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Directors Report of Balmer Lawrie & Company Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 98th Report on the operations and results of your Company for the financial year ended 31st March, 2015, together with the audited Balance Sheet and Profit & Loss Account of the Company.

Overall Financial Results (Rs. in Lakh)

STANDALONE FINANCIAL RESULTS Year ended 31 March

2015 2014

Surplus for the year before deduction of Finance Charge, Depreciation and tax 24185 24520

Deduct there from:

i. Finance Charge and depreciation 3141 2558

ii. Provision for Taxation 6300 6295

Profit After Tax (PAT) 14744 15667

Add Transfer from: Profit & Loss Account 40334 33669

Total amount available for Appropriation: 55078 49336

Appropriations:

Interim Dividends - -

Proposed Dividend @ Rs. 18 per equity share 5130 5130 (previous year Rs. 18 per equity share)

Corporate Tax on Dividend 1073 872

Transfer to General Reserve 3000 3000

Adjustment for Depreciation 199 -

Minority interest / Foreign Exchange Conversion Reserve etc. - -

Surplus carried forward to next year 45675 40334

Total of Appropriations 55078 49336

(Rs. in Lakh)

CONSOLIDATED FINANCIAL RESULTS* Year ended 31 March

2015 2014

Surplus for the year before deduction of Finance Charge, Depreciation and tax 28704 28142

Deduct there from:

i. Finance Charge and depreciation 6890 5932

ii. Provision for Taxation 6601 6641

Profit After Tax (PAT) 15213 15569

Add Transfer from: Profit & Loss Account 46490 35361

Total amount available for Appropriation: 61703 50930

Appropriations:

Interim Dividends 208 -

Proposed Dividend @ Rs. 18 per equity share 6386 4291 (previous year Rs. 18 per equity share)

Corporate Tax on Dividend 1194 902

Transfer to General Reserve 3984 3560

Adjustment for Depreciation 247 -

Minority interest / Foreign Exchange Conversion Reserve etc. 5054 (4313)

Surplus carried forward to next year 44630 46490

Total of Appropriations 61703 50930

* The Directors' Report is based on standalone results and this information is given as an added information to the shareholders.

Overview of the state of the Company's Affairs

* At the close of another year of sustained performance, the Company recorded its highest ever Turnover (inclusive of Excise Duty) of Rs. 294404 Lakh in 2014-15 - despite the slowdown in the economy - as against Rs. 284289 Lakh (inclusive of Excise Duty) achieved in 2013-14, representing a growth of around 3.56% over the previous year.

* Profit Before Tax during 2014-15 aggregated Rs. 21044 Lakh, which was a marginal diminution from Rs. 21962 Lakh in 2013-14, the decline being attributable primarily to tough economic environment prevalent both in the manufacturing and service sectors.

* Consequently, Profit After Tax also decreased from Rs. 15667 Lakh in the previous year to Rs. 14744 Lakh in 2014-15.

* Segment-wise performance analysis indicates that the Service sectors, led by SBU: Logistics were the main Profit drivers.

* Rs. 3000 Lakh has been transferred to General Reserves during the year ended 31st March, 2015.

* No material changes and commitments have occurred after the close of the financial year till the date of this Report, which could affect the financial position of the Company other than those enumerated in the Para "Material changes and commitments affecting the financial position of the Company occurred between the end of the financial year and the date of the report" mentioned herein below.

Share capital

The paid up Equity share capital of the Company as at 31st March, 2015 stood at Rs. 28,50,06,410. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity shares.

Dividend

A dividend of Rs. 18 (Rupees eighteen) per Equity Share on the paid-up capital as on 31st March, 2015 [as against Rs. 18 (Rupees eighteen) per Equity Share in the previous year] has been recommended by the Board of Directors, for declaration by the Members at the ensuing 98th Annual General Meeting to be held on 22nd September, 2015. The trend of past dividend payment is depicted below:

Material changes and commitments affecting the financial position of the Company occurred between the end of the financial year and the date of the report

1. The execution of Voluntary Separation Package for employees working at the manufacturing unit of SBU: Industrial Packaging at Sewree,Mumbai was completed on 9th July, 2015.

2. SBU: Logistics Infrastructure and SBU: Logistics Services has been integrated into SBU: Logistics with effect from 1st August, 2015.

Management Discussion and Analysis Report

An analytical Report on the businesses of the Company as required under the Listing Agreement with Stock Exchanges - covering both the activities, manufacturing and services - is furnished along with this report under the heading "Management Discussion and Analysis" and attached as "Annexure A".

Consolidated Financial Statements

The financial statements and results of your Company have been duly consolidated with its subsidiaries, associates and joint ventures pursuant to applicable provisions of the Companies Act 2013, the Listing Agreement with the Stock Exchanges and Accounting Standards.

Further, in line with Section 129(3) of the Companies Act, 2013 read with the Rules thereon, the Listing Agreement with the Stock Exchanges and in accordance with the Accounting Standard 21, Consolidated Financial Statements prepared by your Company includes a Statement in Form 'AOC-I' containing the salient feature of the financial statement of your Company's subsidiaries, associates and joint venture companies which forms part of the Annual Report.

Accounts of Subsidiary Companies

In line with the provisions of Section 136 of Companies Act 2013, your Company has placed separate audited accounts in respect of each of its subsidiaries on its website - www.balmerlawrie.com. Members, if so wish, shall be provided separate audited financial statement of the subsidiary Companies.

Report on Subsidiaries

During the year under review, no company has ceased to be a subsidiary, joint venture or associate company.

The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link :

http://www.balmerlawrie.com/app/webroot/uploads/

Policy_on_Determining_Material_Subsidiary-BL.pdf.

A brief write up on the performance and financial position of subsidiary, joint venture and associate companies of your Company is presented hereunder:

Balmer Lawrie (UK) Ltd. [BLUK]

Balmer Lawrie (UK) Ltd. ('BLUK') is a 100% subsidiary of your Company incorporated in the UK. The subsidiary had previously been engaged in the business of Leasing & Hiring of Marine Freight Containers and also in Tea Warehousing, Blending & Packaging.

After exiting these businesses, BLUK has been utilizing the proceeds to fund other business opportunities. BLUK has till date invested approximately US $ 1.86 million equivalent to Indonesian Rupiah 18.20 billion in PT. Balmer Lawrie Indonesia (PTBLI) - having its registered office at Jakarta, Indonesia - which represents 50 % of the paid - up equity share capital of the joint venture company. Balance 50% of the paid up share capital of PTBLI is subscribed by PT. Imani Wicaksana of Indonesia. PTBLI is engaged in the manufacture and marketing of greases and other lubricants in Indonesia. The plant is in the process of Stabilization. During the year under review, the joint venture incurred losses due to lower volume of Sales achieved than anticipated. A new Chief Executive has been deputed to the joint venture to bring about improvement in performance.

Visakhapatnam Port Logistics Park Limited [VPLPL]

As a part of its Strategic Plan, your Company has consistently been looking for opportunities for setting up logistics infrastructure facilities at ports and inland locations. In pursuance of this objective, your Company has vigorously worked with Visakhapatnam Port Trust (VPT) for the last several years for setting up a Multi-Modal Logistics Hub (MMLH) at Visakhapatnam in joint venture. The efforts have ultimately yielded results with the signing of Shareholders'/JV Agreement between your Company & VPT. The proposed JV Company has been incorporated and christened as Visakhapatnam Port Logistics Park Limited (VPLPL). The JV will have equity participation between your Company & VPT in the ratio of 60:40. While your Company's contribution to equity would be in the form of cash, VPT's would be upfront lease rental of 53.025 acres of land allotted to VPLPL for a period 30 years. VPT handed over the earmarked land to VPLPL in January 2015. The project would be managed by your Company. A Project Management Consultant has been appointed to implement the project. The civil work has started in the month of July 2015. The project is expected to be completed by July 2016.

Report on Joint Ventures

AVI-OIL India Private Ltd. [AVI-OIL]

For the year 2014-15, AVI-OIL has shown a negative growth as compared to the previous year with only 876 KL of lubricants blended, 18 MT of greases reprocessed and packed and 196 MT of the ester base stocks manufactured.

With the decreased physical performance, the company achieved a gross turnover of Rs. 43 Crore with net sales amounting to Rs. 38.50 Crore which was lower by 3% as compared to the previous year.

However, the Profit Before Tax (PBT) of Rs. 1.88 Crore was higher by 11.5 times as compared to Rs. 0.16. Crore for the previous year. The increase in profit is mainly attributable to the product mix sold compiled with reduction in raw material and other costs.

The Profit before Depreciation, Interest and Tax (PBDIT) increased by 58% to Rs. 5.50 Crore as compared to Rs. 3.47 Crore for the last year.

Balmer Lawrie Van-Leer Ltd. [BLVL]

Company's Performance:

In the backdrop of weak global economy and weak market and business sentiments, BLVL has achieved a gross turnover of Rs. 306 Crore and increase of 5% over the last financial year which stood at Rs. 294 Crore. The net profit before tax clocked at Rs. 7.91 Crore as against Rs. 6.77 Crore, indicating a clear jump of 11.68%. The impact of sudden variation in Polymer prices in the last quarter of the financial year has impacted the profitability of BLVL. Moreover, weak market demands from Europe and US has largely depleted the production of steel drum closures. Overall BLVL's performance remained stable.

BLVL's products continued to be in demand. Capacity constraints at the plastic container plants at Navi Mumbai and Dehradun restricted possible growth of market share. Efforts are being made to debottleneck production facilities and further improve sales performance in the current year.

Transafe Services Ltd. [TSL]

During the financial year 2014-15, TSL achieved a turnover of Rs. 57.50 Crore which is around 16% lower as compared to the previous year. TSL closed the financial year 2014-15 recording a loss of Rs. 6.79 Crore which is 9% higher than previous year's loss of Rs. 6.24 Crore.

In respect of leasing business of TSL, there has been:

a) off leasing of containers from various customers and

b) rate reduction - due to CONCOR rate negotiation for 6 years & more old containers & increased haulage charges for Private Rail Operators which has resulted in marginal decrease in turnover.

Logistics business of the Company witnessed a reduced level of operation in 2014-15 compared to last year mainly due to certain major logistics contracts expected to be awarded to the Company not maturing in 2014-15. The margin in the logistics business deteriorated.

There has also been a decrease in TSL's container manufacturing business viz., the Creative Containers Division, with a turnover of Rs. 11.60 Crore for the FY 2014-15 as compared to Rs. 17.19 Crore in the previous year. The decrease in the manufacturing business is due to delay in finalization of orders by major customers during 2014-15.

As reported earlier in the Annual Report 2013-14, TSL has duly been referred to Board for Industrial and Financial Reconstruction. The rehabilitation report of TSL is under consideration with the respective Bankers.

Balmer Lawrie (UAE) LLC [BLUAE]

Balmer Lawrie (UAE) LLC (the Company) achieved increased production and sales volumes in most of the major product segments.

Increased focus on customer service and product innovation enabled the Company to strengthen customer relationships. The company achieved significant improvement in retention of skilled employees and employee morale, with positive impact on productivity and efficiencies. Simultaneously, cost reduction was achieved on many fronts. These endeavours enabled the company to stay ahead of competition, which none the less remains intense.

BLUAE drew up plans and embarked on plant modernization and capacity enhancement initiatives across its different product lines. Plans are being finalized for developing infrastructure and creating capacities to meet the targeted business growth over the next decade.

Overall performance during the year was significantly better than in the previous year and is considered satisfactory.

Balmer Lawrie Hind Terminals Pvt. Ltd. [BLHTPL]

BLHTPL, during the financial year 2014-15, continued with the Virtual CFS business arrangement with the Company and earned a total revenue of Rs. 5.88 Crore during the period under review as against total revenue of Rs. 2.52 Crore, earned for the previous financial year ended 31 March 2014. The Profit after Tax of BLHTPL for the financial year ended 31st March 2015 was Rs. 3.95 Crore as against previous financial year [2013-14] figure of Rs. 1.68 Crore. BLHTPL, in total has declared and paid a Dividend of 8300%, which was Rs. 830 per Equity share of Rs. 10/- each fully paid-up.

This Joint Venture was started with the idea that over a reasonable period, the JV Company will own and operate its own CFS rather than operating as a Virtual CFS. For various reasons, this has not been possible and accordingly the JV partners have mutually decided to dissolve the JV Company during the financial year 2015-16.

Memorandum of Understanding (MoU)

Every year your Company enters into a MoU with the Government of India, Ministry of Petroleum & Natural Gas [MoP&NG] based on the guidelines issued by the Department of Public Enterprises [DPE]. The MoU sets out various targets on operational, financial and efficiency parameters, customer satisfaction, human resource development, sustainability, Corporate Governance etc. Your Company's performance vis-a-vis the targets set in the MoU is evaluated at the year-end by the Department of Public Enterprises [DPE]. It is a matter of satisfaction to report that the performance score in respect of the MoU for the year 2013- 14 has been adjudged by DPE to be in the highest rating category i.e. "Excellent". Based on the internal assessment and considering audited results for the year 2014-15, your Company expects to have a "Very Good" rating for the financial year 2014- 15.

Human Resource Management

The strategy of your Company is centered around managing talent, developing leadership and managerial competencies, managing employee performance and enhancing employee engagement. Towards achieving these objectives, your Company put in place the following initiatives during the year 2014-15:

Talent Acquisition

Your Company in its efforts to reinforce its talent pool and to create a leadership pipeline through infusion of fresh talent has during the year, recruited 79 Executives, Officers and Trainees during the year 2014-15.

Training & Development

Your Company believes in continuously honing the skills and competencies of the people with an objective of creating a leadership pipeline. With this objective in mind, your Company planned and executed exhaustive training programmes for its employees: both in General Management as well as specialist skill development with focus on the requirement of the businesses. In all, 1029 (One Thousand Twenty- nine) Man-days of training, both in-house and through external programmes were imparted to all categories of employees during the year.

Managing Performance

With a view to improve upon performance orientation and bring about objectivity in assessment, the Company has institutionalized a KPT based and Competency linked performance appraisal system for its executives.

To further enhance timely completion of PMS, the process has already been e-enabled upto the level of Executives in grade E-3 and work on e-enablement for the balance categories are on the verge of completion.

Employment of Special Categories

During the year 2014-15, 4 (Four) employees in the SC category, 17 (Seventeen) employees in the OBC category, 9 (Nine) women employees and 7 (Seven) employees in the Minorities category were recruited. The actual number of employees belonging to special categories, Group-wise, as on 31st March, 2015 is given below:-

Group Regular SC ST OBC [*] PH Women Mino- Manpower rities as on 31.03.2015

A 469 40 5 36 0 49 29

B 227 25 - 38 3 30 15

C 115 7 - 13 3 13 4

D 554 75 7 34 7 5 84

[including D1]

Total 1365 147 12 121 13 97 132

[*] On and from 08th September, 1993 onwards

Employee Engagement and Welfare

An effective work culture has been established in the organization which encourages participation and involvement of employees in activities beyond work. Towards furthering this, during the year, the 149th Foundation Day was celebrated in all units and establishments across the country. The employees and their family members participated in large numbers and made the event a memorable occasion. Also various programs like Annual Sports Day, Cultural Evening and competition for family members' of employees etc. were organized by the Recreation Club at the different major locations of the Company.

Direct connect to Leadership is a key to employee engagement. Continuing the initiative started in financial year 2012-13, this year again your Company went ahead with the Town Hall Meetings where the Directors of the Company communicate directly with all Executives and Officers of the Company and respond to their queries and concerns. Town Hall Meetings have been institutionalized and are your Company's effective medium of dialogue with employees.

Employee Relations

Your Company has pursued an open and transparent policy of consultation with the collectives. Employee Relations continued to be cordial at all units / locations of your Company and there was no instance of any industrial unrest at any of the locations. Your Company continued its efforts to maintain industrial harmony in all its units and there was no loss of mandays due to any industrial action at any of the units / establishments of your Company.

Implementation of the Persons with Disabilities [Equal Opportunities, Protection of Right and Full Participation] Act, 1995

In compliance with the above Act, your Company has identified positions for recruitment of persons with disabilities. Action for recruitment is on hand to fill up the shortfall.

Implementation of Official Language

To ensure implementation of Rajbhasha policy of the Government of India, your Company has taken several steps to promote usage of Hindi in official work. Various activities like workshops, meetings, etc. were organized during the year and the Rajbhasha Pakhwada was celebrated at all locations of your Company with enthusiasm. Your Company launched its Hindi website in June 2015.

Women Empowerment

Your Company provides a very conducive ambience for employment of women. The percentage of women employees is on the rise with new recruitments. The present strength of women employees is 7.11% despite the fact that a large chunk of our workforce constitutes of shop floor workers. Your Company has created an atmosphere conducive for women employees to join and build a career in this organization.

We would like to assure you that your Company maintains the highest standard as regards addressing gender equity in the organization and they are offered equal opportunities of learning and growth. We also comply with guidelines / statutes as applicable in these matters.

Internal Complaints Committee

Your Company has formed an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. It is to be noted that no complaints have been received by this Committee during the financial year 2014-15.

Corporate Social Responsibility (CSR)

Balmer Lawrie has a legacy of contributing towards community development. As a responsible corporate citizen, several CSR activities are undertaken for the benefit of weaker sections of the society. Our CSR initiative 'Balmer Lawrie Initiative for Self Sustenance (BLISS)' is directed towards providing and improving the long term economic sustenance of the underprivileged and the other initiative 'Samaj Mein Balmer Lawrie (SAMBAL)' aims at improving the living standards of populations in and around our work-centers. In pursuance of this, several community development projects are undertaken, partnering with various NGOs with a focus to trigger development at the micro-community level and thereby generate the desired developmental impact.

CSR Policy

Your Company had a long term perspective for CSR & Sustainability plan even before the provision of CSR policy was mandated by the Companies Act 2013. In the Board's Report for the financial year 2013-14 it was reported that the said plan was developed by Ernst & Young in consultation with the management keeping in view the guidelines issued by the Department of Public Enterprises, Government of India.

Your Company has a well laid out CSR policy in compliance with Section 135 of the Companies Act, 2013 including rules made thereunder and Schedule VII to the Companies Act, 2013, which focus on the following thematic areas covering marginalised sections (women & child, aged, disabled, orphan, etc.) of the society:

* Health & Sanitation

* Education

* Livelihood

* Environmental Sustainability

This CSR policy and long term perspective plan shall act as the core framework that would guide your Company's CSR efforts for the next five to seven years.

CSR is integral to the very belief of Balmer Lawrie and finds a place in the Mission itself "Consistently delivering value to all stakeholders with environmental and social responsibility". The various CSR programs run by your Company constantly endeavour to integrate the interest of the business with that of the communities in which it operates as also benefit the marginalized Communities.

The CSR Policy of your Company is enclosed as "Annexure B" to this annual report and the detailed policy is available on our website at: http://www.balmerlawrie.com/app/webroot/uploads/ CSR_&_Sustainbility_Policy-BL.pdf .

The Composition of the CSR Committee as on date.

In line with the provisions of Section 135 of the Companies Act 2013, your Company has set up a Board Level Committee on Corporate Social Responsibility comprising:

a) Ms. Manjusha Bhatnagar, Director (Human Resource & Corporate Affairs) - Chairperson

b) Shri Prabal Basu, Chairman & Managing Director-Member

c) Shri Alok Chandra, Government Nominee Director - Member

The Company will re-align the composition of CSR committee once Independent Directors are appointed on recommendation of Central Government.

CSR is managed by a Senior Management team under the overall guidance and approval of projects by Director (Human Resource & Corporate Affairs) and Chairman & Managing Director. Your company has Regional CSR committees that help in identifying CSR related initiatives in accordance with the activities stipulated in Schedule VII of the Companies Act 2013, DPE guidelines and CSR policy of your Company.

The Annual Report on CSR is annexed as "Annexure C" to this Board's Report.

Responsibility statement of the CSR Committee

The Responsibility statement of the CSR Committee is attached as "Annexure D".

Employee Health & Safety

Your Company is committed to maintaining a Safe, Healthy and Sustainable (HSE) work environment in all its operations. We are providing corporate support to develop, guide, monitor and promote HSE issues in your Company. We also carry out regular audits of our factories / plants and work places and conduct training programmes on Health & Safety regularly.

Environmental Protection and Sustainability

Environment protection is a high priority for your Company and various precautionary measures have been put in place. Treatment / discharge of effluents conforms to the standards laid down by the regulatory authorities in all the Plants and Manufacturing Facilities.

Your Company has initiated action to reduce power consumption and generation of waste in all its Manufacturing Units. The power & fuel consumption at each of its manufacturing plants are monitored and it is ensured that quantity of usage per unit of output is continuously reduced.

During the financial year 2014-15, we have already installed a cost effective Effluent Treatment Plant / Zero Liquid Discharge Plant at our Manali Complex, Chennai.

Extensive tree plantation at all locations of SBU: Logistics has been done to develop green cover. Further Sewage Treatment Plant (STP) has also been established at Mumbai location of the said SBU.

As a good practice, regular Energy Audits of our establishments are carried out by external agencies in order to improve Energy Efficiency and better Energy Management.

Communications & Branding Initiatives

Several initiatives in the area of internal communications were improved and sustained in the year 2014-15 to enhance the process of information sharing in the organisation, including:

* Regular publication of Weekly Media Update, BL Online Monthly Bulletin, BL Organizational Gazette, the quarterly house magazine. These publications are available on the Company's website.

* Town Hall Meetings: An open house providing a platform to employees to interact with the Whole time Directors.

* Revamp of the Company Intranet was initiated with the objective of making it more interactive, user-friendly and content rich.

* A comprehensive Corporate Branding Manual is being developed post revamping of the products and services logos and restructuring of SBUs.

The external communication initiatives, especially from a branding perspective include:

* Revamped logos of products and services.

* Media Coverage: Corporate Reports in business magazines/papers and coverage of CSR initiatives etc.

* Launch of Hindi Website.

* SBU specific Microsites: The microsites for Logistics Infrastructure and Services went live. The development of the others are in progress.

Further, comprehensive branding plans are in the process of implementation in SBUs: Greases & Lubricants and Travel & Vacations.

Implementation of ERP

Your Company is committed to adapt competitive market driven latest tools, and technologies. SAP ERP was already implemented in SBU's: Industrial Packaging, Leather Chemicals, Refinery & Oil Field Services, and integrated with Logistics and Travel & Vacations activities.

In November 2014, Time Management was successfully rolled out in SAP ERP HR system. Now all Employees attendances and time management is tracked inside ERP system.

To have an integrated Vendor Management and to have a holistic view, your Company is in the process of implementing SAP SRM (Supplier Relationship Management) ERP product.

In July 2015, your Company successfully went live with SAP ERP in SBU Greases & Lubricants. This was the final phase of SAP implementation. The transition has been with minimum glitches and the platform has demonstrated appropriate resilience.

Progress on principles under 'Global Compact'

Your Company is a founder member of the Global Compact, and it remains committed to further the principles enumerated under the Global Compact programme. The details of various initiatives taken in this regard can be found in the Communication of Progress (CoP) uploaded on the website of the Company.

The Communication of Progress report for the year 2014-15 is a synopsis of organizational efforts in execution of Sustainable Development and Corporate Social Responsibility (CSR) projects, adoption of green technologies and environment friendly processes. It also highlights Balmer Lawrie's commitment towards the shared principles and process improvements and technological up-gradations undertaken in the manufacturing businesses to reduce carbon footprint and protect the environment around its units/establishments.

Implementation of Right to Information Act, 2005

The Right to Information (RTI) Act, 2005 was enacted by Government of India with effect from October 12, 2005 to promote openness, transparency and accountability in functioning of Government Departments, PSUs etc.

Balmer Lawrie has designated Senior Manager (Legal) as Central Public Information Officer and Company Secretary as Appellate Authority under the RTI Act, 2005. Detailed information as per the requirement of RTI Act, 2005 has been hosted in your Company's Web Portal http://balmerlawrie.com/ pages/viewpages/27 and the same is updated from time to time. Information sought under RTI Act, 2005 is being provided within the prescribed time-frame. During 2014-15, 42 applications were received, 38 of them were accepted and in 2 cases information was denied and 2 were disposed of subsequently as per RTI Act after 31st March 2015.

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

As required under Section 134(3)(m) of the Companies Act, 2013, ("the Act") read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the information is annexed hereto as "Annexure E".

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 as provided under Section 92 of the Companies Act, 2013, is annexed hereto as "Annexure F".

Number of Meetings of the Board

During the year 2014-15, eight Board Meetings were held. The details of the number of meetings of the Board held during the financial year 2014-15 has been enumerated in the Corporate Governance Report. The intervening gap between any two Board meetings was within the period prescribed under the Companies Act, 2013; Listing Agreement and DPE Guidelines on Corporate Governance. For further details regarding number of meetings of the Board and its Committees, please refer Corporate Governance report annexed to this Report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act, 2013, it is hereby acknowledged and confirmed that:

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors have 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 your Company at the end of the financial year as on 31st March, 2015 and of the profit and loss of your Company for the said financial year;

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

(d) the Directors have prepared the annual accounts for the financial year ended 31st March, 2015 on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and were operating effectively;

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

Company's Policy on Directors' Appointment and Remuneration

By virtue of Article 7A of the Articles of Association of the Company, the President of the India is entitled to determine terms and conditions of appointment of the Directors. This inter-alia includes determination of remuneration payable to the Wholetime Directors. No sitting fee is paid to the Wholetime / Non-Wholetime Government Nominee Directors.

Your Company being a Government Company vide notification no. G.S.R. 463(E) dated 5 June 2015 has been exempted from applicability of Section 134(3)(e) and 197 of the Companies Act, 2013. Your Company has a HR Policy for all employees including Directors and Key Managerial Personnel as required under the DPE Guidelines for CPSEs.

Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments under Section 186 of the Companies Act 2013 are given in the note no. 10, 11 and 15 of Balance Sheet.

Related Party Transactions

Your Company intimated that majority of the Related Party Transactions were made with its Holding Company, Subsidiary Companies, Associate Companies and Joint Venture Companies. Related Party transactions made with Holding Company, Subsidiary Companies are exempted under Clause 49(VII)(D) and (E) of Listing Agreement being transactions between two Government Companies. Further omnibus approval was taken for Related Party Transactions for value upto Rs. 1 Crore. Further, there were no materially significant Related Party Transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which have a potential conflict with the interest of the Company at large.

Justification on the Related Party Transactions entered into

The details of the Related Part Transactions entered into by your Company during the financial year 2014- 15 has been enumerated in Note no. 26.20 of Balance Sheet. The particular of contracts and arrangements as required under Section 134(3)(h) of the Companies Act 2013 in the prescribed Form AOC-2 is attached hereto as "Annexure G".

All contracts / arrangements / transactions entered by your Company during the financial year with Related Parties were in the ordinary course of business and on an arm's length basis.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all Related Party Transactions is placed before the Audit Committee.

The "Related Party Transactions Policy" as approved by the Board is uploaded on the Company's website and may be accessed at the link:

http://www.balmerlawrie.com/app/webroot/uploads/

Related_Party_Transactions_Policy-BL.pdf.

The said policy lays down a procedure to ensure that transactions by and between a Related Party and the Company are properly identified and reviewed to ensure that the Related Party Transactions are properly approved and disclosed in accordance with the applicable law. The Policy also sets out materiality thresholds for Related Party Transactions.

Risk Management

Your Company has formulated a Risk Management Policy in the year 2008 with the objective of Adoption of a Risk Assessment / Identification Policy, Implementation of Risk Assessment, Evaluation & Minimization Procedures and for reviewing the procedures for controlling risks through a properly defined framework. The Risk Management Policy has been uploaded on the Company's website: http://www.balmerlawrie.com/app/webroot/uploads/ Risk_Management_Policy_BL.pdf .

Deposits

Your Company has not accepted any deposits from the public under section 73 of Companies Act, 2013 and therefore no disclosure is required in relation to details relating to deposits covered under Chapter V of the Companies Act, 2013.

Details of significant and material orders passed by the Regulators, Courts and Tribunals

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Internal Financial Controls

Your Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. Self-certification exercises are carried out at senior management level certifying effectiveness of the internal control system, adherence to the code of conduct and the company's policies in the areas of their responsibilities, including financial or commercial transactions, if any, where they have personal interest or potential conflict of interest.

As required under the Companies Act, 2013, your Company has an Internal Control System commensurate with the size, scale and complexity of the organisation. Your Company confirms having the following in place:

* An Internal Audit System whose reports are reviewed by the Audit Committee;

* Orderly and efficient conduct of Company's Business, including adherence to Company's policies;

* Procedures to safeguard Company's assets;

* Procedures to prevent and detect frauds and errors;

* Accuracy and completeness of the accounting records.

Your Company has in place adequate Internal Financial Control system with reference to financial statements. It requires the Directors to review the adequacy of internal controls and compliance controls, financial and operational risks, risk assessment and management systems and related party transactions, which has been complied with. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Vigilance

Your company believes in transparency, equity and fair play, which should be the guiding principles of any ethical business organization. Vigilance is about ensuring the practice of these cardinal principles of a successful organization. It is not a hindrance to successful conduct of business rather it is cornerstone of a successful enterprise.

The Vigilance Department connotes an awareness in your Company - to prevent wrong doings and if detected, punishing the same. Vigilance prevents loss of resources due to unethical conduct of employees. In its proactive mode, Vigilance concentrates on the establishment of Systems, Procedures and Practices aimed at preventing seepage and loss of resources. Vigilance in the punitive mode, keeps surveillance on wrong doers and ensures that they are caught and suitably punished.

Your Company has made substantial investment in implementing information technology solutions. Most businesses have been brought on e-Platform by re-engineering the procedures, which have facilitated us to have a better connect with stakeholders and offer superior services.

Vigil Mechanism / Whistle Blower Policy

Your Company has established a Vigil Mechanism / Whistle Blower Policy for the directors and employees to be able to report management instances of unethical behaviour, actual or suspected fraud or violation of your Company's code of conduct or ethics policy in compliance of the Companies Act 2013 and the Listing Agreement. The details of the Vigil Mechanism / Whistle Blower Policy are given in the Corporate Governance Report 2014-15 and can be downloaded from the following hyperlink of the Company's website: http://www.balmerlawrie.com/app/webroot/uploads/ Whistle_Blower_Policy.pdf.

Report on Corporate Governance

Your Company reaffirms its commitment to the standards of Corporate Governance. This Annual Report contains a Report on compliance of Corporate Governance during 2014-15 marked as "Annexure H" and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges. The Auditors' Certificate regarding Compliance of the conditions of Corporate Governance has also been published in this Report marked as "Annexure I".

Being a Government Company, your Company also complies with the Guidelines on Corporate Governance for Central Public Sector Enterprises 2010 which have been made mandatory by the Department of Public Enterprises since May 2010.

Details relating to Remuneration of Directors, Key Managerial Personnel and Employees

Your Company being a Government Company vide notification no. G.S.R. 463(E). dated 5 June 2015 has been exempted from applicability of Section 134(3)(e) and 197 of the Companies Act 2013.

Board Evaluation and Criteria for evaluation

Your Company being a Government Company vide notification no. G.S.R. 463(E). dated 5 June 2015, has been exempted from applicability of Section 134(3)(e) and 178 of the Companies Act 2013.

The Annual Performance Appraisal of Top Management Incumbents of Public Enterprises is done through the administrative Ministry as per the DPE Guidelines in this regard. Your Company being a Central Public Sector Enterprise under the administrative jurisdiction of - Ministry of Petroleum & Natural Gas also has to follow the similar procedure.

Directors and Key Managerial Personnel

The Board currently consists of four Whole-time Directors and two Government Nominee Directors. No Independent Director has been nominated by MoP&NG on the Board of the Company since 29 May 2013.

It may be noted that pursuant to Article 7A of the Articles of Association of the Company, so long as the Company remains a Government company, the Directors - including Independent Directors - are to be nominated by the Government of India. Your Company continues to pursue with the Administrative Ministry for expediting appointment of Independent Directors on the Board of your Company to bring the Board composition in line with the Listing Agreement with the Stock Exchanges and the applicable CPSE Guidelines for Corporate Governance for CPSEs.

Declaration by Independent Directors

Your Company does not have any Independent Director on its Board. Hence, the Declaration by Independent Directors prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement could not be obtained.

Cessations

* Shri VLVSS Subba Rao, Government Nominee Director ceased to be a Director of the Company with effect from 30th May, 2014 consequent upon withdrawal of his nomination upon his transfer from the Ministry of Petroleum & Natural Gas (MoP&NG).

* Shri P. P. Sahoo, Director [Human Resource & Corporate Affairs] laid down his office upon attaining the age of superannuation on 31st May, 2014.

* Shri Anand Dayal, Director [Manufacturing Businesses] laid down his office upon attaining the age of superannuation on 31st December, 2014.

* Shri Partha Sarathi Das, Government Nominee Director ceased to be a Director of the Company effective at the close of the business hours on 27th May, 2015 consequent upon withdrawal of his nomination by the MoP&NG.

* Shri Virendra Sinha, Chairman & Managing Director and Shri Niraj Gupta, Director (Service Business) both laid down their offices upon attaining the age of superannuation on 31st July, 2015.

The Board places on record its deep appreciation of the commendable performance and significant contribution made by Shri Sahoo, Shri Subba Rao, Shri Anand Dayal, Shri Partha Sarathi Das, Shri Virendra Sinha and Shri Niraj Gupta during their tenure as Directors of your Company.

Appointments :

Shri Alok Chandra, Advisor [Finance] in MoP&NG, was appointed as an Additional Director on 8th August, 2014 in place of Shri VLVSS Subba Rao, pursuant to a direction from the Administrative Ministry and his appointment was ratified by the members at the 97th Annual General Meeting held on 25th September, 2014.

* Ms. Manjusha Bhatnagar has been appointed as an Additional Director in place of Shri P.P. Sahoo w.e.f. 2nd January, 2015.

* Shri D. Sothi Selvam has been appointed as an Additional Director in place of Shri Anand Dayal w.e.f. 2nd January, 2015.

* Shri Prashant Sitaram Lokhande has been appointed as a Government Nominee Director, with effect from 20th July, 2015 through Resolution passed by Circulation, in terms of Section 161(3) of the Companies Act based upon the direction received from the MoP&NG.

* Shri Kalyan Swaminathan has been appointed as Additional Director in place of Shri Niraj Gupta with effect from 1st August, 2015 pursuant to a directions from the Administrative Ministry.

In accordance with the provisions of Section 161 of the Companies Act, 2013 read with Article 9 of the Articles of Association of the Company, Ms. Manjusha Bhatnagar, Shri D. Sothi Selvam and Shri Kalyan Swaminathan would hold office up to the date of the forthcoming Annual General Meeting. Your Company has received due Notice from a member under Section 160 of the Companies Act, 2013 proposing candidatures of Ms. Manjusha Bhatnagar, Shri D. Sothi Selvam and Shri Kalyan Swaminathan for their appointment at the ensuing Annual General Meeting, as Directors, whose period of office shall be subject to determination by retirement of directors by rotation. Accordingly, particulars relating to the said candidatures have been included in the Notice of the Annual General Meeting, for circulation to the members pursuant to Section 160 of the Act read with Rule 13 of the Companies [Appointment & Qualification of Directors] Rules, 2014.

Also, Shri Prabal Basu has been appointed as the Chairman & Managing Director of your Company in place of Shri Virendra Sinha on 30th July, 2015 with effect from 1st August, 2015 upon directions received from the Administrative Ministry.

In accordance with the provisions of Section 152[6] of the Companies Act, 2013 read with Article 12 of the Articles of Association, Shri Prabal Basu and Shri Alok Chandra would retire by rotation at the ensuing Annual General Meeting and they are eligible for reappointment at the said Meeting.

A Brief Profile of the Directors is mentioned in the notice of 98th Annual General Meeting and in the Corporate Governance Report.

It may also be noted that Shri Amit Ghosh ceased to be the Company Secretary upon attaining the age of superannuation on 31st October 2014. His exemplary performance and contribution was taken on record. Ms. Kavita Bhavsar was appointed as the Company Secretary in his place with effect from 9th December, 2014.

In view of the provisions of Section 203 of the Companies Act, 2013 Shri Manoj Lakhanpal Senior Vice President (Finance) and Chief Financial Officer of the Company and Ms. Kavita Bhavsar, Company Secretary are Key Managerial Personnel of the Company.

Audit Committee

Your Company has a qualified and independent Audit Committee, the composition of which and other details are mentioned in the Corporate Governance Report 2014-15. All the recommendations of the Audit Committee have been accepted by the Board of Directors.

Auditors & Auditors' Report

Statutory Auditor:

Your Company being a Government Company, Auditors are appointed or reappointed by the Comptroller and Auditor General of India in terms of Section 143(5) of the Companies Act, 2013. However, the remuneration of the Auditors for the year 2015-16 is to be determined by the members at the ensuing Annual General Meeting as envisaged in the said Act. Members are requested to authorize the Board to decide on their remuneration as per applicable statutory provisions.

In terms of Section 139(5) of the Companies Act 2013, Comptroller & Auditor General of India (C&AG) has appointed M/S Dutta Sarkar & Co. Chartered Accountants, having its office at 7A Kiran Sankar Roy Road, 2nd Floor, Kolkata 700001 as Statutory Auditors of the Company for the FY 2015-16 for both standalone as well as the consolidated financial statements of the Company.

Qualification, reservation, adverse remark or disclaimer made by the Statutory Auditors and corresponding Management Response:

Auditors' Report on Standalone Financial Statements:

Members may note that the Auditors' Report dated 27th May, 2015 for the year ended 31st March, 2015 contains no qualification or reservation on the Accounts of the Company on a Standalone Basis

Auditors' Report on Consolidated Financial Statements:

Members may note that the Auditors' Report on Consolidated Financial Statements dated 27th May, 2015 for the year ended 31st March, 2015 contains a qualification. The Statutory Auditors have made the following observations in their report.

"We did not audit the financial statements of PT Balmer Lawrie Indonesia (PTBLI), a jointly controlled entity of the wholly owned subsidiary Balmer Lawrie (UK) Ltd. for the year ended 31st March, 2015 as prepared by the management of PTBLI, whose financial statements reflect total assets of Rs. 1263.67 Lakh as at 31st March, 2015, total revenues of Rs. 996.35 Lakh and net cash inflows amounting to Rs. 7.43 Lakh for the year ended on that date, as considered in the consolidated financial statements. These financial statements are unaudited and have been furnished to us by the Managementand our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of the said jointly controlled entity (PTBLI), and our report in terms of sub-sections (3) and (11) of Section 143 of the Act in so far as it relates to the said jointly controlled entity (PTBLI), is based solely on such unaudited financial statements."

Explanatory management response as approved by the Board:

The Accounts of PTBLI were duly cleared by their auditors and signed on 20th May, 2015 at Djakarta, Indonesia. However, there was a considerable delay in receiving copy of the same at the Corporate Office and signed accounts could be handed over to the Auditors only after authentication of the Consolidated Accounts of the Company.

Comments of Comptroller & Auditor General of India

The comments of the Comptroller & Auditor General of India, under Section 143(6)(b) of the Companies Act, 2013 on the Accounts of the Company for the financial year ended 31st March, 2015 is annexed with financial statements.

Secretarial Auditor:

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Vinod Kothari & Co. Practicing Company Secretaries, to conduct Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report in Form MR-3 for the Financial Year ended 31st March, 2015 is annexed herewith and marked as "Annexure J".

Qualification, reservation, adverse remark or disclaimer made by the Secretarial Auditors and corresponding Management Response:

The Secretarial Auditor has qualified their Report as mentioned below :

Matters of Emphasis:

Your Company is a listed company and accordingly, it is required to have at least 1/3rd of total number of directors as Independent Directors, as per section 149(4) of the Companies Act, 2013. Further, in terms of Clause 49 the Listing Agreement (LA), the Board shall comprise of at least half of its total number as Independent Directors, if the Chairman of the Board is an executive director. Since the Chairman of the Board is an executive director in case of your Company, your Company was required to have at least half of its total number of directors as Independent Directors.

As against this, there is no Independent Director on the Board of your Company since May 29, 2013. We have been informed that your Company has intimated the need for appointment of Independent Directors to the Ministry of Petroleum & Natural Gas (MoP&NG), which is the appointing authority in this regard.

Due to the absence of Independent Directors on your Company's Board, your Company could not have proper composition of Audit Committee, Nomination and Remuneration Committee, as well as the CSR Committee, as required under the provisions of the Companies Act 2013 and Listing Agreement. This has consequential impact on all required decisions of the said Committees also. There could not have been any meeting of Independent Directors for evaluation of performance of the Chairman, executive directors, and quality, quantity and timeliness of flow of information between the Company management and the Board, as envisaged in Clause VI of Schedule IV of the Companies Act, 2013, and also relevant clauses of the LA.

In view of the absence of Independent Directors on its Board, the Company has not complied with the requirements of Clause(s) 49IIA, 49IIB, 49IIIA and 49IV of the LA.

We further report, subject to above, that the Company has complied with the conditions of Corporate Governance as stipulated in the listing agreement as well as DPE Guidelines on Corporate Governance.

Management Response:

The Articles of Association of the Company vide Clause 7A provides that -

"Notwithstanding anything contained in these Articles and so long as the Company remains a Government Company, the President of India shall subject to the provisions of Article 6 thereof and Section 255 of the Act, be entitled to appoint one or more Directors (including wholetime Director(s) by whatever name called) of the Company to hold office for such period and upon such terms and condition as the President of India may from time to time decide.

In the event of any conflict between this Article and Article 47 hereof, this Article shall prevail over the said Article 47."

Accordingly, the Company being a Government Company is directed by the MoP&NG (being the Administrative Ministry) every time a change in appointment of Director is required. The Company has written to its Administrative Ministry for appointment of the Independent Directors. The Company has been pursuing with the Ministry for expediting appointment of Independent Directors on the Board of the Company to bring the Board and the Committees composition in line with the Listing Agreement with the Stock Exchange.

Cost Auditors:

Pursuant to Section 148 of the Companies Act, 2013 the Board of Directors on the recommendation of the Audit Committee appointed M/s. Musib & Co., Cost Accountants, as the Cost Auditor of your Company for the year under review relating to goods manufactured by Strategic Business Units : Industrial Packaging, Leather Chemicals and Greases & Lubricants of your Company. The remuneration proposed to be paid to the Cost Auditor requires ratification of the members of your Company. In view of this, your ratification for payment of remuneration to the Cost Auditor for the financial year 2015-16 is being sought at the ensuing Annual General Meeting.

Cost Audit Reports for all the applicable products for the year ended 31st March, 2014 were filed on 19th September, 2014 with Cost Audit Cell of Ministry of Corporate Affairs department within specified due dates.

Acknowledgement

Your Directors are focused on creation of enduring value for all stakeholders utilizing multiple drivers of growth in the diverse Strategic Business Units of the Company.

Towards that end, the Directors wish to place on record their sincere appreciation of the significant role played by the employees towards realization of new performance milestones through their dedication, commitment, perseverance and collective contribution. The Board of Directors also places on record its deep appreciation of the support and confidence reposed in your Company by its customers as well as the dealers who have contributed towards the customer-care efforts put in by your Company. The Directors would also wish to thank the vendors, business associates, consultants, bankers, auditors, solicitors and all other stakeholders for their continued support and confidence reposed in your Company.

The Directors are also thankful to Balmer Lawrie Investments Ltd. (the Holding Company) and the Ministry of Petroleum & Natural Gas, Government of India, for their valuable guidance and support extended to the Company from time to time.

Finally, the Directors wish to place on record their special appreciation to the valued Shareholders of your Company for their unstinted support towards fulfilment of its corporate vision.

On behalf of the Board of Directors

Prabal Basu Chairman & Managing Director

D. Sothi Selvam Wholetime Director

Registered Office: Balmer Lawrie House 21 Netaji Subhas Road Kolkata - 700001. Date: 12th August 2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 97th Report on the operations and results of your Company for the financial year ended 31 March 2014, together with the audited Balance Sheet and Profit & Loss Account of the Company.

Overall Financial Results (Rs In lakh) FINANCIAL RESULTS OF THE COMPANY Year ended 31 March

2014 2013

Surplus for the year before 24520 24437

Finance Charge, depreciation and tax

Deduct there from:

Finance Charge and depreciation 2558 2085

Provision for Taxation 6295 6075

15667 16277

Add Transfer from:

Profit & Loss Account 33669 26260

Total amount available for

Apropriation: 49336 42537

Appropriations:

Proposed Dividend @Rs 18 per equity share 5130 5016 (previous year Rs 17.60 per equity share)

Corporate Tax on Dividend 872 852

Transfer to General Reserve / Minority 3000 3000

interest/Foreign Exchange Conversion Reserve etc.

Surplus carried forward to next year 40334 33669

Total of Appropriations 49336 42537

CONSOLIDATED FINANCIAL RESULTS Year ended 31 March 2014 2013

Surplus for the year before 28142 28925

Finance Charge, depreciation and tax

Deduct there from:

Finance Charge and depreciation 5932 6055

Provision for Taxation 6641 6156

15569 16714 Add Transfer from: Profit & Loss Account 35361 27171

Total amount available for Appropriation: 50930 43885

Appropriations:

Proposed Dividend @ Rs 18 per equity share 4291 4453

(previous year Rs 17.60 per equity share)

Corporate Tax on Dividend 902 910

Transfer to General Reserve / Minority (753) 3161

interest / Foreign Exchange Conversion Reserve etc.

Surplus carried forward to next year 46490 35361

Total of Appropriations 50930 43885

Overview

- At the close of another year of sustained performance, the Company recorded its highest ever Turnover of Rs2843 crore in 2013-14 - despite the slowdown in the economy - as against Rs 2762 crore achieved in 2012-13, representing a growth of around 3% over the previous year.

- Profit Before Tax during 2013-14 aggregated Rs 220 crore, which was a marginal diminution from Rs224 crore in 2012-13, the decline being attributable primarily to tough economic environment prevalent both in the manufacturing and service sectors.

- Consequently, Profit After Tax also decreased from Rs 163 crore in the previous year to Rs 157 crore in 2013-14,

- Segment-wise performance analysis indicates that the Service sectors, led by SBU: Logistics Services and Logistics Infrastructure were the main Profit drivers.

Dividend

A dividend of Rs 18 per equity share on the paid- up capital as on 31 March 2014 [as against Rs 17.60 per equity share in the previous year] has been recommended by the Board of Directors, for declaration by the Members at the ensuing 97th Annual General Meeting to be held on 25 September 2014. The trend of past dividend payment is depicted here:

Note : Dividend rate for 2012-13 and 2013-14 are post Bonus issue made in May 2013.

Management Discussion and Analysis Report

An analytical Report on the businesses of the Company - covering both the activities, manufacturing and services - is furnished along with this report under the heading "Management Discussion and Analysis".

Report on Subsidiary

Balmer Lawrie (UK) Ltd.

Balmer Lawrie (UK) Ltd (''BLUK'') is a 100% subsidiary of your Company incorporated in the UK. The subsidiary had previously been engaged in the business of Leasing & Hiring of Marine Freight Containers as also in Tea Warehousing, Blending & Packaging.

After exiting these businesses, BLUK has been utilizing the proceeds to fund other business opportunities. BLUK has to date invested approximately US $ 1.52 million equivalent to Indonesian Rupiah 14.20 billion in PT. Balmer Lawrie Indonesia [PTBLI] - having its registered office at Jakarta, Indonesia - which represents 50% of the paid-up equity share capital of the joint venture company. Balance 50% of the paid-up share capital of PTBLI is subscribed by PT. Imani Wicaksana of Indonesia. PTBLI is engaged in the manufacture and marketing of greases and other lubricants in Indonesia. The plant is in the process of stabilization. During the year under review, the joint venture suffered acutely because of adverse fluctuation of the exchange parity of Indonesian Rupiah vis-à-vis US Dollar.

BLUK does not have any other business activity and has invested its surplus funds aggregating approximately $3.2 million in term-deposits with banks for financing future business opportunities. In 2013- 14, BLUK bought back 1,583,280 Shares in its capital from the Company, being its Holding company, at a price of $2.50 million. The financial year 2013-14 also saw BLUK making payment of its maiden dividend of $ 1 million out of its reserves, which was paid as interim dividend, there being no final dividend.

Exemption from attaching accounts of the Subsidiary

Vide its General Circular No. 2/ 2011(Ref. No. 5/12/2007-CL-III) dated 8 February 2011, the Ministry of Corporate Affairs, Government of India stipulated that the provisions for attachment of the accounts of the subsidiary shall not apply if the conditions specified therein - including consent of the Board of Directors of the concerned company by resolution, for not attaching the Balance Sheet of the subsidiary - are duly fulfilled. It is hereby affirmed that these conditions have been duly complied with by your Company and the consent of the Board for non-attachment of the Annual Accounts of the subsidiary, Balmer Lawrie [UK] Ltd, had also been obtained on 29 March 2011 for the year ended on 31 March 2011 as well as for each successive financial year thereafter.

However, such accounts have been duly consolidated in terms of applicable Accounting Standards and have been shown translated into the Indian Rupee.

It is hereby confirmed that the annual accounts of the subsidiary company and the related detailed information shall be made available to the members seeking such information and the same shall also be kept available for inspection at the Registered Office of the Company.

Report on Joint Ventures

AVI-OIL India Private Ltd. (AVI-OIL)

During 2013-14, Avi-Oil - which is a joint venture [JV] of Indian Oil Corporation Ltd., NYCO S.A., France & your Company - has shown positive growth compared to the previous year with an increase in the production from 972 KL in the previous year to 1,144 KL blended lubricating oils in 2013-14.

Avi-Oil achieved gross sales ofRs 44 crore in 2013-14 as against Rs 40 crore achieved in the previous year. The Profit BeforeTax in the year under report at about Rs 16 lakh, was, however, 78% lower than 2012-13 and primarily because of rise in costs and pressure on margins as a result of challenging market conditions.

The major event in the year under report was the participation of Avi-Oil with NYCO in the Platinum Sponsorship for the ''National Conference on Environment Friendly Insulating Oils - EFIL 2013'' organized by the Central Power Research Institute, Bangalore under Ministry of Power, Government of India. The Conference focused on the use of ester based fluids as liquid dielectrics in utility power transformers. Renewals of all relevant approvals issued by various statutory bodies were obtained well in time to sustain Military and Civil Aviation businesses.

Balmer Lawrie Van Leer Ltd. [BLVL]

Sales for the year 2013-14 at Rs 264.05 crore was about 26% higher than Rs 211.55 crore achieved in 2012- 13. All divisions registered higher sales turnover and Plastic Containers contributed the major share of the increase.

The Profitability of the JV was, however, adversely impacted by significant foreign currency losses during the year ofRs 3.01 crore. The Profit Before Tax recorded by the JV was Rs 6.77 crore [as against Rs 8.32 crore in 2012-13],

BLVL''s products continued to be in demand. Sales of Steel Drum Closure dipped during the first quarter due to lower export volumes but subsequently picked up sufficiently to maintain the volumes of 2012-13.

Capacity constraints at Plastic Container Divisions at Navi Mumbai and Dehradun restricted possible growth of Market share. However, all Plastic Container divisions sold more volumes than the previous year mainly on account of improved manufacturing efficiencies. Efforts are being made to further improve the sales performance in the current year. Plastic Container Division, Dehradun successfully added large blow-moulded drums to the product range and the same was well received by the customers.

During the year BLVL also completed acquisition of balance 49% equity in Proseal Closures Ltd to make it a wholly owned subsidiary.

Transafe Services Ltd [TSL]

During the financial year 2013-14, TSL achieved a turnover of Rs 68.86 crore which is around 15 % percent higher compared to the previous year. TSL closed the financial year 2013-14 recording a loss ofRs 6.24 crore (as againstRs 12.88 crore incurred in the previous year).

Strategically, TSL is increasingly focusing on domestic logistics and logistics services related activities. The margin in the logistics business has improved substantially (resulting in loss reduction from Rs 3.01 crore in 2012-13 to Rs 0.66 crore in 2013-14) consequent to action taken for decreasing transit time, increasing vehicle turnaround, ensuring better utilization of the idle fleet and catering to corporate customer rather than market loads.

In respect of the leasing business, there has been a marginal reduction in the turnover due to decrease of lease rental rate on account of ageing fleet of containers. However, TSL has been able to increase its customer base with concomitant improvement in realization.

There has been a substantial increase in TSL''s container manufacturing business, which has

achieved a turnover ofRs 17.19 crore as compared to Rs 3.09 crore in the previous year. It is expected that the manufacturing business of TSL would be performing much better with the increase in demand from the major customers and robust order booking position.

Consequent to the erosion of its net-worth, TSL has duly been referred to BIFR. The rehabilitation report of TSL is under discussion with the respective Bankers and the same is expected to be submitted shortly before the BIFR upon finalization.

It may be clarified that there is no future liability on the Company attributable to TSL since the investment therein has been wholly provided for and no corporate guarantee has been provided by the Company on behalf of TSL.

Balmer Lawrie (UAE) LLC (BLUAE)

Balmer Lawrie (UAE) LLC (BLUAE) achieved modest increase in sales volumes and market shares in all major product categories in 2013. This was achieved despite the subdued demand that BLUAE''s customers continued to face owing to political turmoil in major markets in the region, which in turn adversely affected the demand for its products.

With competition intensifying and prices under pressure, BLUAE focused on improving customer service, product innovation, expansion of product range, employee retention and efficiency improvement to stay ahead of competition.

Margins remained under pressure. While prices of major raw materials moved within narrow bands during the year, there were cost increases in other areas especially on manpower. Overall performance showed improvement and is considered satisfactory.

In the near-term, BLUAE is focusing on skill development, technological up-gradation of its production facilities, augmentation of capacities in select product categories and improvement in efficiencies.

Balmer Lawrie Hind Terminals Pvt. Ltd.

As informed in our last report, Balmer Lawrie Hind Terminals Pvt. Ltd [BLHT], a joint venture company having 50:50 equity participation with Hind Terminals Pvt. Ltd. - a logistics solution company headquartered at Mumbai - commenced its business of operating a Virtual Container Freight Station at Manali, Chennai in August 2012. At the end of the financial year 2013- 14, the Joint Venture registered a Profit after Tax of Rs167.99 lakh as against a profit ofRs 17.97 lakh in the last financial year and recommended maiden dividend at the rate of 1000% that is Rs 100 per equity share ofRs 10 each for its shareholders.

Memorandum of Understanding (Moll)

Every year your Company enters into a MoU with the Government of India, Ministry of Petroleum & Natural Gas [MOP&NG] based on the guidelines issued by the Department of Public Enterprises [DPE]. The MoU sets out various targets on operational, financial and efficiency parameters, customer satisfaction, human resource development, sustainability, corporate governance etc. The Company''s performance vis- a-vis the targets set in the MoU is evaluated at the year-end by the Department of Public Enterprises [DPE]. It is a matter of satisfaction to report that the performance score in respect of the MoU for the year 2012-13 has been adjudged by DPE to be in the highest rating category i.e. "Excellent". Based on the internal assessment and considering audited results for the year 2013-14, the Company expects to retain the ''Excellent'' rating for the financial year 2013-14.

Human Resource Management

The strategic objective of the Company is to achieve market leadership in its chosen fields of activities and sustainably create value for customers and other stakeholders.

The approach to Human Resource Management in the Company is centered around partnering with the businesses to achieve the organizational vision with emphasis on

[i] Enhancing work force productivity

[ii] Continuously upgrading employee capability, and

[iii] Developing Leaders.

Talent Acquisition

The Company in its efforts to reinvigorate its talent pool and to create a leadership pipeline through infusion of fresh talent has, during the year, laterally inducted 42 personnel, Executives and Officers taken together, in the regular payroll of the Company.

Furthermore, during the year the Company has taken onboard 93 personnel on Fixed Term Rolling Contract. This was ingrained as part of the acquisition of ''Vacations Exotica'', Brand and Business, enabling the Company to make a big-ticket entry into the Leisure and Holiday Travel business. Your Company''s initiative in this regard, though not new, is seen as trend-setting in terms of scales and strategic shifts in manning model.

Training & Development

Your Company continued to invest in enhancing the Professional skills, Managerial and Leadership

competencies of its employees. With this objective, extensive training programs for employees, in functional/ technical domain, general management, leadership development and customer interface management were planned and executed during the year. These training programs were customized with focus on the requirement of the various businesses/ functions of your Company.

Among other notable initiatives, your Company partnered with XLRI, Jamshedpur for an exclusively customized Senior Management program on Leadership development. In all, 900 (Nine hundred) Man-days of training, both in-house & external programmes were imparted across various categories of employees during the year.

Managing Performance

With a view to improve upon performance orientation and bring about objectivity in assessment, your Company has institutionalized a KPT based and Competency linked performance appraisal system for its executives.

To further enhance performance orientation in the Company, during the year, your Company has defined and put in place improvements in its Performance Management System [PMS]. The PMS policy of the Company not only integrates several benchmarked best practices, it is also compliant with all extant DPE Guidelines.

Employment of Special Categories

During the year 2013-14, 2 (Two) employees in the SC category, 6 (Six) employees in the OBC category, 6 (Six) women employees and 9 (Nine) employees in the Minorities category were recruited. The actual number of employees belonging to special categories, Group-wise, as on 31st March, 2014 is given below:-

Group Regular SC ST OBC PH Women Minorities Manpower as on 31.03.2014

A 486 44 6 30 1 50 35

B 211 22 - 29 3 27 15

C 123 13 2 11 3 16 4

D 611 81 8 37 6 5 91 [including D1]

Total 1431 160 16 107 13 98 145

[*] Recruited on and from 08th September, 1993 onwards

Employee Engagement and Welfare

An effective work culture has been established in the organization which encourages participation and involvement of employees in activities beyond work. Towards furthering this, during the year, the 148th Foundation Day was celebrated in all units and establishments across the country. The employees and their family members participated in large numbers and made the event a memorable occasion. Also various programs like Annual Sports Day, Cultural Evening etc. were organized by the Recreation Club at the different major locations of the Company.

Direct connect to Leadership is a key to employee engagement. Continuing the initiative started in the financial year 12-13, this year again the Town Hall exercise was conducted where the Directors of the Company communicated directly with all Executives and Officers of the Company in person and responded to their queries and concerns. The objective inherent is to institutionalize the process.

Employee Relations

The Company believes in an open and transparent policy of consultation with the collectives. Employee relations continued to be cordial at all units / locations of the Company and there was no instance of any industrial unrest at any of the locations of the Company. The Company continued its efforts to maintain industrial harmony in all its units and there was no loss of man-days due to any industrial action at any of the units / establishments of the Company.

Implementation of The Persons with Disabilities [Equal Opportunities, Protection of Right and Full Participation] Act, 1995

In compliance with the above Act, the Company has identified positions for recruitment of persons with disabilities. Action for recruitments is being initiated to fill up the shortfall.

Implementation of Official Language

To ensure implementation of Rajbhasha policy of the Government of India, your Company has taken several steps to promote usage of Hindi in official work. Various activities like workshops, meetings, etc. were organized during the year and the Rajbhasa Pakhwada was celebrated at all locations of the Company.

Women Empowerment

The Company provides a very conducive ambience

for employment of women. The percentage of women employees is on the rise with new recruitments. The present strength of women employees is 6.85% despite the fact that a large chunk of our workforce constitutes shop floor workers. The Company has created an atmosphere conducive for women employees to join and build a career in this organization.

Your Company maintains the highest standard as regards addressing gender equity in the organization and also complies with guidelines/ statutes as applicable in such matters.

Employee Health & Safety

The Company accords high priority to Employee Health & Safety. In pursuance of this objective, the Company has established an integrated Health & Safety Management System across the organization. The Company has published the HSE [Health, Safety & Environment] Manual which would be used as a reference book in the plants and other establishments of the Company. The Company has also introduced HSE MIS system for all its manufacturing units & Container Freight Stations [CFS]. Every plant/ CFS unit submits a monthly HSE MIS Report to the Corporate Office enabling taking of corrective steps. Major plants / units of the Company are OHSAS 18001 certified. All Occupational Health & Safety Standards are adhered to as per Factories Act, 1948. Major initiatives/activities undertaken in this domain in 2013 - 14 were as follows:

- HSE Audits were carried out in all manufacturing units/establishment of the Company during the year and recommendations thereof implemented.

- Fire protection system/ Hydrant was upgraded at the Corporate Office.

- Intelligent type fire detection system was installed at the Corporate Office.

- Main Electrical distribution board at the Corporate Office was replaced with inbuilt safety features.

- Electrical Safety Audit was done at the Corporate Office by SGS Private Limited.

- Fire hydrant system was installed at the plants of SBU: Industrial Packaging at Silvassa and SBU: Performance Chemicals at Manali.

- Fire Sprinkler system was installed in the main administrative office of SBU: Greases & Lubricants at Silvassa.

- HSE training was conducted for employees

involving 1300 man-hours.

- Special training was carried out for drivers at Corporate Office on safe driving of cars.

- With support from National Safety Council, training on Safe Lifting operations was carried out at Warehousing & Distribution [W&D] unit at Kolkata.

- Safety Week was observed from 4th to 9th March, 2014 across all plants and establishments of the Company.

- Incident reporting & Investigation system was formalized across all SBUs.

Environmental Protection and Sustainability

Being fully committed towards the protection and conservation of the environment, the Company has taken various initiatives to minimize the pollution load of operations. Treatment & disposal of effluents conform to the statutory requirements. Air emissions norms also strictly adhere to the norms laid down in the Environment Protection Act, 1986. Disposal of hazardous waste is done strictly as per Hazardous Waste Rules, 2008. All Plants and major establishments of the Company are certified to environment standards ISO 14000.The Company has in place a comprehensive Long Term Integrated Sustainability Plan, which lays down the sustainability policy, program framework, governance structure, communication etc.

Some of the other initiatives/activities taken up by the Company in this domain in 2013-14 are as under:

- The Company has set up solar power plants at SBU: Industrial Packaging at Navi Mumbai (30KWp) and Asaoti (130KWp) which would significantly reduce greenhouse gases from these manufacturing units.

- Saplings have been planted at all units on the occasion of World Environment Day.

- Toxic Gas Detectors were put in place at SBU: Performance Chemicals at its Manali unit.

- Advanced Fume extraction & ventilation system was installed at SBU: Industrial Packaging at Asaoti.

- Oil level detector was installed in storage tanks at SBU: Greases & Lubricants at Kolkata to prevent tank overflow.

- Workshops were conducted across the organization to sensitize employees on Sustainability.

- External stakeholders trainings were conducted

in the Western & Eastern region on CSR & Sustainability.

- The Application Research Laboratory of the Company continues to make significant progress in developing a number of bio-degradable & environment-friendly lubricants.

- The Company continues to lay thrust on technological up-gradation of its manufacturing processes to ensure that adverse impact of operations on the environment is minimized. In the coming years the focus of the Company would be in the direction of reducing carbon footprints, water footprints and waste footprints at various manufacturing units of the organization.

- A special cell, with expert manpower, operates under the Corporate Affairs Department at the Corporate Office to drive Sustainability & EHS initiatives across the Company.

Communications & Branding Initiatives

Several initiatives taken in the area of internal communications were improved and sustained in the year 2013-14 to enhance the process of information sharing in the organization, including:

- Weekly Media Update: The e-weekly of compilation of news about/relevant to the Company in the media

- BLOOM: Balmer Lawrie Online Monthly e-Bulletin of News, Events & Happenings

- BLOG: BL Organizational Gazette, the Quarterly House Magazine in print form, which focuses on a particular theme of relevance to the organization, besides carrying contributions from employees & their family members.

- Town Hall Meetings: An open house providing a platform to employees to interact with the whole time Directors

The external communication initiatives, especially from a branding perspective, include:

- Media Coverage: Corporate Reports in business magazines/papers and also on news channels

- Revamp of the Corporate Website: The Corporate Website has been revamped with a new and modern look. The development of SBU-specific microsites is in progress.

Further, comprehensive branding plans are in the process of implementation in the SBUs: Greases & Lubricants, Tours & Travel and the newly acquired

premier Holidays brand "Vacations Exotica".

Implementation of ERP

Your Company is pleased to report that implementation of ERP is proceeding as per plan. In April 2013 your Company implemented SAP "go-live" for Human Resources (HR) function followed by Finance & Accounting (F&A) function in August 2013 and thereafter for SBU: Industrial Packaging. It was a well coordinated implementation with simultaneous cutover for all six Industrial Packaging plants and more than 20 F&A locations. The transition with minimal glitches and the transaction platform demonstrated appropriate resilience.

In April 2014, the Company successfully rolled out SAP for SBU: Performance Chemicals. Currently, business operations spanning Marketing, Sales, Despatch, Manufacturing, Quality, Maintenance, Procurement and Inventory are on SAP for both SBU: Industrial Packaging and SBU: Performance Chemicals. SAP has since been extended to Warehousing & Distribution business as also to the SBU: Refinery & Oilfield Services, SBU: Tours - Vacations Exotica and to the new Industrial Packaging plant at Navi Mumbai.

In May 2014, your Company implemented the go- live for e-Recruitment. Your Company is amongst a select group of organizations which have implemented this functionality thereby providing an online platform to prospective employees enabling them to register their resumes against advertised jobs and track their application on the portal.

Your Company is poised to Implement SAP in the second phase in SBU: Greases & Lubricants while in the third phase SBUs--Tours & Travel, Logistics Services and Logistics Infrastructure would be brought under the ambit of SAP.

Progress on principles under ''Global Compact''

The Company is a founder member of the Global Compact, and it remains committed to promote the principles enumerated under the Global Compact programme. The details of various initiatives taken in this regard can be found in the Communication of Progress (CoP) uploaded on the website of the Company.

The CoP for the year 2013-14 captures the efforts put in during the year by your Company to ensure execution of focused Sustainable Development and Corporate Social Responsibility (CSR) projects, adoption of green technologies and environment friendly processes. A ''first-of-its-kind'' CSR initiative was rolled out across the country in the financial year under report. This was the distribution of 20,000 water backpacks to the womenfolk in the desert regions and

water-stressed zones around the country. The new state-of-the-art high throughput plant which has been set up at Navi Mumbai for barrel manufacturing, is powered partially by a 30 KWp solar power unit, and supported by host of other green features designed to reduce overall carbon footprint. A 130 KWp Solar Power plant has also been installed at the Industrial Packaging plant at Asaoti.

Vigilance

Your company believes in principles of good governance. The thrust of Vigilance Department is to take up measures to sensitize all stakeholders about anti-corruption principles, with the belief in the philosophy of "Prevention is better than Cure." Accordingly, preventive vigilance measures were undertaken through regular study of systems prevailing in the Company and through surveillance inspections across the locations with actionable recommendations forwarded to the management for implementation. It is always the endeavor of Vigilance department to ensure that the management obtains the maximum out of its various transactions with stakeholders.

Online complaint handling system is in place and several improvements in systems and procedures have been implemented. Various directives of the Central Vigilance Commission in the matter of leveraging technology through introduction of initiatives like e-procurement, e-disposals and on-line posting of job applications for transparency have been implemented in the Company.

The threshold of procurements made through e-tendering has been substantially reduced to include maximum purchases and contracts awarded through e-procurement process. In the interest of inculcating transparency in the award of contracts and purchases, all tender documents and list of contracts awarded are made available on the website of the Company.

Compliance of Right to Information Act, 2005

As the Company is a Public Authority within the meaning of Section 2(h) of The Right to Information Act, 2005 ("the RTI Act"), various disclosures of information, which are mandatory, have been set out on the website of the Company. Additionally, the Company furnishes monthly, quarterly as well as annual reports within prescribed time-line to the Ministry of Petroleum & Natural Gas, Government of India pertaining to requests for information received under the RTI Act. Monthly reports are also being placed on the website pursuant to the advice received from the Ministry aimed at strengthening implementation of the RTI Act.

An extract of the Annual RTI Report for the financial year 2013-14 as furnished to the Administrative Ministry is set out herein for information of the Members:

The rejections mentioned in Column 5 were made considering the exemptions from disclosure of information as envisaged in Section 8 of the RTI Act.

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

As required under Section 217 (1) (e) of the Companies Act, 1956, ("the Act") read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information is annexed.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Act, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31 March 2014, the applicable accounting standards have been followed and there was no departure from such standards;

(ii) That 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 at the end of the financial year on 31 March 2014 and of the profit of the Company for the said financial year;

(iii) That 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 detecting and preventing fraud and other irregularities;

(iv) That the Directors have prepared the accounts for the financial year ended 31 March 2014 on a ''going concern'' basis.

Consolidated Financial Statement

The financial statements of your Company have been duly consolidated with its subsidiary and joint ventures pursuant to Clauses 32, 41 and 50 of the Listing Agreement with the Stock Exchanges. For the purpose of such consolidation, the Accounting Standards - especially, AS 21 and 27 - have been adhered to.

Report on Corporate Governance

The Company reaffirms its commitment to the standards of Corporate Governance. This Annual Report contains a Report on compliance of Corporate Governance during 2013-14 and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges. The Auditors'' Certificate regarding Compliance of the conditions of Corporate Governance has also been published in this Report.

Being a Government Company, the Company also complies with the Guidelines on Corporate Governance for Central Public Sector Enterprises 2010 which have been made mandatory by the Department of Public Enterprises since May 2010. The said Guidelines - which are aimed at protecting the interest of the shareholders and relevant stakeholders -- are applicable to all listed CPSEs. The Guidelines envisage that CPSEs shall not only follow the SEBI Guidelines on Corporate Governance but should additionally follow those provisions in the said CPSE Guidelines which do not exist in the SEBI Guidelines and also do not contradict any of the provisions of the SEBI Guidelines.

Particulars of Employees

No employee received remuneration of Rs 5,00,000 or more per month or Rs 60,00,000 per annum during the financial year 2013-14 and hence no detail is required to be attached with this Report pursuant to the disclosure under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975.

Comments of Comptroller & Auditor General of India

The comments of the Comptroller & Auditor General of India, under Section 619(4) of the Companies Act, 1956 on the Accounts of the Company for the financial year ended 31 March 2014 are set out elsewhere in the Annual Report.

Directors

Six Independent Directors of the Company viz., Shri K C Murarka, Shri Arun Seth, Shri M P Bezbaruah, Shri P K Bora, Shri Asish K Bhattacharyya and Smt Abha Chaturvedi - who had completed their envisaged term of office - vacated their directorship at the close of business hours on 29 May 2013.

It may be noted that pursuant to Article 7A of the Articles of Association of the Company, so long as the Company remains a Government company, the Directors - including Independent Directors - are to be nominated by the Government of India. The Ministry of Petroleum & Natural Gas [MOP&NG], Government of India being the Administrative Ministry, intimated the Company that proposals to appoint new Non-Official Part-time Independent Directors are under active consideration of the Ministry. The Company continues to pursue with the Ministry for expediting appointment of Independent Directors on the Board of the Company to bring the Board composition in line with the Listing Agreement with the Stock Exchanges and the applicable CPSE Guidelines on Corporate Governance.

Shri P P Sahoo, who was appointed a whole- time Director on 14 December 2011 in the position of Director [Human Resource & Corporate Affairs], retired from the services of the Company on 31 May 2014 upon attaining the age of superannuation.

Government Nominee Director, Shri VLVSS Subba Rao, also ceased to be on the Board of the Company with effect from 30 May 2014.

The Board places on record its deep appreciation of the commendable performance and significant contribution made by Shri Sahoo and Shri Subba Rao during their tenure as Directors of the Company.

Shri Alok Chandra, Advisor [Finance] in MOP&NG, has been appointed as Additional Director on 8 August 2014 in place of Shri VLVSS Subba Rao, pursuant to a direction from the Administrative Ministry. In accordance with the provisions of Section 161 of the Companies Act, 2013 read with Article 9 of the Articles of Association of the Company, Shri Chandra would hold office up to the date of the forthcoming Annual General Meeting. The Company has received due Notice from a member under Section 160 of the Companies Act, 2013 proposing candidature of Shri Chandra for his appointment at the ensuing Annual General Meeting, as Director, whose period of office shall be subject to determination by retirement of directors by rotation. Accordingly, particulars relating to the said candidature have been included in the Notice of the Annual General Meeting, for circulation to the members pursuant to Section 160 of the Act read with Rule 13 of the Companies [Appointment & Qualification of Directors] Rules, 2014.

In accordance with the provisions of Section 152[6] of the Companies Act, 2013 read with Article 12 of the Articles of Association, Shri Niraj Gupta and Shri Anand Dayal would retire by rotation at the ensuing Annual General Meeting and they are eligible for reappointment at the said Meeting.

A Brief Profile of the Directors appears elsewhere in the Annual Report.

Auditors

Your Company being a Government Company, Auditors are appointed or reappointed by the Comptroller and Auditor General of India in terms of Section 143(5) of the Companies Act, 2013. However, the remuneration of the Auditors for the year 2014-15 is to be determined by the members at the ensuing Annual General Meeting as envisaged in the said Act. Members are requested to authorize the Board to decide on their remuneration as per applicable statutory provisions.

Auditors'' Report

Members may note that the Auditors'' Report dated 29 May 2014 for the year ended 31 March 2014 does not contain any reservation or qualification.

Acknowledgement

Your Directors are focused on creation of enduring value for all stakeholders utilizing multiple drivers of growth in the diverse Strategic Business Units of the Company.

Towards that end, the Directors wish to place on record their sincere appreciation of the significant role played by the employees towards realization of new performance milestones through their dedication, commitment, perseverance and collective contribution. The Board of Directors also places on record its deep appreciation of the support and confidence reposed in the Company by its customers as well as the dealers who have contributed towards the customer-care efforts put in by the Company. The Directors would also wish to thank the vendors, business associates, consultants, bankers, auditors, solicitors and all other stakeholders for their continued support and confidence reposed in the Company.

The Directors are also thankful to Balmer Lawrie Investments Ltd. (the Holding Company) and the Ministry of Petroleum & Natural Gas, Government of India, for their valuable guidance and support extended to the Company from time to time.

Finally, the Directors wish to place on record their special appreciation to the valued Shareholders of the Company for their unstinted support towards fulfillment of its corporate vision.

Registered Office: On behalf of the Board of Directors Balmer Lawrie House Virendra Sinha 21 Netaji Subhas Road Chairman & Managing Director Kolkata - 700001.

Prabal Basu Date: 19 August 2014 Whole-time Director


Mar 31, 2013

The Directors recommend the Special Resolution for your approval. None of the Directors are interested or concerned in the Resolution.

The Directors have pleasure in presenting the 96th Report on the state of affairs of your Company for the financial year ended 31 March 2013, together with the audited Balance Sheet and Profit & Loss Account of the Company.

Overall Financial Results (Rs. In lakh)

FINANCIAL RESULTS CONSOLIDATED OF THE COMPANY FINANCIAL RESULTS Year ended 31 March Year ended 31 March 2013 2012 2013 2012

Surplus for the year before Finance Charge, depreciation and tax 24437 21014 28925 26018

Deduct therefrom:

Finance Charge and depreciation 2085 1987 6055 5797

Provision for Taxation 6075 5220 6156 5415

16277 13807 16714 14806

Add Transfer from:

Profit & Loss Account 26260 20753 27171 21570

Total amount available for Appropriation: 42537 34560 43885 36376

Appropriations:

Proposed Dividend @ Rs. 30.80 per equity share as at year-close equivalent to Rs. 17.60 per equity share on the expanded capital base post-bonus issue (previous year Rs. 28.00 per equity share) 5016 4560 4453 4559

Corporate Tax on Dividend 852 740 910 770

Transfer to General Reserve / Minority interest etc. 3000 3000 3161 3876

Surplus carried forward to next year 33669 26260 35361 27171

Total of Appropriations 42537 34560 43885 36376

Overview

Your Company recorded significant achievements in the year 2012-13, some of which are as follows:

- The Company recorded its highest ever Turnover with net sales crossing Rs. 2762 crore as against Rs. 2450 crore in 2011-12, representing an increase of 13% over the previous year. The increase in Turnover was mainly due to increase in revenue from the service businesses which was up by 20% compared to 2011-12. Revenue from manufacturing businesses also recorded a marginal increase of 3% compared to the previous year.

- Profit Before Tax increased from Rs. 190 crore in 2011-12 to Rs. 224 crore in 2012-13, an increase of 18% over the previous year.

- Profit After Tax increased from Rs. 138 crore in the previous year to Rs. 163 crore in 2012-13, an increase of 18% over the previous year.

- Segment-wise performance analysis indicates that the Service sectors, led by SBU: Logistics Infrastructure were the main profit generators.

Issuance of Bonus Equity Shares

The Board of Directors at its Meeting held on 26 March 2013 had approved issuance of 1,22,14,560 bonus equity shares of Rs. 10 each in the proportion of 3 new Bonus Shares of Rs. 10/- each for every 4 existing fully paid Equity Shares of Rs. 10/- each of the Company. The Bonus Shares have been allotted on 25 May 2013 after obtaining assent of the members through Postal Ballot pursuant to the provisions of the Articles of Association of the Company read with Section 192A of the Companies Act, 1956 and Companies [Passing of Resolution by Postal Ballot] Rules, 2011. The Bonus Shares have since been listed on both the Stock Exchanges viz., Bombay Stock Exchange and National Stock Exchange. It may be noted that the Bonus shares rank parri passu with the pre-existing equity shares of the Company and, accordingly, would be entitled to full dividend as recommended by the Board and to be declared by the Members at the 96th Annual General Meeting.

Dividend

A dividend of Rs. 30.80 per equity share on the paid-up capital as on 31 March 2013 — which corresponds to Rs. 17.60 per equity share on the expanded Capital base post the Bonus Issue [as against Rs. 28 per equity share in the previous year]

— has been recommended by the Board of Directors, for declaration by the Members at the ensuing 96th Annual General Meeting to be held on 24 September 2013. The trend of past dividend payment is depicted below:

* Post-Bonus issue dividend rate on the expanded capital base. This works out to a Pre-Bonus issue rate ofRs. 30.80 per share, up from Rs. 28 in 2011-12.

Management Discussion and Analysis Report

An analytical Report on the businesses of your Company - both manufacturing and services — is furnished along with this report under the heading "Management Discussion and Analysis".

Report on Subsidiary Balmer Lawrie (UK) Ltd.

Balmer Lawrie (UK) Ltd (''BLUK'') is a 100% subsidiary of your Company incorporated in the UK. The subsidiary had earlier been engaged in the business of Leasing & Hiring of Marine Freight Containers as also in Tea Warehousing, Blending & Packaging.

After exiting these businesses, BLUK has been utilizing the proceeds to fund other business opportunities. BLUK has to date invested approximately US $ 1.52 million equivalent to Indonesian Rupiah 14.20 billion in PT. Balmer Lawrie Indonesia(PTBLI) — having its registered office at Jakarta, Indonesia - which represents 50% of the paid-up equity share capital of the joint venture company. PTBLI is engaged in the manufacture and marketing of greases and other lubricants in Indonesia. The plant of PTBLI has been commissioned and the activities of PTBLI are in the process of stabilization. While manufacturing operations have stabilized, market development needs to be improved upon.

Exemption from attaching accounts of the Subsidiary

Vide its General Circular No. 2/ 2011(Ref. No. 5/12/2007- CL-III) dated 8 February 2011, the Ministry of Corporate Affairs, Government of India stipulated that the provisions for attachment of the accounts of the subsidiary shall not apply if the conditions specified therein — including consent of the Board of Directors of the concerned company by resolution, for not attaching the Balance Sheet of the subsidiary — are duly fulfilled. It is hereby affirmed that these conditions have been duly complied with by your Company and the consent of the Board for non-attachment of the subsidiary''s Annual Accounts had also been obtained on 29 March 2011 for the year ended on 31 March 2011 as well as for each successive financial year thereafter.

However, such accounts have been duly consolidated in terms of applicable Accounting Standards and have been shown translated into the Indian Rupee.

It is hereby confirmed that the annual accounts of the subsidiary company and the related detailed information shall be made available to the members seeking such information and the same shall also be kept available for inspection at the Registered Office of the Company.

Report on Joint Ventures AVI-OIL India Private Ltd. (AVI-OIL)

During 2012-13, Avi-Oil - which is a joint venture [JV] of Indian Oil corporation Ltd., NYCO S.A., France & your Company — recorded negative growth compared to the previous year with the said company blending 972 KL of lubricating oils [down from 1,119 KL blended in the previous year], re-processing 10 MT of greases [as against 22MT in the last year] and manufacturing 148 MT of synthetic ester base stocks [as against 189 MT in the previous year].

The shortfall was a culmination of various causative factors including a slowdown in receipt of orders from Defence coupled with drop in export of the Industrial Lubricants to NYCO as they have expanded their own production capacity. The JV is hopeful that the situation would improve in the near-term with the expected improvement in the general economic condition and consequent to the Indian Airforce introducing new generation aircrafts.

Avi-Oil registered gross sales of Rs. 40 crore in 2012-13 as against Rs. 41 crore achieved in the previous year. The Profit Before Tax in the year under report at about Rs. 75 lakh was, however, 78% lower than 2011-12 and this was because of sharp increase in the prices of raw materials together with increase in the manpower cost.

The major event in this year was the participation of Avi-Oil in the biannual international Aerospace Exposition ''Aero India 2013'' held at Bengaluru in February 2012. Avi-Oil has been participating in this event since its inception in 1983. The theme of the Avi-Oil stall at the Air Show was that its aviation lubricant quality has kept pace with the up-gradation of the aircraft technology over the last twenty years. To demonstrate Avi-Oil''s support to the Indian Air Force, a book titled "The IAF at Eighty 1932-2012" was issued at the Exposition.

Balmer Lawrie-Van Leer Ltd. (BLVL)

BLVL''s net sales, inclusive of other income, in 2012-13 increased to Rs. 211.55 crore from Rs. 188.93 crore in 2011-12, representing an increase of nearly 12% over the previous year. Profit Before Tax earned for the year touched Rs. 8.32 crore as against Rs. 3.85 crore in 2011-12.

BLVL retained its market share in the year under review despite increase in the level of competition and there was significant increase in the sales volume of both Steel drum Closures and Plastic Containers. The new Plastic Container division of BLVL at Dehradun operated at full capacity and ended the year with positive results. However, severe power shortage had an adverse effect on the performance of the Plastic Containers division at Chennai, since it impacted production volume at the plant.

During the year 2012-13, efforts were made to increase operational efficiencies at all locations. The joint venture company is also considering various initiatives to meet the steadily increasing demand for its products.

Transafe Services Limited (TSL)

During the financial year 2012-13, TSL achieved a turnover of Rs. 75.53 crore from operations which was marginally lower compared to the previous year. TSL closed the financial year 2012-13 recording a loss of Rs. 12.9 crore (as against Rs. 10.1 crore in the previous year). The loss has resulted in further erosion of net worth of TSL and as on 31st March, 2013, TSL has a negative net worth and has been duly referred to BIFR.

The major shortfall has been in TSL''s container manufacturing business viz., the Creative Containers Division, which has suffered in the absence of demand from the major buyers. Strategically, TSL is increasingly focusing on domestic logistics and logistics services related activities.

In line with the Corporate Debt Restructuring (CDR) mechanism approved by the Bankers of TSL in October 2010, TSL has repaid to the Banks about 6.5% of the total long- term loan outstanding during 2012-13.The CDR scheme envisages a ballooning repayment schedule under which Rs. 15.36 crore representing 10% of the loan, would become repayable by TSL in 2013-14.

There is no future liability on the Company attributable to TSL since the investment therein has been wholly provided for and no corporate guarantee has been provided by the Company on behalf of TSL.

Balmer Lawrie (UAE) LLC (BLUAE)

During the year under report, Balmer Lawrie (UAE) LLC continued to face the effects of the uncertain global economic recovery as well as the situation in certain countries in the region which affected the performance of BLUAE''s customers and thus, the demand for BLUAE''s products. Despite the depressed market and continued severity of competition, BLUAE maintained its market share. Prices of major raw materials were volatile during the year thus putting the margins under pressure. Overall, however, the performance was satisfactory.

BLUAE is focusing on product innovation, expansion of product range, improvement in efficiencies and systems to stay ahead of competition and retain its pre-eminent position in the market.

BLUAE continues to work on further enhancing its high standards of customer service in terms of timely supplies, reliability and technical support to its customers etc. The joint venture also invests in continuous technological up-gradation of its production facilities and in adding new capacities.

Balmer Lawrie Hind Terminals Pvt. Ltd.

As informed in our last report, during the last fiscal your Company entered into a new joint venture with a logistics solution company head quartered at Mumbai, viz., Hind Terminals Pvt. Ltd., to carry on business of Container Freight Station (CFS) on the land adjacent to the existing CFS of your Company at Manali, Chennai. The new joint venture under the name and style of Balmer Lawrie Hind Terminals Pvt. Ltd [BLHT] was incorporated in December 2011 with 50:50 equity participation by the joint venture partners.

We are happy to report that BLHT has commenced its business in August 2012 in association with the Company, being a joint venture partner, and has registered a profit of Rs. 27.09 lakh in the financial year ended 31st March 2013.

Memorandum of Understanding (MoU)

Your Company enters into a MoU with the Government of India, Ministry of Petroleum & Natural Gas [MOP&NG] every year based on the guidelines issued by the Department of Public Enterprises [DPE] , detailing therein various targets on operational, financial and efficiency parameters, customer satisfaction, human resource development, sustainability, corporate governance etc. The Company''s performance vis-a-vis the targets set in the MoU is evaluated at the year-end by DPE. It is gratifying to report that the performance score in respect of the MoU for the year 2011-12 has been adjudged by DPE to be in the highest rating category i.e. "Excellent". Based on the internal assessment and considering audited results for the year 2012-13, the Company expects to retain the ''Excellent'' rating for the financial year 2012-13 also.

Human Resource Management

The focus of the organization continues on enhancing work force productivity, managing and retaining talent and upgrading their managerial & leadership capabilities. The organization believes that its success depends on the performance of its people aligned to the organizational goals and objectives. To further this process, the Company during the year 2012-13 embarked on a two-pronged approach; first, to redesign the organization structure, which recognizes the realities of today''s business and second, to drive people performance & delivery. Accordingly, the organization structure was reviewed de novo and a revised organization structure was introduced, which in course of time will lead to a leaner and smarter organization.

Talent Management

Talent Acquisition:

The Company in its efforts to reinvigorate its human resource through infusion of fresh blood and to meet the emerging succession needs has, during the year, inducted 82 persons in the Executives/Officer cadres including (54 lateral hires and 28 Executive Trainees).

Talent Attraction & Retention Policy:

A new Talent Management policy was successfully deployed during the year, which included:

- Rolling out more attractive designations (Upgrading of designations and introduction of the Vice President series of designations)

- Lowering of age/experience criteria to attract young talent from the market, and

- Introduction of a Fast Track Career Scheme for High Performing & Potential Executives

Training & Development

The Company continued to invest in enhancing the professional skills and competencies of its employees by upgrading their functional and leadership competencies.

With the objective of enhancing professional skills and competencies, extensive training programs for employees, both in the areas of general management and specialist skill development were planned and executed. The functional training programs were customized with focus on the requirement of the businesses. In all, 1064 Man-days of training, both through in-house & external programs, were imparted to all categories of employees during the year.

Managing Performance

The Company has been working systematically over the last few years to improve the performance orientation of its Executives. In pursuance of this, a series of PMS [Performance Management System] workshops covering all Executives, were organized during 2012-13. Based on the feedback received during these workshops, a number of modifications were made to the PMS instrument and a more robust PMS, covering the Executives and Officers cadres, was rolled out successfully.

Employment of Special Categories

With pockets of surpluses still available in the unionized cadres, opportunity for direct recruitment presently only exists in the Executive and Officer cadres. During the year, in these cadres, 3 SCs, 2 STs, 13 OBCs, 6 minorities and 9 women were recruited. The actual number of employees belonging to special categories, Group-wise, as on 31st March, 2013 is given below:-

Group Regular SC ST OBC[*] PH Women Minorities Manpower as on 31.03.2013

A 410 28 4 22 1 30 8

B 296 31 3 26 2 45 15

C 146 24 2 12 3 19 5

D / D1 613 85 10 21 6 6 95

Total 1465 168 19 81 12 100 123

[*] Recruited on and from 08th September, 1993 onwards Employee Welfare

An effective participative culture, which encourages participation and involvement of employees in activities beyond work, has been one of the pillars of the organization. Towards furthering this, during the year, the 147th Foundation Day was celebrated in all units and establishments of the Company across the country. The employees and their family members participated in large numbers and made the event a memorable occasion. Also various programs like Annual Sports Day, Cultural Evening etc. were organized by the Recreation Clubs at the different major locations of the Company.

Employee Relations

Management believes in a process of open and transparent consultation with the collectives. Employees are represented in various Trusts & Committees formed by the Company to administer various employee benefit schemes. Plant level committees are in place to discuss and settle productivity, safety and work place related matters. Consultative Forums have been established to resolve disputes / differences.

During the year 2012-13, Long-Term Settlement [LTS] was signed with the union in CFS, Navi Mumbai. Further, broad understanding was reached on the terms of LTS at Chennai and Delhi.

The employee relations continued to be generally cordial at all Units / Locations of the Company during the year and there was no loss of man-days due to any industrial action at any of the unit/establishment of the Company.

Organizational Culture & Employee Engagement

For a better appreciation of its organizational culture, the Company commissioned a Culture Survey (BLCULT - Balmer Lawrie Culture) and followed it up with an Employee Engagement Survey (BLESS - Balmer Lawrie Employee Engagement & Satisfaction Survey) to benchmark the alignment policies and practices to the needs of the organization and its people. More than 95% of the Executives & Officers participated in these surveys and the Satisfaction Score of 71 and the Engagement Score of 68 are a tribute to the alignment of people with the organization.

Towards creating a more innovative workplace and foster greater sense of belongingness and participation across the organization, during the year, the Company launched a suggestion scheme for its employees, under the ''EK Soch'' program.

Implementation of The Persons with Disabilities [Equal Opportunities, Protection of Right and Full Participation] Act, 1995

In compliance with the above Act, the Company has identified positions for recruitment of persons with disabilities. Efforts are being made to fill up the shortfall at the earliest.

Implementation of Official Language

To ensure implementation of Rajbhasha policy of the Government of India, your Company has taken several steps to promote usage of Hindi in official work. Various activities like workshops, Quarterly Review meetings, etc. were organized during the year and the Rajbhasha Pakhwada was celebrated at all locations of the Company. During 2012-13,

Deputy Director Implementation, Official Language Department, Eastern Region, Kolkata inspected Head Office at Kolkata and expressed overall satisfaction on implementation of Official Language in the Company.

Women Empowerment

With conscious efforts at promoting greater gender diversity through extension of a women friendly work place, the number of women employees is on the rise. The present strength of women employees is 6.83% despite the fact that a large chunk of the workforce of the Company constitutes shop floor workers. Further, around 65% of the CSR fund was either directly spent on women centric projects or for women beneficiaries.

Employee Health & Safety

The Company accords high priority to Employee Health & Safety. In pursuance of this the Company has established an integrated Health & Safety Management System across the organization. Major Plants/ Units of the Company are OHSAS 18001 certified. All Occupational Health & Safety standards are adhered to as per Factories Act, 1948.

Major initiatives /activities undertaken in this domain in 2012-13 were as follows:

- Internal Safety Audits were carried out in each of the manufacturing units / establishment of the Company during the year. The implementation of the recommendations of the Safety Audit is closely tracked at the highest level of the management.

- 42nd National Safety Week was celebrated across the organization between 4th & 9th March 2013 creating safety awareness amongst employees and other stakeholders.

- A new Fume Extraction System has been installed and commissioned in the Industrial Packaging Plant at Asaoti.

- Special training programs on Safe Material Handling were carried out at all the Container Freight Stations.

- Fire & Life Safety risk assessment of the Corporate Office was carried out by an expert agency and provisional No Objection Certificate [NOC] obtained from West Bengal Fire & Emergency Services.

- Fire hydrant system was commissioned in the recently expanded area of CFS at Manali.

Environmental Protection and Sustainability

The Company is fully conscious of its responsibility towards the protection and regeneration of the environment and the importance thereof in the sustainability of its businesses. The Company has, accordingly, taken various initiatives to minimize the pollution load of operations. Treatment & disposal of effluents conform to the statutory requirements. Air emissions norms also strictly adhere to the norms laid down in the Environment Protection Act, 1986. Disposal of hazardous waste is done strictly as per Hazardous Waste Rules, 2008. All Plants and major establishments of the Company are certified to environment standards ISO 14000.

During the year under review, a major exercise was carried out across the Company to evaluate and draw up a comprehensive Long Term Integrated Sustainability Plan for the Company and it lays down the sustainability policy, program framework, governance structure, communication etc.

Some of the other initiatives / activities taken up by the Company in this domain in 2012-13 include:

- Commissioning of an Integrated Sewage treatment plant at the Manali complex.

- Commissioning of Energy Audit at all plant of the SBU: Greases & Lubricants to identify potential areas of energy conservation. More than 90% of the recommendations made in the Energy Audit have been implemented.

- Workshops were conducted across the organization to sensitize employees on Sustainability.

- Introduction of Low Volatile Organic Compound (VOC) based paints in manufacturing of barrels by SBU: Industrial Packaging.

- Installation of various Engineering controls such as Non Return Valves, Automatic level detectors in Greases & Lubricants, Kolkata to minimize oil spillage and thereby reduce soil pollution.

- Installation of energy efficient welding machines at the Silvassa and Asaoti Plants of SBU: Industrial Packaging.

- An Operational Excellence exercise was undertaken in the Silvassa Plant of SBU: Industrial Packaging, which resulted in significant savings through improved productivity, machine up time, On-time-in-full delivery, quality usage and reduction in energy consumption etc.

- The Application Research Laboratory of the Company made significant progress in developing a number of biodegradable & environment friendly lubricants.

The Company continues to lay thrust on technological up- gradation of its manufacturing processes to ensure that adverse impact of operations on the environment is minimized. In the coming years the focus of the Company would be in the direction of reducing carbon footprints, water footprints, waste footprints & investment in Solar Power generation at various manufacturing units of the organization.

A special cell, with expert manpower, was set up during the year under the Corporate Affairs department at the Corporate Office to drive Sustainability & EHS initiatives across the Company.

Corporate Communications & Branding

Several initiatives were put in place in the year 2012-13 to enhance the process of internal communication in the Company. These included publication of:

- Weekly Media Update: This is an e-weekly of compilation of news about/relevant to the Company published in the media

- BLOOM: Online Monthly e-Bulletin of News, Events & Happenings pertaining to the Company

- BLOG: BL Organizational Gazette, the Quarterly House Magazine in print form, focusing on themes of relevance to the organization, besides carrying contributions from employees & their family members etc.

During the year, Town Hall Meetings were also organized at all major locations of the Company wherein all the Executives & Officers interacted with the whole time Directors in an open house format and discussed the findings of the Engagement Survey.

The year also witnessed several external communication efforts to enhance the brand image of the Company.

Implementation of ERP

As reported last year, your Company is in the midst of a large scale, multi-year transformation program involving implementation of SAP as its Enterprise Information Technology platform. The project is progressing satisfactorily and the Company would soon join a select group of organizations successfully carrying out business transactions leveraging world class ERP solution.

A significant milestone was achieved on 1st April 2013, when SAP for Human Resource function went live. As on date, SAP is being used by the Company for its Organizational Management, Personnel Actions and Leave Management processes. In future, the Company aims to cover Attendance and Recruitment processes under SAP.

The project is in an advanced stage of readiness to go live on SAP for Accounts & Finance function as also for the SBU: Industrial Packaging. By August 2013, over 250 users, across twenty or more locations, would be on an integrated, best-in-class platform to execute their day to day functions.

After achieving stability in this phase (Phase 1), ERP implementation would be extended in a phased manner to the other SBUs viz., Greases & Lubricants, Performance Chemicals, Refinery & Oilfield Services (in Phase 2) and then Tours & Travel, Logistics Services & Logistics Infrastructure (in Phase 3).

Progress on principles under ''Global Compact''

Your Company is a founder member of the Global Compact - India Chapter, and it remains committed to further the principles enumerated under the Global Compact principles & programs. The details of various initiatives taken to further the principles of Global Compact are available in the Communication of Progress (CoP) uploaded on the website of the Company.

Further, as a Gold Sponsor, Balmer Lawrie supported the 8th National Convention of the Global Compact Network India at Kolkata and actively participated in the deliberations, including chairing of a session.

Vigilance

Your Company believes in encouraging and nurturing a culture of honesty and transparency. It has scaled up existing anti-corruption efforts amongst stakeholders by providing knowledge, skills, strategies and resources to promote transparency and ethical practices in business operation.

As vigilance initiative, several good practices such as a web- based complaint registering system, e-Payment, e- Procurement, e-Auction etc. have been introduced and strengthened to promote ease of access, accountability and efficiency in the Company. Various process improvement measures have been put in place to plug loopholes and to increase efficiency. These measures along with surveillance inspections and deterrent action against wrong-doing, promote a clean and corruption-free environment in the Company.

Compliance of Right to Information Act, 2005

As the Company is a Public Authority within the meaning of Section 2(h) of The Right to Information Act, 2005 ("the RTI Act"), various disclosures of information, which are mandatory, have been set out on the website of the Company. Additionally, the Company furnishes monthly, quarterly as well as annual reports within prescribed time- line to the Ministry of Petroleum & Natural Gas, Government of India pertaining to requests for information received under the RTI Act. Monthly reports are also being placed on the website pursuant to the advice received from the Ministry aimed at strengthening implementation of the RTI Act.

An extract of the Annual RTI Report for the financial year 2012-13 as furnished to the Administrative Ministry is set out herein for information of the Members:

The rejections mentioned in Column 5 were made considering the exemptions from disclosure of information as envisaged in Section 8 of the RTI Act.

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

As required under Section 217 (1) (e) of the Companies Act, 1956, ("the Act") read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the information is annexed.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Act, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31 March 2013, the applicable accounting standards have been followed and there was no departure from such standards;

(ii) That 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 at the end of the financial year on 31 March 2013 and of the profit of the Company for the said financial year;

(iii) That 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 detecting and preventing fraud and other irregularities;

(iv)That the Directors have prepared the accounts for the financial year ended 31 March 2013 on a ''going concern'' basis.

Consolidated Financial Statement

The financial statements of your Company have been duly consolidated with its subsidiary and joint ventures pursuant to Clauses 32, 41 and 50 of the Listing Agreement with the Stock Exchanges. For the purpose of such consolidation, the Accounting Standards — especially, AS 21 and 27 — have been adhered to.

Report on Corporate Governance

The Company reaffirms its commitment to the standards of Corporate Governance. This Annual Report contains a section on compliance of Corporate Governance during 2012-13 and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges. The Auditors'' Certificate regarding Compliance of the conditions of Corporate Governance has also been published in this Report.

Being a Government Company, the Company also complies with the Guidelines on Corporate Governance for Central Public Sector Enterprises 2010 which have been made mandatory by the Department of Public Enterprises since May 2010. The said Guidelines — which are aimed at protecting the interest of the shareholders and relevant stakeholders — are applicable to all listed CPSEs. The Guidelines envisage that CPSEs shall not only follow the SEBI Guidelines on Corporate Governance but should additionally follow those provisions in the said CPSE Guidelines which do not exist in the SEBI Guidelines and also do not contradict any of the provisions of the SEBI Guidelines.

Particulars of Employees

No employee received remuneration of Rs. 5,00,000 or more per month or Rs. 60,00,000 per annum during the financial year 2012-13 and hence no detail is required to be attached with this Report pursuant to the disclosure under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975.

Comments of Comptroller & Auditor General of India

The comments of the Comptroller & Auditor General of India, under Section 619(4) of the Companies Act, 1956 on the Accounts of the Company for the financial year ended 31 March 2013 is set out elsewhere in the Annual Report.

Directors

Six Independent Directors of the Company - viz., Shri K C Murarka, Shri Arun Seth, Shri M. P. Bezbaruah, Shri P. K. Bora, Shri Asish K. Bhattacharyya and Smt. Abha Chaturvedi - who had completed their envisaged term of office, vacated their directorship at the close of business hours on 29 May 2013. The Ministry of Petroleum & Natural Gas [MOP&NG], Government of India has intimated the Company that proposals to appoint new Non-official Part-time Independent Directors are under active consideration of the Ministry. The Company is pursuing with the Administrative Ministry for expediting appointment of Independent Directors on the Board of the Company to bring the Board composition in line with the Listing Agreement with the Stock Exchanges and the applicable CPSE Guidelines on Corporate Governance.

Shri K Subramanyan, who was appointed a whole time Director on 30 December 2005 in the position of Director [Finance], retired from the services of the Company at the close of business hours of 30 November 2012 upon attaining the age of superannuation. Shri Prabal Basu, erstwhile Senior Vice President [Finance], has been appointed in his place as Director [Finance] and has assumed office with effect from 1 December 2012.

The Board places on record its deep appreciation of the commendable performance and significant contribution made by the Independent Directors and Shri Subramanyan during their tenure as Directors of the Company.

Government Nominee Director, Shri VLVSS Subba Rao, who ceased to be on the Board of the Company with effect from 14 August 2012 was again appointed as Additional Director on 26 September 2012 on receipt of a fresh direction from the Administrative Ministry. Pursuant to Section 260 of the Companies Act, 1956 and Article 9 of the Articles of Association of the Company, Shri Subba Rao and Shri Prabal Basu would hold office up to the date of the forthcoming Annual General Meeting. The Company has, however, received due Notice under Section 257 of the Companies Act, 1956 for their appointment, as Director, whose period of office shall be subject to determination by retirement of directors by rotation.

In accordance with the provisions of Section 256 of the Companies Act, 1956 read with Article 12 of the Articles of Association, Shri P. P. Sahoo and Shri Virendra Sinha would retire by rotation at the ensuing Annual General Meeting and they are eligible for reappointment at the said Meeting.

A Brief Profile of the Directors appears elsewhere in the Annual Report.

Auditors

Your Company being a Government Company, Auditors are appointed or reappointed by the Comptroller and Auditor General of India in terms of Section 619(2) of the Companies Act, 1956. Letter of appointment of Auditors for the year 2013- 14 has been received by the Company. However, the remuneration of the Auditors for the year 2013-14 is to be determined by the members at the ensuing Annual General Meeting as per Sections 224(8)(aa) and 619 of the Act.

Auditors'' Report

Members may note that the Auditors'' Report dated 29 May 2013 for the year ended 31 March 2013 does not contain any reservation or qualification.

Acknowledgement

Your Directors are focused on creation of enduring value for all stakeholders utilizing multiple drivers of growth in the form of the diverse Strategic Business Units of the Company.

Towards that end, the Directors like to place on record their sincere appreciation of the significant contribution made by the employees towards realization of new performance milestones. The Board of Directors also places on record its deep appreciation of the support and confidence reposed in the Company by its customers. Mention must also be made of the dealers who have contributed towards customer-care orientation of the Company. The Directors would also wish to thank the vendors, business associates, consultants, bankers, auditors, solicitors and all other stakeholders for their continued support to the Company.

The Directors are also thankful to Balmer Lawrie Investments Ltd. (the Holding Company) and the Ministry of Petroleum & Natural Gas, Government of India, for their valuable guidance and support.

Finally, the Directors wish to place on record their special appreciation to the valued Shareholders of the Company for their unstinted support towards fulfillment of its corporate mission.

Registered Office: On behalf of the Board of Directors

Balmer Lawrie House Virendra Sinha

21 Netaji Subhas Road Chairman & Managing Director

Kolkata - 700001. Prabal Basu

Date: 12 August 2013 Whole-time Director

 
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