the interest received from deployment of surplus funds with scheduled commercial banks. During the year under review, the bank interest rates increased as compared to the immediately preceeding financial year, 2010-11. Further, the quantum of dividend received from the Company's subsidiary, i.e., BL, during the year under review was more as compared to the immediately preceeding financial year, i.e., 2010- 11. Increase in both, bank interest rates and quantum of dividend, yielded more Profit during the year under review.

Financial performance of your Company for the year under review, 2011-12, as compared to the immediately preceeding year, i.e., 2010-11, has been enumerated below:

Financial Results

(Rs. in lakhs)

Year ended on 31st March

2012 2011

Profit before Tax 2998.28 2484.64

Provision for Tax 155.00 61.82

Net Profit 2843.28 2422.82

Dividend

Your Directors are pleased to recommend, for declaration (at the ensuing 11th Annual General Meeting of your Company), dividend @ 100%, i.e., Rs.10 (Rupees Ten only) per Equity share of face value of Rs.10/- each (fully paid-up), for the financial year ended 31st March 2012 [as against dividend @ 85%, i.e., Rs.8.50 (Rupee Eight and paise fifty only) per Equity share of face value of Rs. 10/- each (fully paid-up) recommended and declared in the immediately preceeding year, i.e., 2010-11]. Upon the aforesaid declaration by the members, dividend will be paid to those Shareholders who would be holding shares in the Company as on the date of commencement of the Book Closing period, i.e., as on 19th September 2012. In respect of shares held electronically, dividend will be paid to the beneficial owners, as per details to be furnished by their respective Depositories, i.e., either Central Depository Services (India) Ltd. or National Securities Depository Ltd.

Appropriation

The amount available for appropriation is the sum total of Profit after Tax (PAT) and the balance Profit brought forward from the immedietely preceeding financial year.

The amount available for appropriations for the financial year 2011-12 and 2010-11, are given hereunder:

(Rs. in lakhs)

2011-12 2010-11

PAT 2843.28 2422.82

Add: Balance Profit brought forward from the immediately preceeding financial year 169.50 118.02

Amount Available for Appropriations 3012.78 2540.84

The aforesaid amount available for appropriations for the financial year 2011-12 and 2010-11 was/has been appropriated in the following manner:

(Rs. in lakhs)

2011-12 2010-11

Dividend 2219.73 1886.77 (recommended)

(Rate in %) (100%) (85%)

Corporate Tax on Dividend Nil Nil

Transfer to Reserve Fund 586.66 484.57

Balance carried forward to the next year 206.39 169.50

Deposits with Bank

Surplus funds of the Company have been deployed in the Fixed Deposit Schemes of the scheduled commercial Banks. As on 31st March 2012, the total amount of deployments in the Fixed Deposit Schemes stood at Rs.4790.00 lacs, which in turn, yielded an interest income of Rs.422.96 lacs.

Management Discussion and Analysis Report

Your Company is not engaged in any other business activity, except, to hold the equity shares of Balmer Lawrie & Co. Ltd. and accordingly matters to be covered under 'Management Discussion and Analysis Report' are not applicable to your Company.

Report on Subsidiary Companies

In terms of Sections 4(1)(b)(ii) and 4(1)(c) of the Companies Act, 1956 ('the Act') your Company has two subsidiary companies, namely, Balmer Lawrie & Co. Ltd. ('BL') and Balmer Lawrie (UK) Ltd. ('BLUK'). By virtue of shareholding in BL (61.8%), your Company is the holding Company of the former. BL in turn at present has one foreign subsidiary, namely BLUK, which in turn under Section 4(1)(c) of the Act, is also the subsidiary company of your Company.

Pursuant to General Circular No. 2/2011 (Ref. no. 5/12/2007 - CL III) of the Ministry of Corporate Affairs, Government of India, the provisions of attachment of the accounts of the subsidiary (ies) shall not apply to a holding company, if the holding company fulfills the conditions stipulated in the aforesaid circular, including obtaining consent of its Board of Directors. Your Company is not required to consolidate its accounts with the accounts of its subsidiaries, which is one of the conditions need to be fulfilled to avail the aforesaid exemption. Therefore your company is not entitled to avail the aforesaid exemption. We understand that BL has complied with the conditions, including obtaining consent from its Board of Directors for non-attachment of its subsidiary's accounts. However, such accounts have been duly consolidated in terms of the applicable accounting standards and have been shown translated into Indian Rupees.

Compliance of Right to Information Act, 2005

The Right to information Act, 2005 ('the RTI Act') is applicable to your Company. In accordance with the provisions of the RTI Act, various disclosures of information, which are mandatory, have been set out on the website of your Company. Additionally, your Company furnishes monthly as well as annually RTI returns within the prescribed time line to the Ministry of Petroleum & Natural Gas, Government of India. Status of applications received under the RTI Act, is given under Disclosure of the annexed 'Report on Corporate Governance'.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Section 217 (1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, dealing with the aforesaid disclosures, are not applicable to your Company.

Particulars of Employees

Your Company has no employee in the category to report under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Directors' Responsibility Statement

Your Directors acknowledges the responsibility for ensuring compliance with the provisions of Section 217 (2AA) of the Companies Act, 1956, in preparation of the Annual Accounts of your Company for the financial year ended 31st March 2012 and confirm that:

(i) In the preparation of the accounts for the financial year ended 31st March 2012, the applicable Accounting Standards have been followed and there was no material departure from such standards;

(ii) The Directors have selected such Accounting Policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year on 31st March 2012 and of the Profit of the Company for the said financial year;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) The Directors have prepared the Accounts for the financial year ended 31st March 2012, on a 'Going Concern basis'.

Consolidated Financial Statement

Your Company's investment in the Equity share capital of its subsidiary, namely, Balmer Lawrie & Co. Ltd. ('BL'), is intended to be temporary and as of now there is no change in such intention. Thus, in terms of paragraph 11(a) of the Accounting Standard - 21, issued by the Institute of Chartered Accountants of India ('ICAI') the annual financial statement of your Company has not been consolidated with the financial statement of BL and group companies of BL, i.e., subsidiaries and joint ventures of BL, which in turn fall under the same group that of your Company.

Unlike your Company, the investments of BL, in the equity share capital of its subsidiary and joint venture companies are not temporary and therefore BL, in terms of the Accounting Standards 21 and 27 issued by ICAI read with Clause 32 of the Listing Agreement with the Stock Exchanges, has consolidated its financial statement with that of its subsidiary and joint venture companies, which has been duly audited by BL's Statutory Auditors. In order to provide an insight about the group's financial performance, such Consolidated Financial Statement of BL together with the Report of the Auditors, is annexed hereto.

Corporate Governance

Since the days of initial listing with the Stock Exchanges, which was way back in the year-end of 2002 and the beginning of 2003, your Company has been consistently complying with the various regulations of the Securities & Exchange Board of India ('SEBI'), including regulations on Corporate Governance, which is enumerated under Clause 49 of the Listing Agreement. Pursuant to the said SEBI regulations, a separate section titled 'Report on Corporate Governance' is being furnished and marked Annexure 1.

Your Company being a Government Company is also complying with the corporate governance norms of the Department of Public Enterprise (DPE), to the extent which is not included and does not contradict with SEBI guidelines.

Further, your Company's Statutory Auditors have examined compliance of the aforesaid SEBI corporate governance guidelines and issued a certificate, which is annexed to this Report and marked Annexure 2.

Your Directors in respect of independent directors would like to clarify and confirm that the Administrative Ministry of your Company, namely. Ministry of Petroleum & Natural Gas, Government of India (MOP&NG) has initiated steps to induct independent Directors on the Board of Directors and Audit Committee of your Company, which the Statutory Auditors have already covered in its aforesaid report.

Directors

There has been no change in composition of the Board of Directors.

Shri Sukhvir Singh, a Government Nominee, was appointed as a Director of your Company on 7th June 2010. Shri Singh will retire by rotation at the ensuing 11th Annual General Meeting of your Company. Meanwhile your Company has received a communication from Shri Singh, wherein he has expressed his willingness to be re-appointed, as Director of your Company. Your Directors recommend the re- appointment of Shri Singh and accordingly the said proposal has been included in the Notice of the ensuring 11th Annual General Meeting of your Company.

Auditors

The Statutory Auditors of your Company (being a Government Company), are appointed/re-appointed by the Comptroller & Auditor General of India ('CAG'), in terms of Section 619(2) of the Companies Act, 1956. The remuneration of the Auditor for the year 2012-13, is to be determined by the Members at the ensuing 11th Annual General Meeting as per Sections 224(8) (aa) and 619 of the Companies Act, 1956

Auditors Report

The Report of the Statutory Auditors on Annual Accounts of your Company for financial year ended 31st March 2012, does not have any reservation, qualification or adverse remark.

Report of the Statutory Auditors is annexed hereto.

Comments of Comptroller & Auditor General of India('CAG')

CAG had decided not to review the Auditors Report on Annual Accounts of your Company for the financial year ended 31st March 2012 and therefore has no comment to make under Section 619(4) of the Companies Act, 1956 Comments of CAG is annexed hereto.

Appreciation

Your Directors wish to place on record their appreciation for the continued guidance and support extended by MOP&NG and other Ministries. Your Directors also acknowledge the valuable support and services provided by BL. Your Directors appreciate and value the trust imposed upon them by the members of the Company.

On behalf of the Board

Balmer Lawrie Investments Ltd.

Registered Office: P. Kalyanasundaram

21, Netaji Subhas Road, Chairman

Kolkata-700 001 Sukhvir Singh, Director

Date : 17th August 2012 K. Subramanyan, Director

 
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