The Directors have pleasure in presenting the 100th Report on the operationsand results of your Company for the financial year ended 31st March 2017together with the Audited Financial Statement Auditor's Report and the Comments ofComptroller & Auditor General of India on the Accounts of the Company and otherstatements attached thereto.
FINANCIAL SUMMARY & HIGHLIGHTS
| ||Standalone Financial Results for ||Consolidated Financial Results for |
| ||year ended 31st March ||year ended 31st March |
| ||2017 ||2016 ||2017 ||2016 |
|Surplus for the year before deduction of Finance || || || || |
|Charges Depreciation and Tax ||28449 ||26876 ||28423 ||26849 |
|Deduct there from : || || || || |
|i. Finance Charges and Depreciation ||3038 ||2855 ||3041 ||2857 |
|ii. Provision for Taxation ||8369 ||7586 ||8374 ||7590 |
|Profit after Tax (PAT) ||17042 ||16435 ||17008 ||16402 |
|Add : Transfer from Statement of Profit & Loss ||59110 ||51562 ||74472 ||67001 |
|Total amount available for Appropriation ||76152 ||67997 ||91480 ||83403 |
|Appropriations : || || || || |
|Interim Dividends || || || || |
|Dividend @ Rs.20.00 per equity share || || || || |
|(previous year Rs.18.00 per equity share) ||5700 ||5130 ||5700 ||5130 |
|Corporate Tax on Dividend ||1193 ||1073 ||1193 ||1073 |
|Transfer to General Reserve ||3000 ||3000 ||3000 ||3000 |
|Other Adjustment ||377 ||-316 ||-2587 ||-272 |
|Minority interest / Foreign Exchange Conversion Reserve etc. || || || || |
|Surplus carried forward to next year ||65882 ||59110 ||84174 ||74472 |
|Total of Appropriation ||76152 ||67997 ||91480 ||83403 |
The Board's Report is based on standalone results and this information is given as anadded information to the members.
OVERVIEW OF THE STATE OF THE COMPANY'S AFFAIRS
The Company recorded gross turnover of Rs.190117 Lakh as againstRs.177836 Lakh in 2015-16 marking an increase of around 6.91%. The increase in netturnover was also around 7.37%.
The Company recorded a Profit Before Tax of Rs. 25411 Lakh in 2016-17 asagainst Rs. 24021 Lakh in 2015-16 the increase being attributable primarily to increasein Profits earned by the SBUs: Logistics Services Travel & Vacations LeatherChemicals and Refinery & Oil Field Services.
The Reserve and Surplus of your Company increased to Rs.105199 Lakh as on 31stMarch 2017 compared to Rs. 103644 Lakh as on 31st March 2016 .
The paid up Equity share capital of the Company as on 31st March 2017 stoodat Rs.1140025640. The paid-up share capital was increased during the year upon issueof 85501923 Bonus shares in the ratio of 3 new shares for every share held. Howeverthe Company has not issued any share with differential voting rights nor has granted anystock options or sweat equity shares.
A dividend of Rs.7/- (Rupees Seven only) per Equity Share of the face value of Rs.10(Rupees Ten each) fully paid up on the paid-up equity share capital as on 31stMarch 2017 has been recommended by the Board of Directors for declaration by the Membersat the ensuing 100th Annual General Meeting (AGM) to be held on14th September 2017. Subject to the approval of the Shareholders in theensuing 100th AGM dividend will be paid either by way of warrant demand draftor electronic mode and will be paid to those Shareholders who would be holding shares ofthe Company as on 7th September 2017 End of Day being the cut-off date. Inrespect of shares held electronically dividend will be paid to the beneficial owners ason the cut-off date as per details to be furnished by their respective Depositories i.e.either Central Depository Services (India) Ltd. or National Securities Depository Ltd. Thetrend of past dividend payment is depicted below :
DIVIDEND DISTRIBUTION POLICY
Your Company has formulated a dividend Distribution Policy in the year 2016. The saidPolicy has been uploaded on the Company's website at the link
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
No material changes and commitments have occurred after the close of the financial yeartill the date of this Report which could affect the financial position of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as per the provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached separately as Annexure-1
CONSOLIDATED FINANCIAL STATEMENTS
The Financial Statements and results of your Company have been duly consolidated withits Subsidiaries Associates and Joint Ventures pursuant to applicable provisionsof the Companies Act 2013 the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Indian Accounting Standards (Ind-AS).
Further in line with Section 129(3) of the Companies Act 2013 read with the Rulesthereon SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Consolidated Financial Statements prepared by your Company includes a separate Statementin Form AOC-I' containing the salient features of the Financial Statement of yourCompany's Subsidiaries Associates and Joint Venture Companies which forms part of theAnnual Report.
REPORT ON SUBSIDIARIES
During the year under review no company has ceased to be a Subsidiary Joint Ventureor Associate Company except Balmer Lawrie Hind Terminals Pvt. Ltd . Joint Venturewhich was dissolved by order of the Hon'ble High Court of Madras dated 20thOctober 2016.
The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link:http://www.balmerlawrie.com/app/webroot/uploads/Policy_on_Determining_Material_Subsidiary-BL.pdf
As per the aforesaid policy none of the subsidiaries appear to be material subsidiaryof your Company.
FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES
In line with the provisions of Section 136 of the Companies Act 2013 your Company hasplaced separate audited accounts in respect of each of its subsidiaries on its website -www.balmerlawrie. com. Members shall be provided separate audited financial statement ofthe Subsidiary Companies as per requisition made by them.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES JOINT VENTURES AND ASSOCIATECOMPANY
A brief write up on the performance and financial position of Subsidiary Joint Ventureand Associate companies of your Company is presented hereunder:
BALMER LAWRIE (UK) LTD. [BLUK]
Balmer Lawrie (UK) Ltd. (BLUK') a 100% subsidiary of your Company is incorporatedin the UK. The subsidiary had previously been engaged in the business of Leasing andHiring of Marine Freight Containers as also in Tea Warehousing Blending and Packaging.
After exiting these businesses BLUK has been utilizing the proceeds to fund otherbusiness opportunities. BLUK has to date invested approximately US$ 2.01 millionequivalent to Indonesian Rupiah 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 upshare capital of PTBLI is subscribed by PT. Imani Wicaksana of Indonesia. PTBLI is engagedin the manufacture and marketing of greases and other lubricants in Indonesia. Theoperations at the plant has now stabilized and the Joint Venture is actively trying to geta foothold in the challenging Indonesian lube market. During the year under review theJoint Venture has significantly reduced the loss incurred by it (by 72.5% from theprevious year level) due to increase in volume of Sales achieved during 2016-17. TheTurnover achieved by the JV has grown by 19% in the current financial year over thatachieved during 2015-16. The performance of PTBLI is expected to show further improvementfrom 2017-18 onwards.
However the Joint Venture is facing financial constraints due to high bank loan and toovercome the situation planned to induct a new partner to the venture.
VISAKHAPATNAM PORT LOGISTICS PARK LIMITED [VPLPL]
As a part of its Strategic Plan your Company has consistently been looking foropportunities for setting up logistics infrastructure facilities at ports and inlandlocations. In pursuance of this objective your Company has vigorously worked withVisakhapatnam Port Trust (VPT) for the last several years for setting up a Multi- ModalLogistics Hub (MMLH) at Visakhapatnam in Joint Venture. The efforts have ultimatelyyielded results with the signing of Shareholders'/JV Agreement between your Company andVPT in March 2014. The proposed JV Company has been incorporated and christened asVisakhapatnam Port Logistics Park Limited (VPLPL). The JV will have equity participationbetween your Company and VPT in the ratio of 60:40. While your Company's contribution toequity would be in the form of cash VPT's would be upfront lease rental of 53.025 acresof land allotted to VPLPL for a period of 30 years. VPT handed over the earmarked land toVPLPL in January 2015. The work on the land development / civil work towards constructionof the administrative building and the other related infrastructure is going on in fullswing and your Company expects to commission this facility within financial year 2017-18.
REPORT ON JOINT VENTURES
BALMER LAWRIE (UAE) LLC [BLUAE]
Balmer Lawrie (UAE) LLC (the Company) achieved highest ever production and salesvolumes in most of the major product segments during the year 2016.
Increased focus on customer service initiatives taken to garner greater market shareand product innovation enabled the Company to strengthen customer relationships. TheCompany achieved significant improvement in retention of skilled employees and employeemorale with positive impact on productivity and efficiencies. Simultaneously costreduction was achieved on many fronts. These endeavors enabled the Company to stay aheadof competition which nonetheless remains intense.
BLUAE has now firmed up long term plans and embarked on plant modernization andcapacity enhancement initiatives across its different product lines.
Overall performance during the year was extremely satisfactory and inspite of stiffcompetition in the market leading to tremendous pressure on the margins for the productssold by the Company the Company had been able to achieve the best ever performance duringthe year under review. However in the light of the current business environmentprevailing in the region where the Company operates the Company is facing challenges inmaintaining such growth momentum during 2017.
BALMER LAWRIE VAN LEER LTD. [BLVL]
During the FY 2016-17 the Company has registered a growth in turnover by 9% toRs.331.50 Crore as against Rs.303.57 Crore last year. The operating profit increased by41% in the current Financial Year over last year levels.
The Company in order to overcome challenges of capacity constraints in production hasdecided to go in for expansion of facilities for production of Plastic containers. Withthis expansion under its fold the Company expects to be a major market player in thecoming years.
AVI-OIL INDIA PRIVATE LTD. [AVI-OIL]
For the year 2016-2017 the Company has achieved sales volume of 1302 KL of lubricantsblended 27 MT of greases reprocessed and packed and 259 MT of the ester base stocksmanufactured.
The Company was able to achieve the Net Sales of Rs.6057 Lakh with Profit Before Taxof Rs.1647 Lakh as compared to Net Sales of Rs.6098 Lakh with Profit Before Tax ofRs.1352 Lakh achieved during the year 2015-2016.
The increase in profit is mainly attributable to better price management coupled with aprofitable product mix and reduction in raw material and other costs achieved during thecurrent financial year.
The Company continues to supply aviation lubricants to both the Defence and CivilAviation sectors.
TRANSAFE SERVICES LTD. [TSL]
During the financial year 2016-17 the Joint Venture achieved a turnover of Rs.5682.24 Lakh as against Rs.7895.79 Lakh achieved during 2015-16. However TSL ended upwith loss of Rs.1078 Lakh as against loss of Rs.725 Lakh incurred for the previousfinancial year 2015-16.
The total revenue for manufacturing business stood at Rs.1641 Lakh as compared toRs.1844 Lakh earned during the previous year 2015-16. This decline in revenue was mainlydue to non-receipt of big orders which were expected during the year under review.
Its leasing business revenue is on the decline due to usage of old containers wherebyeither the customers had off-leased the containers or negotiated its further usage at alower rate. During the financial year 2016-17 the income from lease rentals was Rs.1979Lakh as against Rs.2163 Lakh earned during the previous year 2015-16.
Its logistics business has also not been able to grow during 2016-17 and ended up withrevenue of Rs.1861 Lakh as against Rs.2356 Lakh earned during the previous financialyear 2015-16.
TSL's reference before Board of Industrial & Financial Reconstruction [BIFR] gotabetted with effect from the date of enforcement of the Sick Industrial Companies[Special Provisions] Repeal Act 2003 i.e. from 1st of December 2016.
The Joint Venture partners are presently exploring various options to revive TSL.
MEMORANDUM OF UNDERSTANDING (MOU)
Every year your Company enters into MoU with the Government of India Ministry ofPetroleum & Natural Gas [MoPNG) based on guidelines issued by the Department of PublicEnterprises [DPE]. The MoU sets out various targets on operational financial efficiencyreturn on investment capacity utilization technology upgradation etc. Your Company'sperformance score in respect of the MoU for the year 2015-16 has been adjudged by the DPEin "Very Good" category. Based on internal assessment and considering auditedresults for the year 2016-17 your Company expects to have an Excellent rating for thefinancial year 2016-17.
HUMAN RESOURCE MANAGEMENT
The focus of the organization continues to be enhancing employee engagement managingtalent upgrading leadership & managerial capabilities and managing employeeperformance. The organization believes that its success depends on the alignment andperformance of its people. With this objective the following initiatives have beenspearheaded by the Company :-
[a] Talent Acquisition
The Company in its efforts to reinvigorate its human resources through infusion offresh blood and address diversity has during the year inducted a total of 54 numbers ofExecutives and Officers.
[b] Training and Development
The Company continued to invest in enhancing the professional skills and competenciesof its employees. With the objective of enhancing the functional and leadershipcompetencies extensive training programs for employee in line with the businessrequirement of the Company both in the areas of general management and specialist skilldevelopment were planned and executed. In all 1444 Man-days were achieved includingin-house and external programmes for all categories of employees during the year.
The Functional Directors attended a 3-day training programme on "Masterclass forDirectors & Boardroom" conducted by Institute of Directors India in October2016. Also an Orientation Programme for "Capacity Building of IndependentDirectors" conducted by DPE at Puducherry was attended by Ms. Atreyee BorooahThekedath Independent Director in the month of March 2017.
[c] Managing Performance
With a view to improve upon performance orientation and bring about objectivity inassessment the Company has already rolled out a Competency Linked Performance AppraisalSystem for its executives.
[d] Employee Engagement and Welfare
An effective work culture has been established in the organization which encouragesparticipation and involvement of employees in activities beyond work. Towards furtheringthis during the year the 151st Foundation Day was celebrated in all units andestablishments across the country. The employees and their family members participated inlarge numbers and made the event a memorable occasion.
Also various programs like Annual Sports Day Cultural Evening etc. were organized bythe Balmer Lawrie Recreation Club at different major locations of the Company.
Employment of Special Categories
During the year in the Executive and Officer cadre 11 employees in the SC category20 employees in the OBC category 1 employee in the ST category 5 Women employees and 7employees in the Minorities category were recruited. The actual number of employeesbelonging to special categories group-wise as on 31st March 2017 is given below :
|Group ||Regular Manpower as on 31.03.2017 ||SC ||ST ||OBC [*] ||PH ||Women ||Minorities |
|A ||488 ||43 ||6 ||51 ||2 ||48 ||25 |
|B ||222 ||31 ||0 ||34 ||3 ||27 ||16 |
|C ||88 ||3 ||0 ||20 ||1 ||11 ||3 |
|D ||390 ||52 ||5 ||81 ||7 ||5 ||68 |
|[including D1] || || || || || || || |
|Total ||1188 ||129 ||11 ||186 ||13 ||91 ||112 |
[*] On and from 08th September 1993 onwards.
Implementation of the Persons with Disabilities [Equal Opportunities Protection ofRight and Full Participation] Act 1995
In compliance with the above Act your Company has identified positions for recruitmentof persons with disabilities. A special drive to this effect was initiated in the year2015 and out of 6 (Six) candidates selected 5 (Five) candidates have already joined.However to mitigate the shortfall another special drive is slated during 2017-18.
Your Company believes in a process of open and transparent consultation with thecollectives. Employees are represented in various Trusts formed by your Company toadminister various employee benefit schemes. Plant level committees are in place todiscuss and settle productivity and work place related matters. Consultative Forums havebeen established to resolve disputes / differences.
The employee relations continued to be generally cordial at all Units / Locations ofthe Company during the year.
Implementation of Official Language
To ensure implementation of Rajbhasha policy of the Government of India yourCompany has taken several steps to promote usage of Hindi in official work. Variousactivities like workshops meetings etc. were organized during the year and the RajbhashaPakhwada was celebrated at all locations of the Company. Implementation of theRajbhasha Policy is top driven in your Company and a Hindi Kavi Sammelan including poetsfrom other Kolkata based Public Sector undertakings was organized in October'16.
During the year your Company also organized a Workshop on Hindi implementation at itsHeadquarter in Kolkata for key executives. Shri Ram Vichar Yadav Deputy General Manager(OL) Hindustan Petroleum Corporation Limited was invited as a faculty for conducting theworkshop. Also your Company lent its expert faculty for conducting Workshops in Hindi forvarious Town Official Language Implementation Committees.
Your Company provides a very conducive ambience for employment of women. The percentageof women employees is on the rise with new recruitments. Thepresentstrengthofwomenemployeesis7.66%despite the fact that a large chunk of our workforceconstitutes of shop floor workers. Your Company has created an atmosphere conducive forwomen employees to join and build a career in this organization. Our Board of Directorshas three women Directors including a full time Functional Director.
Internal Complaints Committee
Your Company has constituted Internal Complaints Committees in all the four regions ofthe country under the Sexual Harassment (Prevention Prohibition and Redressal) Act 2013.Also the Company held Workshops in different regions to educate employees about the aboveAct and to propagate the policy of the Company in this regard.
No Complaint under the Act was received during the year 2016-17.
Corporate Social Responsibility (CSR)
Annual report on CSR activities
1. A brief outline of the Company's CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programs;
"We are committed to serve the community by empowering it to achieve itsaspirations and improving its overall quality of life."
To undertake CSR activities in chosen areas through partnerships particularly for thecommunities around us and weaker sections of the society by supporting need basedinitiatives.
Improve the health and nutrition status of communities particularly vulnerablegroups such as women children and elderly by improving health infrastructure andfacilitating service provision.
Focus on quality of education and encourage children from marginalized sectionsand girls to complete school education and opt for higher education.
To focus on livelihoods and skill development in order to provide opportunitiesto women and youth and make them self-reliant.
Initiate holistic development programs for differently abled children andorphans with a view to provide them opportunities to lead a meaningful life.
To support the national efforts in rehabilitation and relief post unfortunatenatural disasters.
We at Balmer Lawrie are committed to continuously improve our efforts towards oursocial responsibility focus on marginalized sections and encourage our employees tocontribute in CSR activities. Towards this commitment the company shall be guided by thefollowing guiding principles.
Affirmative action to provide opportunities to marginalized communities.
Efforts towards gender inclusiveness.
Encourage community participation and ownership in order to ensuresustainability of CSR activities.
Encourage voluntary participation of employees.
Enhancing visibility of our CSR so that others can benefit from our learnings.
CSR activities would be based on partnerships.
Wherever possible we will align our activities with the business objectives.
Capacity building for the weaker sections of the society.
Balmer Lawrie believes that good financial results are not an end in itself to assessthe success of any business; rather it is a means to achieve higher socio-economic goals.In pursuance of this belief the Company is committed to conduct its business in asocially responsible manner and be responsive to the needs of the society at large.Accordingly the Company has been pursuing various CSR initiatives since the last twodecades or so.
Balmer Lawrie's CSR initiatives are driven by two Flagship Programs - Balmer LawrieInitiative for Self-Sustenance [BLISS] and Samaj Mein Balmer Lawrie [SAMBAL]. While thefirst Program is directed at providing and improving the long term economic sustenance ofthe underprivileged the second Program aims at improving the living standards and qualityof life of the population in and around the Company's work-centers.
Balmer Lawrie has developed its Corporate Social Responsibility (CSR) andSustainability Policy in consonance with the CSR Policy framework enshrined in the Section135 of Companies Act 2013 (Act) and in accordance with the Companies (CSR Policy) Rules2014 (Rules) notified by the Ministry of Corporate Affairs Government of India andGuidelines on Corporate Social Responsibility and Sustainability for Central Public SectorEnterprises issued by Department of Public Enterprises Government of India (DPEGuidelines 2014) which are effective from 1st April 2014. It shall apply toall CSR Projects / Programs undertaken by Balmer Lawrie.
In pursuance of these Programs the Company had undertaken several communitydevelopment projects in the year 2016-17 focusing on Swachh Bharat Abhiyan SanitationEducation Health adoption of Tribal schools funding of Skill Development Institutesadoption of a Village to trigger development of micro-communities and thereby generate thedesired developmental impact. CSR efforts are channelized to focus on thematic areas asstated in our CSR policy and target groups like children women youth elderly anddifferently abled people.
For Details of CSR policy visit our website:
2. The Composition of the CSR Committee : (a) Total No. of Directors in the Committee:Four
(b) No. of Independent Directors in the Committee: One
3. Average net profit of the Company in the last three financial years (as per Section198 of the Companies Act 2013) Rs. 20632 Lakh.
4. Prescribed CSR Expenditure during 2016-17
(two per cent of the amount as in item 3 above) - Rs.412.65 Lakh.
5. Details of CSR spent during the financial year
(a) Total amount to be spent for the financial year; Rs.412.65 Lakh
(b) Amount unspent if any; NIL
(c) Manner in which the amount spent during the financial year 2016-17 is detailedbelow :
CSR Expenditure 2016-17
|Sl No. CSR Project or activity identified ||Sector in which the project is covered ||Project or Programs 1) Local area or other 2) specify the State and District where Projects or programs was undertaken ||Amount outlay (budget) project or program wise ||Amount spent on projects or programs Sub heads: (1) Direct Expenditure on projects or programs (2) Over- heads ||Cumulative Expenditure upto to the reporting period ||Amount spent : direct or through agency |
|a b ||c ||d ||e ||f ||g ||h |
|1. Construction of Skill Development Institute ||Skill Development ||1) Other 2) Kerala/ Kochi and Telangana/ Vishakha- patnam ||150 ||150 ||150 ||BPCL & HPCL |
|2. Building a School Block of "Mogappair School" in Chennai. ||Education ||1) Local area 2) Tamil Nadu/ Chennai ||50 ||50 ||50 ||Rotary Club of Midcity |
|3. Support to SV Patel Rashtriya Ekta Trust for "Statue of Unity" ||Donation to Trust ||1) Others 2) Gujarat/ Vadodara ||38 ||38 ||38 ||SV Patel Rashtriya Ekta Trust |
|4. Construction of Skill Development Institute ||Skill Development ||1) Other 2) Odisha / Khurda ||30 ||30 ||30 ||IOCL |
|5. Running of Mobile Medical Unit by Helpage India ||Health ||1) Local area 2) Tamil Nadu/Manali ||26 ||26 ||26 ||Helpage India |
|6. Water Tank at Sayli village ||Swachh Bharat Abhiyan ||1) Local area 2) Dadra Nagar & Haveli/Sayli ||20 ||19.85 ||19.85 ||Rotary Club of Panvel |
|7. Sponsoring of 02 family homes ||Education ||1) Local area 2) West Bengal/ Kolkata &Telangana / Vishakha- patnam ||19.25 ||19.25 ||19.25 ||SOS Children's Village of India |
|8. Sponsoring of 02 classes of Indian Institute of Cerebral palsy (IICP) for the child- ren suffering from Cerebral Palsy ||Education ||1) Local area 2) West Bengal / Kolkata ||18.5 ||18.5 ||18.5 ||Indian Institute of Cerebral palsy (IICP) |
|9. Maintenance cost for School Toilets constructed under "Swachh Vidyalaya" ||Swachh Bharat Abhiyan ||1) Local area and Others 2) West Bengal/ Kolkata Andhra Pradesh/ Chitoor Haryana/ Asaoti ||16 ||15.64 ||15.64 ||Pragati Sangha of Dara in West Bengal / Sarva Shiksha Abhiyan in Assam and Chhattisgarh |
|10. Toilet Block at School ||Swachh Bharat Abhiyan ||1) Local area 2) Mahara- shtra /Raigad ||15 ||15 ||15 ||Rotary Club of Panvel |
|11. Sonography Machine at Govt. Hospital ||Health ||1) Local area 2) Tamil Nadu/Ranipet ||13 ||10 ||10 ||Rotary Club of Chennai |
|12. Providing education to the doorsteps of the tribal populace. ||Education ||1) Others 2) West Bengal/South 24 Parganas ||10 ||10 ||10 ||Ekal Vidyalayas One Teacher Schools (OTS) Friends of Tribal Society |
|13. Workshop conducted on Sustainability Training ||Training ||1) All India ||3.32 ||3.32 ||3.32 ||CII |
|14. Swachh Bharat Activities in School ||Swachh Bharat Abhiyan ||1) Local Area 2) Tamil Nadu/Chittoor ||2.3 ||2.46 ||2.46 ||Balmer Lawrie |
|15. Toilet Renovation at Matunga Dayanand Ballika Vidyalaya ||Swachh Bharat Abhiyan ||1) Local Area 2) Mahara- shtra/Mumbai ||2.5 ||2.36 ||2.36 ||Rotary Club |
|16. Miscellaneous || || || ||2.27 ||2.27 || |
| || || || ||412.65 ||412.65 || |
6. In case the Company has failed to spend the two per cent of the average net profitof the last three financial years or any part thereof the Company shall provide thereasons for not spending the amount in its Board report. - NA
7. Responsibility statement of the CSR Committee :
"It is hereby certified that the implementation and monitoring of CSR policy isin compliance with CSR objectives and policy of the Company."
|Shyam Sundar Khuntia ||Manjusha Bhatnagar |
|[Director (Finance) and CFO] ||(Chairperson of the CSR Committee) |
REPORT ON CORPORATE GOVERNANCE
Your Company has been consistently complying with the various Regulations andGuidelines of the Securities & Exchange Board of India (SEBI) as well as of Departmentof Public Enterprises (DPE).
Pursuant to the said SEBI Regulations and DPE Guidelines a separate section titledCorporate Governance Report' is being furnished and marked as Annexure 4.
The provisions on Corporate Governance under DPE Guidelines which do not exist in theSEBI Guidelines and also do not contradict any of the provisions of the SEBI Guidelinesare also complied with.
Further your Company's Statutory Auditors have examined compliance of conditions ofCorporate Governance and issued a certificate which is annexed to this Report and markedas Annexure 5.
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 5thJune 2015 has been exempted from applicability of Section 134(3)(e) and 197 of theCompanies Act 2013.
BOARD EVALUATION AND CRITERIA FOR EVALUATION
Your Company being a Government Company vide notification no. G.S.R. 463(E). dated 5thJune 2015 has been exempted from applicability of section 134(3)(p) and 178(2) (3) and(4) of the Companies Act 2013.
The Annual Performance Appraisal of Top Management Incumbents of Public Enterprises isdone through the Administrative Ministry as per the DPE Guidelines in this regard. YourCompany being a Central Public Sector Enterprise under the administrative jurisdiction ofMinistry of Petroleum & Natural Gas also has to follow the similar procedure.
The Board of the Company currently has total 7 Directors out of which 5 are Whole-time(Functional/ Executive Directors) 2 are Non-executive Directors one being GovernmentNominee Director and other an Independent Director. The Board consists of 3 WomenDirectors.
It may be noted that pursuant to Article 7A of the Articles of Association of theCompany 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 expeditingappointment of Independent Directors on the Board of your Company to bring the Boardcomposition in line with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the applicable Guidelines on Corporate Governance for CPSEs.
Ms. Indrani Kaushal has been nominated by the administrative ministry as GovernmentNominee Director of the Company for a period of three years on co-terminus basis or untilfurther order from the administrative ministry whichever is earlier. Ms. Kaushal wasappointed as a Government Nominee Director in the form of an Additional Director of theCompany with effect from 27th December 2016 in terms of Section 161 of the Companies Act2013 and Articles 7A and 9 of the Articles of Association of the Company. The resolutionof her appointment as Director of the Company is submitted to the shareholders for theirconsideration at the 100th AGM.
Ms. Atreyee Borooah Thekedath was nominated as Independent Director of the Company fora period of three years or until further orders from the administrative ministry. Ms.Borooah had been appointed as an Independent Director Additional Director of the Companywith effect from 13th February 2017. Pursuant to Section 149 and other applicableprovisions of the Companies Act 2013 the resolution of her appointment as director of theCompany is submitted to the shareholders for their consideration at the 100thAGM.
In accordance with the provisions of Section 152(6) of the Companies Act 2013 readwith Article 12 of the Articles of Association Shri Prabal Basu (Chairman & ManagingDirector) and Shri Kalyan Swaminathan Director (Service Businesses) would retire byrotation at the ensuing Annual General Meeting and they are eligible for reappointment atthe said Meeting.
A Brief Profile of the Directors proposed to be appointed/reappointed is mentioned inthe notice of 100th AGM and in the Corporate Governance Report.
- Shri Alok Chandra Government Nominee Director ceased to be a Director of the Companyeffective at the close of the business hours on 10th February 2017 consequentupon withdrawal of his nomination by the MoPNG.
- Shri Prashant Sitaram Lokhande Government Nominee Director ceased to be a Directorof the Company effective at the close of the business hours on 10th February2017 consequent upon withdrawal of his nomination by the MoPNG.
The Board places on record its deep appreciation of the guidance and significantcontribution made by Shri Alok Chandra and Shri Prashant Sitaram Lokhande during theirtenure as Directors of your Company.
Your Company has a qualified and independent Audit Committee the composition of whichand other details are mentioned in the Corporate Governance Report 2016-17.
As on 31st March 2017 the Audit Committee consists of five members out ofwhom one is a Non-Executive Government Nominee Director three Whole-time Directors andOne Non-executive Independent
Director being the Chairperson of the Committee. All the members of the Audit committeeare financially literate and many of them have expertise on financial matters. Thecomposition of the committee is as under :
|Names ||Position Held |
|Ms. Atreyee Borooah Thekedath ||Chairperson |
|Ms. Indrani Kaushal ||Member |
|Shri D. Sothi Selvam ||Member |
|Shri Kalyan Swaminathan ||Member |
|Shri Shyam Sundar Khuntia ||Member |
The Company Secretary acts as the Secretary of the Audit Committee.
All the recommendations of the Audit Committee have been accepted by the Board ofDirectors.
STATUTORY AUDITORS & AUDITORS' REPORT
STATUTORY AUDITORS :
Your Company being a Government Company Statutory Auditors are appointed orreappointed by the Comptroller and Auditor General of India in terms of Section 143(5) ofthe Companies Act 2013.
In terms of the Companies Act 2013 Comptroller & Auditor General of India(C&AG) has appointed M/s. Dutta Sarkar & Co. Chartered Accountants having itsoffice at 7A Kiron Sankar Roy Road 2nd Floor Kolkata 700001 as StatutoryAuditors of the Company for the Financial Year 2017-18 for both Standalone as well as theConsolidated Financial Statements of the Company.
Pursuant to Section 142 and other applicable provisions of the Companies Act 2013 theremuneration of the Auditors for the year 2017-18 is to be determined by the members atthe ensuing Annual General Meeting as envisaged in the said Act. Members are requested toauthorize the Board to decide on their remuneration as per applicable statutoryprovisions.
REPORT OF THE STATUTORY AUDITORS
Report of the Statutory Auditors is annexed with the Financial Statements.
COMMENTS OF COMPTROLLER & AUDITOR GENERAL OF INDIA
The office of the Comptroller & Auditor General of India (CAG') had conducteda supplementary audit of the Financial Statements (both Standalone and Consolidated) ofthe Company for the year ended 31st March 2017. On the basis of the audit CAGstates that nothing signiflcanl has come to its knowledge which would give rise to anycomment upon or supplement to Statutory Auditors' Report. Comments of the Comptroller& Auditor General of India as per the Companies Act 2013 are attached with theFinancial Statement.
Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee appointed M/s. Bandyopadhyaya Bhaumik & Co.Cost Accountants as the Cost Auditor of your Company for the year under review relatingto goods manufactured by Strategic Business Units : Industrial Packaging LeatherChemicals and Greases & Lubricants of your Company. The remuneration proposed to bepaid to the Cost Auditor requires ratification of the members of your Company. In view ofthis your ratification for payment of remuneration to the Cost Auditor for the financialyear 2017-18 is being sought at the ensuing Annual General Meeting.
COST AUDITOR'S REPORT
Cost Audit Reports for all the applicable products for the year ended 31st March 2016were filed on 7th September 2016 with Cost Audit Cell of Ministry of CorporateAffairs department within specified due dates.
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 hadappointed M/s. Siddhartha Murarka Practicing Company Secretaries to conduct SecretarialAudit of the Company for the Financial Year 2016-17. The Secretarial Audit Report in FormMR-3 for the Financial Year ended 31st March 2017 is annexed herewith and marked as
SECRETARIAL AUDITORS' REPORT
Qualifi cation reservation adverse remark or disclaimer made by the SecretarialAuditor in their Report and corresponding Management Response :
The Secretarial Auditor has qualifi ed their Report as mentioned below :
|Sl. No. Observation / Comment/ Qualification of the Secretarial Auditors ||Clarification from the Management |
|1. In certain cases the Company has not complied Regulation 23(2) of SEBI LODR 2015 which requires the Company to obtain prior approval of Audit Committee for all Related Party Transactions. In certain cases delayed ratification of Related Party Transactions by the Board has led to deviation from requirements of Section 188(3) read with Section 188(1) of the Act; ||The management endeavours to adhere to the requirement of seeking prior approval of the Audit Committee/Board before entering into the Related Party transactions. However in few cases where the transactions are basically running contracts carried out in usual course of business and are of repetitive nature the renewal of the ongoing contract had fallen due at such time when the Audit Committee meeting was not scheduled and the ongoing business activity could not be stalled in midway. Hence in such cases prior approval of the Audit Committee/ Board could not be obtained but the ratification for the same was duly obtained subsequently. |
| ||The Board and Audit Committee had rati fied the transaction thereby signifying that it did not want it to exercise the option of rendering it void. Accordingly there was no violation of Section 188(3) of the Companies Act 2013. |
|2. The composition of the Board and its Committees are not in accordance with the requirements of the Act and SEBI LODR 2015 because required number of Independent Directors have not been nominated by the Administrative Ministry Ministry of Petroleum and Natural Gas. This improper composition of the Board and its Committees has also led to deviation with other allied requirements such as Quorum for Committee Meetings Separate Meeting of Independent Directors etc. ||We are a Government Company as it is evident from our shareholding pattern. |
| ||As per the Articles of Association of the Company so long as the Company remains a Government Company the President of India shall be entitled to appoint one or more person(s) to hold office as Director(s) on the Board. Accordingly Ministry of Petroleum & Natural Gas being the Administrative Ministry directs us regarding change or appointment of Directors. |
| ||The Company has intimated the need for appointment of Independent Directors to the administrative ministry. |
Your Directors are focused on creation of enduring value for all stakeholders utilizingmultiple 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 ofthe significant role played by the employees towards realization of new performancemilestones through their dedication commitment perseverance and collective contribution.The Board of Directors also places on record its deep appreciation of the support andconfidence reposed in your Company by its customers as well as the dealers who havecontributed towards the customer-care efforts put in by your Company. The Directors wouldalso wish to thank the vendors business associates consultants bankers auditorssolicitors and all other stakeholders for their continued support and confidence reposedin 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 its valuable guidanceand support extended to the Company from time to time.
Finally the Directors wish to place on record their special appreciation to the valuedShareholders of your Company for their unstinted support towards fulfilment of itscorporate vision.
On behalf of the Board of Directors
Chairman & Managing Director
Shyam Sundar Khuntia
Director (Finance) & CFO
Balmer Lawrie House
21 Netaji Subhas Road
Date: 27th July 2017