Balmer Lawrie & Company Ltd.
|BSE: 523319||Sector: Others|
|NSE: BALMLAWRIE||ISIN Code: INE164A01016|
|BSE 00:00 | 28 Jul||134.00||
|NSE 00:00 | 28 Jul||133.90||
|Mkt Cap.(Rs cr)||2,291|
|Mkt Cap.(Rs cr)||2291.40|
Balmer Lawrie & Company Ltd. (BALMLAWRIE) - Director Report
Company director report
To the Members
The Directors have pleasure in presenting the 103rd Reporton the operations and results of your Company for the Financial Year ended 31stMarch 2020 together with the Audited Financial Statements Auditor's Reports andthe Comments of Comptroller & Auditor General of India on the Accounts of the Companyand other statements/ reports attached thereto.
FINANCIAL SUMMARY & HIGHLIGHTS
* The Board's Report is based on standalone financialstatements of the Company and this information is given as an added information to themembers.
Overview of the state of the Company'sAffairs
The Company recorded net turnover of Rs.161216.14 Lakh duringFinancial Year 2019-2020 as against Rs.185375.33 Lakh in Financial Year 2018-19registering a decrease of approximately 13% above last year.
The Company recorded a Profit Before Tax of Rs.23244.21 Lakh inFinancial Year 2019-20 as against Rs.28010.48 Lakh in Financial Year 201819. The decreaseis primarily attributable to the impact of onset of COVID-19 pandemic in the last
quarter of the financial year on the performance of various SBUsparticularly SBU: Logistics.
Transfer to Reserves
The Reserve and Surplus of your Company decreased to Rs. 114866.36 Lakhas on 31st March 2020 as compared to Rs. 118620.19 Lakh as on 31stMarch 2019 on account of issue of Bonus shares by your Company in December 2019. Duringthe Financial Year 2019-20 no amount has been transferred to General Reserve.
The paid-up Equity share capital of the Company as on 31stMarch 2020 stood at Rs.1710038460 consisting of 171003846 Equity Shares of Rs.10/-each fully paid up. In December 2019 the Company issued 57001282 Equity shares of Rs.10each fully paid-up as Bonus Share in the ratio - 1 equity share for every 2 equity sharesheld in the Company.
The Company has not issued any share with differential voting rightsnor has granted any stock option or sweat equity share.
A dividend of Rs. 7.50/- (Rupees Seven and Paise Fifty only) per EquityShare on the entire paid up Equity share capital of the Company has been recommended bythe Board of Directors for Financial Year 201920 for declaration by the Members at theensuing 103rd Annual General Meeting (AGM) to be held on 25thSeptember 2020. The dividend if declared at the ensuing 103rd AGM will bepaid within statutory time limit of 30 days from the date of such declaration either byway of warrant demand draft or electronic mode to those Shareholders who would be holdingshares of the Company as on 18th September 2020 (End of Day). In respect ofshares held electronically dividend will be paid to the beneficial owners as on 18thSeptember 2020 (End of Day) as per details to be furnished by their respectiveDepositories i.e. either Central Depository Services (India) Ltd. or National SecuritiesDepository Ltd. The dividend to be paid shall be subject to the applicable provisions ofthe Income Tax Act 1961. The trend of dividend payment is depicted below:
Note: The dividends for the Financial Year(s) 2016-17 onwards is on theincreased paid up capital upon issue of Bonus shares in the years 2016. Further thedividend for the Financial Year 2019-20 as recommended by the Board of Directors is on theincreased paid up capital upon the issue of Bonus Shares done in December 2019. Thedividend for Financial Year 2019-20 is yet to be declared by the members of the Company atthe 103rd AGM.
DIVIDEND DISTRIBUTION POLICY
Your Company had formulated a Dividend Distribution Policy in the year2016. The proposed Dividend Policy has been uploaded on the Company's website at thelink:
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
The spread of COVID-19 pandemic has severely affected the businessesaround the globe. In many countries including India there has been severe disruption toregular operations due to lock-downs disruptions in transportations supply chain travelbans quarantines social distancing and other emergency measures.
Some of the services of the Company have been identified as EssentialServices and have been permitted to be allowed during the lockdown phases. The Company isalso running its manufacturing facilities and is providing goods and services to itsCustomers.
Barring the first few days of complete lockdown operations of theCompany were largely open and catering to customers. However the offtake in terms ofvolumes was not very encouraging and was below par when compared with normal times.Service businesses suffered badly due to the stoppage of air travel and disruption in thesupply chain systems.
The Company has made detailed assessment of its liquidity position forthe next few months and of the recoverability and carrying values of its assets comprisingProperty Plant and Equipment Intangible assets Trade Receivables Inventories andInvestments as at the Balance Sheet date and no major challenges are envisaged in theserespects due to pandemic.
The Company is virtually debt free and has adequate liquidity to meetits business requirements. The security of the assets is ensured and all of these areoperating seamlessly. All internal financial reporting systems are working without anydisruption. As of now after the initiation of release of lockdown we have not faced anymajor disruptions on account of local supply chains. We do not have any long-termcontracts/agreements where non-fulfilment of any obligations will have significant impacton the business of the Company.
The management believes that it has considered
all the possible impact of known events arising from COVID-19 globalhealth pandemic in the preparation of financial statements. However the impact assessmentof COVID-19 pandemic is a continuous process given the uncertainties associated with itsnature extent and duration. The management shall continue to monitor any material changesto future economic conditions on a continuing basis.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as per the provisions ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI LODR) isattached separately as Annexure- 1'.
CONSOLIDATED FINANCIAL STATEMENTS
The Financial Statements and Results of your Company have been dulyconsolidated with its Subsidiaries and Associates pursuant to applicable provisions of theCompanies Act 2013 & allied Rules the SEBI LODR and Indian Accounting Standards(Ind-AS).
Further in line with first proviso to Section 129(3) of the CompaniesAct 2013 read with the Rules thereon Consolidated Financial Statements prepared by yourCompany includes a separate Statement in Form AOC-1' containing the salientfeatures of the Financial Statement of your Company's Subsidiaries and Associateswhich forms part of the Annual Report.
REPORT ON SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES ANDTHEIR CONTRIBUTION TO THE OVERALL PERFOMANCE IN THE COMPANY
During the Financial Year 2018-19 the Company had revised the policyfor determining material subsidiaries in terms of the amended SEBI LODR w.e.f. 1stApril 2019. The policy may be accessed on the Company's website at the link:
As per the aforesaid policy none of the subsidiaries appear to bematerial subsidiary of your Company.
FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES
In line with the provisions of Section 136 of the Companies Act 2013your Company has placed separate audited accounts of each of its subsidiaries on itswebsite - www.balmerlawrie.com. Members shall be provided separate financial statement ofeach of the Subsidiary Companies as per requisition made by them in writing.
A brief write up about the Subsidiaries Associates and Joint VenturesCompanies of your Company inter-alia reporting about their respective performancefinancial position and other significant events is presented hereunder:
BALMER LAWRIE (UK) LTD. [BLUK]
Balmer Lawrie (UK) Ltd. (BLUK') is a 100% subsidiary of yourCompany incorporated in the United Kingdom. The subsidiary had previously been engaged inthe business of Leasing & Hiring of Marine Freight Containers as also in TeaWarehousing Blending & Packaging.
After exiting these businesses BLUK has been utilizing the proceeds tofund other business opportunities. BLUK has to date invested approximately US$ 2.01million equivalent to Indonesian Rupiah 21.0 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 sharecapital of PTBLI is subscribed by PT. Imani Wicaksana of Indonesia. PTBLI is engaged inthe manufacture and marketing of greases and other lubricants in Indonesia. The operationsat the plant has now stabilized and the JV is actively trying to get a foothold in thechallenging Indonesian lube market.
During the year 2018-19 Balmer Lawrie had initiated steps for closingof operations of BLUK and is in the process of getting necessary statutory clearances forclosure shortly from the authorities in the United Kingdom. As a part of this process theshares of PTBLI held by BLUK had been transferred to Balmer Lawrie during the year2018-19. It may be expected that the process of voluntary winding of BLUK would becompleted during the Financial Year 2020-21.
VISAKHAPATNAM PORT LOGISTICS PARK LIMITED [VPLPL]
As a part of our expansion plans a company by name "VisakhapatnamPort Logistics Park Limited" (VPLPL) was formed as Joint Venture (JV) in July 2014between Balmer Lawrie & Co. Ltd. and Visakhapatnam Port Trust (VPT) to build aMultimodal Logistics Hub (MMLH) facility comprising mechanised warehouses specialised /temperature controlled storage solutions facilities for mechanised material handling andinter modal transfer between container terminals bulk/ break - bulk cargo terminals. Thishub provides facility to handle both bonded and non-bonded cargo coupled with offering ofvalue added services such as customs clearance sorting/grading/aggregation/disaggregation etc. to handle freight. The unit is also having rail connectivity of 1.30KM length where 4 rakes can be handled in a day.
The JV is having equity participation between your Company and VPT inthe ratio of 60:40. Balmer Lawrie & Co. Ltd.'s contribution to equity is in theform of cash while VPT's contribution is in the form of "upfront lease rentalfor 30 years lease" of approx. 53 acres of land.
VPLPL has engaged a core and structured sales and operations team forbusiness development and efficient execution. The response from the trade has beenpositive and we have been able to cater to the customer's requirement by virtue ofoffering storage facilities in ambient and temperature controlled warehouses. The unit iswitnessing significant business opportunities to cater to the growing demand of steelexports from Visakhapatnam Port Trust for which rail siding facility has come up as aunique selling proposition for the trade.
VPLPL enjoys excellent camaraderie and cooperation from VisakhapatnamPort Trust our JV partner and we complement each other in attracting business for theunit.
VPLPL had made an application for grant of CFS license in May 2017 butthe same is yet to be granted by Government. Your company as well VPT have maderepresentations through respective parent ministries to the Government that this is notjust a CFS but a MMLH providing various services in one location thus drivingefficiencies in logistics and reducing costs for the trade. Some clarifications weresought by the Government and the same has been provided which is being reviewed.
During the course of its first full year of operations in FinancialYear 2019-20 VPLPL was able to generate a revenue of Rs.4.71 Crores and reported a lossof Rs.16.04 Crores. It is optimistic of multi-fold revenue during the next Financial Year2020-21 which will gain further impetus if the CFS license is granted.
REPORT ON JOINT VENTURES
Balmer Lawrie (UAE) LLC [BLUAE]
Balmer Lawrie (UAE) LLC (the company) had another very satisfactoryyear of operations and could achieve highest ever production and sales volumes in most ofthe major product segments during the year 2019.
Increased focus on customer service initiatives taken to garnergreater market share and product innovation enabled BLUAE to strengthen customerrelationships. The company achieved significant improvement in retention of skilledemployees and employee morale with positive impact on productivity and efficiencies.Simultaneously cost reduction was achieved on many fronts through various technologicalupgradation initiatives. These endeavors enabled the company
to stay ahead of competition which none the less remains intense.
As reported earlier BLUAE has embarked on plant modernization andcapacity enhancement initiatives across its different product lines. Such capacityenhancement projects are in full swing and are likely to be completed by the end of thecurrent Financial Year. The progress of the projects has been adversely affected due toonset of COVID-19 pandemic/resultant lockdown in UAE/other parts of the world from wherecertain machineries are getting imported for such projects.
Overall performance during the year was extremely satisfactory andinspite of stiff competition in the market leading to tremendous pressure on the marginsfor the products sold by the company. BLUAE had been able to achieve excellent financialresults during the year under review. However in the light of the continuinggeo-political/depressed business environment prevailing in the region where the companyoperates due to onset of COVID-19 pandemic the company expects an extremely challengingtask to maintain similar growth momentum during 2020 as had been achieved over the lastfew years.
BALMER LAWRIE-VAN LEER LTD. [BLVL]
In spite of the sluggish economy post September 2019 and the rampantoutbreak of COVID-19 pandemic Balmer Lawrie-Van Leer Ltd. (BLVL) announced a 2.7 % jumpof Profit Before Tax (PBT). The PBT has increased to Rs. 38.41 Crores from Rs. 37.39Crores. This is despite the fact there is a drop of Gross Revenue from Rs. 500 Crores toRs. 444 Crores due to sharp fall in raw material prices which is the index of fixation ofSelling Price. The Steel Drum closure unit of BLVL at Turbhe and at Bengaluru have beenable to maintain the last year PBT with similar production levels. The Plastic Division atTurbhe has shown a substantial jump in PBT compared to last year. Moreover a strongincrease in value addition was witnessed in all Plastic Drum divisions across BLVL.
The proposed Plastic Drum Factory at Dahej is nearing completion andexpected to be commissioned in the last quarter of the current Financial Year 2020-21.
AVI-OIL INDIA PRIVATE LTD. [AVI-OIL]
For the Financial Year 2019-20 AVI-OIL has achieved sales volume of826 KL of lubricants blended 15 MT of greases reprocessed & packed and 311 MT of theester base stocks manufactured.
During the Financial Year 2019-20 AVI-OIL achieved the net sales ofRs. 4697 Lakh as compared to the previous year net sales of Rs. 6318 Lakh.
The Profit before Tax (PBT) for the year 2019-20 is Rs.725 Lakh ascompared to previous year PBT of Rs.1200 Lakh. The decrease is mainly due to lower salesincrease in employee cost and other expenses.
The Profit before Depreciation Interest and Tax (PBDIT) for theFinancial Year 2019-20 is Rs.1068 Lakh as compared to the last year PBDIT of Rs.1448 Lakh.
TRANSAFE SERVICES LTD. [TSL]
TSL is a joint venture of Balmer Lawrie & Co. Ltd. (BL')and Balmer Lawrie - Van Leer Ltd. (BLVL') with each holding 50% shares. TSL wasfacing rough weathers since 2009-10 and during the Financial Year 2012-13 its accumulatedlosses surpassed its net worth and consequently in 2013 a suo-moto application forrevival was made before erstwhile "Board for Industrial & FinancialReconstruction" (BIFR') under the repealed Sick Industrial Companies(Special Provisions) Act 1985 (SICA'). Due to the emergence of a new law-"Insolvency and Bankruptcy Code 2016 (IBC')" the aforesaid pendingapplication before BIFR became inactive since December 2016. Thereafter in the year2018 one of the bankers of TSL filed an insolvency application before the NationalCompany Law Tribunal (NCLT') under IBC. This insolvency application after fewhearings before NCLT got admitted on 21st November 2019. Consequently uponsuch admission the powers of the Board of Directors of TSL got suspended and the affairs& running of TSL were entrusted to an Insolvency Resolution Professional (IRP)appointed by NCLT. On and from 21st November 2019 since the IRP has takencharge/control of TSL the financial statement of TSL are not consolidated with BL in theconsolidated Financial Statements.
PT BALMER LAWRIE INDONESIA [PTBLI]
PT Balmer Lawrie Indonesia (PTBLI) is a 50:50 joint venture companybetween PT. Imani Wicaksana Indonesia and Balmer Lawrie & Co. Ltd. The Company wasformed in 2010. The business of the joint venture can be broadly categorized into:
- Processing Business
- Direct Sales
- Institutional Sales
- Export of lubricants to neighbouring countries
During Financial Year 2019-20 PTBLI achieved a turnover of Rs.2316.06Lakh which was around 42.31% lower than the previous year primarily on account of lowerprocessing business in 2019-20 as also adverse impact of onset of COVID-19 pandemic
in the last quarter. The total loss during the current Financial Yearwas Rs.320.81 Lakh against a profit of Rs.64.37 Lakh during previous Financial Year.
CESSATION/CHANGE IN JOINT VENTURES/ SUBSIDIARIES/ASSOCIATE COMPANIES DURING THE YEAR
During the year 2018-19 Balmer Lawrie had initiated steps for closingof operations of BLUK and is in the process of getting necessary statutory clearances forclosure shortly from the authorities in the United Kingdom. It may be expected that theprocess of voluntary winding of the company would be completed during the Financial Year2020-21.
MEMORANDUM OF UNDERSTANDING (MOU)
Every year your Company signs an MOU with the Government of IndiaMinistry of Petroleum and Natural Gas (MoPNG) based on guidelines issued by the Departmentof Public Enterprises (DPE). The MOU targets include revenue from operations operatingprofit to Revenue PAT/Net Worth return on investment in JV's capital expenditureinventory management capacity utilization and human resource management etc. Periodicreview on achievement of MOU was carried throughout the year. Your Company'sperformance score in respect of the MOU for the year 2018-19 has been adjudged by the DPEin "Excellent" category.
MOU evaluation for the Financial Year 2019-20 is in process.
HUMAN RESOURCE MANAGEMENT (HRM)
The organization believes that its success depends on the alignment& performance of its people. In order to create value for the Organization and basedon the long-term plan and current realities the following domains have been the focusareas of Human Resource Management in the Financial Year 2019-20:
- To ensure the organization has the right people in the right job atthe right time.
- Enhancing employee productivity to reach the best in class levels andimprove profitability by striving for competitive wage cost.
- Renewed focus on enhancing employee engagement and employeeexperience.
- Continue to build employee capability upgrading leadership andmanage talent & employee performance across all levels of the workforce.
(a) Talent Acquisition
In today's intensely dynamic markets the Company has successfullyinducted 69 (Sixty-Nine) Executives and 40 (forty) Officers (Non-Unionized Supervisors)
during the year to reinforce the Company's performance and bolsterthe Company's capabilities in all business areas.
(b) Learning and Development
In its continued efforts to harness human potential and unearthuntapped skills the Company aligns the learning & development practices and solutionsin line with the organizational growth or productivity. We continued to invest inenhancing the professional skills and competencies of our employees. With the objective ofenhancing the functional and leadership competencies extensive training programs foremployees in line with the business requirement of the Company in the areas of GeneralManagement Safety and Sustainable development and specialist skill development wereplanned and executed. The Company also invested in e-learning content this year. In all1285 Man-days of training were achieved including in-house and external programmesincluding workshops conferences seminars virtual sessions and class-room trainingprogrammes for all categories of employees during the year.
(c) Managing Performance
With a view to improve upon performance orientation and bring aboutobjectivity in assessment the Company has already rolled out a Competency LinkedPerformance Appraisal System for its executives. With a view to ensure timely completionof Performance Management Appraisals the process has already been e-enabled forexecutives upto grade E-8. Your Company has maintained 100% online submission of ACR/APARin respect of all Executives (E0 and above) along with compliance of prescribed timelinesw.r.t writing of ACR/APAR during Financial Year 2019-20.
(d) Employee Engagement and Welfare
An effective and employee centric work culture in the organizationencourages participation involvement of employees in activities beyond work and theiralignment with the organisation. Towards furthering this during the year the 154thFoundation Day was celebrated in all units and establishments across the country. Theemployees and their family members participated in large numbers and made the event amemorable occasion. Also various programs like Annual Sports Day Cultural Evening etc.were organized by the Recreation Club at different major locations of the Company.
Welfare & representation of SCs STs OBCs and the status ofimplementation
As on 1st January 2020 in the executive & officercadre 12 employees in the SC category 25
employees in the OBC category and 5 employees in the ST category wererecruited. The actual number of employees belonging to special categories group- wise ason 31st March 2020 is given below: -
Implementation of the Persons with Disabilities [Equal OpportunitiesProtection of Right and Full Participation] Act 1995 and the Rights of Persons withDisabilities Act 2016
In compliance with the above Act the Company has implementedreservation rosters including 4% reservation for persons with benchmark disabilities.Further to mitigate the shortfall a special recruitment drive is planned during the year2020 - 21.
The Management believes in a process of open & transparentconsultation with the collectives. Employees are represented in various Trusts formed bythe Company to administer various employee benefit schemes. Plant level committees are inplace to discuss and settle productivity and work place related matters. ConsultativeForums have been established to resolve disputes / differences.
The employee relations continued to be generally cordial at all Units /Locations of the Company during the year.
Implementation of Official Language
To ensure implementation of Official Language policy of the Governmentof India your Company has taken several steps to promote usage of Hindi in official work.30 workshops were organized during the year in which 395 employees were trained on usageof Hindi in Official work. Hindi Pakhwada was celebrated at all locations of the Companyduring the month of September 2019. Hindi Kavi Sammelan was organized on 27thSeptember 2019. A Hindi essay writing competition was organized for PSU employees on 13thDecember 2019 under the aegis of Town Official Language Implementation (PSUs) Kolkata.
We have also trained 32 employees in Hindi Prabodh Praveen and Pragyacourses. Issue of Balmer Lawrie Organizational Gazette (BLOG) for October 2019 wasreleased completely in Hindi. Similarly Balmer Lawrie Online Monthly (BLOOM) Bulletin isalso released bilingually. Implementation of the Official Language
Policy is top driven in your Company and the Company has used Hindi inall our activities of CSR the Company's Foundation Day Town Hall meetings WorldEnvironment Day Safety Week Vigilance Awareness Week International Womens' DayQuami Ekta Week.
Your Company received award from Town Official Language ImplementationCommittee (TOLIC) (PSUs) Kolkata for the implementation of official Language in officialwork and active support extended to TOLIC in organizing activities for the propagation ofHindi for the year 2019-20. The award was presented by the Hon'ble Governor of WestBengal during the half yearly meeting held on 29th January 2020.
Empowerment of Women
The Company provides a very conducive ambience for employment of women.The percentage of women employees is on the rise with new recruitments. The presentstrength of women employees is 8.98% despite the fact that a large chunk of our workforceconstitutes shop floor workers. The Company has created an atmosphere conducive for womenemployees to join and build a career in this organization.
The Company also organized a self defense Workshop during itsWomen's Day Celebration for the Women Personnel in Eastern Region.
Welfare of the Weaker Sections
The Company's policy does not permit employment of any personbelow the age of 18 years directly or through contractor in any of its businesses. Toensure this the age of all candidates for employment is verified at the time ofrecruitment and recruitment rules ban employment of persons below 18 years. It also doesnot buy goods/products from agencies that use child labour.
The Company does not practice any form of discrimination or bias inmatters related to hiring of employees their career planning training and developmentpromotion transfers or on remuneration and perquisites. All sections of employeesincluding women are given equal opportunities and the Human Resource Policy is to advancethe cause of meritocracy and foster development of employees including learning andgrowth.
The Company does not practice any discrimination in matters relatingto recruitment compensation promotion training on the basis of religion caste regionpolitical affiliation or sex excepting positive discrimination in hiring of employees togive effect to constitutional guarantees for socially backward/
underprivileged groups like SC / ST /OBC / Minorities/ Persons withBenchmark Disability.
In all recruitments where there are candidates from SC/ ST / Minoritycommunities the Selection Committee has a member from the said community to ensure thatthe interest of these communities is safeguarded.
Your Company encourages participation in various inter-regional sportsactivities by its employees. Your Company is also a member of the Petroleum SportsPromotion Board (PSPB) and has been participating in the events conducted by the PSPB.
Disclosures as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Internal Committee (IC)
Your Company has reconstituted Internal Committees in all four regionsnamely Eastern Western Northern and Southern Region (separate ICs have been constitutedin Bangalore Hyderabad and Chennai) of the country under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 (as amended) (theAct'). The following is furnished in terms of the Act: -
a) Number of complaints filed during the Financial Year - Nil
b) Number of complaints disposed of during the Financial Year - Nil
c) Number of complaints pending as on end of the Financial Year - Nil
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Annual Report on CSR Activities
1. A brief outline of the Company's CSR policy including overviewof projects or programs proposed to be undertaken and a reference to the web-link to theCSR policy and projects or programs.
"We are committed to serve the community by empowering it toachieve its aspirations and improving its overall quality of life."
To undertake CSR activities in chosen areas through partnershipsparticularly for the communities around us and weaker sections of the society bysupporting need-based initiatives.
Improve the health and nutrition status of communitiesparticularly vulnerable groups such as women children and elderly by improving healthinfrastructure and facilitating service provision.
Focus on quality of education and encourage children frommarginalized sections and girls to complete school education and opt for higher education.
To focus on livelihoods and skill development in order toprovide opportunities to women and youth and make them self-reliant.
Initiate holistic development programs for differently abledchildren and orphans with a view to provide them opportunities to lead a meaningful life.
To support the national efforts in rehabilitation and reliefpost unfortunate natural disasters.
We at Balmer Lawrie are committed to continuously improve our effortstowards our social responsibility focus on marginalized sections and encourage ouremployees to contribute in CSR activities. Towards this commitment the Company shall beguided by the following guiding principles:
Affirmative action to provide opportunities to marginalizedcommunities.
Efforts towards gender inclusiveness.
Encourage community participation and ownership in order toensure sustainability of CSR activities.
Encourage voluntary participation of employees.
Enhancing visibility of our CSR so that others can benefit fromour learnings.
CSR activities would be based on partnerships.
Wherever possible we will align our activities with thebusiness objectives.
Capacity building for the weaker sections of the society.
Corporate Social Responsibility
India is the first country in the world to make Corporate SocialResponsibility (CSR) mandatory by an amendment to the Companies Act 2013 in April 2014.CSR is a transformational practice by the business corporations in India. It is aninitiative towards the collective community well-being. The primary objective of themandate is to invest in the socio-economic cultural and
environmental upliftment of the communities. The holistic empowermentof the disadvantaged communities require sustainable approaches to achieve commoncommunity goals. As an initiative towards the collective community wellbeing CSR is apositive step towards promoting quality health education livelihood care and protectionwhile ensuring environmental sustainability and ecological balance. Balmer Lawrie iscommitted to conducting its business in a socially responsible manner and be responsive tothe needs of the society at large. Consistently the organization has undertaken variousCSR initiatives since the last few decades driving sustainable development and growth forits stakeholders. In line with this the Company has been driving various projectsindependently around its units and establishments across the country and has also beensupporting various programs initiated by the Government of India like the Swach BharatAbhiyan and Skill Development Institutes. CSR has become an integral part of aCompany's functioning and today it has become important that a firm demonstrates suchresponsibility. Although earlier it was not a legal compulsion that had to be walkedthrough by any firm but following it was considered as a good practice for consideringsocial and environmental issues.
Balmer Lawrie's CSR initiatives are driven by two FlagshipPrograms - Balmer Lawrie Initiative for Self-Sustenance [BLISS] and Samaj Mein BalmerLawrie [SAMBAL]. While the first Program is directed at providing and improving thelong-term economic sustenance of the underprivileged the second Program aims at improvingthe living standards and quality of life of the population in and around theCompany's area of operation.
To extend our commitment towards a sustainable society Balmer Lawriehas undertaken various innovative CSR programs. The Company has been successful in itscommitment towards the CSR programs and is constantly making progress for the bettermentof the communities. Balmer Lawrie takes pride in furthering the initiatives which comeunder the purview of CSR by engaging with impactful specialized organizations and incompliance with the DPE guidelines the Companies Act 2013 and Schedule VII of theCompanies Act 2013.
1. A total sum of Rs.514.36 Lakh was spent during the Financial Year2019-20 towards CSR activities expenses.
The CSR policy is posted on the Company's website at:
2. The Composition of the CSR Committee as on 31st March2020 was as under:
(a) Total No. of Directors in the Committee: Seven
(b) No. of Independent Directors in the Committee: Three
3. Average net profit of the Company for last three Financial Years - Rs.23532 Lakh.
4. Prescribed CSR Expenditure (two % of the amount as in item 3 above)- Rs. 471 Lakh.
5. Details of CSR spent during the Financial Year:
(a) Total amount to be spent for the Financial Year; Rs.514.36 Lakh
(b) Amount unspent if any: NIL
(c) Manner in which the amount spent during the Financial Year 2019-20is detailed below:
CSR EXPENDITURE INCURRED DURING FINANCIAL YEAR 2019-20
6. In case the Company has failed to spend the two % of the average netprofit of the last three Financial Years or any part thereof the Company shall providethe reasons for not spending the amount in its Board Report. - Not Applicable
7. Responsibility Statement of the CSRCommittee
"It is hereby certified that the implementation and monitoring ofCSR Policy is in compliance with CSR objectives and Policy of the Company."
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report of the Company as per SEBI LODR for theyear ended 31st March 2020 is attached as Annexure-2'.
OCCUPATIONAL HEALTH & SAFETY
Employee Health & Safety
Your Company accords high priority to Employee Health & Safety. Inpursuance of this your Company has established an integrated Health & SafetyManagement System across the organization. Your Company has published an HSE Manual whichis being used as a reference book in plants and other establishments of your Company. YourCompany carries out HSE audits for all its Manufacturing Units Container Freight Stations(CFS) and Temperature Controlled Warehouses (TCW) as per the approved HSE audit protocol.Your Company has also introduced an HSE MIS system for all Manufacturing CFS & TCWunits. Every plant / CFS / TCW unit submits a monthly HSE MIS to Corporate Office enablingit to take corrective steps. Major plants / units of your Company are OHSAS 18001certified. All Occupational Health & Safety Standards are adhered to as per theFactories Act 1948. Your Company has taken adequate protection for its employees tocombat with COVID-19 pandemic in line with the directives issued by MHA from time to time.Major initiatives/ activities undertaken in this domain in Financial Year 2019 - 20 are asfollows:
HSE Audits were carried out in manufacturing units/establishmentof your Company during the year and recommendations thereof implemented.
Your Company achieved Zero LTI (Lost Time Injury) in theFinancial Year 2019-20.
HSE awareness training was conducted for permanent employees andcontract workers.
The 49th National Safety Week was observed from 4thto 10th March 2020 in all units/establishments across locations. The weekcommenced on 4th March 2020 which was observed as National Safety Day withthe administering of the safety pledge and reading out of C&MD's message. In linewith the theme various programs were organized over the week. The programs includedextempore quiz skit spot the hazard contest mock drills safety slogan & essaywriting competitions.
Environmental Protection and Sustainability:
Being fully committed towards the protection and conservation of theenvironment your Company has taken various initiatives to minimize the pollution load ofoperations. Treatment & disposal of effluents
conform to the statutory requirements. Air emissions norms alsostrictly adhere to the norms laid down in the Environment Protection Act 1986. Disposalof hazardous waste is done strictly as per Hazardous Waste and Other Waste Rules 2016.All Plants and major establishments of the Company are certified to environment standardsISO 14001. The Company has in place a comprehensive Long-Term Integrated SustainabilityPlan which lays down the sustainability policy program framework governance structurecommunication etc.
Some of the other initiatives/activities taken up by your Company inthis domain in the Financial Year 2019-20 include:
- installed RO System to process and reuse of ETP treated water in drummanufacturing process. This reduces the water consumption of the plant significantly.
- productivity improvement and significant improvement in operationalefficiency reduced electricity consumption by 3%. This reduces the carbon footprint of theplant.
- installed new Fume Extraction System which improves the plant airquality significantly.
- Asbestos roof sheets were replaced with precoated galvanized ironroof sheets thereby improving the work environment and reduce health risk hazard.
- installed Inverter based 3 phase welding m/c replacing old 2 phasewelding m/c. Power consumption reduces from 250A to 80A.
- used water-based grease in it's processes thus reducinggeneration of hazardous waste in their plant.
- collects and reuse Paint Sludge thus reducing the generation ofhazardous waste.
- constructed separate area for storage of hazardous waste in theirplant.
- installed 120A capacity Active Harmonics Filters at Auto welder tomitigate the harmonics. This reduces electrical energy consumption and carbon footprint ofthe plant.
- the unit replaced HSD by LPG as fuel for it's baking oven whichreduces the energy consumption of the plant significantly.
Greases and Lubricants (G&L)
G&L Manali G&L-Silvassa G&L- Kolkata:
- installed Occupancy Sensors to automatically control consumption ofelectricity by the office lightings.
- planted number of trees in current Financial Year. This creation ofgreenery area aims to reduce carbon foot print.
- Asbestos roof sheets were replaced with precoated galvanized ironroof sheets thereby improving the work environment and reduce health risk hazard.
- Replaced 12 nos 800W lamps at High Mast Lighting tower by 350W LEDlight. Carbon emission reduced by 19T. Power consumption reduced by 23650 units (approx.)
- started usage of thermal label printer replacing screen printing ofdrums thereby reducing the usages of solvent inside the plant.
- dust collector at Lithium Hydroxide Dosing area at Kettle has reducedemission of LIOH dust particles in the plant. This improves air quality of the plantsignificantly.
Saplings were planted at all units on the occasion of WorldEnvironment Day 2019. Online quiz and essay competition on Environment carried out for allemployees to create awareness.
CFS Navi Mumbai IP-Taloja IP-Kolkata IP- ChittoorIP-Vadodara TCW-Hyderabad TCW- Patalganga and other BL establishments across Indiaplanted number of trees in current Financial Year. This creation of greenery area aims toreduce carbon foot print.
The Company has till date installed solar plants with a totalcapacity of 526 kWp in five different sites at Asaoti Navi Mumbai Chennai Patalgangaand Rai. Out of this 33 kWp solar power plant has been commissioned in the currentFinancial Year at TCW-Patalganga. This helps us to offset 800 tons of carbon dioxide peryear from the manufacturing / cold chain operations.
Different Plants of Balmer Lawrie installed LED lights replacingconventional lights reducing electrical consumption.
Many Plants of Balmer Lawrie installed atomizer tap controllerthus reducing water consumption of the plants significantly.
At all Balmer Lawrie Plants and Establishments single useplastic is banned.
The Company has continued its efforts at technologicalup-gradations in its manufacturing processes to ensure that adverse impact of theoperations in the environment are minimized.
The Research & Development team continuously works toidentify raw materials processes and technologies which will have minimum impact on theenvironment. The Application Research Laboratory of the Company has made significantprogress in developing a number of biodegradable lubricants. Continuous trainings arebeing imparted to the workforce on the latest development in the lubricant industry.
COMMUNICATIONS & BRANDING INITIATIVES
The various internal communications and branding initiatives drivenduring the Financial Year 2019-20 to create employee bonding and enhance the process ofinformation sharing in Balmer Lawrie (BL) are as follows:
Regular publication of the Daily Media Update (a news report forthe Ministry and Top Management team covering news on BL news from the Oil & Gassector and initiatives of the Government).
Regular publication of the Weekly Media Update (a news reportfor employees covering news on BL news related to GOI and PSEs and news from theverticals that we do business in); BL Online Monthly Bulletin (monthly newsletter) BLOrganizational Gazette (the quarterly house magazine). These publications are available onthe Company's intranet and website. BL Online Monthly Bulletin is also beingpublished in Hindi from August 2019.
Internal events like celebration of Foundation Day etc. toenhance employee engagement.
Continuous communication on prevention of containment ofCOVID-19 at the workplace.
The external communication initiatives especially from a brandingperspective and achievements are as follows:
Balmer Lawrie won awards in two categories during the SCOPECorporate Communications Excellence Awards-2019 - The Collect Stories' campaignby brand Vacations Exotica (VE) under
the category Effective use of Digital Media' and TheMaking of Next'- the History Book penned down during the completion of 150 years ofthe organization under the Special Brand Building Publication' category.
Special BL Corporate Calendar (both wall and table-top) designedin-house to showcase the diverse businesses of Balmer Lawrie.
PR and Communication for inauguration of new barrelmanufacturing plant at Vadodara in June 2019 AGM in September 2019 etc.
Branding for FlyLikeKing.com and support for the launch of theportal in July 2019.
Media Coverage: Corporate Reports in business magazines/papersand coverage of CSR initiatives etc.
Branding of the Company at Kolkata Airport.
Branding in Exhibitions and Corporate events highlighting BL asmarket leader in the various businesses it operates.
Regular updates related to Company events initiatives ofHon'ble Prime Minister and Ministry of Petroleum and Natural Gas are posted on the BLFacebook and Twitter pages.
Branding of Swachh Bharat Abhiyan and other similar initiatives.
Social Media campaign on Say No to Single UsePlastic' - #AbNahiTohKab on BL Facebook and Twitter from October to December 2019.
Further Corporate Communications is driving the process of empanelmentof Agencies in the areas of Creative and Advertising / Digital Marketing / PR etc. andcomprehensive branding plans for the year 202021 are in the process of implementation inSBUs: Greases & Lubricants and Travel & Vacations by their respective marketingteams.
PROGRESS ON PRINCIPLES UNDER GLOBALCOMPACT'
Your Company is a founder member of the UN Global Compact and itremains committed to further the principles enumerated under the Global Compact programme.The details of various initiatives taken in this regard can be found in theCommunication of Progress (CoP)' and the Message of Continued Support toGlobal Compact' uploaded on the website of the Company (www.balmerlawrie.com).
Your Company's C&MD in his Message of Continued Supportto Global Compact' said that the Coronavirus (COVID-19) global pandemic has not onlydisrupted the economy but has also taken away the lives of thousands of people around theworld. Dealing with
COVID-19 pandemic has become a tough test for all of us. The pandemicwill pose many more challenges in the months to come. There will be a great sense ofunease everywhere for a greater period of time. He stated that we will have adisrupted' economy for the next six months to one year or may be even more. Theslowdown is going to be across sectors and the visible impact will be strong on thefinancials. We have to be prepared for difficult times ahead and have to work very hardtowards reconstruction of the economy. He mentioned that as a Company we are resilient andare putting in that extra effort and going that extra mile to ensure safety of theemployees and business continuity. Your Company has contributed Rs 12825899/- to thePrime Minister's Citizen Assistance and Relief in Emergency Situations (PM CARES)Fund to help fight the COVID-19 pandemic in the country. Balmer Lawrie allocated Rs. OneCrore from its Corporate Social Responsibility (CSR) Fund and the rest of the amount wasvoluntary contribution of one day's salary by the employees of the Company.
The Communication of Progress Report for the Financial Year 2019-20captures your Company's endeavors and accomplishments in furthering itssustainability objectives. Balmer Lawrie furthered the various initiatives in line withthe Swachh Bharat Abhiyan and Skill India Mission. The Swachh Bharat activities wereparticularly focused on banning single use plastic. As a member company of the Ministry ofPetroleum and Natural Gas (MoPNG) Government of India your Company contributed Rs. 300Lakh for the Skill Development Institutes (SDIs) at Ahmedabad Rae Bareilly GuwahatiVisakhapatnam Kochi and Bhubaneswar. Your Company will continue to focus on the triplebottom line while proactively working towards restoration of the economy and therebyensuring sustenance and growth of the businesses and the organisation. The CoP alsocaptures the various initiatives undertaken to promote greater environmentalresponsibility besides others.
DISCLOSURE ON IMPLEMENTATION OF RIGHT TOINFORMATION ACT 2005
The Right to Information (RTI) Act 2005 was enacted by Government ofIndia with effect from 12th October 2005 to promote openness transparency andaccountability in functioning of Government Department PSUs etc.
Balmer Lawrie has designated Senior Manager (Legal) as Central PublicInformation Officer and Company Secretary as First Appellate Authority under the RTI Act2005. Detailed information as per the requirement of RTI Act 2005 has been hosted on yourCompany's Web Portal at https://www.balmerlawrie.com/static/rti and the same isupdated from time to time.
Information sought under RTI Act 2005 is being provided within theprescribed time-frame detail of which for the Financial Year 2019-20 is shown in the tablebelow: -
(A) CONSERVATION OF ENERGY -
(i) The steps taken or impact on conservation of energy:
Your Company has always considered energy and natural resourceconservation as a major focus area and has been consciously making efforts towardsimproving the energy performance year on year. Energy conservation policy is formulatedand deployed across all the locations for Sustainable Development. Your Company has takenvarious measures to not only reduce the consumption of energy through use of energyefficient equipment but has also focused on renewables as a source of alternative energythereby reducing the load of carbon emission.
SBU: G&L has adopted installation of LED lights at High Masts thussaving 23650 units of electricity per year. Occupancy sensors and automatic lightingcontrol has been installed at many of its units. Change in pouch filling & sealingmachine technology has resulted in saving of 5400 units of electricity per year.
SBU: IP has achieved significant power savings by energy conservationinitiatives such as installation of Insulated-Gate Bipolar Transistor controlled weldingmachines installation of three phase welding machines active harmonic filters at autowelder synchronization of conveyors for reduction of idle running time in various plants.IP units changed many conventional lamps with LED lamps at its different units thusconserves electrical energy.
SBU: LC has taken various energy efficiency measures based on EnergyAudit which is conducted on a periodical basis to ascertain the energy efficiency of itsvarious equipment and to reduce adverse use of energy and or its wastages. SBU: LC hasinstalled energy efficiency motors for its processes Variable Frequency Drive (VFD) forhigher rating motors. At its plants and offices conventional light fittings has beenreplaced with LED light fittings to conserve electrical energy.
(ii) The steps taken by the Company for utilizing alternate sources ofenergy:
In the current Financial Year Temperature Controlled
Warehouse at Patalganga commissioned Solar Plant of 33 kWp capacity forin-house consumption taking the total installed capacity to 526 kWp. Leather Chemicalsunit at Manali Chennai has Solar Power Plant of 200 kWp capacity generating on anaverage 500 units per day.
Cumulative generation of Solar Energy at your Company in the currentFinancial Year is 469522 units. This helped your Company to offset approximately 800tons of carbon dioxide in current Financial Year from the manufacturing/cold chainoperations.
(iii) The capital investment on energy conservation equipment:
Your Company has focused on investing in modern technology forimproving the specific energy consumption. This investment is broadly done in the areas ofLED lighting occupancy sensors and automatic lighting control energy efficiency pumpmotor three phase welding machines active harmonic filters IGBT type welding machinesstar rated Inverter Air Conditioners sensors & automatic controls for coolers andhigh mast automatic power factor control panel and other equipment aimed at reduction ofthe consumption or wastage of energy.
(B) TECHNOLOGY ABSORPTION -
(i) The efforts made towards technology absorption:
Technology absorption and innovation are at the core of any sustainablegrowth of an organization. Your Company has over the years adopted technologies which ledto automation of processes increase in speed and efficiency of systems & processesreduced usage and wastage of energy faster analysis and decision making etc. therebyenabling the Company to service its customers better. Apart from regular process &manufacturing related technology interventions the Research & Development centers ofyour Company are constantly monitoring the changing trends in technology and needs ofcustomers and are developing cost effective products which can meet the growthaspirations of the Company.
SBU: G&L's R&D efforts are directed towards
development of High-Performance Fire-Resistant Greases for SteelIndustry Fire Resistant Synthetic based Hydraulic Oil for Metal Industry (Steel &Aluminum) High Performance Grease for Traction Motor Bearing in Electric Locos of IndianRailways Import Substitute Specialty Greases for Defence Equipment and Aircraftapplications.
Product Development center of SBU: LC has focused and directed itsefforts on developing "Finishing Chemical Ranges" to increase its productbasket. Protein binder and wax emulsion has been successfully developed. Other varietiesnamely lacquers acrylic binders will be launched shortly.
SBU: IP has taken various initiatives aimed at recycling and re-use ofprocess wastes thereby reducing the load on the environment. From Solvent extraction unitimprovement in paint technology telescopic loading nesting & denesting of conicaldrums to automatic control and management of finished goods yard conveyor these are someof the many focus improvement projects being undertaken by the SBU through its robustoperational excellence framework.
(ii) The benefits derived like product improvement cost reductionproduct development or import substitution:
Your Company is constantly exploring both incremental and fundamentalinnovations in all its business activities by exploiting both in-house and outsideknowledge aimed at increasing throughput minimizing conversion cost and developing newpipeline of sustainable products which can help strengthen its position in the marketplace.
The expertise gained through assimilation of such knowledge is helpingthe businesses to develop high- performance cost-effective products matching the best inthe industry. Continuous engagement with reputed OEMs has helped the Greases &Lubricants business in developing tailor made products meeting the specific requirementsof the OEMs. Leather Chemicals business has been able to bring down the free formaldehydecontent of its syntans below the detectable limit by suitable synthesis. IndustrialPackaging business through its operational excellence initiatives has been able toimprove yield reduce cost and increase the throughput.
(iii) In case of imported technology (imported during the last threeyears reckoned from the beginning of the financial year)
a. The details of technology imported: NA
b. The year of import: NA
c. Whether the technology been fully absorbed: NA
d. If not fully absorbed areas where absorption has not taken placeand the reasons thereof: NA
(iv) The expenditure incurred on Research and Development
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO -
DETAILS OF PROCUREMENT FROM MICRO SMALL AND MEDIUM ENTERPRISES AS PERPUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERISES (MSEs) ORDER 2012
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in formMGT- 9 is attached hereto as "Annexure-3".
Further in terms of Section 92 of the Companies Act 2013 read withRules made thereunder the Company shall place a copy of the Annual Return (MGT-7) on thewebsite of the Company www.balmerlawrie.com after filing the same with Ministry ofCorporate Affairs.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) and 134(5) of theCompanies Act 2013 ("the Act") the Board of Directors to the best of theirknowledge and ability state that:
(a) In the preparation of the annual accounts for the Financial Yearended 31st March 2020 the applicable accounting standards had been followedalong with proper explanation relating to material departures.
(b) The Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto 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 2020 and of the Profit andLoss of your Company for that period.
(c) The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of your Company and for preventing and detecting fraud andother irregularities.
(d) The Directors had prepared the annual accounts for the FinancialYear ended 31st March 2020 on a going concern basis.
(e) The Directors had laid down internal financial controls to befollowed by your Company and that such internal financial controls are adequate and weregenerally operating effectively.
(f) The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received declaration from the Independent Directors ofthe Company confirming that they meet the criteria of independence prescribed under theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Detailed particulars of Loans and Investments under Section 186 of theCompanies Act 2013 are given in Note No. 7 & 15 and 6 respectively of the StandaloneFinancial Statement.
RELATED PARTY TRANSACTIONS (RPT)
Majority of the Related Party Transactions of the Company were madewith its Holding Company Subsidiary companies Associate companies and Joint Venturecompanies. It may be pertinent to mention that Related Party Transactions made with
Holding Company and Wholly Owned Subsidiary company and transactionsbetween two Government companies are exempted under Regulation 23 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Further omnibus approval wastaken for entering into Related Party Transactions for value upto Rs. One Crore whereas inother cases approval of Audit Committee was taken. Further there were no materiallysignificant RPT during the year under review made by the Company with Directors KeyManagerial Personnel or other designated persons which have a potential conflict with theinterest of the Company at large.
The Company has revised its RPT Policy in terms of the amended SEBILODR. The policy as amended may be accessed on the Company's website at the link:
The said policy lays down a procedure to ensure that transactions byand between a Related Party and the Company are properly identified and reviewed to ensurethat the Related Party Transactions are properly approved and disclosed in accordance withthe applicable law. The Policy also sets out materiality thresholds for Related PartyTransactions.
The details of the Related Party Transactions entered into by yourCompany during the Financial Year 201920 has been enumerated in Note no. 42.18 of theStandalone Financial Statement.
Justification for entering into Related PartyTransactions
The Related Party Transactions are entered into based on considerationsof various factors like business exigencies synergy in operations the policy of theCompany and Capital Resources of the Subsidiaries and Associates.
The particular of contracts and arrangements as required under Section134(3)(h) of the Companies Act 2013 in the prescribed Form AOC-2 is as under:
FORM AOC 2
(Pursuant to clause (h) of sub-section (3) of section 134 of theCompanies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 Form fordisclosure of particulars of contracts/ arrangements entered into by the Company withRelated Parties referred to in Sub-Section (1) of Section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto
1 Details of contracts or arrangements ortransactions not at arm's length basis
2 Details of material contracts or arrangements ortransactions at arm's length basis
ENTERPRISE RISK MANAGEMENT POLICY
The Company has an approved Risk Management Policy to protect and addvalue to the organization. These Risks are classified into High Medium and Low dependingupon the probability of their occurrence and potential impact. The Risks are evaluatedquantified prioritized and mitigation plans are reviewed at regular interval by the ChiefRisk Officer with the various Risk Owners and are reported to the Risk ManagementCommittee and the Audit Committee.
The said policy is posted on the Company's website at:
Your Company has not accepted any deposit from the public during theFinancial Year 2019-20 and therefore no disclosure is required in relation to detailsrelating to deposits covered under Chapter V of the Companies Act 2013.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSCOURTS AND TRIBUNALS WHICH IMPACT THE GOING CONCERN STATUS AND THE COMPANY'SOPERATIONS IN FUTURE
No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company'soperations in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company has put in place adequate financial controls for ensuringthe efficient conduct of its business in adherence with laid down policies ofsafeguarding its assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial information which is commensurate with the operation of the Company.Effectiveness of Internal Financial control is ensured through management review controland self-testing and independent testing by the external consultant.
During the Financial Year 2019-20 Internal Financial Control wasreviewed by an external consultant Hari Bhakti & Co LLP which reported as follows:
a. The Internal Control over Financial Statement is generally adequatewith areas of observation/ improvements as listed in the report.
b. The observations have been discussed with the process owner and alsoreported and reviewed by the management.
As required under the Companies Act 2013
your Company has an Internal Control System commensurate with the sizescale and complexity of the organisation. Your Company confirms having the following inplace:
- An Internal Audit System whose reports are reviewed by the AuditCommittee.
- Procedure and system for orderly and efficient conduct of theCompany's Business including adherence to the Company's policies.
- Procedures to safeguard the Company's assets.
- Procedures to prevent and detect frauds and errors.
- Procedures and systems including ERP for accuracy and completeness ofthe accounting records.
Shri Vinod Kumar IFoS is the Chief Vigilance Officer (CVO) with effectfrom 10th October 2018.
Your Company always promotes integrity and eliminates corruption. Tolead the business scenario in a transparent manner your Company accepts the principles ofgood governance which is one of the major aspects. Vigilance Department endeavors toensure that the management obtains maximum out of its various transactions with thestakeholders. The Company always welcomes the stakeholders to combat any corruption whichmay come across. Therefore Vigilance Department never accepts any wrong doings and alsodo not indulge in any malpractices.
It is needless to mention that Vigilance Department has taken lot ofinitiatives in the improvements in the systems and procedures which have been implemented.Central Vigilance Commission from time to time issues various directives in the matter ofleveraging technology in respect of e-procurement e-disposals e-Saksham and on-lineposting of job applications which have been implemented keeping in view to bring in moretransparency. Your Company has also taken initiatives for introducing on-line bill paymentsystem which helps vendors to keep a track on the payment related position. The recentintroduction of SAP system across pan India helped the Company to bring in moretransparency with a positive target.
As per the directives of Central Vigilance Commission this year alsoVigilance Awareness Week (VAW) was observed by the Company by taking pledge through panIndia having seminars at different locations where eminent speakers were present andgave their valuable lectures by sharing their practical experiences with meaningfulsuggestions for the betterment of the organization.
Quiz/slogan/essay writings/debate competitions were also held acrosspan India in various establishments schools and colleges which had TV coverages ondifferent channels. Posters and banners were displayed in various places for bringingawareness. This year the pledge was also administered in local languages everywhere apartfrom bilingual languages i.e. Hindi and English. The main motive was to bring intogetherness and spread the message of being vigilant all over not only within theCompany but all over the country.
This year during VAW we have also organized Awareness Walk and HumanChain. It was a good experience for us. There was a lot of awareness generated whenparticipants walked with banners and placards with messages related to the problems ofbribe corruption theft and the importance of vigilance and transparency. Last but notthe least Vendors Meet was held and integrity pledges were also taken by the Vendors aswell as the integrity pledge was also taken by the students of schools/ colleges in theirpremises and by the employees
families through on-line system.
Your Company's focus is to have a commitment to honestyintegrity transparency and mutual trust to create the organization an ethical company.CVO advises the management for taking various measures which are required to be adoptedto improve the functioning of the Company on the basis of gaps noticed in theCompany's systems and procedures during vigilance inspections investigationsscrutiny etc. The Company's C&MD Shri Prabal Basu plays an important role byextending his fullest cooperation to Vigilance Department for its smooth functioning.
Details of Vigilance Cases
In terms of Office Memorandum dated 24th January 2018having reference no.F.No.28(1)/2016-Leg.I issued by Under Secretary to Government ofIndia details of vigilance cases disposed off during the year ended 31stMarch 2020 and vigilance cases pending as on 31st March 2020 is mentionedherein below.
a. Vigilance Cases disposed off during the year ended 31stMarch 2020
b. Vigilance Cases pending as on 31st March 2020
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company had established a Vigil Mechanism / Whistle Blower Policyin January 2010. The said policy concerns the Employees and covers the followingcategories:
- Unionized Employees
- Any other Employees (such as Outsourced Contractual TemporariesTrainees Retainers etc. as long as they are engaged in any job / activity connected withthe Company's operation).
so as to enable them to report to the management instances of unethicalbehaviour actual or suspected fraud or violation of your Company's Code of Conduct.The details of the Vigil Mechanism / Whistle Blower Policy are given in the CorporateGovernance Report 2019 - 20 and can be downloaded from the following hyperlink of theCompany's website:
REPORT ON CORPORATE GOVERNANCE
Your Company has been consistently complying with the variousRegulations and Guidelines of the Securities & Exchange Board of India (SEBI) as wellas of Department of Public Enterprises (DPE) to the extent within its control.
Pursuant to the said SEBI Regulations and DPE Guidelines a separatesection titled Corporate Governance Report' is being furnished and marked as"Annexure-4".
The provisions on Corporate Governance under DPE Guidelines which donot exist in the SEBI Guidelines and also do not contradict any of the provisions of theSEBI Guidelines are also complied with.
Further your Company's Statutory Auditors have examinedcompliance of conditions of Corporate Governance and issued a certificate which isannexed to this Report and marked as "Annexure-5".
DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNELAND EMPLOYEES
Your Company being a Government Company vide Notification No. GSR463(E) dated 5th June 2015 as amended by Notification No. GSR 582(E) dated 13thJune 2017 and notification No. GSR 802(E) dated 23rd February 2018 hasbeen 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. GSR463(E) dated 5th June 2015 as amended by Notification No. GSR 582(E) dated 13thJune 2017 and notification No. GSR 802(E) dated 23rd February 2018 has beenexempted from applicability of Section 134(3)(p) and 178(2) (3) and (4) of the CompaniesAct 2013.
The Annual Performance Appraisal of Top Management Incumbents ofCentral Public Sector Enterprises is done through the Administrative Ministry as per theDPE Guidelines in this regard. Your Company being a Central Public Sector Enterprise underthe administrative jurisdiction of Ministry of Petroleum & Natural Gas also has tofollow the similar procedure.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of the Company as on 31st March 2020 consisted ofTwelve Directors out of which four were Functional/Executive/Whole-time Directors twowere Non-executive Government Nominee Directors and six were Independent Directors.
Based on the direction received from MoPNG vide letter bearingreference number CA-31024/1/2018- PNG(23808) dated 20th December 2019 ShriAdhip Nath Palchaudhuri had been appointed as an Additional Director with the designationof Director (Service Businesses) by the Board w.e.f. 1st March 2020 and letterbearing reference number CA- 31024/2/2018-PNG(25059) dated 20th January 2020Shri Sandip Das had been appointed as an Additional Director in the designation ofDirector (Finance) by the Board w.e.f. 1st May 2020. Considering the aboveappointments and cessation as on the date of this report the Board consisted of twelveDirectors out of which:
Four (4) are Functional/Executive/Whole-time Directors;
Two (2) are Non-executive Government Nominee Directors; and
Six (6) are Independent Directors.
It may be noted that pursuant to Article 7A of the Articles ofAssociation of the Company so long as the Company remains a Government company theDirectors (including Independent Directors) are to be nominated by the Government ofIndia.
NUMBER OF MEETINGS OF THE BOARD
The Board met eight (8) times during the Financial Year 2019-20 thedetails of same are given in
the Corporate Governance Report attached as "Annexure-4".The intervening gap between any two Board meetings was within the period prescribed underthe Companies Act 2013 SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and DPE Guidelines on Corporate Governance.
During the year following Directors were appointed by the Shareholdersat the 102nd AGM:
1. Shri Arun Tandon Independent Director
2. Shri Arun Kumar Independent Director
3. Shri Anil Kumar Upadhyay Independent Director
4. Shri Bhagawan Das Shivahare Independent Director
In the ensuing AGM it is proposed to consider reappointment of ShriAdika Ratna Sekhar (DIN 08053637) who retires by rotation and being eligible offershimself for reappointment.
It is proposed to appoint Shri Adhip Nath Palchaudhuri (DIN 08695322)and Shri Sandip Das (DIN 08217697) as Executive Directors of the Company at the ensuingAGM in furtherance of the nominations received from the Administrative Ministry and theircandidatures proposed by the shareholder of the Company. The details of the directorsseeking appointment and reappointment are given in the explanatory statement attached tothe notice of the 103rd AGM.
CESSATIONS - ON ACCOUNT OF WITHDRAWAL OF NOMINATION OR RETIREMENT
- Shri D. Sothi Selvam Director (Manufacturing Businesses) had ceasedto be Director on the Board of the Company w.e.f 16th December 2019 on accountofrepatriation to his parent organization.
- Smt. Atreyee Booroah Thekedath Independent Director had ceased to bethe Director on the Board of the Company w.e.f 31st January 2020 on account ofcompletion of her tenure.
- Shri Kalyan Swaminathan Director (Service Businesses) had ceased tobe the Director on the Board of your Company w.e.f. 1st March 2020 on accountof superannuation.
Your Company has a qualified and independent Audit Committee thecomposition of same and other details are mentioned in the Corporate Governance Report forthe Financial Year 2019 - 20.
The Audit Committee as on 31st March 2020 consisted offive (5) members out of which one is Whole-time Director and four Independent Directors
Shri Sunil Sachdeva Independent Director is the Chairperson of theCommittee. The composition of the Audit Committee as on 31st March 2020 was asfollows:
i. Shri. Sunil Sachdeva Independent Director- Chairperson
ii. Shri Vikash Preetam Independent Director- Member
iii. Shri Arun Tandon Independent Director-Member
iv. Shri Bhagawan Das Shivahare Independent Director-Member
v. Shri Shyam Sundar Khuntia erstwhile Director (Finance)- Member
All the members of the Audit Committee are financially literate andsome members possess accounting/ financial management expertise also. The CompanySecretary acts as the Secretary to this Committee.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company is in compliance with the applicable Secretarial Standards(1&2) issued by the Institute of Company Secretaries of India and approved by theCentral Government under Section 118(10) of the Companies Act 2013.
STATUTORY AUDITORS & AUDITORS' REPORTStatutory Auditor:
Your Company being a Government Company Statutory Auditors areappointed or reappointed by the Comptroller and Auditor General of India in terms ofSection 143(5) of the Companies Act 2013.
In terms of the Companies Act 2013 Comptroller & Auditor Generalof India (C&AG) has appointed M/S. B K Shroff & Co; (Chartered Accountant) 23-ANetaji Subhas Road Room No. - 15 3rd Floor Kolkata - 700001 West Bengal asStatutory Auditors of the Company for the Financial Year 2019-20 for both Standalone aswell as the Consolidated Financial Statements of the Company.
Pursuant to Section 142 and other applicable provisions of theCompanies Act 2013 the remuneration of the Auditors for the year 2019-20 is to bedetermined by the members at the ensuing Annual General Meeting as envisaged in the saidAct. Members are requested to authorize the Board to decide on their remuneration as perapplicable statutory provisions.
REPORT OF THE STATUTORY AUDITORS
Report of the Statutory Auditors is annexed with the FinancialStatements. The Statutory Auditors of the
Company have not reported any fraud as specified under the secondproviso to section 143(12) of the Act.
COMMENTS OF COMPTROLLER & AUDITOR GENERAL OFINDIA
The office of the Comptroller & Auditor General of India(CAG') had conducted a supplementary audit of the Financial Statements (bothStandalone and Consolidated) of the Company for the year ended 31st March 2020.
The CAG has commented on the Standalone Financial Statements of theCompany that on the basis of supplementary audit nothing significant has come to theirknowledge which would give rise to any comment upon or supplement to StatutoryAuditor's report.
The CAG has also commented on the Consolidated Financial Statements ofthe Company that on the basis of supplementary audit nothing significant has come totheir knowledge which would give rise to any comment upon or supplement to StatutoryAuditor's report. Further Section 139(5) and 143(6)(a) of the Act are not applicableto the entities as detailed in Annexure thereto being private entities / entitiesincorporated in Foreign countries under the respective laws for appointment of their
Statutory Auditor and for conduct of supplementary audit. AccordinglvCAG has neither appointed the Statutory Auditors nor conducted the supplementany audit ofthose companies.
Comments of the Comptroller & Auditor General of India as per theCompanies Act 2013 are attached with the Financial Statements.
MAINTENANCE OF COST RECORDS
Your Company has made & maintained such Cost Accounts & Recordsas specified by the Central Government under sub-section (1) of Section 148
of the Companies Act 2013.
COST AUDITOR'S REPORT
Cost Audit Reports for all the applicable products for the year ended31st March 2019 were filed on 6th September 2019 with Cost AuditCell of Ministry of Corporate Affairs within specified due dates.
Pursuant to Section 148 of the Companies Act 2013 the Board ofDirectors on recommendation of the Audit Committee appointed M/s. S. B. & AssociatesCost Accountants as the Cost Auditor of your Company for the Financial Years 2020-21 and2021-22 relating to goods manufactured by Strategic Business Units: Greases &Lubricants Industrial Packaging and Leather Chemicals of your Company. The remunerationproposed to be paid to the Cost Auditor requires ratification of the members of yourCompany. In view of this ratification for payment of remuneration to the Cost Auditor forthe Financial Year 2020-21 and 2021-22 is being sought at 103rd Annual General Meeting.
Pursuant to the provision of Section 204 of the Companies Act 2013 andthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard had appointed M/s. D. Dutt & Co Practicing Company Secretaries to conductSecretarial Audit of the Company for the Financial Year 2019-20. The Secretarial AuditReport in Form MR-3 for the Financial Year ended 31st March 2020 is annexedherewith and marked as "Annexure-6".
SECRETARIAL AUDITORS' REPORT
The qualifications / adverse remark / disclaimer made by theSecretarial Auditor and the corresponding management response are as enumerated below.
Your Directors are focused on creation of enduring value for allstakeholders utilizing multiple drivers of growth in the diverse Strategic Business Unitsof the Company.
Towards that end the Directors wish to place on record their sincereappreciation of the significant role played by the employees towards realization of newperformance milestones through their dedication commitment perseverance and collectivecontribution. The Board of Directors also places on record its deep appreciation of thesupport and confidence reposed in your Company by its customers as well as the dealers whohave contributed towards the customer-care efforts put in by your Company. The Directorswould
also wish to thank the vendors business associates consultantsbankers auditors solicitors and all other stakeholders for their continued support andconfidence reposed in your Company.
The Directors are also thankful to Balmer Lawrie Investments Ltd. (theHolding Company) and the Ministry of Petroleum & Natural Gas Government of India forits valuable guidance and support extended to the Company from time to time.
Finally the Directors wish to place on record their specialappreciation to the valued Shareholders of your Company for their unstinted supporttowards fulfilment of its corporate vision.