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Notes to Accounts of Balmer Lawrie & Company Ltd.

Mar 31, 2015

1 Rights, Preferences and Restrictions attached to Shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

ADDITIONAL DISCLOSURES

1 (a) Conveyance deeds of certain Leasehold land costing Rs. 5,867.94 lakhs (Rs. 2,889.41 lakhs) and buildings, with written down value of Rs. 2,933.76 lakhs (Rs. 2,900.70 lakhs) are pending registration / mutation.

(b) Certain buildings & sidings with written down value of Rs. 4,991.72 lakhs (Rs. 5083.80 lakhs) are situated on leasehold/rented land. Some of the leases with Kolkata Port trust have expired and are under renewal. Action has been taken for finalising the agreements with Kolkata Port Trust for renewal of such pending cases.

2 Contingent Liabilities as at 31st March, 2015 not provided for in the accounts are:

(a) Disputed demand for Excise Duty, Income Tax, Sales Tax, Provident Fund and Service Tax amounting to Rs. 9,418.35 lakhs (Rs. 18,972.80 lakhs) against which the Company has lodged appeal/petition before appropriate authorities. Details of such disputed demands as on 31st March, 2015 are given in Annexure - A.

(b) Claims against the company not acknowledged as debts amounts to Rs. 1,102.53 lakhs (Rs. 1,090.76 lakhs) in respect of which the Company has lodged appeals/petitions before appropriate authorities. In respect of employees/ex-employees related disputes, financial effect is ascertainable on settlement.

3 Counter guarantees given to Standard Chartered Bank, Bank of Baroda, Canara Bank, Yes Bank and Indusind Bank in respect of guarantees given by them amounts to Rs. 10,726.36 lakhs (Rs. 10,884.35 lakhs).

4 Estimated amount of contract remaining to be executed on Capital Accounts and not provided for [net of advances paid - Rs. 24.29 lakhs (Rs. 15.37 lakhs)] amounted to Rs. 208.91 lakhs (Rs. 1,741.34 lakhs).

5 The net amount of exchange difference credited to Profit & Loss account is Rs. 235.79 lakhs [ (-) Rs. 416.95 lakhs].

6 Trade receivables, loans and advances and deposits of which confirmations are not received from the parties are subject to reconciliation and consequential adjustments on determination / receipt of such confirmation.

7 Research and Development expenditure charged to Profit & Loss Account during the year amounts to Rs. 762.49 lakhs (Rs. 609.48 lakhs).

8 Excess Income Tax provision in respect of earlier years amounting to Rs. 500 lakhs (Rs. 600 Lakhs) has been reversed in the current year.

9 The amount of Excise duty deducted from the amount of "Sales - Manufactured Goods" is relatable to Sales made during the period and the amount of Excise Duty recognised separately in Note 25 - "Other Expenses" is related to the difference between the closing stock and the opening stock.

10 Employee Benefits

Consequent to Accounting Standard 15 on Employee Benefits (Revised) issued by the Institute of Chartered Accountants of India being applicable to the Company during the year, the prescribed disclosures are made in Annexure B.

Defined Benefit Plans / Long Term Employee benefits in respect of Gratuity, Leave Encashment and Long Service Awards are recognised in the Profit & Loss Account on the basis of Actuarial valuation done at the year end. The details of such employee benefits as recognised in the financial statements are attached as Annexure B.

11 Loans and Advances in the nature of loans to Subsidiary / Joint Ventures / Associates

The company does not have any Loans and Advances in the nature of Loans provided to its subsidiary / Joint Venture Companies / Associates as at the year end except as is disclosed in 26.20 below.

5 Related Party Disclosure

i) Name of related Party Nature of Relationship

Balmer Lawrie Investments Ltd. Holding Company

Balmer Lawrie (U.K.) Ltd. Wholly owned subsidiary

Visakhapatnam Port Logistics Wholly owned subsidiary Park Ltd.

Transafe Services Ltd. Joint Venture

Balmer Lawrie - Van Leer Ltd. Joint Venture

Balmer Lawrie (UAE) Llc. Joint Venture

Avi - Oil India (P) Ltd. Joint Venture

Balmer Lawrie Hind Terminals Joint Venture Pvt. Ltd.

Proseal Closures Ltd. Wholly owned subsidiary of Balmer Lawrie Van Leer Ltd.

i) Name of Related Party Nature of Relationship

PT Balmer Lawrie Indonesia Joint Venture of Balmer Lawrie (UK) Ltd.

Shri V Sinha, Chairman and Key Management Personnel Managing Director

Shri P.P. Sahoo, Director Key Management Personnel (till 31.05.2014) (HR & CA)

Shri A. Dayal, Director Key Management Personnel (Manufacturing Businesses) (till 31.12.2014)

Shri N. Gupta, Director Key Management Personnel (Services Businesses)

Shri P. Basu, Director (Finance) Key Management Personnel

Ms Manjusha Bhatnagar Director Key Management Personnel (HR & CA) (w.e.f. 30.12.2014)

Shri D. Sothi Selvam, Director Key Management Personnel (Manufacturing Business) (w.e.f. 02.01.2015)

Shri Amit Ghosh, Company Secretary Key Management Personnel (till 31.10.2014)

Ms Kavita Bhavsar, Company Secretary Key Management Personnel (w.e.f. 08.12.2014)

12 Segment Reporting

Information about business segment for the year ended 31st March, 2015 in respect of reportable segments as defined by the Institute of Chartered Accountants of India in the Accounting Standard - 17 in respect of "Segment Reporting" is attached as Annexure - C.

13 Earnings per Share

i. Earnings per share of the company has been calculated considering the Profit after Taxation of Rs. 14,744.44 lakhs (Rs. 15,666.99 lakhs) as the numerator.

ii. The weighted average number of equity shares used as denominator for calculation of basic and diluted earnings per share is 2,85,00,641 (2,85,00,641) and face value per share is Rs. 10.

iii. The nominal value of shares for calculation of basic and diluted earnings per share is Rs. 2,850.06 lakhs (Rs. 2850.06 lakhs) and the earnings per share for the year on the above mentioned basis comes to Rs. 51.73 (Rs. 54.97).

14 Miscellaneous Expenses shown under "Other Expenses" (Note no. 25) do not include any item of expenditure which exceeds 1% of the total revenue.

15 (a) Certain fixed deposits amounting to Rs. 3,200 lakhs (Rs. 3,400 lakhs) are pledged with a ban against short term loans availed from the said bank. However, there are no loans outstanding against these pledges as on 31.3.2015.

(b) Certain fixed deposits amounting to Rs. 58.87 lakhs (Rs. 54.21 lakhs) are pledged with a bank against guarantees availed from the said bank.

(c) Fixed Deposit with bank amounting to Rs. 1.37 lakhs (Rs. 1.37 lakhs) are lodged with certain authorities as security.

16 Consequent to implementation of SAP in Industrial Packaging & Leather Chemicals, overheads are loaded on real time basis on to semi-finished goods and finished goods on standard cost which is periodically reviewed. Prior to introduction of SAP, such loading of overheads was done on the closing stock of semi-finished goods and finished goods at the year-end based on the allocation of overheads at pre-determined ratios on the stock of semi-finished goods and finished goods. The impact of this change, however, is not ascertainable.

17 Pursuant to the enactment of the Companies Act 2013 (the 'Act'), the Company has, effective 1st April 2014, reviewed and revised the estimated useful lives of its fixed assets, in accordance with the provisions of Schedule II of the Act, except those mentioned in 2(f) of Significant Accounting Policies. This has resulted in lower depreciation for the year on account of Plant & Machinery to the tune of Rs. 212.18 Lacs and higher depreciation for other assets of Rs. 576.77 Lacs, net impact being Rs. 364.59 Lacs. Out of this a sum of Rs. 301.65 Lacs has been adjusted against retained earnings as per transitional provisions specified in Schedule II of the Act, and the consequential estimated impact on the results for the year is Rs. 62.94 lakhs. An amount of Rs. 199 Lacs (net of deferred tax) has been adjusted against the opening balance of Retained earnings for the assets which had no residual life as at 1st April, 2014.

18 (a) The financial statements have been prepared as per revised Schedule III to the Companies Act, 2013.

(b) Previous year's figures have been re-grouped or re-arranged wherever so required to make them comparable with current year figures.

(c) Figures in brackets relate to previous year.


Mar 31, 2014

Note No. 1

ADDITIONAL DISCLOSURES

1.1 (a) Fixed Deposit with bank amounting to Rs 1.37 lakhs (Rs 1.57 lakhs) are lodged with certain authorities as security.

(b) Conveyance deeds of certain land costing Rs 2,889.41 lakhs (Rs 2,948.46 lakhs) and buildings, with written down value of Rs 2,900.70 lakhs (Rs 2,880.29 lakhs) are pending registration / mutation.

(c) Certain buildings & sidings with written down value ofRs 5,083.80 lakhs (Rs 5,156.87 lakhs) are situated on leasehold/rented land. Some of the leases with Kolkata Port Trust have expired and are under renewal. Action has been taken for finalising the agreements with Kolkata Port Trust for renewal of such pending cases.

1.2 Contingent Liabilities as at 31st March, 2014 not provided for in the accounts are:

(a) Disputed demand for Excise Duty, Income Tax, Sales Tax, Provident Fund and Service Tax amounting to Rs 18,972.80 lakhs (Rs 8,462.88 lakhs) against which the Company has lodged appeal/petition before appropriate authorities. Details of such disputed demands as on 31st March, 2014 are given in Annexure - A.

(b) Claims against the company not acknowledged as debts amounts to Rs 1,090.76 lakhs (Rs 1,039.40 lakhs) in respect of which the Company has lodged appeals/petitions before appropriate authorities. In respect of employees/ex-employees related disputes, financial effect is ascertainable on settlement.

1.3 Counter guarantees given to Standard Chartered Bank, Bank of Baroda, Canara Bank and Indusind Bank in respect of guarantees given by them amounts to Rs 10,884.35 lakhs (Rs 10,864.36 lakhs).

1.4 Estimated amount of contract remaining to be executed on Capital Accounts and not provided for [net of advances paid - Rs 15.37 lakhs (Rs 940.69 lakhs)] amounted to Rs 1,741.34 lakhs (Rs 5,094.96 lakhs).

1.5 There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date except as is shown below:

The above information has been determined to the extent such parties have been identified on the basis of information available with the company and relied upon by the auditors

1.6 The net amount of exchange difference debited to Profit & Loss account isRs 416.95 lakhs (Rs 103.74 lakhs).

1.7 Confirmation letters have been issued in respect of trade receivables, loans and advances and deposits of the company but not responded to in many cases. Hence unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of such confirmation.

1.8 Research and Development expenditure charged to Profit & Loss Account during the year 2013-14 amounts to Rs 609.48 lakhs (Rs 585.48 lakhs).

1.9 Excess Income Tax provision in respect of earlier years amounting toRs 600 lakhs (Rs 1,040.00 Lakhs) has been reversed in the current year.

1.10 The amount of Excise duty deducted from the amount of "Sales - Manufactured Goods" is relatable to Sales made during the period and the amount of Excise Duty recognised separately in Note 25 - "Other Expenses" is related to the difference between the closing stock and the opening stock.

1.11 Employee Benefits

Consequent to Accounting Standard 15 on Employee Benefits (Revised) issued by the Institute of Chartered Accountants of India being applicable to the Company during the year, the prescribed disclosures are made in Annexure B.

Defined Benefit Plans / Long Term Employee benefits in respect of Gratuity, Leave Encashment and Long Service Awards are recognised in the Profit & Loss Account on the basis of Actuarial valuation done at the year end. The details of such employee benefits as recognised in the financial statements are attached as Annexure B.

1.12 Loans and Advances in the nature of loans to Subsidiary / Joint Ventures / Associates

The company does not have any Loans and Advances in the nature of Loans provided to its subsidiary / Joint Venture Companies / Associates as at the year end except as is disclosed in 26.21 below.

1.13 Related Party Disclosure

i) Name of Related Party Nature of Relationship

Balmer Lawrie Investments Ltd. Holding Company

Balmer Lawrie (U.K.) Ltd. Wholly owned subsidiary

Transafe Services Ltd. Joint Venture

Balmer Lawrie - Van Leer Ltd. Joint Venture

Balmer Lawrie (UAE) Llc. Joint Venture

Avi - Oil India (P) Ltd. Joint Venture

Balmer Lawrie Hind Terminals Pvt. Ltd. Joint Venture

Proseal Closures Ltd. Wholly owned subsidiary of Balmer Lawrie Van Leer Limited.

PT Balmer Lawrie Indonesia Joint Venture of Balmer Lawrie (UK) Ltd. Shri V Sinha, Chairman and Managing Director Key Management Personnel

Shri V N Sharma, Director Key Management Personnel (Manufacturing Businesses) (till 31-07-2012)

Shri K Subramanyan, Director (Finance) Key Management Personnel (till 30-11-2012) Shri P.P. Sahoo, Director (HR & CA) Key Management Personnel

Shri A. Dayal, Director Key Management Personnel (Manufacturing Businesses) (w.e.f. 01-08-2012)

Shri N. Gupta, Director (Services Businesses) Key Management Personnel (w.e.f. 27-07-2012)

Shri P. Basu, Director (Finance) Key Management Personnel (w.e.f. 01-12-2012)

1.14 Segment Reporting

Information about business segment for the year ended 31st March, 2014 in respect of reportable segments as defined by the Institute of Chartered Accountants of India in the Accounting Standard - 17 in respect of "Segment Reporting" is attached as Annexure - C.

1.15 Earnings per Share

i. Earnings per share of the company has been calculated considering the Profit after Taxation of Rs 15,666.99 lakhs (Rs 16,277.03 lakhs) as the numerator.

ii. The weighted average number of equity shares used as denominator for calculation of basic and diluted earnings per share is 2,85,00,641 (2,85,00,641) and face value per share is Rs 10.

iii. The nominal value of shares for calculation of basic and diluted earnings per share is Rs 2,850.06 lakhs (Rs 2850.06 lakhs) and the earnings per share for the year on the above mentioned basis comes to Rs 54.97 (Rs 57.11).

iv. Consequent to the approval of the shareholders, vide the postal ballot, the Company has issued Bonus Shares in the proportion of three new equity shares for every four existing equity shares held. Accordingly a sum ofRs 1221.45 lakhs has been capitalized out of General Reserve and transferred to Share Capital Account on allotment of fully paid bonus shares on 25th May, 2013. The earnings per share have been adjusted for bonus issue of 3:4.

The Company''s proportionate share of the estimated amount of contracts remaining to be executed on Capital Accounts relating to the Joint Venture Companies and not provided for in their respective financial statements amounts to Rs 2257.24 lakhs (Rs 9.79 lakhs).

The aggregate amounts of each of the assets, liabilities, income and expenses related to the interests in the Joint Venture companies are as follows :-

1.16 Miscellaneous Expenses shown under "Other Expenses" (Note no. 25) do not include any item of expenditure which exceeds 1% of the total revenue.

1.17 (a) Certain fixed deposits amounting to Rs 3,400 lakhs (Rs 3,500 lakhs) are pledged with a bank against short term loans availed from the said bank. However, there are no loans outstanding against these pledges as on 31.3.2014.

(b) Certain fixed deposits amounting to Rs 54.21 lakhs (Rs 43.20 lakhs) are pledged with a bank against guarantees availed from the said bank.

26.29 Consequent to implementation of SAP in Industrial Packaging, overheads are loaded on real time basis on to semi-finished goods and finished goods on standard cost which is periodically reviewed. Prior to introduction of SAP, such loading of overheads was done on the closing stock of semi-finished goods and finished goods at the year-end based on the allocation of overheads at pre-determined ratios on the stock of semi-finished goods and finished goods. The impact of this change, however, is not ascertainable.

1.18 During the current year the company finally closed down the operations of the Tea division which had been underperforming over a number of years. It was a non-core activity and was not a reportable segment under Accounting Standard 17 - Segment Reporting. With the closure of operations on 30th September, 2013 all the fixed assets of the division, having a carrying value ofRs 90.10 lakhs, have been disposed off during the year at a net profit on sale of such assets ofRs 36.56 lakhs. The closure of the business has neither any material impact on the operating results of the Company nor on its cash flows.

1.19 During the year the Company revised depreciation rates on items given under furniture equipment scheme to employees. The effect of such revision amounted to reduction of current year profit by Rs 13.85 lakhs.

1.20 (a) The financial statements have been prepared as per revised Schedule VI to the Companies Act, 1956.

(b) Previous year''s figures have been re-grouped or re-arranged wherever so required to make them comparable with current year figures.

(c) Figures in brackets relate to previous year.


Mar 31, 2013

1.1 (a) Fixed Deposit with bank amounting to Rs. 1.57 lakhs (Rs. 1.57 lakhs) are lodged with certain authorities as security.

(b) Conveyance deeds of certain land costing Rs.2,948.46 lakhs (Rs. 3,007.51 lakhs) and buildings, with written down value of Rs. 2,880.29 lakhs (Rs. 2,930.28 lakhs) are pending registration / mutation.

(c) Certain buildings & sidings with written down value of Rs. 5,156.87 lakhs (Rs. 4,794.34 lakhs) are situated on leasehold/rented land. Some of the leases with Kolkata Port trust have expired and are under renewal. Action has been taken for finalising the agreements with Kolkata Port Trust for renewal of such pending cases.

1.2 Contingent Liabilities as at 31st March, 2013 not provided for in the accounts are:

(a) Disputed demand for Excise Duty, Income Tax, Sales Tax and Service Tax amounting to Rs. 8,461.33 lakhs (Rs. 7,787.79 lakhs) against which the Company has lodged appeal/petition before appropriate authorities. Details of such disputed demands as on 31st March, 2013 are given in Annexure - A.

(b) Claims against the company not acknowledged as debts amounts to Rs. 1039.40 lakhs (Rs. 779.53 lakhs) in respect of which the Company has lodged appeals/petitions before appropriate authorities. In respect of employees/ex-employees related disputes, financial effect is ascertainable on settlement.

(c) Bills discounted with banks Rs. NIL Lakhs (Rs. 12.67 Lakhs).

1.3 Counter guarantees given to Standard Chartered Bank, Bank of Baroda, HSBC, State Bank of India, Canara Bank and Indusind Bank in respect of guarantees given by them amounts to Rs. 10,864.36 lakhs (Rs. 10,779.88 lakhs).

1.4 Estimated amount of contract remaining to be executed on Capital Accounts and not provided for [net of advances paid - Rs. 940.69 lakhs (Rs. 188.24 lakhs)] amounted to Rs. 5,094.96 lakhs (Rs. 1,875.37 lakhs).

1.5 There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date.

The above information has been determined to the extent such parties have been identified on the basis of information available with the company and relied upon by the auditors.

1.6 The net amount of exchange difference debited to Profit & Loss account is Rs. 103.74 lakhs (Rs. 283.66 lakhs).

1.7 Confirmation letters have been issued in respect of trade receivables, loans and advances and deposits of the company but not responded to in many cases. Hence unconfirmed balances are subject to reconciliation and consequent adjustments, if any, would be determined / made on receipt of such confirmation.

1.8 Remuneration of Chairman & Managing Director and Wholetime Directors:

1.9 Research and Development expenditure charged to Profit & Loss Account during the year 2012-13 amounts to Rs. 585.48 lakhs (Rs. 523.47 lakhs).

1.10 Excess Income Tax provision in respect of earlier years amounting to Rs. 1,040.00 lakhs (Rs. 1,320.00 Lakhs ) has been reversed in the current year.

1.11 During the current financial year, the performance of Transafe Services Ltd. a joint venture company, was not upto the levels envisaged in the Corporate Debt Restructuring Scheme (CDR) due to adverse market conditions. Considering the same, the Company, as a measure of prudence, has provided a sum of Rs. 147.63 lakhs (Rs. 1,181.87 lakhs) towards diminution in the value of investments in TSL. Further, the Company, has also made a provision of Rs. 908.96 lakhs (Rs. 908.96 lakhs), which is balance of the loan provided earlier to Balmer Lawrie-Van Leer Ltd. (another joint venture company) for acquisition of shares of TSL.

1.12 The amount of Excise duty deducted from the amount of "Sales - Manufactured Goods" is relatable to Sales made during the period and the amount of Excise Duty recognised separately in Note 25 - "Other Expenses" is related to the difference between the closing stock and the opening stock.

1.13 Employee Benefits

Consequent to Accounting Standard 15 on Employee Benefits (Revised) issued by the Institute of Chartered Accountants of India being applicable to the Company during the year, the prescribed disclosures are made in Annexure B.

Defined Benefit Plans / Long Term Employee benefits in respect of Gratuity, Leave Encashment and Long Service Awards are recognised in the Profit & Loss Account on the basis of Actuarial valuation done at the year end. The details of such employee benefits as recognised in the financial statements are attached as Annexure B.

1.14 Loans and Advances in the nature of loans to Subsidiary / Joint Ventures / Associates

The company does not have any Loans and Advances in the nature of Loans provided to its Subsidiary / Joint Venture Companies / Associates as at the year end except as is disclosed in 26.21 below.

1.15 Segment Reporting

Information about business segment for the year ended 31st March, 2013 in respect of reportable segments as defined by the Institute of Chartered Accountants of India in the Accounting Standard - 17 in respect of "Segment Reporting" is attached as Annexure - C.

1.16 Earnings per Share

(i) Earnings per share of the company has been calculated considering the Profit after Taxation of Rs. 16,277.03 lakhs (Rs. 13,807.28 lakhs) as the numerator.

(ii) (a) The weighted average number of equity shares used as denominator for calculation of basic earnings per share is 1,62,86,081 (1,62,86,081) and face value per share is Rs. 10.

(b) The weighted average number of equity shares used as denominator for calculation of diluted earnings per share is 2,85,00,641 (2,85,00,641) and face value per share is Rs. 10. (Please refer to Note No. 1F)

(iii) (a) The nominal value of shares for calculation of basic earnings per share is Rs. 1,628.61 lakhs (Rs. 1,628.61 lakhs) and the Basic earnings per share for the year on the above mentioned basis comes to Rs. 99.94 (Rs. 84.78).

(b) The nominal value of shares for calculation of diluted earnings per share is Rs. 2,850.06 lakhs (Rs. 2,850.06 lakhs ) and the Diluted earnings per share for the year on the above mentioned basis comes to Rs. 57.11 (Rs. 48.45).

1.17 Miscellaneous Expenses shown under "Other Expenses" (Note no. 25) do not include any item of expenditure which exceeds 1% of the total revenue.

1.18 (a) Certain fixed deposits amounting to Rs. 3,500 lakhs (Rs. 2,700 lakhs) are pledged with a bank against short term loans availed from the said bank. However, there are no loans outstanding against these pledges as on 31.3.2013.

(b) Certain fixed deposits amounting to Rs. 43.20 lakhs (Rs. 43.20 lakhs) are pledged with a bank against guarantees availed from the said bank.

1.19 (a) The financial statements have been prepared as per revised Schedule VI to the Companies Act, 1956.

(b) Previous year''s figures have been re-grouped or re-arranged wherever so required to make them comparable with current year figures.

(c) Figures in brackets relate to previous year.

 
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