54th Annual Report 2013 - 2014 Report-2013-14.pdf · 13. Pursuant to the Provisions of Section 108...

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54th Annual Report 2013 - 2014

Directors : Reinier Hietink ChairmanMohan Menon Managing DirectorVirendra Sinha DirectorAnand Dayal DirectorEgbert Jan Boertien DirectorKannan Ananthakrishnan Director

Company Secretary : Rajesh Juthani

Bankers : The Hong Kong & Shanghai Banking Corporation Ltd.Bank of IndiaIndusInd Bank Ltd.Royal Bank of ScotlandKotak Mahindra Bank Ltd.

Statutary Auditors : Walker Chandiok & Co LLP

Internal Auditors : L.B. Jha & Co.

Registered Office : D-195/2, T.T.C. Indl. Area, MIDC Turbhe, Navi Mumbai-400 705.Tel. : 6739 6400 Fax : 6739 6436 E-mail : [email protected]

Works : Drum Closure Division:D-195/2, T.T.C. Indl. Area, MIDC Turbhe, Navi Mumbai-400 705.Tel. : 6739 6400 Fax : 6739 6436

Plastic Container Division Mumbai:D-195/2, T.T.C. Indl. Area, MIDC Turbhe, Navi Mumbai-400 705.Tel. : 2763 0035-37 Fax : 2763 0038

Plastic Container Division Chennai:Village : Janakipuram, Taluk : MadurantakamDist. : Kancheepuram, Chennai, Tel. : 044-2756 7131 / 7132

Plastic Container Division Dehradun:Khasra No. 122, Central Hope Town (Now known as SelakuiIndustrial Area) Pargana Pachhwa Doon, Dist. Dehradun, Uttarakhand.

Registrar & Share Transfer Agent : Sharepro Services (India) Pvt. Ltd.13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka TelephoneExchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (East),Mumbai - 400 072Tel. : 022-2851 1872/6772 0300/6772 0400, Fax : 2859 1568

Contents Notice : 1Directors’ Report : 4Report on Corporate Governance : 10Independent Auditor’s Report : 14Annexure to the Independent Auditor’s Report : 16Balance Sheet : 18Profit and Loss Account : 19Cash Flow Statement : 20Notes to Financial Statement : 21Directors’ Report and Accounts ofProseal Closures Ltd. (Subsidiary) : 46

1

Balmer Lawrie-Van Leer Limited

NOTICE is hereby given that the Fifty Fourth Annual GeneralMeeting of BALMER LAWRIE-VAN LEER LIMITED will be held atthe Registered office of the Company at D-195/2, TTC Industrialarea, MIDC Turbhe, Navi Mumbai-400 705 on Friday the 5th

September, 2014 at 3.00 P.M. to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Statement ofProfit and Loss for the year ended March 31, 2014 and theBalance Sheet as at that date, together with the Report of theBoard of Directors and the Auditors thereon.

2. To declare a dividend on Ordinary Shares.

3. To appoint a Director in place of Mr. Anand Dayal (DIN03368900) who retires by rotation and being eligible offershimself for re-appointment.

4. To appoint a Director in place of Mr. Kannan Ananthakrishnan(DIN 05281184) who retires by rotation and being eligibleoffers himself for re-appointment.

5. To appoint Auditors and fix their remuneration.

To consider and, if thought fit, to pass with or withoutmodification, the following resolution as Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139and other applicable provisions, if any, of the Companies Act,2013, M/s. Walker Chandiok & Co LLP, Chartered Accountantsbe and are hereby re-appointed as the Auditors of the Companyto hold the office from the conclusion of ensuing AnnualGeneral meeting until the conclusion of next Annual GeneralMeeting on a remuneration to be fixed by the Board ofDirectors in addition to re-imbursement of out of pocketexpenses in connection with the audit of the accounts of theCompany for the year ending March 31, 2015.”

SPECIAL BUSINESS:

6. To consider and, if thought fit, to pass with or withoutmodification, the following resolution as Special Resolution:

‘“RESOLVED THAT in supersession of the Resolution passedat the 49th Annual General Meeting held on 30th July, 2009 andpursuant to the provision of the Section 180(1)(c) of theCompanies Act, 2013 and all other applicable provisions, ifany, including any amendment or modification thereof, consentof the Company be and is hereby accorded to the Board ofDirectors to borrow any sum or sums of money for thepurpose of the business of the Company, from time to time,notwithstanding that the money or monies to be borrowedtogether with the money already borrowed by the Company(apart from temporary loans obtained/to be obtained from theCompany’s Bankers in the ordinary course of business) mayexceed the aggregate of the paid up capital and free reservesof the Company (reserves not set apart for any specificpurposes) provided that the total amount so borrowed shall

not exceed Rs.100 Crore (Rupees One Hundred Crore only).”

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE ISENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF AND THE PROXY NEED NOT BEA MEMBER OF THE COMPANY. Proxy in order to beeffective must be received at the Company’s registeredoffice not less than 48 hours before the meeting. Proxiessubmitted on behalf of Companies, Societies, Partnershipfirms etc., must be supported by appropriate resolution/authority, as applicable, issued on behalf of thenominating organizations. Members are requested tonote that a person can act as a proxy on behalf ofmembers not exceeding 50 (fifty) and holding in theaggregate not more than 10% of the total shares capitalof the Company carrying voting rights. In case a proxyis proposed to be appointed by a member holding morethan 10% of the total share capital of the companycarrying voting rights, then such proxy shall not act asa proxy for any other person or shareholder. A ProxyForm is sent herewith.

2. The Explanatory Statement pursuant to Section 102 of theCompanies Act, 2013 relating to the Special Business to betransacted at the meeting is annexed hereto.

3. The Register of Member and Share Transfer Books of theCompany will remain closed from Saturday, the 30th August,2014 to Friday, the 5th September, 2014, both days inclusive.

4. Subject to the provisions of section 123, 124, 126 and allother applicable provisions, if any, of the Companies Act,2013 the Dividend on Equity Shares as recommended by theBoard, if declared at the Annual General Meeting, will be paidon or before 5th October, 2014 to those members whosenames appear on the register of Members as on Saturday,the 30th August, 2014. The dividend in respect of shares heldin the electronic form, will be payable to the beneficial ownersof the shares as per list provided by National SecuritiesDepository Limited (NSDL) and Central Depository Services(India) Limited (CDSL) as on Friday, 29th August, 2014.

5. Member holding shares in electronic form and who havefurnished bank particulars to the Depository Participants willbe paid dividend through National Electronic Clearing Service(NECS) where this facility is available. In other cases thedividend warrant with bank details as furnished by DepositoryParticipants will be posted at the registered address. Anychange in address, bank details, nominations, power ofattorney etc., is to be intimated to their Depository Participants.

6. Members holding shares in physical form are requested tonotify above changes quoting their folio number either to theCompany or to the Registrar and Share Transfer AgentM/s. Share Pro Services (India) Private Limited, 13 AB, SamhitaWarehousing Complex, Second Floor, Sakinaka Telephone

NOTICE TO MEMBERS

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54th Annual Report 2013 - 2014Exchange Lane, off Andheri-Kurla Road, Sakinaka, Andheri(East), Mumbai-400 072. (Telephone nos. 6772 0300/ 67720400).

7. Pursuant to Section 72 of the Companies Act, 2013,Shareholders are entitled to nominate any person to whomhis securities shall vest in the event of his death. Shareholdersholding shares in electronic form are therefore requested tofile nomination in prescribed form to their depository andshareholder holding shares in physical form can send thisform to Company or Registrar and Share Transfer AgentM/s. Share Pro Services (India) Private Limited at abovementioned address.

8. Members are requested to avail the facility of receiving dividendthrough National Electronic Clearing Service (NECS) to avoidloss of warrant(s) and undue delay in receipt thereof.

9. Pursuant to Section 125 of the Companies Act, 2013 theamount of dividend remaining unpaid or unclaimed for aperiod of seven years from the date of transfer to theCompany’s Unpaid Dividend Account, will be transferred tothe Investor Education and Protection Fund (“the Fund”) andno payments shall be made in respect of any such claimsby the Fund.

10. All unpaid/unclaimed dividend up to and including the financialyear ended on 31st March, 2006 have been transferred to theFund. Unclaimed Dividend for the financial year 2006-07 willbe due for transfer to Fund by 09.10.2014.

11. Members who have either not received or un en-casheddividend warrant(s) for the financial year 2006-07, 2007-08,2009-10, 2011-12 and 2012-13 are requested to immediatelysend their warrant(s) for revalidation or send claim to theCompany or Registrar and Share Transfer Agent M/s. SharePro Services (India) Private Limited at above mentionedaddress.

12. The Ministry of Corporate Affairs as a part of “Green Initiativein Corporate Governance” has allowed paperless compliances

by Companies. The MCA Circular permits Companies to sendsoft copies of the notice/documents including Annual Reporton e-mail to its members. Members are therefore requestedto support this Initiative by registering/updating their e-mailaddress either with their depository or Registrar and ShareTransfer Agent M/s. Share Pro Services (India) Private Limitedat above mentioned address.

13. Pursuant to the Provisions of Section 108 of the CompaniesAct, 2013 and Rule 20 of the Companies (Management &Administration) Rules, 2014 a member can exercise his rightto vote at all general meeting by electronic means. AlthoughE-voting is not applicable to unlisted public companies as perexemption granted by MCA up to 31st December, 2014 theShareholders are requested to register/update their e-mailaddress either with their Depository Participant or Registrarand Share Transfer Agent M/s. Share Pro Services (India)Private Limited at above mentioned address to facilitate sendingnotice, notice of dividend credit through NEFT etc.

14. Particulars of Directors seeking re-appointment at the meetingare annexed.

15. Members desiring any information with respect to Accountsare requested to write to the Company Secretary at least tendays before the date of the meeting.

16. Members are requested to kindly bring their copy of AnnualReport.

By Order of the Board of Directors

For Balmer Lawrie-Van Leer Limited

Place : Mumbai, Rajesh Juthani

Dated: 25th July, 2014. Company Secretary

Registered Office:D-195/2, TTC Industrial Area,MIDC Turbhe, Navi Mumbai-400 705

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Details of Directors seeking re-appointment at the forth coming Annual General Meeting

Name of the Director Mr. Anand Dayal Mr. Kannan Ananthakrishnan

Date of Birth December 13, 1954 May 5, 1965

Date of Appointment December 01, 2012 June 1, 2012

Education Qualification Graduate in Economics & Political Science, B.S.C, ACS, CPADiploma in Marketing Management

Experience (in no. of Years) 35 Years 24 years

Experience in specific areas Marketing, Manufacturing and General Strategic Planning, Finance, Accounts andManagement General Management

Details of shares held in Co. Nil Nil

List of Companies in which Outside Balmer Lawrie & Co. Ltd., – Director Outside Directorship: NoneDirectorship is held as on Balmer Lawrie (UAE) LLC., – DirectorMarch 31, 2014 AVI Oil India (P) Ltd., – Director

Proseal Closures Ltd., – DirectorPT Balmer Lawrie, Indonesia asCommissioner

Chairman/Member of the Committees Audit Committee: None Audit Committee: Noneof other Cos. on which he is aDirector as on March 31, 2014

Shareholder’s & Investor Grievance Shareholder’s & Investor GrievanceCommittee: None Committee: None

Explanatory Statement Pursuant to Section 102 of theCompanies Act, 2013 (“the Act”)

The shareholders at the 49th Annual General Meeting held on 30thJuly, 2009 had authorized the Board of Directors of the Companyto borrow money up to a limit of Rs.100 Crore.

As per the provisions of Section 180(1)(c) of the Companies Act,2013 the borrowing (excluding temporary loan obtained by theCompany from bankers in ordinary course of business viz. loansrepayable on demand or within six months, cash credit facilities,bill discounting facility and other short term loan) in excess of thepaid up capital and free reserves (excluding reserves not set apartfor any specific purpose) require approval from members.

Members approval is now sought for authorising the Board toborrow upto Rs. 100 Crore in terms of the provision of Section180(1)(c) of the Companies Act 2013.

None of the Directors of the Company are concerned or interestedin the resolution.

By Order of the Board of Directors

For Balmer Lawrie-Van Leer Limited

Place : Mumbai, Rajesh Juthani

Dated: 25th July, 2014. Company Secretary

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FINANCIAL PERFORMANCE:

DIVIDEND

The Board has recommended a dividend of 12% or Rs.1.20 per

Equity share of Rs.10/- each for the year ended March 31, 2014.

The Board has further proposed a transfer of Rs.15.00 Lac to

“General Reserve”.

COMPANY PERFORMANCE

Despite continued slowdown and subdued business confidence,

your Company’s Total Revenue for the year ended March 31, 2014

grew by 25 % from Rs. 21155.50 Lac in previous year to

Rs. 26404.98 Lac. However continuing impact of higher inflation,

higher interest costs, rising input costs, and sudden depreciation

of INR versus USD during the year had an adverse impact on

operating margins. Operating Profit was marginally higher at

Rs. 1501.61 Lac as against Rs. 1407.50 Lac in previous year. Profit

before Tax was lower at Rs. 677.40 Lac as against

Rs. 832.33 in previous year. Profit earned in 2012-13 was higher

mainly due to onetime write back of provision made towards

payment of interest against loan taken for purchase of shares in

the joint venture of the Company, M/s. Transafe Services Limited

(“TSL”) amounting to Rs. 294.50 Lac.

STEEL DRUM CLOSURE DIVISION-Mumbai

The domestic demand continued to be robust. Improvement in

exports helped the Company to sustain operations at higher level.

Stable steel prices and depreciation of Rupee versus USD helped

to post higher sales and improved margins. The Division achieved

increased sales of Rs. 7656.48 Lac and Profit before Tax of Rs.

355.00 Lac as against Rs. 6744.82 Lac and Rs. 188.58 Lac

respectively in the previous year.

PLASTIC CONTAINER DIVISION-Mumbai

With the commencement of production of Large Blow Moulded

drums at Dehradun, some of the north based Customers earlier

serviced by Mumbai Plant were shifted to Dehradun. However local

demand remained buoyant and capacity vacated due to shifting

was fully absorbed. Sales revenue of Plastic Container Division,

Mumbai grew from Rs. 11038.52 Lac to Rs. 14057.76 Lac during

current year.

Constant increase in polymer prices, unfavorable exchange rates

and increase in power cost, had severe negative impact on the

margins. The Division suffered an exchange loss of Rs. 278.13 Lac

during the year and posted a marginal loss of Rs. 35.99 Lac as

against the profit before tax of Rs. 225.10 Lac in the previous

year.

DIRECTORS’ REPORT(Including Report on Management Discussion & Analysis)

TO THE MEMBERS OF BALMER LAWRIE-VAN LEER LIMITED

Your Directors are pleased to present 54th Annual Report of the

Company and Audited Financial Statements for the year ended

March 31, 2014.

Rs. In Lacs

Particulars 2013-14 2012-13

Net Sales/income 26404.98 21155.50

Total Expenditure 24903.37 19748.00

Operating Profit 1501.61 1407.50

Add: Other Income 432.85 534.74

Profit before Interest, Depreciation and

Taxes 1934.46 1942.24

Less: Interest 449.02 374.94

Less: Depreciation 808.04 734.97

Profit before Tax 677.40 832.33

Less: Provision for Tax

(a) Current Tax 230.00 257.00

(b) Earlier year – Taxes — (10.00)

(c) Deferred Tax (54.20) (67.36)

Profit after Tax 501.60 652.69

Add: Balance brought forward from

previous year 3561.93 3523.73

Amount available for appropriation 4063.53 4176.42

Appropriations

Transfer to General Reserve 15.00 65.27

Proposed Dividend 215.42 472.56

Tax on Dividend 16.43 76.66

Balance of Profit carried forward 3816.68 3561.93

5

Balmer Lawrie-Van Leer LimitedPLASTIC CONTAINER DIVISION-Chennai

Power issue continue to affect normal production and consequent

use of D.G. set for production to keep the operations going impacted

the operational costs. Severe Competition and shrinkage of demand

lead to lower value addition. This together with sharp Rupee

depreciation against USD had an adverse impact on margins and

financial performance of the Division. The Division suffered a loss

of Rs. 28.54 Lac on account of exchange. The Company has plans

to turnaround the performance of the Division by improving

productivity, change in marketing strategy and conversion of more

customers to V200 drums.

While Sales during the current year increased from Rs.2235.86

Lac to Rs. 2618.76 Lac, the Division suffered a loss of Rs. 163.93

Lac as against loss of Rs. 159.89 Lac incurred in the previous

year.

PLASTIC CONTAINER DIVISION-Dehradun

This Division performed better both in terms of productivity and

sales. During the year 2013-14 the Division commenced commercial

production of Large Blow Moulded drums and has received a good

response from the market. Sales Income of this Division grew from

Rs. 1136.30 Lac to Rs. 2071.98 Lac and the Division made a profit

before tax of Rs. 90.95 Lac as against Rs. 53.69 Lac earned in

the previous year.

CLARIFICATION ON QUALIFICATION IN AUDIT REPORT

The statutory auditors M/s. Walker Chandiok & Co. LLP has

qualified their report on Company’s Accounts for non-provisioning

of interest expenses amounting to Rs. 163.61 Lac on a loan from

M/s. Balmer Lawrie & Co. Limited (BL) in accordance with terms

of such loan agreement. According to Statutory auditors there is

overstatement of profit to the extent of Rs. 163.61 Lac.

The statutory auditors M/s. Walker Chandiok & Co. LLP has further

qualified their report on Company’s Accounts for non-provisioning

for diminution in value of investment amounting to Rs. 1817.92 Lac

in Equity shares of Transafe Service Limited (TSL) despite complete

erosion of net worth of Transafe Services Limited as per their

audited accounts as at 31st March, 2013 and 31st March, 2014.

The Company had made a strategic investment by acquiring

11,361,999 Equity Shares of TSL in 2009 by availing 100% loan

from BL. Subsequent to this investment, TSL has continuously

reported losses. Consequent to losses and erosion of net worth,

the value of the investment held by the Company has also reduced.

However the Company is of the view that the Company’s financial

interests are protected even in the unlikely event of net worth of

TSL being not restored as clause 1.3 of the Loan Agreement dated

July 31, 2009 executed between Company as “Borrower” and BL

as “Lenders” confirms that erosion in value of investment will have

no financial impact on the Company.

A legal opinion was sought and the Company was advised that as

per the clause 1.3 of the Loan Agreement the loan availed by the

Company from BL is a non recourse loan and therefore there will

be no loan repayment liability on the Company after the expiry of

period of 60 months as per the terms of loan agreement.

The Company had made a provision for interest amounting to

Rs. 294.50 Lac on the said loan for the period from 1st April, 2010

to 31st March, 2012.

During 2012-13 the Company after written communication to BL

wrote back Rs. 294.50 Lac being interest accrued and due but not

paid pertaining to period 2010-11 and 2011-12 and has also stopped

accruing any further interest on this loan. BL as lender has not

raised any claim for interest so far.

Since the loan is a non recourse, the Company is neither liable for

re-payment of loan/interest nor provide for diminution in value of

investment. Both Investment in shares and Loan liability should get

offset at the end of loan period.

SUBSIDIARY COMPANY

During the current year the Company acquired the remaining 1078

Equity shares of Rs. 1000/- each in Proseal Closures Limited from

original promoters for a total consideration of Rs. 2200.00 Lac

based on business valuation by an independent valuation agency.

The entire investment was financed through share application

money received from promoters pursuant to preferential allotment

of shares. After this acquisition Proseal Closures Limited has

become 100% subsidiary of your Company with effect from 23rd

January, 2014. The Audited Annual Accounts for the year ended

on 31st March, 2014 together with Auditors’ and Directors’ Reports

of the Company’s subsidiary, M/s. Proseal Closures Ltd., are

attached herewith. The subsidiary company has reported Total

Income of Rs. 8139.28 Lac as against Rs. 6436.53 Lac in previous

year and a Profit before tax of Rs. 1220.75 Lac as against Rs.

705.28 Lac in the previous year.

Since the Equity shares of the Company are not listed on any

of the stock exchanges in India as on 31st March, 2014 the

Accounting Standard-21 of the Institute of Chartered

Accountants of India is not applicable and the Consolidated

Financial Statements are not attached herewith.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company operates in two main segments viz., Steel Drum

Closures and Plastic Containers.

Steel Drum Closures:

Market for Steel Drum Closures is primarily dependent on demand

and growth rate of Steel Drum Manufacturer which is steadily

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54th Annual Report 2013 - 2014growing in alignment with growth in the economy. Despite overall

economic slow-down inflationary pressures, and subdued exports,

the performance of Steel drum segment has remained robust.

The FOB value of exports was Rs. 4388.68 Lac as against

Rs. 4222.94 Lac.

Plastic Containers/Drums:

Indian packaging industry and Plastic Container industry in particular

has displayed a reasonable growth rate over the last few years.

Plastic Containers as an alternative to Steel Drums by virtue of

cost differential continue to enjoy preference and have wider

application base both for consumer and industrial applications.

Your Company’s products are well accepted in the market and

Company continue to be preferred supplier to most of the large

corporate engaged in Lube & Oil, Organic and Inorganic Chemicals,

Printing Inks, Construction Chemicals, Leather Chemicals, Spice

Oil and Food and Beverages. During the year the Company

achieved highest ever production and sales of large sized drums

at Mumbai.

Your Company has also initiated an action to get its manufacturing

facility at all locations compliant with Global GFSI Standard to meet

the specific requirement of Food and Beverage segment.

OUTLOOK, OPPORTUNITIES, THREATS, RISKS AND

CONCERNS:

The phase of uncertainty in economy, lack of business confidence,

high inflation, increase in government spending and borrowings,

high fiscal deficits and rising fuel prices is showing the sign of

cooling down. In recent time developed economy like US and some

countries of Europe have started showing sign of positive growth.

Indian economy during last two year suffered due to rise in fiscal

deficit, widening of gap in balance of trade causing sharp depreciation

of rupee vs. USD and high commodity prices. This impacted

domestic industries earnings badly. However Export oriented

industries could post impressive performance due to wild fluctuations

in exchange rate.

OPPORTUNITIES

“Trisure” make Steel Drum Closures is a brand recognised world

over. Many of the large users of steel drums in India categorically

specify the use of “Trisure” Closures as pre-condition for all drums

procured by them. The Company expects to retain the dominant

position in the domestic market and continue to reap benefits of

organic and expansionary growth of these sectors and Customers.

The Company’s “Valerex’” brand drums with its aesthetic appearance

and the best possible strength to weight ratio continue to be

preferred as premium packaging in various segments like Lubricants,

Food, Construction and other Speciality Chemicals.

BUSINESS THREAT

Reduction in exports can pose a serious challenge to sustainability

of Steel Drum Closures business due to under utilization of

capacities.

With rising polymer prices the cost differential between steel drums

and plastic drums has narrowed and some of the customers may

shift to steel drums if the trend continues.

The proliferate growth in the number of competitors especially in

large sized Blow moulded drums is a threat to value addition which

can only be compensated by higher volumes, improved efficiency

and better customer service.

RISKS & CONCERNS

Your Company recognizes that risk is inevitable and is an integral

part of any business. In today’s dynamic market conditions the

business complexity has been multifold. It is therefore imminent to

identify, review and take corrective remedial action on time. The

Impact can be minimized if at least not eliminated. Company has

identified and classified the business risks as Business cyclical

risks, Customer or Vendor Concentration risks, Competition risk,

Credit risk, Exchange risk, Regulatory and Compliance Risk. Some

of the major risks and concerns are enumerated below:

Steel Drum Closure business is primarily dependent on exports

and any deterioration in economic conditions, escalation of geo-

political tension or political instability of importing country can impact

the Company’s business.

Non availability of adequate and continuous power in state where

Company’s units are located can impact the business and margins

of the Company.

Continuation of high inflation and commodity prices can adversely

affect the industry demand and product margins.

High interest cost leading to slump in sales of automobile industry

can impact the oil & Lube sector and reduced demand for packaging.

Company’s high dependence on one supplier for HMHDPE, principle

raw material and limited negotiation power can impact the business

continuity and margins.

Company’s high dependence on the Joint Venture partners for sale

of steel drum closures and on few big customers in oil and lube

sector for Plastic Containers, the business risks attached to their

business can affect the performance of your Company.

Sizeable capacity additions by both existing players and new

entrants can lead to increase in completion amongst each other

and can lead to erosion of market share and margin.

With increase in capacities the Company has been selling on credit

7

Balmer Lawrie-Van Leer Limitedto domestic market. Any failure to collect the money for any reason

or dispute can impact the financial position of the Company.

Any change in statutory compliance, permissions and environment

clearance may affect the operations.

The Company has taken steps to address some of the risks

through optimization of operations, widening of Customer base,

development of vendors, product innovations to reduce cost of

operation and improve profitability. Company has started hedging

transactions involving foreign exchange by booking forwards or

utilizing inward remittances for import payments. Foreign Currency

exposure is reviewed at each Board meeting.

Adherences to statutory compliance under various statutes and

acts are verified by the Internal Auditors every quarter and non

compliance, if any, is brought to the notice of Board. Board reviews

the report and advice suitable action. Board review the performance,

business related risks from time to time and suggest remedial

actions.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

Your Company understands the importance of a motivated and

skilled human resource as source for of its competitiveness. Your

Company strives to create a challenging, maintain a favorable

work environment and follows a policy that enhances employee

engagement, encourages entrepreneurial behavior, innovation and

drive employees towards business excellence. The company

organizes in house training as also encourages the employees for

participation in external training held by industry experts, plant

visits and attending seminar and conferences.

Industrial relations continued to be cordial at all locations during the

year. A negotiation for Long Term Settlement with permanent

workmen at Plastic Division, Mumbai is in progress.

The Company has performance based variable pay scheme with

weight-age on individual KRA’s, team, Divisional and Company

performance. Company’s compensation policy includes payment of

annual performance bonus based on evaluation of performance of

each individual employee by a committee from senior management.

Senior management’s performance is reviewed and remuneration/

annual increment is finalized under guidance of Remuneration

Committee.

The Company had 348 permanent employees (including permanent

workmen and trainees) on its pay roll as on 31st March, 2014.

SAFETY HEALTH AND ENVIRONMENT

Safety, Health and environment protection continues to be key

focus areas and one of the prime drivers of the Company’s

operating efficiency. The Company is committed to ensuring zero

injuries to its employees, contract workforce and the communities

in which it operates. The Company is focusing on training, new

initiatives and regular communications for improving safety at the

work place across the organization.

Besides periodical in-house reviews and surveillance audits of ISO

9001 by an external agency, the Board reviews the performance

against set standard and guides on deficiencies in safety, health

and hygiene conditions at workplace.

All the manufacturing units continue to be fully compliant with

applicable local environmental regulations and have necessary

consent for emission of effluents and disposal of hazardous

wastes.

INDPENDENT DIRECTORS & CORPORATE SOCIAL

RESPONSIBILITY (“CSR”)

Your Company has initiated an action for induction of Independent

Directors on the Board and re-constitution of existing Audit

Committee, Shareholders Grievance Committee and Remuneration

Committee to comply with the requirements under Companies Act,

2013.

Your Company is in the process of forming a CSR Committee

immediately after induction of Independent Directors and frame a

Corporate Social Responsibility Policy in alignment and compliance

of Rules under Companies (Corporate Social Responsibility Policy)

Rules 2014 and for the activities specified in Schedule VII of the

Companies Act, 2013.

Company acknowledges its’ responsibility to community at large

and has in past participated in social programs by way of contribution

for treatment of cancer patients, education of poor student and

vocational training for women to enable them to earn livelihood.

Company is committed to working in this direction.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has in place adequate internal Control systems

through established processes and procedures set up by the

management. Internal control system provides for:

• Reliability and integrity of financial and operational information

• Adherence to applicable Accounting standards

• Compliance with applicable laws, statutes as well as internal

procedures and practices

• Safe guard of assets and their proper usage

The Audit Committee of the Board review, inter alia, the adequacy

and effectiveness of the internal control systems and environment.

The Audit Committee at their meeting review the performance (both

financial and operating) internal audit and compliance reports and

8

54th Annual Report 2013 - 2014monitors action initiated on internal audit recommendations including

those relating to strengthening the Company’s risk management

policies and systems.

The Board reviews quarterly and annual performance reports in

comparison with the budget and discuss with management the

reasons for variation and analysis. Board approves the capital

expenditure Budget for all operating plants.

Company has also engaged an external audit firm M/s. L. B. Jha

& Co., Chartered Accountants, to carryout periodical audits at all

plants and of all functions and to report on deviations from laid

down procedures. Report also brings out degree of risks associated

and their recommendations to strengthen the business processes.

The respective HODs and plant/functional heads review the

observations arising out of the audit in the first instance. Audit

Committee consisting of Board members reviews the highlight of

this Report with comments from HODs and Unit heads on compliance

and/or corrective action planned along with ‘Action Taken Report’.

SHARE CAPITAL

During the year the Company made a preferential allotment of

2,200,000 Equity shares of Rs.10 each at Rs. 100 per share

(including a premium of Rs.90 per share) to the Promoter

Companies viz. Greif International Holding B.V and Balmer Lawrie

& Co. Ltd., Pursuant to allotment, the paid up share capital of the

Company has increased from Rs.1576.34 Lac to Rs.1796.34 Lac.

The entire proceeds from issue of shares were utilized for acquiring

remaining 49% shareholding of Proseal Closures Limited.

PUBLIC DEPOSITS

The Company has not accepted/renewed any fixed deposits from

public during the year. There are no unclaimed deposits.

LOANS, ADVANCES & GUARANTEES

Your company has not granted any loans (secured or unsecured),

advances or issued guarantees to companies, firms or other

parties covered under Section 189 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

The commercial transaction with promoter Companies, subsidiary

and associate companies of promoter companies for purchase

and sale of goods and/or services or use of facility(s) are in

ordinary course of business and are disclosed in annexed financial

statements at Note 41. These transactions are carried out at arm’s

length prices after detailed negotiation.

CREDIT RATING

ICRA Limited a Rating agency has maintained Company’s Short

term rating to A2+ (pronounced as ICRA A two plus) and long term

ratings to LA- (pronounced as ICRA A minus)

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and

the Articles of Association of the Company, Mr. Anand Dayal (DIN

03368900) and Mr. Kannan Ananthakrishnan (DIN 05281184) retire

by rotation and are eligible for re-appointment.

STATUTORY AUDITORS

M/s. Walker Chandiok & Co. LLP Chartered Accountants, retire as

auditors of the Company at the ensuing Annual General Meeting

and are eligible for re-appointment. The company has obtained

necessary consent and confirmation as required under the

Companies Act, 2013 from auditors.

COST AUDITORS

M/s. Musib & Associates, Cost Accountant has been appointed as

the Cost Auditors for conducting audit of the cost records maintained

by the Company for the year ended 31st March, 2014.

PARTICLUARS OF EMPLOYEES

None of the Employees of the Company are drawing remuneration

in excess of Rs. 60 Lac per annum or Rs. 5 Lac per month

if employed for a part of the financial year as on 31st March,

2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

& FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY

Replaced old Acrylic sheets fitted on factory roof at Plastic Container

Division, Mumbai with new Acrylic sheets which improved day light

and helped to keep factory lighting switched off during day time.

This resulted in saving of approx. 54,750 units per annum.

Replaced standard motor based convention hydraulic pump with

Servo Motor and Servo Pump in V20 Injection Moulding Machine

IM-1 at Plastic Container Division, Mumbai which resulted in saving

in power during idle time and reduction in consumption. This resulted

in saving of approx. 61,320 units per annum.

At Steel Drum Closure Division Mumbai traditional copper-iron type

rectifiers replaced by IGBT based energy saving rectifiers, installed

energy monitoring devices and sealed air leakages to save on

power cost.

TECHNOLOGY UPGRADATION AND ABSORPTION

During the year the Steel Drum Closure Division changed plating

process from Hexavalent Passivation (CR-6) to Trivalent Passivation

(CR-3) to give the product silver colour instead of golden colour.

CR-6 process was toxic, polluting and required extensive effluent

treatment where as new CR-3 process is non-polluting and

environment friendly. The change was made as a part of

implementation of green technology in the process.

9

Balmer Lawrie-Van Leer LimitedForeign Exchange earnings and outgo

2013-14 2012-13

In Rs. Lac in Rs. Lac

Revenue from Exports 4388.68 4222.94

Expenditure/Imports 11697.35 8607.22

CORPORATE GOVERNANCE

Equity Shares of your Company are not listed on any stock

exchanges in India and the company is not required to

comply with the clause 49 of the listing agreement. However

Your Company believes and gives immense importance to

the good Corporate Governance and best industry practices.

A detailed report on Corporate Governance is annexed which

forms the part of Board’s report.

DIRECTORS’RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956,

the Board of Directors confirms that:

I. In the preparation of the annual accounts, the applicable

accounting standards have been followed other than reported

by auditors in their report and that there are no material

departures;

II. They have, in selection of accounting policies, consulted the

Statutory Auditors and have applied them consistently and

made judgments and estimates that are reasonable and

prudent, so as to give a true and fair view of the state of

affairs of the Company as at March 31, 2014 and profits of

the Company for that period;

III. They have taken proper and sufficient care to the best of

their knowledge and ability, for the maintenance of adequate

accounting records in accordance with the provisions of the

Companies Act,1956 for safeguarding the assets of the

Company and for detecting fraud and other irregularities;

IV. They have prepared the annual accounts on a going concern

basis;

V. They have devised a proper system to ensure compliance

with the provisions of all applicable laws and are of the opinion

that such systems are adequate and is running efficiently.

ACKNOWLEDGEMENT

Your Directors wish to thank Customers, Suppliers, Service

Providers, Bankers and Shareholders for their continued assistance,

co-operation and support extended to the Company. You Directors

also wish to thank Promoter Companies for their assistance,

technical and financial support

Your Directors also wish to place on record their appreciation of

continued co-operation and commitment by all cadres of employees.

For and on Behalf of the Board of Directors

MOHAN MENON

Place : Mumbai Managing Director

Dated: 16th May, 2014. (DIN 02838483)

10

54th Annual Report 2013 - 2014REPORT ON CORPORATE GOVERNANCE

Board of DirectorsThe Board consists of five non-executive directors [three being a nominee of Greif International Holding B.V., and two being the nomineesof Balmer Lawrie & Co. Ltd.,] and one executive managing director.

The table below gives composition of the Board, and inter-alia nature of directorship, the directorship held by each of the directors inother Companies as member on the Board/Committee of the Board as Chairman/member etc., no of shares held by each of the Directorsin your Company.

Name of Director Category No. of Directorship in No. of Membership in No. of shares held inother (Public, Private & mandatory Committees* Company as onForeign) Cos. as on as on 31.03.14 31st March, 201431.03.2014

Mr. Reinier HietinkNominated w.e.f.09.01.08 Chairman–NED 4 — Nil

Mr. Virendra SinhaNominated w.e.f.25.06.11 NED 4 3 Nil

Mr. Mohan MenonAppointed w.e.f.01.10.10 MD 2 — Nil

Mr. K. AnanthakrishnanNominated w.e.f.01.06.12 NED — — Nil

Mr. Egbert Jan BoertienNominated w.e.f.01.06.12 NED 11 — Nil

Mr. Anand DayalNominated w.e.f.01.12.12 NED 5 — Nil

NED Non-Executive DirectorMD Managing Director* Membership in Audit /Investor Grievance/Remuneration Committee of all Public Limited Companies has been considered.

Board Meetings and Attendance records of Directors

During the F.Y. 2013-14 Board meetings were held on 15th May, 2013, 28th May, 2013 (adjourned meeting of 15th May, 2013), 5th July,2013, 13th September, 2013, 11th December, 2013 and 19th March, 2014:

Directors No. of Board Meeting Attended Attendance at the AGM Attendance at the EGM

Mr. Reinier Hietink 6 Yes No

Mr. Virendra Sinha 6 Yes No

Mr. Mohan Menon 6 Yes Yes

Mr. K. Ananthakrishnan 6 Yes No

Mr. Egbert Jan Boertien 1 No No

Mr. Anand Dayal 6 Yes No

The details of remuneration paid/payable to Directors during the Year 2013-14.

Directors Sitting Fees Salary & Perquisites Commission Total Remuneration

Mr Reinier Hietink Nil Nil Nil Nil

Mr. Virendra Sinha Nil Nil Nil Nil

Mr. Mohan Menon Nil 34,07,941 1,14,516 35,22,457

Mr. K. Ananthakrishnan Nil Nil Nil Nil

Mr. Egbert Jan Boertien Nil Nil Nil Nil

Mr. Anand Dayal Nil Nil Nil Nil

Audit Committee

The Audit Committee comprises of Mr. Reinier Hietink as the Chairman and Mr. Mohan Menon, the Managing Director and Mr. VirendraSinha, Non Executive Director.

During the F.Y. 2013-14 Audit Committee meeting held on 15th May, 2013, 28th May, 2013 (Adjourned meeting of 15th May, 2013), 12th

September, 2013, 11th December, 2013 and 19th March, 2014 .

11

Balmer Lawrie-Van Leer LimitedAll members attended all committee meetings.

Terms of reference of the Audit Committee are:

• To oversee the Company’s financial reporting process,

• To review with management the quarterly/half yearly/annual financial statements before submission to the Board for approval,

• To review with management performance of statutory and internal auditors,

• To review adequacy of internal control system and the internal audit functions,

• To recommend to the Board the appointment, re-appointment, removal and fixation of audit fees

• To review and discuss with internal auditors any significant findings and follow up thereon

• To review related party transactions.

The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company

The meetings of the Audit Committee are usually attended by the Managing Director, Company Secretary, representatives of Internaland Statutory auditors. Business and Unit head are invited to the meetings as and when required. The Company Secretary acts asthe Secretary of the Audit Committee.

The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company

Managing Director and Company Secretary usually attend the meetings of Audit Committee along with the representatives of Internaland Statutory Auditors. Business and Unit head are invited to the meetings whenever required. The Company Secretary acts as theSecretary of the Audit Committee.

Remuneration Committee

Remuneration Committee consists of Mr. Reinier Hietink and Mr. Virendra Sinha, Non Executive Nominee Directors, one each from GreifInternational Holding B.V. and Balmer Lawrie & Co. Limited.

The Terms of reference of the Remuneration Committee includes

• To approve the appointment and remuneration of senior executives, Company’s remuneration plan, approve annual salary increase& annual performance incentives for senior executives including annual increment and fixation of remuneration to Managing Director,

• To consider and approve matters relating to retirement plans, succession planning

• To evaluate and approve remuneration policy

Remuneration Committee met twice on 12th September, 2013 and 19th March, 2014 during the year.

Shareholders’/Investors’ Grievance Committee

Investors Grievance Committee consists of Mr. Virendra Sinha, Mr. Anand Dayal and Mr. Mohan Menon, Managing Director.

Mr. Rajesh Juthani, Company Secretary, acts as Compliance officer since 7th April, 2006.

There were no complaints from any shareholder during the year which was pending or unattended for more than 30 days exceptrequiring compliance from investor.

Share Transfer Committee

The Board has constituted a Committee of Officers consisting of Mr. Mohan Menon, the Managing Director, Mr. Rajesh Juthani, CompanySecretary and Mr. Prashant Muzumdar and has empowered them to approve share transfer.

During the year the Committee met 7 (Seven) times and processed 11 (Eleven) physical transfers comprising 593 Equity Shares.

There were no valid Share Transfers pending as on March 31, 2014.

General Body Meetings

During 2013-14 an Extra Ordinary General Meeting was held on 26th July, 2013 and was attended by 8 (eight) members present inperson and proxy.

Company also held 53rd (Fifty Third) Annual General Meeting on 12th September, 2013 and was attended by 7 (seven) members presentin person or proxy.

Date, time and place of last three Annual General Meetings:

Financial Year Date Time Venue

2010-11 August 25, 2011 3.30 p.m. D-195/2, TTC Industrial Area, MIDC, Turbhe, Navi Mumbai-400 705

2011-12 August 29, 2012 3.30 p.m. D-195/2, TTC Industrial Area, MIDC, Turbhe, Navi Mumbai-400 705

2012-13 September 12, 2013 3.30 p.m. D-195/2, TTC Industrial Area, MIDC, Turbhe, Navi Mumbai-400 705

12

54th Annual Report 2013 - 2014Company has not passed any Special Resolution during last three year requiring approval through Postal Ballot and no special resolutionis proposed to be passed through postal ballot at this Annual General Meeting.

Following Special Resolution were passed at the AGM held during last three years:

1. Re-appointment of M/s Price Waterhouse as Statutory Auditors.

2. Appointment and remuneration to Mr. Mohan Menon, Managing Director.

3. Modification in terms of remuneration paid to Mr. Mohan Menon, Managing Director.

Following Special Resolution were passed at the Extra Ordinary General Meeting held on 26th July, 2013:

1. Increase in Authorized Share Capital from Rs. 16.00 Crore to Rs. 18.50 Crore.

2. Alteration of Memorandum and Articles of Association consequent to increase in Authorized Share Capital.

3. Preferential Allotment of 2,200,000 Equity shares to Promoters.

4. Investment for acquisition of 1078 Equity shares of Rs.1000 each at a premium in Proseal Closures Limited for a total considerationof Rs. 22.00 Crore.

Disclosures

There are no materially significant related party transactions made by the Company with its Promoter’s, Directors or Management, theirrelatives or subsidiaries etc. which can have potential conflict with the interests of the Company at large.

The register of Contracts pursuant to Section 189 of the Companies Act, 2013 is placed before the Board regularly for its informationand approval. Transactions with the related parties are also disclosed at Explanatory Note no. 41 in the enclosed Financial Statements.

The Managing Director has confirmed to the Board that all the Directors and Senior Executive (below Board level) have complied withcode of conduct and there was no major fraud reported or committed during the year.

General Shareholder Information

AGM Date Time & Venue Friday the 5th September, 2014 at 3.00 P.M. at the Registered office of the Companyat D-195/2, TTC Industrial Area, MIDC, Turbhe, Navi Mumbai-400 705.

Date of Book Closure 30th August, 2014 to 5th September, 2014 (both days inclusive)

Listing on Stock Exchanges De-Listed with effect from 4th March, 2008

CIN No. U99999MH1962PLC012424

ISIN Number INE920D01015

Market Price information Shares of the Company are not Traded on any stock exchange and hence thisinformation is not available.

Registrar and Transfer Agents M/s Sharepro Services (India) Private Limited, 13AB, Samhita Warehousing Complex,2nd Floor, Sakinaka Telephone Exchange Lane, off Andheri-Kurla Road, Sakinaka,Andheri (East),Mumbai- 400 072Contact Person : Mr. Krishnan/Mr. PavitranTelephoneNo: 2851 1872 / 6772 0300/ 6772 0400Fax No : 2859 1568

Share Transfer System Share of the Company is not listed on any stock exchange and is not traded. Sharecan be transferred in both electronic mode (through the depository system) and physicalmode as “off market trade”. Shares in physical form are received for transfer by theCompany or its Registrar & Transfer Agent and is processed by the Registrar & TransferAgents. All valid transfers are approved by the Committee of Officers for share transfers.Normally the share certificate/s is/are duly transferred and dispatched within period of30 days from the date or receipt unless valid reasons.

Distribution of shareholding and Please see Annexureshareholding pattern as on 31.03.2014

De-materialization of shares & liquidity 49.72 % of the Paid up Share Capital is in dematerialized form as on March 31, 2014

Outstanding GDRs/ ADRs/Warrants or Nilany convertible instruments, conversiondate & likely impact on equity

13

Balmer Lawrie-Van Leer LimitedDistribution Schedule as on March 31, 2014

Shares Held No. of Holders % No. of Shares %

1-500 9174 98.613 592339 3.300

501-1000 81 0.871 63309 0.353

1001-2000 30 0.322 40574 0.226

2001-3000 2 0.021 4550 0.025

3001-4000 3 0.033 11132 0.062

4001-5000 5 0.054 22501 0.125

5001-and above 8 0.086 17217609 95.909

Total 9303 100.000 17952014 100.00

Shareholding pattern as on March 31, 2014

Category No. of Shares held Percentage

1. Indian Promoters 8601277 47.91Balmer Lawrie & Co. Ltd

2. Foreign Promoters 8601282 47.91Greif International Holding B.V.

4. Mutual Funds, Trust, Banks,Financial Institutions andInsurance Companies 7237 0.04

5. Bodies Corporate 14726 0.08

6. Indian Public & Others 722395 4.03

7. NRI’s/OCB’s 5097 0.03

Total 17952014 100.00

14


REPORT ON THE FINANCIAL STATEMENTS

1. We have audited the accompanying financial statements of

Balmer Lawrie-Van Leer Limited, (the “Company”), which

comprise the Balance Sheet as at 31 March 2014, and the

Statement of Profit and Loss and Cash Flow Statement for the

year then ended, and a summary of significant accounting

policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIALSTATEMENTS

2. Management is responsible for the preparation of these financial

statements, that give a true and fair view of the financial

position, financial performance and cash flows of the Company

in accordance with the accounting principles generally accepted

in India, including the Accounting Standards notified under the

Companies Act, 1956 (the “Act”) read with the General Circular

15/2013 dated 13 September 2013 of the Ministry of Corporate

Affairs in respect of section 133 of the Companies Act, 2013.

This responsibility includes the design, implementation and

maintenance of internal control relevant to the preparation and

presentation of the financial statements that give a true and

fair view and are free from material misstatement, whether

due to fraud or error.

AUDITORS’ RESPONSIBILITY

3. Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with the Standards on Auditing issued by the

Institute of Chartered Accountants of India. Those Standards

require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether

the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditors’

judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud

or error. In making those risk assessments, the auditor

considers internal control relevant to the Company’s preparation

and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an

opinion on the effectiveness of Company’s internal control. An

audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting

estimates made by management, as well as evaluating the

overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion.

BASIS FOR QUALIFIED OPINION

6. We draw your attention to the following matters:

(a) As stated in Note 39 to the financial statements, theCompany has not accrued interest aggregatingRs.16,361,279 (previous year Rs.16,361,279) on a loanin accordance with terms of such loan agreement. Hadthe Company provided for interest in accordance withthe terms of the aforesaid agreement, net profit for theyear ended 31 March 2014 would have been lower byRs.11,052,862 (Previous year: Rs.30,948,014), othercurrent liabilities as at 31 March 2014 would have beenhigher by Rs.62,172,860 (Previous year: Rs.45,811,581)and the reserves and surplus as at that date would havebeen lower by Rs.42,000,876 (Previous year:Rs.30,948,014). Further, interest expense amounting toRs.45,811,581 (Previous year: Rs.Nil) would have beenclassified as a prior period item. Predecessor auditor’saudit opinion on the financial statements for the yearended 31 March 2013 was also qualified in respect ofthis matter.

(b) As stated in Note 39 to the financial statements, non-current investments, as at 31 March 2014, held by theCompany, include an investment amounting toRs.181,791,984 in its joint venture company, TransafeServices Limited, whose financial statements indicatesignificant accumulated losses and net worth being fullyeroded, however, no provision has been recognized inthe books for ‘other than temporary’ diminution in valueof investments. In the absence of sufficient appropriateaudit evidence, we are unable to comment upon thecarrying value of this investment and the consequentialimpact, if any, on the financial statements. Predecessorauditor’s audit opinion on the financial statements for theyear ended 31 March 2013 was also qualified in respectof this matter.

QUALIFIED OPINION

7. In our opinion and to the best of our information and accordingto the explanations given to us, except for the effects ofmatter described in paragraph 6(a) and possible effects of thematter described in paragraph 6(b) in the Basis for QualifiedOpinion paragraph, the financial statements give the informationrequired by the Act in the manner so required and give a trueand fair view in conformity with the accounting principlesgenerally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairsof the Company as at 31 March 2014;

(b) in the case of Statement of Profit and Loss, of the profitfor the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cashflows for the year ended on that date.

INDEPENDENT AUDITORS’ REPORTTo the Members of Balmer Lawrie-Van Leer Limited

15

Balmer Lawrie-Van Leer LimitedREPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS

8. As required by the Companies (Auditor’s Report) Order, 2003(the “Order”) issued by the Central Government of India interms of sub-section (4A) of Section 227 of the Act, we givein the Annexure a statement on the matters specified inparagraphs 4 and 5 of the Order.

9. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purpose of our audit;

(b) except for the matter described in paragraph 6(a) in theBasis for Qualified Opinion paragraph, in our opinion,proper books of account as required by law have beenkept by the Company so far as appears from ourexamination of those books;

(c) the financial statements dealt with by this report are inagreement with the books of account;

(d) except for the effects of matter described in paragraph6(a) and possible effects of the matter described inparagraph 6(b) in the Basis for Qualified Opinion

paragraph, in our opinion, the financial statements complywith the Accounting Standards notified under theCompanies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of CorporateAffairs in respect of section 133 of the Companies Act,2013; and;

(e) on the basis of written representations received from thedirectors, as at 31 March 2014 and taken on record bythe Board of Directors, none of the directors is disqualifiedas at 31 March 2014 from being appointed as a directorin terms of clause (g) of sub-section (1) of Section 274of the Act.

For Walker Chandiok & Co LLP(formerly Walker, Chandiok & Co)Chartered AccountantsFirm Registration No: 001076N

Khushroo B. PanthakyPlace: Mumbai PartnerDate: May 20, 2014 Membership No.: F-42423

16

54th Annual Report 2013 - 2014Annexure to the Independent Auditors’ Report of even date to the members of Balmer Lawrie-Van Leer Limited, on the financialstatements for the year ended 31 March 2014

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Companyand taking into consideration the information and explanations given to us and the books of account and other records examined byus in the normal course of audit, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixedassets.

(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified ina phased manner over a period of 3 years, which, in our opinion, is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations havebeen obtained by the management.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relationto the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies between physical inventory andbook records were noticed on physical verification.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the registermaintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to 4(iii)(d) of the Order are notapplicable.

(b) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the registermaintained under Section 301 of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are notapplicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of itsbusiness for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit,no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained underSection 301 of the Act have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs.fivelakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and theCompanies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

(vii) In our opinion, the company has internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect ofCompany’s products and are of the opinion that, prima facie, the prescribed accounts and records have been made andmaintained. However, we have not made a detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(ix) (a) The Company is regular in depositing undisputed statutory dues including provident fund, investor education and protectionfund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and othermaterial statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess thathave not been deposited with the appropriate authorities on account of any dispute.

(x) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash lossesin the current and the immediately preceding financial year.

(xi) In our opinion, the Company has not defaulted in repayment of dues to any bank during the year. The Company has no duespayable to a financial institution or debenture-holders during the year.

17

Balmer Lawrie-Van Leer Limited(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and

other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, provisions of clause 4(xiii)of the Order are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, theprovisions of clause 4(xiv) of the Order are not applicable.

(xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, theprovisions of clause 4(xv) of the Order are not applicable.

(xvi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties/companies covered in the registermaintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of theOrder are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For Walker Chandiok & Co LLP(formerly Walker, Chandiok & Co)Chartered AccountantsFirm Registration No: 001076N

Khushroo B. PanthakyPlace: Mumbai PartnerDate: May 20, 2014 Membership No.: F-42423

18

54th Annual Report 2013 - 2014BALANCE SHEET AS AT MARCH 31, 2014

As at As atMarch 31, 2014 March 31, 2013

Note No. Rupees RupeesEQUITY AND LIABILITIES

Shareholders’ Funds:

Share Capital 2 179,634,140 157,634,140

Reserves and Surplus 3 733,041,519 508,066,287

912,675,659 665,700,427Non-Current Liabilities

Long-Term Borrowings 4 47,652,963 240,222,365

Deferred Tax Liabilities (Net) 5 29,452,367 34,872,907

Long-Term Provisions 6 28,739,902 25,346,658

105,845,232 300,441,930Current Liabilities

Short-Term Borrowings 7 305,797,977 270,218,543Trade Payables 8 298,030,584 264,467,567Other Current Liabilities 9 314,189,108 121,759,048Short-Term Provisions 10 47,565,174 71,123,849

965,582,843 727,569,007

TOTAL 1,984,103,734 1,693,711,364

ASSETS

Non-Current Assets

Fixed AssetsTangible Assets 11 616,852,162 621,793,576Intangible Assets 12 920,808 2,425,908Capital Work-in-Progress 25,126,675 48,647,576

Non-Current Investments 13 444,291,837 224,291,975Long-Term Loans and Advances 14 29,357,406 34,007,729Other Non-Current Assets 15 10,000 10,000

1,116,558,888 931,176,764Current Assets

Inventories 16 271,382,690 270,560,800

Trade Receivables 17 414,108,799 379,691,942

Cash and Bank Balances 18 33,136,928 15,984,062

Short-Term Loans and Advances 19 144,518,583 86,654,288

Other Current Assets 20 4,397,846 9,643,508

867,544,846 762,534,600

TOTAL 1,984,103,734 1,693,711,364

Significant accounting policies and other explanatory information 1 to 49

As per our report of even date attached. For and on behalf of the Board of Director

For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co) Mohan Menon – Managing DirectorChartered Accountants (DIN 02838483)

Anand Dayal – DirectorKhushroo B. Panthaky (DIN 03368900)Partner

Rajesh Juthani – GM (Finance) &Company Secretary

Mumbai, May 20, 2014 Mumbai, May 16, 2014

19

Balmer Lawrie-Van Leer LimitedSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014

Year Ended Year EndedMarch 31, 2014 March 31, 2013

Note Rupees Rupees

REVENUE

Revenue from Operations (Gross) 23 2,901,762,777 2,316,367,556

Less: Excise Duty 261,264,809 200,817,829

Revenue from Operations (Net) 2,640,497,968 2,115,549,727

Other Income 24 43,285,241 53,474,334

TOTAL REVENUE 2,683,783,209 2,169,024,061

EXPENSES

Cost of Materials Consumed 25 1,880,227,209 1,405,959,553

Changes in Inventories of Finished Goods and Work-in-Progress 26 (32,333,687) 6,715,925

Employee Benefits Expense 27 183,413,389 160,945,136

Finance Costs 28 44,902,407 37,494,344

Depreciation and Amortisation Expense 29 80,803,584 73,497,122

Other Expenses 30 459,030,559 401,178,970

TOTAL EXPENSES 2,616,043,461 2,085,791,050

Profit Before Tax 67,739,748 83,233,011

Tax Expense

Current tax (Refer Note 40) 23,000,000 25,700,000

Tax pertaining to earlier years — (1,000,000)

Deferred Tax Credit (5,420,540) (6,735,966)

Profit for the Year 50,160,288 65,268,977

Earnings Per Equity Share [Nominal Value Per Share: Rs. 10

(Previous Year: Rs. 10)]

Basic and Diluted 31 3.10 4.14

Significant accounting policies and other explanatory information 1 to 49

The accompanying Notes are an integral part of these Financial Statements.






20

54th Annual Report 2013 - 2014CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014


Rupees Rupees Rupees RupeesA. CASH FLOW FROM OPERATING ACTIVITIES:

Net profit before tax 67,739,748 83,233,011Adjustments for:Depreciation 80,803,584 73,497,122Profit on sale of tangible assets (net) (813,071) (40,530)Interest income (1,415,390) (1,131,998)Dividend Income on Investment in Subsidiary (28,050,000) (10,098,000)Finance costs 44,902,407 37,494,344Bad debts/ Advances written off 185,046 —Provision for doubtful debts (net) — 2,505,592Provision for indirect taxes 3,684,599 3,613,548Liabilities no longer required written back (2,845,931) (33,340,356)Unrealised foreign exchange loss/(gain) 5,560,640 102,011,884 (461,813) 72,037,909

Operating profit before working capital changes 169,751,632 155,270,920Changes in working capital:

Increase/(Decrease) in trade payables 34,186,267 70,593,863Increase/(Decrease) in short-term provisions (120,526) 2,135,637Increase/(Decrease) in long-term provisions (291,355) (167,271)Increase/(Decrease) in other current liabilities 16,979,032 37,873,049(Increase)/Decrease in trade receivables (37,633,954) (75,889,884)(Increase)/Decrease in inventories (821,890) (30,213,845)(Increase)/Decrease in short-term loans and advances (57,864,295) (2,895,810)(Increase)/Decrease in long-term loans and advances (2,658,598) (4,524,111)(Increase)/Decrease in other current assets (3,322,122) (51,547,441) 6,225,250 3,136,878

Operating profit after working capital changes 118,204,191 158,407,798Direct taxes paid (net of refund) (16,719,547) (22,351,280)Net cash generated from operating activities (A) 101,484,644 136,056,518

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (including capital work-in-progress) (36,307,600) (87,777,432)Sale of tangible assets 854,902 40,530Investments in Subsidiary (219,999,862) —Fixed deposits matured/ (placed) 682,582 2,500,993Interest received 2,049,809 1,743,909Dividend Income on Investment in Subsidiary 28,050,000 10,098,000Net cash used in investing activities (B) (224,670,169) (73,394,000)

C. CASH FLOW FROM FINANCING ACTIVITIESDividend paid (including dividend distribution tax thereon) (52,903,658) (21,968,862)Issue of share capital (inclusive of securities premium) 220,000,000 —Repayment of long-term borrowings (31,087,730) (28,912,779)Proceeds from long-term borrowings 14,000,000 43,887,600Finance costs paid (44,592,738) (37,504,186)Proceeds from short-term borrowings 35,273,524 (18,171,242)Net cash generated from/(used in) financing activities (C) 140,689,398 (62,669,469)NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) 17,503,873 (6,951)

Cash and cash equivalents at the beginning of the year 14,365,729 14,372,680Cash and cash equivalents at the end of the year 31,869,602 14,365,729NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 17,503,873 (6,951)

Cash and cash equivalents comprise of:Cash on Hand 184,019 143,128Cheques on Hand 15,031,932 5,522,147Bank Balances:

In Current Accounts 16,653,651 8,700,454Cash and cash equivalents as per Note 18 to the financial statements 31,869,602 14,365,729

Notes: 1. The above Cash Flow Statement has been prepared under “Indirect Method” as set out in Accounting Standard-3 on“Cash Flow Statements” notified under Section 211(3C) of the Companies Act, 1956, of India.

2. Figures in brackets indicate cash outgo.3. Previous year’s figures have been regrouped/ rearranged wherever necessary.


For Walker Chandiok & Co LLP Mohan Menon (DIN 02838483) – Managing Director(Formerly Walker, Chandiok & Co)Chartered Accountants Anand Dayal (DIN 03368900) – Director

Khushroo B. Panthaky Rajesh Juthani – GM (Finance) &Partner Company SecretaryMumbai, May 20, 2014 Mumbai, May 16, 2014

21

Balmer Lawrie-Van Leer LimitedSIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDEDMARCH 31, 2014.

NOTE 1: Summary of Significant Accounting Policies

1.1 Basis of accounting and preparation of financial statements

These financial statements have been prepared in accordance with the generally accepted accounting principles (GAAP) in Indiaunder the historical cost convention on accrual basis. These financial statements have been prepared to comply in all materialaspects with the accounting standards notified under Section 211(3C) and the other relevant provisions of the Companies Act,1956, of India (the “Act”). All assets and liabilities have been classified as current or non-current as per the Company’s operatingcycle and other criteria set out in the Revised Schedule VI to the Act. Based on the nature of products and the time betweenthe acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained itsoperating cycle as 12 months for the purpose of current – non current classification of assets and liabilities.

The preparation of financial statements in conformity with GAAP requires that the management of the Company make estimatesand assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets andliabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimatesinclude the useful lives of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respectof retirement benefit plans, provision for inventory obsolescence, etc. Difference, if any, between the actual results and estimatesis recognised in the period in which the results are known.

1.2 Fixed Assets (including Capital Work-in-Progress)

(a) Tangible assets

Tangible Assets are stated at cost of acquisition inclusive of all attributable cost of bringing the same to their workingcondition, net of cenvat credit, accumulated depreciation and accumulated impairment losses, if any.

Subsequent expenditure related to an item of tangible asset are added to its book value only if they increase the futurebenefits from the existing asset beyond its previously assessed standard of performance.

Items of tangible assets that have been retired from active use and are held for disposal are stated at the lower of theirnet book value and net realisable value and are shown separately in the financial statements. Any expected loss isrecognised immediately in the Statement of Profit and Loss.

Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried atcost are recognised in the Statement of Profit and Loss.

The Company provides pro-rata depreciation on additions and disposals made during the year. Tangible Assets aredepreciated in accordance with rates prescribed under Schedule XIV of the Act, based on straight-line method. In the caseof tangible assets where the technological progress and upgradation is faster, the Company has provided accelerateddepreciation at rates higher than the rates specified in schedule XIV to the Companies Act, 1956. Accordingly, the usefullife of such assets has been recomputed and depreciation has been provided including the following:

— Leasehold land is being amortised over the period of lease;

— Enabling Assets are being amortised over a period of five years; and

— Second hand Plant and Equipment at Dehradun Plant is being depreciated over a period of fifteen years based on theuseful life estimated by a Chartered Engineer.

Depreciation in respect of Valerex division is in accordance with Schedule XIV of the Act, based on rates applicable forcontinuous process plant as per the legal opinion obtained by the Company.

Assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition.

(b) Intangible Assets

Intangible Assets are stated at acquisition cost, net of cenvat credit, accumulated amortisation and accumulated impairmentlosses, if any. Intangible assets i.e. Computer Softwares are amortised on a straight line basis over their estimated usefullife of four years. Gains or losses arising from the retirement or disposal of an intangible asset are determined as thedifference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expensein the Statement of Profit and Loss.

(c) Capital Work-in-Progress

Assets acquired but not ready for use are classified under Capital work-in-progress.

1.3 Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition/ construction of qualifying assets, which are assetsthat necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets,until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognised as anexpenses in Statement of Profit and Loss in the period in which they are incurred.

22


1.4 Impairment

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible)may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflowsfrom continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered asa cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unitis made. Assets whose carrying value exceeds their recoverable amount are written down to their recoverable amount.Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its value in use. Value in use is thepresent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at theend of its useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances.However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by chargingusual depreciation if there was no impairment.

1.5 Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which suchinvestments are made, are classified as current investments. All other investments are classified as long term investments.Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However,provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reductionbeing determined and made for each investment individually.

1.6 Inventories

Inventories are stated at lower of cost and net realisable value. Cost of raw materials, stores, spares and packing materials isdetermined at weighted average cost or net realisable value, whichever is lower. The cost of finished goods and work in progresscomprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimatedselling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary tomake the sale.

1.7 Foreign Currency Translations

Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assetsand liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet.Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets andliabilities are recognised in the Statement of Profit and Loss. Non-monetary foreign currency items are carried at cost.

The premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset/ liability,is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised inthe Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising oncancellation or renewal of such a forward exchange contract are recognised as income or as expense for the period.

1.8 Revenue Recognition

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer as perthe terms of the contract and are recognised net of trade discounts, rebates, sales taxes and excise duties.

Export incentives are recognised when the right to receive the benefit is established.

1.9 Other Income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rates applicable.

Management and marketing fees are recognised on the basis of rendering of services.

Dividend income is recognised when the right to receive dividend is established.

1.10 Employee Benefits

Defined Contribution Plan

The Company has Defined Contribution Plan for post employment benefit namely Provident Fund, Superannuation Fund andEmployee’s State Insurance Plan (ESIC) which is recognised by the income tax authorities and administered through appropriateauthorities. The Company contributes to a Government administered Provident Fund and Employee State Insurance Plan andhas no further obligation beyond making its contribution.

The Company makes contribution for superannuation to Life Insurance Corporation of India (“LIC”) and has no further obligationbeyond making its contribution.

The Company’s contributions to the above funds are charged to Statement of Profit and Loss every year.

Defined Benefit PlanThe Company has Defined Benefit Plan comprising of Gratuity Fund. The Gratuity scheme is funded through Group Gratuity CumLife Assurance Scheme from LIC. The adequacy of accumulated fund balance available with LIC has been compared with actuarial

SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDEDMARCH 31, 2014.

23


valuation carried out by an independent actuary as at the Balance Sheet date and shortfall/ excess, if any, has been providedfor/ considered as prepaid.

The actuarial valuation method used by independent actuary for measuring the liability is the Projected Unit Credit Method.

Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and arerecognised immediately in the Statement of Profit and Loss as income or expense.

Compensated AbsencesAccumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the yearare treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulatingcompensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise.

Termination BenefitsTermination benefits in the nature of voluntary retirement benefits are recognised in the Statement of Profit and Loss as and whenincurred.

1.11 Segment ReportingThe accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company.Further, inter-segment revenue have been accounted for based on the transaction price agreed to between segments which isprimarily market based. Revenue and expenses have been identified to segments on the basis of their relationship to the operatingactivities of the segment. Income and expenses, which relate to the Company as a whole and are not allocable to segmentson a reasonable basis, have been included under “Unallocable Income” and “Unallocable Expenses” respectively. Segment assetsand liabilities include those directly identifiable with respective segments. Unallocable assets and liabilities represent the assetsand liabilities that relate to the Company as a whole and not allocable to any segment.

1.12 Current and Deferred TaxTax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or lossfor the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxationlaws prevailing in the respective jurisdictions.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets.Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficientfuture taxable income will be available against which such deferred tax assets can be realised. Where there are unabsorbedbusiness losses and/or unabsorbed depreciation, deferred tax assets are recognised and carried forward only to the extent thatmanagement is virtually certain that sufficient future taxable income will be available against which such deferred tax assets canbe realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted orsubstantively enacted by the Balance Sheet date. At each Balance Sheet date, the Company reassesses unrecognised deferredtax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the amounts and thereis an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset whenthere is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assetsand the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

Minimum Alternative Tax (“MAT”) credit is recognised as an asset only when and to the extent there is convincing evidence thatthe Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date andthe carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effectthat the Company will pay normal income tax during the specified period.

1.13 Provisions and Contingent LiabilitiesProvisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resourcesembodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheetdate and are not discounted to their present value.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will beconfirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of theCompany or a present obligation that arises from past events where it is either not probable that an outflow of resources willbe required to settle or a reliable estimate of the amount cannot be made.

1.14 LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operatingleases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis overthe period of the lease.


24



Rupees Rupees

NOTE 2 : SHARE CAPITAL

Authorised

18,500,000 (Previous Year: 16,000,000) Equity Shares of Rs. 10 each 185,000,000 160,000,000

Issued

17,974,814 (Previous Year: 15,774,814) Equity Shares of Rs. 10 each 179,748,140 157,748,140

Subscribed and Paid up

17,952,014 (Previous Year: 15,752,014) Equity Shares of Rs. 10 each fully paid up 179,520,140 157,520,140

Add: Forfeited Equity Shares 114,000 114,000

[22,800 (Previous Year: 22,800) Equity Shares of Rs. 10 each (amount

originally paid up Rs. 5 each)]

179,634,140 157,634,140

(a) Reconciliation of Share Capital

As at March 31, 2014 As at March 31, 2013

No. of Shares Amount No. of Shares Amount

Issued

Balance as at the beginning of the year 15,774,814 157,748,140 15,774,814 157,748,140

Add: Shares issued during the year 2,200,000 22,000,000 — —

Balance as at the end of the year 17,974,814 179,748,140 15,774,814 157,748,140

Subscribed and Paid up(including forfeited equity shares)

Balance as at the beginning of the year 15,774,814 157,634,140 15,774,814 157,634,140

Add: Shares issued during the year 2,200,000 22,000,000 — —

Balance as at the end of the year 17,974,814 179,634,140 15,774,814 157,634,140

(b) Rights, preferences and restrictions

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

(c) No bonus shares has been issued during last five years.

(d) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company


No. of Shares % holding No. of Shares % holding

Equity Shares

Balmer Lawrie and Company Limited 8,601,277 47.91% 7,501,277 47.62%

Royal Packaging Industries Van Leer B.V.** — — 6,319,883 40.12%

Greif International Holding B.V. 8,601,282 47.91% 1,181,299 7.50%

** The name has been changed to Greif International Holding B.V.


25



Rupees Rupees

NOTE 3 : RESERVES AND SURPLUS

Capital Reserve 720,125 720,125

Securities PremiumBalance as at the beginning of the year 123,762,975 123,762,975

Add: Addition made during the year (Refer Note below) 198,000,000 —

Balance as at the end of the year 321,762,975 123,762,975

[Securities Premium includes Rs. 171,000 (Previous Year: Rs. 171,000) originally paid up on

22,800 (Previous Year: 22,800) equity shares forfeited]

General ReserveBalance as at the beginning of the year 27,390,480 20,863,582Add: Transferred from Surplus in Statement of Profit and Loss 1,500,000 6,526,898


Surplus in Statement of Profit and LossBalance as at the beginning of the year 356,192,707 352,372,781Profit for the year 50,160,288 65,268,977Appropriations:Proposed Dividend (21,542,417) (47,256,042)Dividend Distribution Tax on Proposed Dividend (1,642,639) (7,666,111)Transferred to General Reserve (1,500,000) (6,526,898)


Total 733,041,519 508,066,287

Note:During the year the Company has allotted 2,200,000 Equity Shares of Rs. 10/- each to the promoter companies @ Rs. 100/- per share(including securities premium of Rs. 90/- per share) on preferential allotment basis under special resolution passed by the membersat Extra Ordinary General Meeting (EGM) held on July 26, 2013.

NOTE 4 : LONG-TERM BORROWINGS

Non-Current Current Maturities

As at As at As at As atMarch 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Rupees Rupees Rupees Rupees

Secured

Term Loan from Banks:Indusind Bank — — — 13,783,503HSBC Bank 11,518,080 29,073,120 17,555,040 14,214,480Kotak Mahindra Bank 9,333,333 — 4,666,667 —

Loan from Balmer Lawrie and Company Limited — 181,791,984 181,791,984 —

Vehicle Loans from Bank 551,550 1,401,597 861,823 898,690

21,402,963 212,266,701 204,875,514 28,896,673UnsecuredLoan from Greif International Holding B.V. 26,250,000 26,250,000 — —Sales Tax Deferral Loan — 1,705,664 1,705,660 2,202,829

26,250,000 27,955,664 1,705,660 2,202,829

Total 47,652,963 240,222,365 206,581,174 31,099,502


26


NOTE 5 : DEFERRED TAX LIABILITIES (NET)


Rupees Rupees

Deferred Tax Liabilities:

Depreciation 44,829,653 46,889,538

Deferred Tax Assets:

Provision for Doubtful Debts, Advances and Deposits 2,331,176 2,331,176

Provision for Indirect Taxes 4,926,886 3,731,418

Provision for Employee Benefits 8,119,224 5,954,037

29,452,367 34,872,907

Nature of Security

(i) Term Loans from HSBC Bank are secured by first chargeover movable plant and equipment of the Steel Drum ClosureDivision for Rs. 45,000,000 and equitable mortgage ofleasehold land (95 years), Mumbai along with immovableplant and equipment.

(ii) Term Loan from Kotak Mahindra Bank are secured by firstand exclusive hypothecation charge on all existing and futuremoveable fixed assets including Plant and Equipment of theCompany, located at survey no-237/1, 238 & 264/2 inJanakipuram Village, Madhuranthakam Taluk Village,Kanchipuram district, Chennai. First and exclusive equitablemortgage charge on immoveable properties being propertylocated at survey no-237/1, 238 & 264/2 in JanakipuramVillage, Madhuranthakam Taluk Village, Kanchipuram district,Chennai.

(iii) Loan from Balmer Lawrie and Company Limited is securedby pledge on all the shares held by the Company in TransafeServices Limited.

(iv) Vehicle Loans from Bank are secured by hypothecation ofvehicles purchased. against the loan.

(b) Terms of repayment for unsecured borrowings

Borrowings

(i) Loan from Greif International Holding B.V.

(ii) Sales Tax Deferral Loan

(a) Nature of Security and terms of repayment for secured borrowings

Terms of Repayment

(a) Loan of Rs. 9,184,800 repayable in 5 equal half yearlyinstallments commenced from September, 2013. Interest tobe paid monthly at 11.75% per annum.

(b) Loan of Rs.16,702,800 repayable in 5 equal half yearlyinstallments commenced from October, 2013. Interest to bepaid monthly at 11.60% per annum.

(c) Loan of Rs. 18,000,000 repayable in 30 equal monthlyinstallments commenced from March, 2013. Interest to bepaid monthly at 11.50% per annum.

Loan of Rs. 14,000,000 repayable in 36 equal monthly installmentscommencing from April, 2014. Interest to be paid monthly at12.00% per annum.

Repayable within 60 months from the date of disbursement offirst installment (August, 2009) of the loan. Interest to be paidannually at 9% or the prevailing bank rate whichever is higher.The Company has not accrued interest expense for the currentfinancial year aggregating Rs. 16,361,279 (Previous year Rs.16,361,279).

Repayable in installments ranging between 48 and 60 monthsfrom the date of respective loan. Interest to be paid monthly atthe rate ranging from Base rate plus 1.25% to 3.75%.

Terms of Repayment

The loan has been granted for an indefinite period but not lessthan 8 years from the year 2001. The loan is interest free andis received for strategic investment. The loan is repayable asper mutual agreement.

Payable in 108 monthly installments beginning May 2006.


27



Rupees RupeesNOTE 6 : LONG-TERM PROVISIONS

Provision for Employee Benefits (Refer Note 38 (c))Provision for Compensated Absences 13,554,553 13,845,908

Other Provisions (Refer Note 43)Provision for Indirect Taxes 15,185,349 11,500,750

28,739,902 25,346,658

NOTE 7 : SHORT-TERM BORROWINGS

SecuredCash Credit/ Packing Credit 217,719,568 210,557,187Term Loan from Bank 30,000,000 —

UnsecuredOverdraft with Bank 58,078,409 59,661,356

305,797,977 270,218,543

(a) Cash Credit/Packing Credit from Banks are secured by first pari passu charge on currentassets viz. inventory of raw materials, work-in-progress, finished goods, stocks, stores andconsumables not relating to plant and equipment, bills receivables/ book debts and othermoveable, both present and future and second pari passu charge on movable plant andequipment (including stores and consumables relating to plant and equipment), both presentand future.

(b) Term Loan of Rs. 30,000,000 from Indusind bank is secured by extension of charge onassets of Dehradun plant financed, including immovable property of the plant.

(c) Overdraft from Bank is supported by Corporate Guarantee issued by Greif Inc.

NOTE 8 : TRADE PAYABLES

Dues to micro, small and medium enterprises (Refer Note 46) 52,446,740 8,227,685Dues to others 245,583,844 256,239,882

298,030,584 264,467,567

NOTE 9 : OTHER CURRENT LIABILITIES

Current Maturities of Long-Term Borrowings (Refer Note 4) 206,581,174 31,099,502Interest Accrued but not due on Borrowings 523,570 213,901Unpaid Dividends (Refer Note below) 1,267,326 935,751Deposits Received 7,543,516 4,950,455Advance from Customers 18,945,014 7,292,945Employee Benefits Payable 20,974,682 19,547,224Statutory Dues (including Provident Fund and Tax Deducted at Source) 19,288,262 14,593,279Payable for Fixed Assets 3,200,404 3,872,292Outstanding Expenses 33,640,160 37,028,699Others 2,225,000 2,225,000

314,189,108 121,759,048

There are no amounts due to be transferred to the Investor Education and Protection Fund underSection 205C of the Companies Act, 1956 as at the year end.

NOTE 10 : SHORT-TERM PROVISIONS

Provision for Employee Benefits (Refer Note 38 (b) and (c))Provision for Gratuity 3,400,701 4,107,147Provision for Compensated Absences 984,036 398,116

Provision for Income Tax [Net of Advance Tax Rs. 155,790,084 (Previous Year: Rs. 124,073,233)] 17,976,886 11,696,433Other Provisions:

Provision for Proposed Dividend 21,542,417 47,256,042Provision for Dividend Distribution Tax on Proposed Dividend 3,661,134 7,666,111

47,565,174 71,123,849


28


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29

Balmer Lawrie-Van Leer LimitedSIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDEDMARCH 31, 2014.

NOTE 13 : NON-CURRENT INVESTMENTS

Particulars March 31, 2014 March 31, 2013Rupees Rupees

Trade Investments in Equity Instruments - Unquoted, at Cost

(a) Investment in Subsidiary: 262,499,853 42,499,991

2,200 (Previous Year: 1,122) Equity Shares in Proseal Closures Limitedof Rs. 1,000 each, fully paid up

(b) Investment in Joint Venture: 181,791,984 181,791,984

11,361,999 (Previous Year: 11,361,999) Equity Shares in Transafe Services Limitedof Rs. 10 each, fully paid up (Refer Note 39)

444,291,837 224,291,975

NOTE 14 : LONG-TERM LOANS AND ADVANCES


[Unsecured, Considered Good (unless otherwise stated)]

Capital Advances 1,821,274 9,130,195

Security Deposits

Considered Good 15,312,596 18,023,108

Considered Doubtful 681,671 681,671

Less: Provision for Doubtful Deposits (681,671) (681,671)

Other Loans and Advances:

Balances with Government Authorities 7,326,192 5,003,735

Prepaid Expenses 1,263,184 974,935

Others - Considered Good 3,634,160 875,756

Others - Considered Doubtful 2,143,148 2,143,148

Less: Provision for Doubtful Loans and Advances (2,143,148) (2,143,148)

29,357,406 34,007,729

NOTE 15: OTHER NON-CURRENT ASSETS


Fixed Deposit with Bank with original maturity more than 12 months 10,000 10,000

10,000 10,000

30


NOTE 16: INVENTORIES


Stores and Spares 48,458,462 38,748,704Raw Materials [Includes in Transit Rs. 2,224,984 (Previous Year: Rs. 46,980,366)] 91,058,392 132,272,050Packing Materials 891,629 899,526Work-in-Progress 69,318,900 51,173,010Finished Goods [Includes in Transit Rs. Nil (Previous Year: Rs. 3,950,668)] 61,655,307 47,467,510

271,382,690 270,560,800Details of Inventory

(i) Work-in-ProgressFlanges 6,091,770 4,868,223Plugs 8,419,860 8,581,612Plastic Containers/ Liners 53,252,166 32,792,443Others 1,555,104 4,930,732

69,318,900 51,173,010

(ii) Finished GoodsFlanges 14,432,111 3,766,262Plugs 14,948,280 6,883,805Plastic Containers/ Liners 26,304,692 32,138,702Others 5,970,224 4,678,741

61,655,307 47,467,510

NOTE 17: TRADE RECEIVABLES


Unsecured

Outstanding for a period exceeding six months from the date they are due for paymentConsidered Good 4,618,489 25,236,705Considered Doubtful 4,360,190 4,360,190Less: Provision for Doubtful Debts (4,360,190) (4,360,190)Others 409,490,310 354,455,237

414,108,799 379,691,942

NOTE 18: CASH AND BANK BALANCES


Cash and Cash EquivalentsCash on Hand 184,019 143,128Cheques on Hand 15,031,932 5,522,147Bank Balances:

In Current Accounts 16,653,651 8,700,454

31,869,602 14,365,729Other Bank BalancesFixed Deposits with original maturity more than 3 months but less than 12 months — 682,582Unpaid Dividend Accounts 1,267,326 935,751

1,267,326 1,618,333

Total 33,136,928 15,984,062


31


NOTE 19: SHORT-TERM LOANS AND ADVANCES



Recoverable from Related Parties 8,627,520 3,881,123Loan given to Subsidiary 13,500,000 —Security Deposits 4,105,133 29,938

Other Loans and Advances:Balances with Government Authorities 107,830,260 68,526,897Prepaid Expenses 3,271,547 2,882,869Others 7,184,123 11,333,461

144,518,583 86,654,288

NOTE 20: OTHER CURRENT ASSETS



Interest accrued on Deposits — 634,419

Duty Entitlement Pass Book (DEPB) Licenses on Hand 978,893 1,075,724

Duty Drawback 3,418,953 —

Tangible Fixed Asset held for sale (at lower of cost and net realisable value)[Refer Note 11 (a)] — 7,933,365

4,397,846 9,643,508

NOTE 21: CAPITAL AND OTHER COMMITMENTS


Capital Commitments:

Estimated value of contracts in capital account remaining to be executed[Net of advances of Rs.1,821,274 (Previous Year: Rs.9,130,195)] 11,808,124 12,814,957

11,808,124 12,814,957

NOTE 22: CONTINGENT LIABILITIES


Guarantees given by Banks on behalf of the Company 2,100,000 527,168

2,100,000 527,168


32


NOTE 23: REVENUE FROM OPERATIONS

ParticularsMarch 31, 2014 March 31, 2013

Rupees Rupees

Sale of Products:

Finished Goods 2,800,913,914 2,221,896,457

Other Operating Revenue:

Scrap Sales 92,440,560 81,481,748

Income from Duty Drawback and DEPB Licenses 8,408,303 12,989,351

2,901,762,777 2,316,367,556

Details of Sales (Finished Goods)

Flanges 393,416,072 341,051,770

Plugs 278,267,137 241,930,540

Plastic Containers/ Liners 2,070,029,464 1,593,704,167

Others 59,201,241 45,209,980

2,800,913,914 2,221,896,457

NOTE 24: OTHER INCOME


Rupees Rupees

Interest Income on

Fixed Deposits with Banks 68,972 228,505

Others 1,346,418 903,493

Dividend Income on Investment in Subsidiary 28,050,000 10,098,000

Management and Marketing Fees from Subsidiary 10,150,086 8,863,450

Profit on Sale of Fixed Assets (Net) 813,071 40,530

Liabilities no Longer Required Written Back (Refer Note 39) 2,845,931 33,340,356

Miscellaneous Income 10,763 —

43,285,241 53,474,334


33


NOTE 25: COST OF MATERIALS CONSUMED


Rupees Rupees

Raw Material Consumed (Refer Note 32 (a))

Opening Inventory 132,272,050 100,813,131

Add: Purchases 1,822,005,133 1,422,584,570

Less: Closing Inventory 91,058,392 132,272,050

1,863,218,791 1,391,125,651

Packing Material Consumed (Refer Note 32 (a))

Opening Inventory 899,526 1,109,889

Add: Purchases 17,000,521 14,623,539

Less: Closing Inventory 891,629 899,526

17,008,418 14,833,902

1,880,227,209 1,405,959,553

NOTE 26: CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS


Rupees Rupees

(Increase)/ Decrease in Inventory

Closing Inventory:

Work-In-Progress 69,318,900 51,173,010

Finished Goods 61,655,307 47,467,510

130,974,207 98,640,520

Opening Inventory:

Work-In-Progress 51,173,010 45,245,125

Finished Goods 47,467,510 60,111,320

98,640,520 105,356,445

(32,333,687) 6,715,925

NOTE 27: EMPLOYEE BENEFITS EXPENSE


Rupees Rupees

Salaries, Wages and Bonus (Refer Note 38 (c)) 152,102,231 134,461,601

Contribution to Provident and Other Funds (Refer Note 38 (a) and (b)) 14,688,345 11,086,666

Staff Welfare Expenses 16,622,813 15,396,869

183,413,389 160,945,136


34


NOTE 28: FINANCE COSTS


Rupees Rupees

Interest on Borrowings— From Banks 37,823,833 35,532,005— From Others 4,639,073 1,435,688

Other Borrowing Costs 2,439,501 526,651

44,902,407 37,494,344

NOTE 29: DEPRECIATION AND AMORTISATION EXPENSE


Rupees Rupees

Depreciation on Tangible Assets 79,298,484 71,992,030

Amortisation on Intangible Assets 1,505,100 1,505,092

80,803,584 73,497,122

NOTE 30: OTHER EXPENSES


Rupees Rupees

Consumption of Stores and Spare Parts (Refer Note 32 (b)) 67,326,206 63,551,333

Power, Fuel and Water Charges 166,631,049 159,626,381

Screen Printing Charges 16,919,881 14,441,357

Repairs and Maintenance:

Plant and Equipment 18,355,222 12,587,898

Buildings 3,833,657 2,921,250

Others 277,408 1,099,617

Rent (Refer Note 44) 3,373,215 3,039,804

Rates and Taxes 10,550,499 9,689,557

Bank Charges 8,313,167 7,652,546

Insurance 1,962,569 1,741,529

Communication Charges 1,521,491 1,429,788

Printing and Stationery 1,274,570 1,132,349

System and Software Expenses 3,854,562 2,760,712

Travelling, Conveyance and Car Expenses 17,769,660 14,436,825

Security and Safety Expenses 6,107,965 5,672,853

Legal, Professional and Secretarial Expenses (Refer Note 36) 19,368,046 9,838,801

Freight and Transportation Expenses 56,656,577 53,320,171[net of recovery of Rs. 53,242,642 (Previous Year: Rs. 45,769,805)]

Commission on Sales 15,895,202 12,710,335

Loss on Foreign Exchange (Net) 30,776,086 10,728,513

Provision for Doubtful Debts — 2,505,592

Bad Debts/Advances Written Off 185,046 —

Miscellaneous Expenses 8,078,481 10,291,759

459,030,559 401,178,970


35


NOTE 31: COMPUTATION OF EARNINGS PER SHARE (BASIC AND DILUTED)

The amount considered in ascertaining the Company’s earnings per share constitutes the net profit after tax. The number of sharesused in computing basic earnings per share is the weighted average number of shares outstanding during the period. The numberof shares used in computing diluted earnings per share comprises the weighted average number of shares considered for derivingbasic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutivepotential shares.


Rupees Rupees

I. Profit Computation for both Basic and Diluted Earnings Per Share of Rs. 10 each:Net Profit as per the Statement of Profit and Loss available for EquityShareholders (in Rs.) 50,160,288 65,268,977

II. Weighted average number of Equity Shares for Earnings Per Share computation:Number of shares for Basic and Diluted Earnings Per Share 16,155,850 15,752,014

III. Earnings Per Share:Basic (in Rs.) 3.10 4.14Diluted (in Rs.) 3.10 4.14

NOTE 32: DETAILS OF CONSUMPTION


Rupees Rupees

(a) Details of Raw Materials/ Packing Materials consumed

Steel 324,712,957 274,819,856

High-density Polyethylene 1,262,170,190 946,299,328

Co-polymer Polypropylene 42,950,667 34,856,483

Packing Materials 17,008,418 14,833,902

Others 233,384,977 135,149,984

Total 1,880,227,209 1,405,959,553

(b) Value of imported and indigenous materials consumed

ParticularsYear Ended Year Ended

March 31, 2014 March 31, 2013

Rupees % Rupees %

Raw Materials and Packing Materials

Imported 1,268,981,601 67 860,889,251 61

Indigenous 611,245,608 33 545,070302 39

Total 1,880,227,209 100 1,405,959,553 100

Stores and Spares

Imported 7,936,650 12 2,831,172 4

Indigenous 59,389,556 88 60,720,161 96

Total 67,326,206 100 63,551,333 100

Note: The consumption of raw materials, packing materials, spares, components and other items have been arrived at on the basisof opening stock plus purchases less closing stock. The consumption therefore includes adjustment for shortage/ excess andthe effect of reduction of stock items to net realisable value. Imported and indigenous consumption have been identified to theextent information was available with the Company.


36


NOTE 33: VALUE OF IMPORTS (on CIF basis)


Rupees Rupees

Raw Materials 1,136,956,243 812,874,665

Stores and Spares 6,470,831 4,734,142

Capital Goods (including Capital Work-in-Progress) 1,822,539 32,098,990

NOTE 34: EXPENDITURE IN FOREIGN CURRENCY


Rupees Rupees

Travelling 2,023,988 1,561,172


Professional fees 9,733,350 —

Others 25,230 400,396

NOTE 35: EARNINGS IN FOREIGN CURRENCY


Rupees Rupees

Revenue from Exports on F.O.B. Basis 438,867,830 422,294,340

NOTE 36: AUDITORS’ REMUNERATION (excluding service tax)


Rupees Rupees

Audit Fees 1,275,000 1,800,000

Other Services — 300,000

Out of Pocket Expenses 40,150 41,150

1,315,150 2,141,150

NOTE 37:

The Company has disclosed the turnover as net of total excise duty (excluding difference of excise duty on closing inventory andopening inventory). The excise duty related to the difference between the closing inventory and opening inventory is recognisedseparately in cost of raw materials consumed in the Statement of Profit and Loss. The same is in accordance with the AccountingStandard Interpretation 14 (Revised), “Disclosure of Revenue from Sales Transactions” issued by the Council of The Institute ofChartered Accountants of India.


Rupees Rupees

Excise Duty on Opening Inventory 6,060,894 7,666,691

Excise Duty on Closing Inventory 8,641,236 6,060,894

(Increase)/Decrease in Excise Duty, recognised in the Statement of Profit and Loss (2,580,342) 1,605,797


37


NOTE 38: DISCLOSURE AS PER ACCOUNTING STANDARD 15 (REVISED) – EMPLOYEE BENEFITS


Rupees Rupees

The Company has classified various benefits provided to employees as under:

(a) Defined Contribution Plans

The amount recognised as an expense during the year ended 31st March 2014towards Provident Fund, ESIC contribution and Superannuation is Rs. 8,265,489(Previous Year Rs. 7,462,608), Rs. 213,890 (Previous Year Rs. 302,142) and Rs.2,723,021 (Previous Year Rs. 2,415,768) respectively.

(b) Defined Benefit Plan

Gratuity

(i) In accordance with Accounting Standard 15, actuarial valuation wasdone in respect of the aforesaid defined benefit plan of gratuity basedon the following assumptions:-

Discount Rate 9.00% 8.25%

Rate of increase in Compensation Levels 7.50% 7.00%

Rate of Return on Plan Assets 8.75% 9.30%

Mortality Rate IALM Mortality- LIC (1994-96)Tables (2006-08) Ultimate

Ultimate

(ii) Changes in the Fair value of Plan Assets

Present Value of Plan Assets at the beginning of the year 28,276,265 26,322,841

Expected Return on Plan Assets 2,298,023 2,412,101

Actuarial Gain/ (Loss) on Plan Assets — —

Contributions 4,172,367 350,689

Benefits Paid (2,938,454) (809,366)

Fair Value of Plan Assets at the end of the year 31,808,201 28,276,265

(iii) Changes in the Present Value of Obligation

Present Value of Obligation at the beginning of the year 32,383,412 29,893,753

Interest Cost 2,671,632 2,540,969

Past Service Cost — —

Current Service Cost 2,425,562 2,256,848

Curtailment Cost/ (Credit) — —

Settlement Cost/ (Credit) — —

Benefits Paid (2,938,454) (809,366)

Actuarial (Gain)/ Loss 666,750 (1,498,792)

Present Value of Obligation at the end of the year 35,208,902 32,383,412


38

54th Annual Report 2013 - 2014SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDEDMARCH 31, 2014.


Rupees Rupees

(iv) Amount recognised in the Balance Sheet

Present Value of Obligation at the end of the year 35,208,902 32,383,412

Fair Value of Plan Assets (31,808,201) (28,276,265)

Net Liability recognised at the end of the year 3,400,701 4,107,147

(v) Percentage of each category of plan assets to total fair value of planassets as at year end:

Administered by Life Insurance Corporation of India 100% 100%

(vi) Expenses recognised in the Statement of Profit and Loss

Current Service Cost 2,425,562 2,256,848

Past Service Cost — —

Interest Cost 2,671,632 2,540,969

Expected Return on Plan Assets (2,298,023) (2,412,101)

Curtailment Cost/ (Credit) — —

Settlement Cost/ (Credit) — —

Actuarial (Gain)/ Loss 666,750 (1,498,792)

Total Expenses recognised in the Statement of Profit and Loss 3,465,921 886,924

(vii) Expected Contribution to Gratuity Fund for the next year Rs. 1,821,961 (Previous Year: Rs. 1,737,278).

(viii) Details of Present Value of Obligation, Plan Assets and Experience Adjustment:

March 31, 2014 March 31, 2013 March 31, 2012 March 31, 2011 March 31, 2010Rupees Rupees Rupees Rupees Rupees

Present value of obligation 35,208,902 32,383,412 29,893,753 26,331,990 23,422,923

Fair value of plan assets 31,808,201 28,276,265 26,322,841 21,863,387 15,859,104

(Surplus)/Deficit 3,400,701 4,107,147 3,570,912 4,518,603 7,563,819

Experience Adjustments:

(Gain)/Loss on plan liabilities (1,447,738) (1,500,355) 1,240,564 (131,607) 725,209

(Gain)/Loss on plan assets — — — — 100

(c) Other Employee Benefit Plan

Liability for compensated absences as at year end is Rs. 14,538,589 (Previous Year: Rs. 14,244,024).

NOTE 39:

The Company had purchased 11,361,999 Equity Shares of Rs. 10 each of Transafe Services Limited (“TSL”), an unlisted Company,from ICICI Venture Funds Management Company Limited @ Rs. 16 per share during the year ended March 31, 2010 at the totalconsideration of Rs. 181,791,984. The investment was made by availing a 100% loan from Balmer Lawrie and Company Limited (“BL”)under the loan agreement with BL dated July 31, 2009. As per the said loan agreement, the Company is liable to pay interest on theoutstanding principal amount @ 9% per annum or the prevailing bank rate, whichever is higher, annually by September 30 each year.

Post investment, TSL has reported losses during financial years ended March 31, 2010, March 31, 2011, March 31, 2012, March 31,2013 and March 31, 2014. Consequent to the losses and erosion in the net worth, the fair value of investment held by the Companyhas come down. The Company has made no provision in the accounts for such notional diminution in the value of the investment byvirtue of the provision in clause 1.3 of the aforesaid loan agreement executed with BL.

39


As per a legal opinion from a reputed firm of Solicitors and Advocates on the above mentioned clause 1.3 of the loan agreement, theloan is a non recourse loan and the loan amount is secured by pledge of all the TSL shares in favour of BL. This clause providesthat in case the Company defaults in repayment of the outstanding loan amount at the end of 60 months, BL’s recovery will be limitedto the collateral of the said TSL shares. On transfer of such shares, neither the Company nor BL shall have any further claims onthe other. Investment in TSL will therefore get neutralised against the loan taken from BL having no impact on the profit of the Company.

In the event the Company desires to sell all or part of the TSL shares within the period of 60 months, the same can be done by obtainingprior approval from BL and there shall be an obligation on the Company to repay the loan to BL from the proceeds of such sale ofTSL shares and also execute a satisfactory interim security as mutually agreed. Also, in the event of termination of the agreement,the Company shall be liable to repay the entire loan amount along with the interest due thereon to BL.

During the previous year, the Company had expressed its inability to BL to pay accrued interest amounting to Rs. 29,450,302 (netof TDS) for the financial years ended March 31, 2011 and March 31, 2012. As the Company had never earned any income from thisinvestment and the interest expense being disallowed under the Income tax Act, 1961, the Company has stopped accruing any furtherinterest. Accordingly, during the financial year ended March 31, 2013, the Company had written back the interest accrued and payableamounting to Rs. 29,450,302 and has not accrued the interest expense of Rs. 16,361,279 for the financial year ended March 31, 2013.During the current year also, Company has not accrued interest expense of Rs. 16,361,279 for the financial year ended March 31,2014 based on the written communication to BL.

NOTE 40:

Based on the tax consultant’s opinion/ advice obtained by the Company, the Management is of the opinion that there may not be anytax liability on account of transfer pricing of its transactions with associated enterprises referred to in Section 92 to 92 F of the Income-tax Act, 1961, of India.

NOTE 41: RELATED PARTY DISCLOSURES

(a) Names of related parties and nature of relationship

(i) Parties having joint control over the Company

Balmer Lawrie and Company Limited

Greif International Holding B.V.

(ii) Subsidiary of the Company

Proseal Closures Limited

(iii) Joint Venture

Transafe Services Limited

(iv) Parties under the common control

Balmer Lawrie (UAE) LLC

Greif Singapore Pte Ltd

Greif Egypt LLC

Greif Embalagenes Ind do Brasil Ltda

Greif Nederland B.V.

Greif France SAS

Greif Eastern Packaging Pte Limited

Greif Australia Pty Limited

Greif Phillipines Inc.

American Flange and Manufacturing Co. Inc.

Greif Italia SpA

Trisure Closures Australia Pty Limited

Greif Horizon Metallic Industries Co. LLC

Greif Hua I Taiwan Co Limited

Tri-Sure Closures Systems (Zhenjiang) Co. Ltd.

Greif Malaysia SDN BHD

(v) Key Management Personnel

Mohan Menon - Managing Director


40

54th Annual Report 2013 - 2014N

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41

Balmer Lawrie-Van Leer LimitedN

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43


NOTE 42: DISCLOSURE OF DERIVATIVES

i Forward Exchange Contracts outstanding as at March 31, 2014, to hedge the foreign currency exposure for payments to bemade against Import and other payables are as follows:

Currency Number of Contracts Forward Exchange Contracts

March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Secured Loan

USD 1 1 198,000 198,000

(Equivalent Rs.) 12,636,360 10,854,360

Import Payables

USD 7 7 2,252,565 2,306,880

(Equivalent Rs.) 140,887,916 126,509,194

ii The foreign currency outstanding balances that have not been hedged by any derivative instrument or otherwise as atMarch 31, 2014 are as follows:

Particulars Foreign Foreign Amount Foreign AmountCurrency Currency (In Rupees) Currency (In Rupees)Denomination Amount Amount

March 31, 2014 March 31, 2014 March 31, 2013 March 31, 2013

Trade Receivables USD 946,250 56,320,808 1,421,496 76,874,523

SGD 59,483 2,788,544 31,646 1,367,424

Advance from Customer USD 243,286 14,480,383 — —

Capital Advances EURO — — 20,202 1,411,900

Advances to Suppliers USD 14,000 840,560 14,261 996,733

EURO 9,028 747,154 — —

GBP 130 13,044 — —

Trade Payables USD 1,840,403 112,736,691 297,498 16,228,516

EURO 226,859 18,774,838 386,854 27,037,205

The foreign currency outstanding has been translated at the rates of exchange prevailing on the Balance Sheet date in accordancewith Accounting Standard 11 - “The Effects of Changes in Foreign Exchange Rates (Revised 2003)” notified under Section 211(3C)of the Act.

NOTE 43: PROVISIONS

Indirect Taxes

Particulars Year Ended Year EndedMarch 31, 2014 March 31, 2013

Rupees Rupees

Balance at the beginning of the year 11,500,750 7,887,202

Additions 3,684,599 3,613,548

Amount used — —

Balance at the end of the year 15,185,349 11,500,750

Note: It represents probable liabilities arising out of indirect taxes. The timings of the outflow with regards to the said matters dependson the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertainthe timing of the outflow.


44

54th Annual Report 2013 - 2014SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDEDMARCH 31, 2014.NOTE 44:The Company has entered into cancellable leasing arrangements mainly for residential flats, office premises, warehouse, vehicle etc.The Lease rental of Rs. 3,373,215 (Previous Year: Rs. 3,039,804) has been included under the head ‘Other Expenses - Rent’ underNote 30 ‘to the Financial Statements.

NOTE 45: SEGMENT REPORTINGThe Business Segment has been considered as the primary segment for disclosure. The categories included in each of the reportedbusiness segments are as follows:

(i) Steel Drum Closures(ii) Plastic Containers

The above business segments have been identified considering:(i) The nature of the product(ii) The risk return profile of individual divisions(iii) The internal financial reporting systems

Revenue and expenses has been accounted on the basis of their relationship to the operating activities of the segment. Income andexpenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been includedunder “Unallocable Income” and “Unallocable Expenses” respectively. Assets and Liabilities, which relate to the enterprise as a wholeand are not allocable to segments on a reasonable basis, have been included under “Unallocable Assets/ Liabilities”. Inter-segmenttransfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods.

(Rupees)

Particulars 2013-2014 2012-2013

Steel Drum Plastic Total Steel Drum Plastic TotalClosures Containers Closures Containers

Revenue (including allocable other income)External Segment Revenue 778,508,778 1,875,809,041 2,654,317,819 680,535,012 1,447,808,749 2,128,343,761Inter-Segment Revenue — — — — — —

Total Segment Revenue 778,508,778 1,875,809,041 2,654,317,819 680,535,012 1,447,808,749 2,128,343,761

ResultSegment Result 85,520,188 45,820,299 131,340,487 61,154,354 57,751,508 118,905,862Add: Unallocable Income 29,465,390 40,680,301Less: Interest Expense 44,902,407 37,494,344Unallocable Expenses 48,163,722 38,858,808

Profit Before Taxation 67,739,748 83,233,011

Other InformationSegment Assets 521,404,597 827,635,115 1,349,039,712 517,731,931 854,118,472 1,371,850,403Unallocable Assets 635,064,022 321,860,961

Total Assets 1,984,103,734 1,693,711,364

Segment Liabilities 175,870,520 227,977,104 403,847,624 130,479,880 223,497,581 353,977,461Unallocable Liabilities 667,580,451 674,033,476

Total Liabilities 1,071,428,075 1,028,010,937

Segment Capital Expenditure 23,944,135 17,764,234 41,708,369 20,073,088 65,913,581 85,986,669Unallocable Capital Expenditure 1,236,264 —

Total Capital Expenditure 42,944,633 85,986,669

(Including Capital Work-In-Progress)Segment Depreciation 29,014,586 47,925,913 76,940,499 25,131,661 45,096,598 70,228,259Unallocable Depreciation 3,863,085 3,268,863

Total Depreciation 80,803,584 73,497,122

GEOGRAPHICAL SEGMENTRevenueIndia 2,201,784,125 1,733,306,013Outside India 481,999,084 435,718,048

2,683,783,209 2,169,024,061

AssetsIndia 1,923,406,667 1,613,060,785Outside India 60,697,067 80,650,579

1,984,103,734 1,693,711,364

Capital ExpenditureIndia 42,944,633 85,986,669Outside India — —

42,944,633 85,986,669

45


NOTE 46: OUTSTANDING DUES TO MICRO AND SMALL ENTERPRISES

The Company has amount due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED Act)as at March 31, 2014. The disclosure pursuant to the said act is as under:

Year Ended Year Ended


Principal amount due to suppliers under MSMED Act 52,446,740 8,227,685Interest accrued and due to suppliers under MSMED Act on the above amount unpaid 299,404 72,578Payment made to suppliers (other than interest) beyond the appointed day during the year 78,176,889 22,169,073Interest paid to suppliers under MSMED Act (Other than Section 16) — —Interest paid to suppliers under MSMED Act (Section 16) — —Interest due and payable towards suppliers under MSMED Act for payment already made 701,571 256,664Interest accrued and remaining unpaid at the end of the period to suppliers under MSMEDAct 1,785,808 784,833

Note: This information has been given in respect of such vendors to the extent they could be identified as Micro and Small enterpriseson the basis of information available with the Company.

NOTE 47: PROPOSED DIVIDEND

Year Ended Year EndedParticulars March 31, 2014 March 31, 2013

Rupees Rupees

The Final Dividend proposed for the year is as follows:On Equity Shares of Rs. 10 each:Amount of dividend proposed 21,542,417 47,256,042Dividend per Equity Share Rs. 1.20/- per share Rs. 3.00/- per share

NOTE 48: DIVIDEND REMITTED IN FOREIGN EXCHANGE

Year Ended Year EndedParticulars March 31, 2014 March 31, 2013

Rupees Rupees

Dividend paid during the year 22,503,846 10,419,187Number of non-resident shareholders 3 5Number of Equity Shares held by such non-resident shareholders 7,501,282 8,682,656Year to which the dividends relate to 2012-13 2011-2012

NOTE 49:

The financial statements of the Company for the year ended 31 March 2013 were audited and reported by another firm of CharteredAccountants. Previous year figures have been regrouped or rearranged, wherever considered necessary to make them comparablewith those of the current year.







46

Annual Report 2013 - 2014

PERFORMANCE REVIEW

During the year under review, the Company has earned a totalincome of Rs. 8139.28 Lac. The Profit before Tax is increased toRs. 1220.75 Lac from Rs. 705.28 Lac and the profit after taxincreased to Rs. 802.57 Lac from Rs. 463.16 Lac in the previousyear.

DIVIDEND

Your Directors had declared an interim dividend of Rs. 12,500 perShare on 2200 Equity Shares of Rs. 1000/- each at the BoardMeeting held on 23rd January 2014 and paid to the share holderswhose name appeared in the Register of Members as on the dateof Board Meeting.

Your Directors feel that it is prudent to plough back the profits forfuture growth of the Company and do not recommend any furtherdividend for the year ended 31st March, 2014. The interim dividend

DIRECTORS’ REPORT

To

The Members of PROSEAL CLOSURES LIMITED

Your Directors are pleased to present the 25th Annual Report ofyour Company together with the audited accounts for the financialyear ended 31st March, 2014.

FINANCIAL RESULTS

The Company’s financial performance, for the year ended 31st

March, 2014 is summarized below:

of Rs. 12,500 per Share declared on 23rd January, 2013 beconsidered as final dividend for the Financial Year 2013-14.

DIRECTORS

During the financial year Mr. Prabodhchandra Kallya Bhat (DIN:00436254) stepped down as Managing Director from the Companyand Mrs. Suchitra Prabodhchandra Bhat (DIN: 00299936) andMr. Prakash Ravalnath Prabhu (DIN: 01561050) stepped down asdirectors from the Company with effect from 23rd January, 2014.The Board places on record its appreciation for the servicesrendered by them.

Pursuant to the provisions of applicable Sections of the CompaniesAct, 1956 and the Articles of Associations of the Company,Mr. Mohan Narayan Menon, the Director was re-designated as theManaging Director at the Board Meeting held on 23rd January 2014for a period of one year with effect from 23rd January, 2014, subjectto the approval of Shareholders in the general meeting.

Presently your Company is managed by the Board of Directorsconsisting of following Directors:

DIN Name Designation Date ofAppointment

02063924 Mr. Reinier Hietink Nominee 09/01/2008Director

02838483 Mr. Mohan Narayan Managing 23/11/2010Menon Director

(w.e.f. 23-01-2014)

03368900 Mr. Anand Dayal Director 23/11/2010

In accordance with the requirements of the Companies Act, 2013,read with the provisions in the Articles of Association of theCompany, Mr. Anand Dayal retire by rotation and being eligible offerhimself for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956, with respect to Directors’ ResponsibilityStatement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the year ended31st March, 2014, the applicable accounting standards havebeen followed and there are no material departures from thesame;

(ii) the Directors have selected such accounting policies andapplied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st

March, 2014 and of the profit of the Company for that period;

(iii) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance

(Rs. In Lacs)

F. Y. F. Y.Particulars

31.03.2014 31.03.2013

Revenue from operations 8104.27 6374.61

Other income 35.02 61.92

Profit Before Tax 1220.75 705.28

(Less) Current tax 382.48 172.33

(Less) Deferred tax 35.70 69.80

Profit After Tax 802.57 463.16

(Add) Balance in Profit andLoss Account 1153.76 1058.69

(Less) Interim dividend paid 275.00 NIL

Tax on interim dividend paid 46.74 NIL

Less: Appropriation:

Transfer to General Reserve 80.30 46.35

Proposed Dividend on equity shares NIL 275.00

Tax on Dividend NIL 46.74

Closing Balance 1554.29 1153.76

47

Proseal Closures Limitedwith the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of theCompany on a ‘going concern’ basis.

AUDITORS AND AUDITORS’ REPORT

M/s. Deloitte Haskins & Sells, Chartered Accountants, StatutoryAuditors of the Company, having registration number 008072S willretire at the forthcoming Annual General Meeting and are eligiblefor reappointment. In accordance with the Companies Act 2013, itis proposed to re-appoint them from the conclusion of this AnnualGeneral Meeting till the conclusion of the next Annual GeneralMeeting, subject to the approval of shareholders.

The Company has received letter from them to the effect that theirre–appointment, if made, would be within the prescribed limitsunder Section 141(3) (g) of the Companies Act, 2013 and that theyare not disqualified for re–appointment.

No adverse comments have been made by the Statutory Auditorsin their report.

COST AUDITORS

Cost Compliance Certificate is obtained from M/s. Adarsh Sharma& Co., Cost Accountant for the financial year 2013-14.

SECRETARIAL COMPLIANCE CERTIFICATE

Secretarial Compliance certificate is obtained from B. MaheshShenoy, a Practicing Company Secretary as per Section 383A ofCompanies Act 1956 read with Rule 3(2) of Companies (ComplianceCertificate) Rules, 2001.

PARTICULARS OF EMPLOYEES

There are no employees who come under the purview of section217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, as amended. Hence noparticulars are required to be furnished.

PUBLIC DEPOSITS

The Company has not accepted any deposits during the yearunder review within the meaning of Section 58A and 58AA of The

Companies Act, 1956, and pursuant to Rule 4A of the Companies(Acceptance of deposits) Rules, 1975.

INFORMATION IN PURSUANT TO SECTION 217 (1) (e) OF THECOMPANIES ACT, 1956

Information required to be disclosed u/s 217(1)(e) of the CompaniesAct, 1956, read with companies (Disclosures of particulars in thereport of the Board of Directors) Rules, 1988, with respect toconservation of Energy and Technical Absorption and ForeignExchange Earnings/ Outgo is as follows:

(i) Conservation of Energy

During the year, measures have been taken to reduce thepower consumption through introduction of Lighting energysaving panel, APFC panel and up gradation to LED lightsthus economizing on use of power and electricity in thefactory and office.

(ii) Technology Absorption

Technological inputs received from Holding Company helpedin improving efficiencies and cost reduction therefore.

(iii) Foreign Exchange Earnings And Outgo

The Company has earned Rs. 5365.50 Lac in ForeignExchange through exports during the year while the ForeignExchange outgo was Rs 252.27 Lac.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for theassistance and co–operation received from the financial institutions,banks, Government authorities, customers, vendors and membersduring the year under review. Your Directors also wish to place onrecord their appreciation for the committed services by theCompany’s executives, staff and workers..

For and on behalf of the Board of DirectorsFor PRO-SEAL CLOSURES LIMITED

Bangalore, Mohan Menon Anand DayalMay 6, 2014 Managing Director Director

(DIN: 02838483) (DIN: 03368900)

48


REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of

PROSEAL CLOSURES LIMITED (“the Company”), which comprise

the Balance Sheet as at March 31, 2014, the Statement of Profit

and Loss and the Cash Flow Statement for the year then ended

and a summary of the significant accounting policies and other

explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL

STATEMENTS

The Company’s Management is responsible for the preparation of

the financial statements that give a true and fair view of the

financial position, financial performance and cash flows of the

Company in accordance with the Accounting Standards notified

under the Companies Act, 1956 (“the Act”) (which continue to be

applicable in respect of Section 133 of the Companies Act, 2013

in terms of General Circular 15/2013 dated 13th September, 2013

of the Ministry of Corporate Affairs) and in accordance with the

accounting principles generally accepted in India. This responsibility

includes the design, implementation and maintenance of internal

control relevant to the preparation and presentation of the financial

statements that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with the Standards on Auditing issued by the Institute

of Chartered Accountants of India. Those Standards require that

we comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and the disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the

Company’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of expressing an

INDEPENDENT AUDITORS’ REPORTTo the members of Proseal Closures Limited

opinion on the effectiveness of the Company’s internal control. An

audit also includes evaluating the appropriateness of the accounting

policies used and the reasonableness of the accounting estimates

made by the Management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion and to the best of our information and according to

the explanations given to us, the aforesaid financial statements

give the information required by the Act in the manner so required

and give a true and fair view in conformity with the accounting

principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the

Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit

of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of

the Company for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

1. As required by the Companies (Auditor’s Report) Order, 2003

(“the Order”) issued by the Central Government in terms of

Section 227(4A) of the Act, we give in the Annexure a statement

on the matters specified in paragraphs 4 and 5 of the

Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations

which to the best of our knowledge and belief were

necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by

law have been kept by the Company so far as it appears

from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss,

and the Cash Flow Statement dealt with by this Report

are in agreement with the books of account.

49

Proseal Closures Limitedd. In our opinion, the Balance Sheet, the Statement of Profit

and Loss, and the Cash Flow Statement comply with the

Accounting Standards notified under the Act (which

continue to be applicable in respect of Section 133 of the

Companies Act, 2013 in terms of General Circular 15/

2013 dated 13th September, 2013 of the Ministry of

Corporate Affairs).

e. On the basis of the written representations received from

the directors as on March 31, 2014 taken on record by

the Board of Directors, none of the directors is disqualified

as on March 31, 2014, from being appointed as a director

in terms of Section 274(1)(g) of the Act.

For Deloitte Haskins & Sells

Chartered Accountants

Registration No. 008072S

Sathya P Koushik

Place: Bangalore Partner

Date: May 19, 2014 Membership No. 206920

50


i. Having regard to the nature of the Company’s business /activities / results during the year, clauses xii, xiii, xiv, xix andxx of paragraph 4 of the Order are not applicable to theCompany.

ii. In respect of its fixed assets:

(a) The Company has maintained proper records showingfull particulars, including quantitative details and situationof the fixed assets.

(b) The fixed assets were physically verified during the yearby the Management in accordance with a regularprogramme of verification which, in our opinion, providesfor physical verification of all the fixed assets atreasonable intervals. According to the information andexplanation given to us, no discrepancies were noticedon such verification.

(c) The fixed assets disposed off during the year, in ouropinion, do not constitute a substantial part of the fixedassets of the Company and such disposal has, in ouropinion, not affected the going concern status of theCompany.

iii. In respect of its inventory:

(a) As explained to us, the inventories were physically verifiedduring the year by the Management at reasonableintervals. In respect of inventory of the Company held bythe consignment agent located outside India, as explainedto us, the Company receives periodic confirmation fromthe consignment agent for inventory held.

(b) In our opinion and according to the information andexplanation given to us, the procedures of physicalverification of inventories followed by the Managementwere reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion and according to the information andexplanations given to us, the Company has maintainedproper records of its inventories and no materialdiscrepancies were noticed on physical verification.

iv. The Company has not granted any loans, secured orunsecured, to companies, firms or other parties covered inthe Register maintained under Section 301 of the CompaniesAct, 1956.

In respect of loans, secured or unsecured, taken by theCompany from companies, firms or other parties covered inthe Register maintained under Section 301 of the CompaniesAct, 1956, according to the information and explanationsgiven to us:

(a) The Company has taken loan aggregating toRs.27,500,000 from two parties during the year. At theyear-end, the outstanding balances of such loans takenaggregated Rs.13,500,000 (one party) and the maximumamount involved during the year was Rs.35,500,000/-(two parties).

(b) The rate of interest and other terms and conditions of

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

such loans are, in our opinion, prima facie not prejudicialto the interest of the Company.

(c) The payments of principal amounts and interest in respectof such loans are regular/ as per stipulations.

v. In our opinion and according to the information andexplanations given to us, having regard to the explanationsthat some of the items purchased are of special nature andsuitable alternative sources are not readily available forobtaining comparable quotations, there is an adequate internalcontrol system commensurate with the size of the Companyand the nature of its business with regard to purchases ofinventory and fixed assets and the sale of goods and services.During the course of our audit, we have not observed anymajor weakness in such internal control system.

vi. In respect of contracts or arrangements entered in the Registermaintained in pursuance of Section 301 of the CompaniesAct, 1956, to the best of our knowledge and belief andaccording to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred toin Section 301 that needed to be entered in the Registermaintained under the said Section have been so entered.

(b) Where each of such transaction (excluding loans reportedunder paragraph (iv) above) is in excess of Rs.5 lakhsin respect of any party, the transactions have been madeat prices which are, prima facie reasonable having regardto the prevailing market prices at the relevant time.

vii. According to the information and explanations given to us,the Company has not accepted any deposit from the publicduring the year.

viii. In our opinion, the internal audit functions carried out duringthe year by firm of Chartered Accountants appointed by theManagement have been commensurate with the size of theCompany and the nature of its business.

ix. We have broadly reviewed the cost records maintained bythe Company pursuant to the Companies (Cost AccountingRecords) Rules, 2011 prescribed by the Central Governmentunder Section 209(1) (d) of the Companies Act, 1956 and areof the opinion that, prima facie, the prescribed cost recordshave been made and maintained. We have, however, notmade a detailed examination of the cost records with a viewto determine whether they are accurate or complete.

x. According to the information and explanations given to us inrespect of statutory dues:

(a) Other than Income Tax dues, the Company has generallybeen regular in depositing undisputed dues, includingProvident Fund, Investor Education and Protection Fund,Employees’ State Insurance, Sales Tax, Wealth Tax,Service Tax, Custom Duty, Excise Duty, Cess and othermaterial statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respectof Provident Fund, Investor Education and ProtectionFund, Employees’ State Insurance, Income-tax, SalesTax, Wealth Tax, Service Tax, Customs Duty, Excise

51

Proseal Closures LimitedDuty, Cess and other material statutory dues in arrearsas at March 31, 2014 for a period of more than sixmonths from the date they became payable except forincome tax dues of Rs.10,541,040/-.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax,Service Tax, Customs Duty, Excise Duty and Cess whichhave not been deposited as on March 31, 2014 onaccount of disputes are given below:

Name of Nature of Forum where Period to Amount

Statue Dues Dispute is which the involved

pending amount (Rs.)

relates

Finance Act, Service Tax Customs/Excise 2008-09 264,440

1994 (Including Service Tax

penalty) Appellate

Tribunal

Income Tax Income Tax Deputy 2011-12 423,683

Act, 1961 Commissioner

of Income Tax

xi. The Company does not have accumulated losses at the endof the financial year and the Company has not incurred cashlosses during the financial year covered by our audit and inthe immediately preceding financial year.

xii. In our opinion and according to the information andexplanations given to us, the Company has not defaulted in

the repayment of dues to banks and financial institutions. TheCompany has not issued any debentures.

xiii. The Company has not given any guarantee for loans takenfrom others from banks or financial institutions.

xiv. In our opinion and according to the information andexplanations given to us, the term loans have been appliedfor the purposes for which they were obtained.

xv. In our opinion and according to the information andexplanations given to us and on an overall examination of theBalance Sheet, funds raised on short term basis aggregatingapproximately Rs.56,590,730/-have been used during theyear for long term investment.

xvi. The Company has not made any preferential allotment ofshares to parties and companies covered in the Registermaintained under section 301 of the Act.

xvii.To the best of our knowledge and according to the informationand explanations given to us, no fraud by the Company andno material fraud on the Company has been noticed orreported during the year.

For Deloitte Haskins & SellsChartered AccountantsRegistration No. 008072S

Sathya P KoushikPlace: Bangalore PartnerDate: May 19, 2014 Membership No. 206920

52

Annual Report 2013 - 2014BALANCE SHEET AS AT MARCH 31, 2014


Rupees RupeesA. EQUITY AND LIABILITIES Note

1. Shareholders’ funds(a) Share capital 3 2,200,000 2,200,000(b) Reserves and surplus 4 194,173,002 146,089,723

196,373,002 148,289,7232. Non-current liabilities

(a) Long-term borrowings 5 9,713,185 35,981,570(b) Deferred tax liabilities (net) 27.7 24,500,000 20,930,000(c) Other long-term liabilities 6 2,126,273 2,841,292(d) Long-term provisions 7 2,093,650 1,988,818

38,433,108 61,741,6803. Current liabilities

(a) Short-term borrowings 8 155,171,294 134,501,120(b) Trade payables 9 137,419,941 106,198,758(c) Other current liabilities 10 45,969,281 37,515,680(d) Short-term provisions 11 30,710,441 42,536,224

369,270,957 320,751,782

TOTAL 604,077,067 530,783,185

B. ASSETS

1. Non-current assets

(a) Fixed assets(i) Tangible assets 12 283,759,674 286,184,628(ii) Intangible assets 12 859,955 1,055,158(iii) Capital work-in-progress 888,470 3,868,711

285,508,099 291,108,497(b) Long-term loans and advances 13 12,128,128 9,050,895(c) Other non-current assets 14 6,359,331 2,500,000

303,995,558 302,659,3922. Current assets

(a) Inventories 15 130,822,828 110,641,575(b) Trade receivables 16 84,576,510 59,759,980(c) Cash and cash equivalents 17 5,166,017 8,395,386(d) Short-term loans and advances 18 74,261,489 46,953,994(e) Other current assets 19 5,254,665 2,372,858

300,081,509 228,123,793

TOTAL 604,077,067 530,783,185

Corporate Information and Significant Accounting Policies 1 & 2See accompanying notes forming part of the financial statements

In terms of our report attached

For Deloitte Haskins & Sells For and on behalf of the Board of DirectorsChartered Accountants

Sathya P. Koushik Mohan Menon Anand DayalPartner Managing Director Director

Place : Bangalore Place : MumbaiDate : 19 May, 2014 Date : 6 May, 2014

53

Proseal Closures LimitedSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014


Note Rupees Rupees

1. Revenue from operations (gross) 20 840,150,770 663,864,262

Less: Excise duty 20 29,724,172 26,403,287

Revenue from operations (net) 810,426,598 637,460,975

2. Other income 21 3,501,769 6,192,234

3. TOTAL REVENUE (1+2) 813,928,367 643,653,209

4. EXPENSES

(a) Cost of Raw Materials (including packing materials) consumed 22.a 396,075,706 339,395,066

(b) Changes in inventories of finished goods, work-in-progress 22.b (3,318,028) (12,774,496)and stock-in-trade

(c) Employee benefits expense 23 105,331,223 86,743,902

(d) Finance costs 24 27,422,888 23,366,330

(e) Depreciation/Amortisation expense 12 24,866,804 21,839,370

(f) Other expenses 25 141,474,385 114,554,651

TOTAL EXPENSES 691,852,978 573,124,823

5. Profit before tax (3-4) 122,075,389 70,528,386

6. Tax Expense:

(a) Current tax expense for current year 38,248,485 17,127,800

(b) Current tax expense relating to prior years — 105,077

(c) Net current tax expense 38,248,485 17,232,877

(d) Deferred tax 3,570,000 6,980,000

41,818,485 24,212,877

7. Profit for the year (5-6) 80,256,904 46,315,509

8. Earnings per share (Par value of Rs. 1000/- each):

(a) Basic 27.6.a 36,480 21,053

(b) Diluted 27.6.b 36,480 21,053

Corporate Information and Significant Accounting Policies 1 & 2

See accompanying notes forming part of the financial statements





54

Annual Report 2013 - 2014CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014

Year ended Year endedMarch 31, 2014 March 31, 2013

Rupees Rupees Rupees RupeesA. CASH FLOW FROM OPERATING ACTIVITIESNet Profit/(Loss) before extraordinary items and tax 122,075,389 70,528,387Adjustments for:

Depreciation and amortisation 24,866,804 21,839,370(Profit)/loss on sale/write off of assets 3,024 92,913Finance costs 27,422,888 23,366,330Interest income (1,197,689) (964,566)Net unrealised exchange (gain)/loss (630,466) (1,342,861)

50,464,561 42,991,186Operating profit/(loss) before working capital changes 172,539,950 113,519,573Changes in working capital:

Adjustments for (increase)/decrease in operating assets:Inventories (20,181,253) (17,462,722)Trade receivables (16,514,547) (7,283,080)Balances held as margin money 3,135,738 (1,465,983)Short(term loans and advances (27,307,495) (20,121,674)Long-term loans and advances (369,267) (2,044,339)Other current assets (2,891,640) (895,026)Margin Money for Letter of Credit (3,859,331) (2,026,030)

Adjustments for increase/(decrease) in operating liabilities:Trade payables 31,101,608 43,378,028Other current liabilities 16,712,762 9,242,268Other long-term liabilities (715,019) 571,945Short-term provisions (1,487,155) 353,723Long-term provisions 104,832 253,238

(22,270,767) 2,500,348Cash generated from operations 150,269,183 116,019,921Net income tax (paid)/refunds (17,838,073) (21,745,219)Net cash flow from operating activities (A) 132,431,110 94,274,702B. CASH FLOW FROM INVESTING ACTIVITIESCapital expenditure on fixed assets, including capital advances (23,635,760) (58,705,322)Proceeds from sale of fixed assets 156,898 572,006Interest from Banks received 1,207,522 928,571

Net cash flow from/(used in) investing activities (B) (22,271,340) (57,204,745)C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from long-term borrowings 20,850,000 45,757,000Repayment of long-term borrowings (53,986,518) (35,373,648)Net increase/(decrease) in working capital borrowings 14,606,628 (8,845,525Finance cost (27,422,888) (22,831,952)Dividends paid (55,000,000) (19,800,000)Tax on dividend (9,347,250) (3,212,055)Net cash flow from/(used in) financing activities (C) (110,300,028) (44,306,180)Net increase/(decrease) in Cash and cash equivalents (A+B+C) (140,258) (7,236,223)Cash and cash equivalents at the beginning of the year 524,029 7,777,725Effect of exchange differences on restatement of foreign currency

Cash and cash equivalents 46,627 (17,473)Cash and cash equivalents at the end of the year* 430,398 524,029Reconciliation of Cash and cash equivalents with the Balance Sheet:Cash and cash equivalents as per Balance Sheet (Refer Note 17) 5,166,017 8,395,386Less: Bank balances not considered as Cash and cash equivalents

as defined in AS 3 Cash Flow Statements (Balances held as marginmoney or security against guarantees and other commitments. 4,735,619 7,871,357

Cash and cash equivalents at the end of the year* 430,398 524,029*Comprises:(a) Cash on hand 123,577 102,003(b) Balances with banks

(i) In current accounts 128,969 98,960(ii) In EEFC accounts 177,852 323,066(iii) In deposit accounts — —

430,398 524,029

Corporate Information and Significant Accounting Policies (Refer Notes) 1 & 2See accompanying notes forming part of the financial statements





55


NOTE 1 : CORPORATE INFORMATION

Proseal Closures Limited (the “Company”) was incorporated in 1989 and manufactures Steel Drum Closures, viz Flanges, Bungs,Capseals, Levers, Latches, Clips, Closing rings, Gaskets and other accessories.

The Company is a 100% Subsidiary of Balmer Lawrie Van Leer Limited which is a Joint Venture between Greif Inc. , which is a GlobalLeader in the Industrial Packaging Industry and M/s Balmer Lawrie Co Ltd, a Government of India enterprise.

The Company is headquartered in Bangalore, and exports Steel Drum Closures to U.S.A, Europe , Middle East, Far East and Africancountries. The Company also caters to the Indian market.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

2.1: Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India(Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C)of the Companies Act, 1956 which continue tobe applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956. The financial statements have been preparedon accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statementsare consistent with those followed in the previous year.

2.2: Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptionsconsidered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses duringthe year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Futureresults could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periodsin which the results are known/materialise.

2.3: Inventories

Inventories are valued at the lower of cost (on weighted average basis) and the net realisable value after providing for obsolescenceand other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroiand other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion ofoverheads and, where applicable, excise duty.

2.4: Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, highly liquid investmentsthat are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.5: Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effectsof transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows fromoperating, investing and financing activities of the Company are segregated based on the available information.

2.6: Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956,based on the technical estimates that indicate the useful lives of the assets that would be comparable with or higher than those arrivedat using the rates prescribed in the schedule above. The useful lives and rates of depreciation for the various categories of assetsare as follows.

Asset Useful Life in Years Rate of Depreciation

Building : 30 Years 3.34% p.a

Plant & Machinery : 22 Years 4.75% (On Single Shift Basis)7.42% (On Double Shift Basis)

Tools & Dies : 9 Years 11.31% p.a

Computers : 7 years 16.21% p.a

Furniture & Fixtures : 16 Years 6.33% p.a

Motor Vehicle-Goods : 7 years 16.21% p.a

Motor Vehicle-Others : 11 Years 9.50% p.a

Assets costing less than Rs. 5,000 each are fully depreciated in the year of capitalisation.

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

56


2.7: Revenue recognition

Sale of goods

Revenue from export sales is recognised on the basis of the shipping bills for exports. Revenue from domestic sales is recognised

based on the passage of title to goods which generally coincides with dispatch. Sales include excise duty and are stated net of discounts,

other taxes, and sales returns.

Export incentives are accrued for based on fulfillment of eligibility criteria for availing the incentives and when there is no uncertainty

in receiving the same. These incentives benefits under Duty Entitlement Pass Book and Duty Drawback Schemes.

2.8: Other income

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

2.9: Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest

on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental

expenses incurred up to that date that are attributable to the asset purchased. Subsequent expenditure relating to fixed assets is

capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard

of performance.

Fixed assets acquired and put to use for project purpose are capitalised and depreciation thereon is included in the project cost till

commissioning of the project.

Capital work-in-progress:

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising

direct cost, related incidental expenses and attributable interest.

2.10: Foreign currency transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company and its integral foreign operations are accounted at the exchange rates

prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated

at the year-end rates.

Treatment of exchange differences

Exchange differences arising on settlement/restatement of short-term foreign currency monetary assets and liabilities of the Company

are recognised as income or expense in the Statement of Profit and Loss.

Accounting of forward contracts

Premium/discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the

period of the contracts if such contracts relate to monetary items as at the Balance Sheet date. Refer Notes 2.19 for accounting for

forward exchange contracts relating to firm commitments and highly probable forecast transactions.

2.11: Employee benefits

Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated

absences .

Defined contribution plans

The Company’s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined

contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are

rendered by the employees.


57

Proseal Closures LimitedNOTES FORMING PART OF THE FINANCIAL STATEMENTS

Defined benefit plans

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method,

with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of

Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already

vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement

benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for

unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited

to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees

are recognised during the year when the employees render the service. These benefits include performance incentive and compensated

absences which are expected to occur within twelve months after the end of the period in which the employee renders the related

service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future

compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders

the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less

the fair value of the plan assets out of which the obligations are expected to be settled.

2.12: Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency

borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to

the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure

of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities

relating to construction/development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the

assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when

active development activity on the qualifying assets is interrupted.

2.13: Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation

and management structure. The operating segments are the segments for which separate financial information is available and for which

operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in

assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue,

segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the

operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable

basis have been included under “unallocated revenue/expenses/assets/liabilities”.

2.14: Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised

as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

2.15: Earnings per share

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any)

by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the

58


profit/(loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges

to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for

deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion

of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would

decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as

at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the

proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive

potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive

equity shares are adjusted for share splits/reverse share splits and bonus shares, as appropriate.

2.16: Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of theIncome Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income thatoriginate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax ratesand the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences.Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certaintythat there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timingdifferences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available againstwhich these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the samegoverning tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each BalanceSheet date for their realisability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit andLoss.

2.17: Impairment of assets

The carrying values of assets/cash generating units at each Balance Sheet date are reviewed for impairment. If any indication ofimpairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of theseassets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Valuein use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When thereis indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased,such reversal of impairment loss is recognised in the Statement of Profit and Loss.

2.18: Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflowof resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirementbenefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation atthe Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingentliabilities are disclosed in the Notes.

2.19: Derivative contracts

The Company enters into derivative contracts in the nature of forward contracts with an intention to hedge its existing assets andliabilities, firm commitments and highly probable transactions. Derivative contracts which are closely linked to the existing assets andliabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

All other derivative contracts are marked-to-market and losses are recognised in the Statement of Profit and Loss. Gains arising onthe same are not recognised, until realised, on grounds of prudence.

2.20: Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation incash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assetsand liabilities as current and non-current.


59


NOTE 3: SHARE CAPITAL


Particulars Number of Rs. Number of Rs.shares shares

(a) Authorised

Equity shares of Rs.1000 each with voting rights 5,000 5,000,000 5,000 5,000,000

(b) Issued, Subscribed and fully paid up

Equity shares of Rs.1000 each with voting rights 2,200 2,200,000 2,200 2,200,000

Total 2,200 2,200,000 2,200 2,200,000

Refer Notes (i) to (iv) below

Notes:

(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Particulars Opening Balance Closing Balance

Equity shares with voting rights 2,200 2,200

Year ended March 31, 2014

— Number of shares 2,200 2,200

— Amount (Rs.) 2,200,000 2,200,000

Year ended March 31, 2013

— Number of shares 2,200 2,200

— Amount (Rs.) 2,200,000 2,200,000

(ii) Details of shares held by the holding company, the ultimate holding company, their subsidiaries and associates:

Equity shares with voting rightsParticulars

Number of shares*

As at March 31, 2014

Balmer Lawrie-Van Leer Limited - Holding company 2200

As at March 31, 2013

Balmer Lawrie-Van Leer Limited - Holding company 1122

* Including Shares held by six (Previous year three) nominees of Holding Company

(iii) The Company has only one class of Equity Share, having a par value of Rs.1000/-. Each holder of equity shares is entitled

to one vote per share. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive any

of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to number

of equity shares held by the shareholders.

60


(iv) Details of shares held by each shareholder holding more than 5% shares:

Class of shares/Name of shareholder As at March 31, 2014 As at March 31, 2013

Number of shares % holding in that Number of shares % holding in thatheld class of shares held class of shares

Equity shares with voting rights

Balmer Lawrie-Van Leer Limited * 2200* 100.00% 1122* 51.00%

K Prabodhchandra Bhat — 0.00% 859 39.05%

Prakash R Prabhu — 0.00% 218 9.91%

* Including Shares held by six (Previous year three) nominees of Holding Company

NOTE 4: RESERVES AND SURPLUS

Particulars As at March 31, 2014 As at March 31, 2013

Rs. Rs.

(a) General reserve

Opening balance 29,726,203 25,091,203

Add: Transferred from surplus in Statement of Profit and Loss 8,030,000 4,635,000

Closing balance 37,756,203 29,726,203

(b) Other reserves-State Subsidy 987,900 987,900

(c) Surplus/(Deficit) in Statement of Profit and Loss

Opening balance 115,375,620 105,868,736

Add: Profit/(Loss) for the year 80,256,904 46,315,509

Less:

Interim Dividends paid to the equity shareholders[Rs. 12,500 per share (Previous Year ‘Nil per share)] 27,500,000 —

Dividends proposed to be distributed to equity shareholders[‘Nil per share (Previous Year Rs. 12,500 per share)] — 27,500,000

Tax on dividend 4,673,625 4,673,625

Transferred to:

General reserve 8,030,000 4,635,000

Closing balance 155,428,899 115,375,620

Total 194,173,002 146,089,723

NOTE 5: LONG-TERM BORROWINGS

Particulars As at March 31, 2014 As at March 31, 2013Rs. Rs.

(1) Term loans from Banks — Secured [Refer Note (i)(a) below] 9,713,185 10,981,570

(2) Loans and advances from related parties — Unsecured[Refer Note (i) (b) below and Note 27.4.b] — 25,000,000

Total 9,713,185 35,981,570


61


Details of terms of repayment for long-term borrowings and security provided in respect of secured long-term borrowings:

As at As atParticulars Terms of repayment and security March 31, 2014 March 31, 2013

Rs. Rs.

(a) Term loans from banks: [IncludingCurrent Maturities of Long termDebts (Secured)-[Refer Note 10 (a)]

1. Corporation Bank Long term loan 9,183,665 10,702,000

Current maturities of long term loan 9,736,335 16,617,000

Exclusive Mortgage/First Charge on Factory land andBuilding and Hypothecation on Plant and Machinery andother Moveable Properties.

Term Loan 1 : The Terms of Repayment will be 22 EqualMonthly instalments of Rs. 9.75 Lakh each Commencingfrom 31.08.2011 and last instalment fall due on 31.05.2013.The Interest at 13.60% p.a shall be paid separately asand when due.

Term Loan 2 : The Terms of Repayment will be 24 EqualMonthly instalments of Rs. 5.83 Lakhs each Commencingfrom 31.07.2012 and last instalment fall due on 30.6.2014.The Interest at 13.60% p.a shall be paid separately asand when due.

Term Loan 3 : The Terms of Repayment will be 36 EqualMonthly instalments of Rs. 6.25 Lakhs each Commencingfrom 30.06.2013 and last instalment fall due on 31.05.2016.The Interest at 13.60% p.a shall be paid separately asand when due.

2. Corporation Bank (Vehicle Loan) Long term loan 529,520 279,570

Current maturities of long term loan 496,872 484,340

Secured by hypothecation of vehicle purchased under theloan.

1. The Terms of Repayment: 36 Monthly Instalments ofRs. 18,434/- each commencing from June 2011.

Interest Rate: 12.25% per annum

2. The terms of repayment : 36 Monthly Instalments ofRs. 21,620/- each commencing from July 2012 atInterest Rate of 12.25% per annum

3. The terms of repayment: 36 monthly instalments ofRs. 23,193/- each commencing from January 2014.Interest Rate: 10.65% per annum.

(b) Loans and advances from relatedparties (Unsecured): (Refer Note27.4.b) [Including Current Maturitiesof Long term Debts (Secured)-[Refer Note 10 (a)]

Long Term Loan

K Prabodhchandra Bhat As per the terms of the loan, the company had to — 16,000,000repay the loan within 2 years from the previous year.However, on account of transfer of the shares to theholding company, by Mr. K Prabodhchandra Bhat the loanwas prepaid.

Prakash R Prabhu As per the terms of the loan, the company had to — 9,000,000repay the loan within 2 years from the previous year.However, on account of transfer of the shares to theholding company, by Mr. Prakash R Prabhu the loan wasprepaid.

19,946,392 53,082,910


62

Annual Report 2013 - 2014NOTES FORMING PART OF THE FINANCIAL STATEMENTS

NOTE 6: OTHER LONG-TERM LIABILITIES


Rupees Rupees

(a) Others:(i) Retention Money Payable 16,458 1,239,224(ii) Trade/security deposits received 150,000 150,000(iii) Provision for Gratuity (Refer Note 27.1.b) 1,959,815 1,452,068

Total 2,126,273 2,841,292

NOTE 7: LONG-TERM PROVISIONS


Rupees Rupees

(a) Provision for employee benefits:(i) Provision for compensated absences 2,093,650 1,988,818

Total 2,093,650 1,988,818

NOTE 8: SHORT-TERM BORROWINGS


Rupees Rupees

(a) Loans repayable on demandFrom banks:

Secured [Refer Note (i) below] 81,671,294 89,501,120Unsecured [Refer Note (ii) below) 60,000,000 45,000,000

(b) Loans from related partyUnsecured [Refer Note (iii) below) 13,500,000 —

Total 155,171,294 134,501,120

Notes:(i) Details of security for the secured short-term borrowings:

ParticularsNature of security March 31, 2014 March 31, 2013

Rupees Rupees

Loans repayable on demandfrom banks: (Secured)Corporation Bank-Open Cash Credit Hypothecation of Stock and Book Debts of

the Company by way of exclusive firstcharge 18,928,881 25,869,589

Corporation Bank-Packing Credit Loan in Exclusive First charge by way of hypotheca-Foreign Currency and Indian Currency tion of entire stock meant for export and

export receivables. 55,143,844 63,631,531Bills Discounting Hypothecation of Stock and Book Debts of

the Company by way of exclusive first charge 7,598,569

81,671,294 89,501,120

(ii) Details of short-term borrowings guaranteed by some of the directors or others:

ParticularsNature of guarantee March 31, 2014 March 31, 2013

Rupees Rupees

Royal Bank of Scotland (Unsecured) Unsecured loan guaranteed by Greif Inc. 60,000,000 45,000,000

60,000,000 45,000,000

(iii) Details of short-term borrowings by holding company:

ParticularsNature of guarantee March 31, 2014 March 31, 2013

Rupees Rupees

Balmer Lawrie Van Leer Ltd. Unsecured loan repayable within 12 months 13,500,000 —

13,500,000 —

63


NOTE 9: TRADE PAYABLES


Rupees Rupees

Trade payables:

Acceptances 23,192,618 29,183,488

Other than acceptances 114,227,323 77,015,270

Total 137,419,941 106,198,758

NOTE 10: OTHER CURRENT LIABILITIES


Rupees Rupees

(a) Current maturities of long-term debt (Refer Note (i) below) 10,233,207 17,101,340

(b) Interest accrued but not due on borrowings 224,464 272,327

(c) Other payables

(i) Statutory remittances 5,507,358 3,675,039

(ii) Payables on purchase of fixed assets — 1,343,165

(iii) Advances from customers 28,746,114 14,123,809

(iv) Others

—Provision for gratuity (net) (Refer Note 27.1.b) 1,000,000 1,000,000

—Deferred Rent 258,138 —

Total 45,969,281 37,515,680

Note:

(i): Current maturities of long-term debt (Refer Note (i) in Note 5 - Long-term borrowings for details of security:


Rupees Rupees

(a) Term loans

From Corporation Bank – Secured 10,233,207 17,101,340

Total 10,233,207 17,101,340

NOTE 11: SHORT-TERM PROVISIONS


Rupees Rupees

(a) Provision for employee benefits:

(i) Provision for compensated absences 292,143 1,779,298

(b) Provision-Others:

(i) Provision for tax (Net of advance tax Rs. 9,413,073/-(As at 31 March, 2013-Rs. 9,106,299/-) 30,418,298 8,583,301

(ii) Provision for proposed equity dividend — 27,500,000

(iii) Provision for tax on proposed dividends — 4,673,625

30,418,298 40,756,926

Total 30,710,441 42,536,224

64

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65


NOTE 13: LONG-TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


Rupees Rupees

(a) Capital advances 3,784,040 917,773

(b) Security deposits 5,351,320 5,309,309

(c) Loans and advances to employees 627,256 300,000

(d) Advance income tax (net of provisions Rs. 108,974,198/-(As at 31 March, 2013 Rs. 91,284,598/-). 2,365,512 2,523,813

Total 12,128,128 9,050,895

NOTE 14: OTHER NON-CURRENT ASSETS


Rupees Rupees

(i) Margin Money with Banks 6,359,331 2,500,000

Total 6,359,331 2,500,000

NOTE 15: INVENTORIES

(At lower of cost and net realisable value)


Rupees Rupees

(a) Raw materials 66,217,210 51,167,817

(b) Work-in-progress (Refer Note below) 15,056,064 18,387,524

(c) Finished goods (other than those acquired for trading) 43,004,059 36,273,028

(d) Stores and spares 5,692,875 4,027,805

(e) Others (Packing Materials) 852,620 785,401

Total 130,822,828 110,641,575

Note: Details of inventory of work-in-progress


Rupees Rupees

Drum Closures 5,808,833 5,671,687

Levers & Latches and Clips 8,931,373 10,440,360

Rubber Gaskets 172,602 2,000,866

Closing Rings 143,256 274,611

Total 15,056,064 18,387,524

66


NOTE 16: TRADE RECEIVABLES (Unsecured, Considered good)


Rupees Rupees

Trade receivables outstanding for a period exceeding six months from the date theywere due for payment — 579,879

Other Trade receivables 84,576,510 59,180,101

Total 84,576,510 59,759,980

NOTE 17: CASH AND CASH EQUIVALENTS


Rupees Rupees

(a) Cash on hand 123,577 102,003

(b) Balances with banks

(i) In current accounts 128,969 98,960

(ii) In EEFC accounts 177,852 323,066

(iii) In deposit accounts (Refer Note (i) below) — —

(iv) In earmarked accounts

— Margin money with banks 4,735,619 7,871,357

Total 5,166,017 8,395,386

Of the above, the balances that meet the definition of Cash and cash equivalentsas per AS 3 Cash Flow Statements is 430,398 524,029

NOTE 18: SHORT-TERM LOANS AND ADVANCES (Unsecured, Considered good)


Rupees Rupees

(a) Loans and advances to employees 1,427,400 1,150,662

(b) Prepaid expenses 2,504,761 2,141,512

(c) Balances with Government authorities:

(i) CENVAT credit receivable 24,506,759 17,261,062

(ii) VAT credit receivable 33,116,251 21,043,973

(iii) Service tax credit receivable 9,944,646 4,607,966

67,567,656 42,913,001

(d) Others (Advance to Suppliers) 2,761,672 748,819

Total 74,261,489 46,953,994


67


NOTE 19: OTHER CURRENT ASSETS (Unsecured Considered good)

As at As atParticulars March 31, 2014 March 31, 2013

Rupees Rupees

(a) Accruals

Interest accrued on deposits 126,390 136,223

(b) Balances with Government authorities

Duty drawback receivable 5,128,275 2,236,635

Total 5,254,665 2,372,858

NOTE 20: REVENUE FROM OPERATIONS

For the year ended For the year endedParticulars March 31, 2014 March 31, 2013

Rupees Rupees

(a) Sale of products (Refer Note (i) below) 766,176,815 592,669,545

(b) Other operating revenues (Refer Note (ii) below) 73,973,955 71,194,717

840,150,770 663,864,262

Less:

(c) Excise duty 29,724,172 26,403,287

Total 810,426,598 637,460,975


Rupees Rupees

(i) Sale of products comprises:

Manufactured goods

Drum Closures 284,674,195 222,003,049

Lever & Latches 295,348,493 257,058,011

Closing Rings 102,497,524 75,651,207

Rubber Gaskets 63,496,703 16,238,728

Plastic Products 8,419,511 948,231

Others 11,740,389 20,770,319

Total - Sale of manufactured goods 766,176,815 592,669,545

(ii) Other operating revenues comprise:

Sale of scrap 63,049,161 58,255,777

Duty drawback and other export incentives 10,924,794 12,181,678

Others — -

Service charges for Job Works — 757,262

Total - Other operating revenues 73,973,955 71,194,717

68


NOTE 21: OTHER INCOME


Rupees Rupees

(a) Interest income from Bank Deposits. 1,197,689 964,566

(b) Net gain on foreign currency transactions and translation 1,783,162 4,897,767

(c) Other non-operating income (Refer Note (i) below) 520,918 329,901

Total 3,501,769 6,192,234

(i) Miscellaneous income 520,918 329,901

Total - Other non-operating income 520,918 329,901

NOTE 22.a: COST OF RAW MATERIALS (including Packing Materials) CONSUMED


Rupees Rupees

Opening stock 51,953,218 46,312,881

Add: Purchases 411,192,318 345,035,403

463,145,536 391,348,284

Less: Closing stock 67,069,830 51,953,218

Cost of material consumed 396,075,706 339,395,066

Material consumed comprises:

Steel 319,500,414 275,021,700

Plating Materials 23,052,443 15,587,204

Packing Materials 12,526,775 9,025,804

Others 40,996,074 39,760,358

Total 396,075,706 339,395,066

69


NOTE 22.b: CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE


Rupees Rupees

Inventories at the end of the year:

Finished goods 42,922,516 36,273,028

Work-in-progress 15,056,064 18,387,524

57,978,580 54,660,552

Inventories at the beginning of the year:

Finished goods 36,273,028 29,479,968

Work-in-progress 18,387,524 12,406,088

54,660,552 41,886,056

Net (increase)/decrease (3,318,028) (12,774,496)

NOTE 23: EMPLOYEE BENEFITS EXPENSE*


Rupees Rupees

Salaries and wages* 89,084,606 71,379,946

Contributions to provident and other funds (Refer Note 27.1) 6,284,557 5,339,265

Staff welfare expenses 9,962,060 10,024,691

Total 105,331,223 86,743,902

* Includes expenses relating to Employees on Contract Basis ‘ 35,603,732/- (As at 31 March, 2013 ‘27,939,405)

NOTE 24: FINANCE COSTS


Rupees Rupees

(a) Interest expense on:

(i) Borrowings 25,840,002 22,804,030

(ii) Others - Interest on delayed payment of income tax 1,582,886 562,300

Total 27,422,888 23,366,330

70


For the year ended For the year endedMarch 31, 2014 March 31, 2013

Rupees Rupees

NOTE 25: OTHER EXPENSES

Consumption of stores and spare parts 14,278,716 7,181,015

Increase/(decrease) of excise duty on inventory 401,717 70,025

Power, Fuel and Water 26,485,790 19,834,743

Rent including lease rentals (Refer Note 27.5) 3,002,552 969,408

Repairs and maintenance — Buildings 2,234,754 525,152

Repairs and maintenance — Machinery 4,160,207 11,617,897

Repairs and maintenance — Others 13,485,412 10,509,679

Insurance 755,817 646,331

Rates and taxes 1,228,058 445,977

Communication 1,010,318 610,277

Travelling and conveyance 14,028,130 8,399,261

Printing and stationery 67,356 674,767

Freight and forwarding 22,456,247 19,801,845

Sales commission 5,000,359 3,726,933

Sales discount 2,253,391 412,731

Export Processing Charges 7,648,471 3,933,351

Donations and contributions 57,000 137,006

Legal and professional 13,507,159 12,334,560

Payments to auditors (Refer Note (i) below) 1,190,080 965,360

Loss on fixed assets sold/scrapped/written off 3,024 92,913

Bank Charges 3,850,088 6,119,302

Miscellaneous expenses 4,369,739 5,546,118

Total 141,474,385 114,554,651

Notes:

For the year ended For the year endedMarch 31, 2014 March 31, 2013

Rupees Rupees

(i) Payments to the auditors comprise (Including service tax):

As auditors - statutory audit 1,067,420 842,700

For taxation matters 112,360 112,360

Reimbursement of expenses 10,300 10,300

Total 1,190,080 965,360

71


NOTE 26: ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

26.1: Contingent liabilities and commitments (to the extent not provided for)


Rupees Rupees

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt :

(i) Service Tax (including Penalties) under Appeal with CESTAT 3,491,171 1,566,145

(ii) Income Tax (Assessment year 2011-12) under rectification with Deputy 423,683 —Commissioner of Income Tax

The above amounts are based on notice of demands/ assessment ordersand the Company is contesting these claims with relevant authorities.Outflows, if any arising out of these claims would depend on the outcomeof the decisions of the relevant authorities and the Company’s right forfuture appeals before the judiciary. No reimbursements are expected.

(b) Other money for which the Company is contingently liable :

(i) Bills discounted with banks: 104,503,953 68,598,176

(ii) Commitments:

(a) Estimated amount of contracts remaining to be executed on capital accountand not provided for Tangible assets 3,069,401 1,466,187

(b) The Company has entered into an arrangement with the workmen under theIndustrial Disputes (Karnataka) Rules, 1957, wherein the workmen will be paidwages as stipulated in the arrangement. This arrangement is effective till 30June, 2014.

26.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006


Rupees Rupees

(i) Principal amount remaining unpaid to any supplier as at the end of theaccounting year 3,465,474 3,722,186

(ii) Interest due thereon remaining unpaid to any supplier as at the end of theaccounting year 35,023 34,862

(iii) The amount of interest paid along with the amounts of the payment made tothe supplier beyond the appointed day — —

(iv) The amount of interest due and payable for the year 161 29,690

(v) The amount of interest accrued and remaining unpaid at the end of theaccounting year 35,023 34,862

(vi) The amount of further interest due and payable even in the succeeding year,until such date when the interest dues as above are actually paid — —

The figures for the year ending 31st March 2014 have been determined to the extent such parties have been identified on thebasis of information collected by the Management. This has been relied upon by the auditors.

26.3 Details on derivatives instruments and unhedged foreign currency exposures

I. The following derivative positions are open as at 31 March, 2014. These transactions have been undertaken to act as economichedges for the Company’s exposures to various risks in foreign exchange markets and may/may not qualify or be designated ashedging instruments. The accounting for these transactions is stated in Notes 2.10 and 2.19.

72


(a) Forward exchange contracts and options [being derivative instruments], which are not intended for trading or speculativepurposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement dateof certain payables and receivables.

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March , 2014

Currency Amount Buy / Sell Cross currency

USD 300,000 Sell Rupees

USD (240,000) Sell Rupees

Note: Figures in brackets relate to the previous year as at 31st March 2013

II. The year-end foreign currency exposures that have not been hedged by a derivative instrument or otherwise aregiven below:


Receivable/(Payable) Receivable/(Payable) Receivable/(Payable) Receivable/(Payable)Rs. in Foreign currency Rs. in Foreign currency

43,167,605 USD 723,439 20,189,090 USD 372,768

7,158,159 EUR 87,583 3,738,564 EUR 54,198

(2,356,045) (USD 39,098) (1,706,456) (USD 31,214)

(2,908,500) (EUR 35,000) (2,333,900) (EUR 33,289)

26.4 Value of imports calculated on CIF basis:


Rupees Rupees

Raw materials 12,676,528 8,915,780

Spare parts 2,040,213 829,736

Capital goods — 6,819

26.5 Expenditure in foreign currency:


Rupees Rupees

Travelling 468,328 567,878

Export Processing Charges 5,042,029 2,245,017


73


26.6 Details of consumption of imported and indigenous items

As at 31st March, 2014

Rs. %

Imported

Raw materials, packing materials etc. 12,676,528 3%8,915,780 3%

Spare parts 2,040,213 14%829,736 12%

Total 14,716,7419,745,516

Indigenous

Raw materials 383,399,178 97%330,479,286 97%

Spare parts, Packing materials etc. 12,238,503 86%6,351,279 88%

Total 395,637,681336,830,565

Note: Figures/percentage in italics relate to the previous year

26.7 Earnings in foreign exchange


Rupees Rupees

Export of goods calculated on FOB basis 536,550,153 396,344,664

NOTE 27: DISCLOSURES UNDER ACCOUNTING STANDARDS

27.1 Employee benefit plans

27.1. (a) Defined contribution plans:

The Company makes provident fund, superannuation fund and employee state insurance scheme contributions to defined contribution

plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs

to fund the benefits. The Company recognised Rs. 4,576,914/- (Year ended 31 March, 2013 Rs. 3,761,090) for Provident Fund

contributions, Rs. 576,288/- (Year ended 31 March, 2013 Rs. 602,697) for Superannuation Fund contributions and Rs. 2,420,693/-

(Year ended 31 March, 2013 Rs. 2,076,497) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss

up to the period 31 March 2014. The contributions payable to these plans by the Company are at rates specified in the rules of the

schemes..

27.1. (b) Defined benefit plans:

The Company offers gratuity (included as part of Contributions to provident and other funds in Note 23 Employee benefits

expense) under employee benefit schemes to its employees:


74


The following table sets out the funded status of the above defined benefit scheme and the amount recognised in the financial statements:

Year ended Year endedParticulars March 31, 2014 March 31, 2013

Rupees Rupees

Components of employer expense

Current service cost 570,622 466,261

Interest cost 619,652 554,623

Expected return on plan assets (395,376) (334,528)

Curtailment cost/(credit) — —

Settlement cost/(credit) — —

Past service cost — —

Actuarial losses/(gains) 336,457 289,122

Total expense recognised in the Statement of Profit and Loss 1,131,355 975,478

Actual contribution and benefit payments for year

Actual benefit payments 1,990,384 957,762

Actual contributions 623,608 621,747

Net asset/(liability) recognised in the Balance Sheet

Present value of defined benefit obligation 7,354,201 7,878,800

Fair value of plan assets 4,394,386 5,426,732

Funded status [Surplus/(Deficit)] (2,959,815) (2,452,068)

Unrecognised past service costs — —

Net asset/(liability) recognised in the Balance Sheet (2,959,815) (2,452,068)

Change in defined benefit obligations (DBO) during the year

Present value of DBO at beginning of the year 7,878,800 6,823,914

Current service cost 570,622 466,261

Interest cost 619,652 554,623

Curtailment cost/(credit) — —

Settlement cost/(credit) — —-

Plan amendments — —

Acquisitions — —

Actuarial (gains)/losses 275,511 991,764

Past service cost — —

Benefits paid (1,990,384) (957,762)

Present value of DBO at the end of the year 7,354,201 7,878,800

75


Year ended Year endedParticulars March 31, 2014 March 31, 2013

Rupees Rupees

Change in fair value of assets during the yearPlan assets at beginning of the year 5,426,732 4,725,577Acquisition adjustment — —Expected return on plan assets 395,376 334,528Actual company contributions 623,608 621,747Actuarial gain/(loss) (60,946) 702,642Benefits paid (1,990,384) (957,762)Plan assets at the end of the year 4,394,386 5,426,732Actual return on plan assets 334,430 1,037,170Composition of the plan assets is as follows:Central and State Government Securities 40.94% 42.07%Debentures and Bonds 37.52% 42.85%Equity Shares 4.69% 5.22%Fixed Deposits 14.99% 8.35%Government Guaranteed Securities 1.37% 1.35%money Market Instruments 0.49% 0.16%Actuarial assumptionsDiscount rate 8.95% 7.95%Expected return on plan assets 7.50% 7.50%Salary escalation 5.00% 5.00%Attrition 2.00% 2.00%

Mortality tables LIC Mortality LIC Mortality(1994-96) Table (1994-96) Table

Performance percentage considered

Estimate of amount of contribution in the immediate next year 1,000,000 1,000,000

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date forthe estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and otherrelevant factors.

Experience adjustments

2013-2014 2012-2013 2011-2012 2010-2011 2009-2010

GratuityPresent value of DBO 7,354,201 7,878,800 6,823,914 5,549,297 4,053,833Fair value of plan assets 4,394,386 5,426,732 4,725,577 4,526,115 4,054,971Funded status [Surplus/(Deficit)] (2,959,815) (2,452,068) (2,098,337) (1,023,182) 1,138Experience gain/(loss) adjustments on plan liabilities 1,019,119 620,308 868,593 335,607 112,811

Experience gain/(loss) adjustments on plan assets (60,946) 702,642 702,642 (3,323) 41,080

Particulars For the year ended For the year ended March 31, 2014 March 31, 2013

Actuarial assumptions for long-term compensated absencesDiscount rate 8.95% 7.95%Expected return on plan assets 7.50% 7.50%Salary escalation 5.00% 5.00%

Attrition 2.00% 2.00%

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date forthe estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and otherrelevant factors.

76


27.2 Details of borrowing costs capitalised


Rupees Rupees

Borrowing costs capitalised during the year

— as Fixed Assets — —

— as Capital work in progress — 5,322,984

— 5,322,984

27.3 Segment information

The Company has identified business segments as its primary segment with secondary segment reported geographically. The Companyhas only one business segment viz “Drum Closures” . Therefore primary business segment information is not disclosed.

The Company’s operations span across the world and are categorised geographically as (a) “USA”, (b) “Germany” (c) “UAE” (d) “India”(e) “Rest of the world”.

Geographic Segment Revenues (By geographical Segment assets (By Capital expenditure incurredgeographical location of geographical location of (By geographical location of

Customers) assets) assets)For the year ended As at during the year ended

March 31, 2014 March 31, 2014 March 31, 2014Rs. Rs. Rs.

India 257,815,527 526,827,573 —230,757,804 479,747,160 110,514,411

USA 185,016,750 48,357,905 —135,418,373 40,772,938 —

UAE 36,334,488 10,365,374 —33,344,267 994,919 —

Germany 20,939,665 2,690,146 —41,256,115 — —

Rest of the world 313,821,937 13,470,557 —202,876,650 6,744,355 —

Total 813,928,367 601,711,555 —643,653,209 528,259,372 —

Notes:

(1) Figures in italics relates to the previous year

(2) Segment Assets in USA include goods in transit (sent on consignment basis)

(3) The geographic segments individually contributing 10 percent or more of the Company’s revenues and segment assets areshown separately:

(4) Reconciliation to total assets March 31, 2014 March 31, 2013

Segment Assets as per above 601,711,555 528,259,372

Advance Tax (Net) 2,365,512 2,523,813

Total Assets 604,077,067 530,783,185

(5) Segment assets include all assets relating to the segment and consist principally of Fixed assets, Receivables, Inventory, OtherCurrent and Non—Current Assets. Assets located outside India primarily relate to Trade Receivables except for USA, wherethere are Trade receivables and Inventories.


77


27.4 Related party transactions

27.4. (a) Details of related parties:

Description of relationship Names of related parties

Holding Company Balmer Lawrie Van Leer Ltd

Key Management Personnel (KMP) Mr. Mohan Narayan Menon (W.e.f Jan 23, 2014)

Mr. P C Bhat (Resigned W.e.f Jan 23, 2014)

Mr. Prakash R Prabhu (Relative to P.C. Bhat -Resigned W.e.f Jan 23, 2014)

Sealcon Closures Enterprises over which the key management personnel havesignificant influence (Till Jan 31, 2013)

Note: Related parties have been identified by the Management.

27.4. (b) Details of related party transactions during the year ended 31 March, 2014 and balances outstanding as at31 March, 2014:

Holding Company Key Management Enterprises over TotalPersonnel & which the key

relatives of such managementpersonnel personnel have

significant influence

Purchase of goods

Balmer Lawrie Van Leer Ltd 1,427,141 — — 1,427,141641,384 — — 641,384

Sealcon Closures — — — —— — 3,055,021 3,055,021

Sale of Goods

Balmer Lawrie Van Leer Ltd 8,893,061 — — 8,893,06110,809,692 — — 10,809,692

Purchase of fixed assets

Balmer Lawrie Van Leer Ltd — — — —— — — —

Sealcon Closures — — — —— — 17,517,175 17,517,175

Management Fees


Reimbursement of Expenses Payable

Balmer Lawrie Van Leer Ltd 3,879,376 — — 3,879,376727,873 — — 727,873

Rent Paid — 2,250,000 — 2,250,000— 375,000 — 375,000

Dividend Paid


PC Bhat & family — 13,475,000 — 13,475,000— 13,475,000 — 13,475,000

78


Holding Company Key Management Enterprises over TotalPersonnel & which the key

relatives of such managementpersonnel personnel have

significant influence

Unsecured Loans Received

P.C.Bhat — 12,200,000 — 12,200,000— 14,850,000 — 14,850,000

Prakash Prabhu — — — —— 2,000,000 — 2,000,000

Balmer Lawrie Van Leer Ltd 13,500,000 — — 13,500,000— — — —

Repayment of Unsecured Loans

Balmer Lawrie Van Leer Ltd — — — —— — — —

P.C.Bhat — 28,200,000 — 28,200,000— 10,525,000 — 10,525,000

Prakash Prabhu — 9,000,000 — 9,000,000— — — —

Interest on Above loan

P.C.Bhat — 2,887,891 — 2,887,891— 1,591,263 — 1,591,263

Prakash Prabhu — 37,809 — 37,809— 972,162 — 972,162

Balmer Lawrie Van Leer Ltd 248,548 — — 248,548— — — —

Managerial Remuneration

P.C.Bhat — 2,385,086 — 2,385,086— 3,338,374 — 3,338,374

Balances outstanding at the endof the year

Trade receivables 706,585 — — 706,5852,341,996 — — 2,341,996

Trade payables 9,360,968 — — 9,360,9684,671,116 138,000 — 4,809,116

Borrowings 13,500,000 — — 13,500,000— 25,000,000 — 25,000,000

Note: Figures in Italics relates to the previous year

27.5 The Company has entered into operating lease arrangements for office premises. The leases are cancellable in nature Thelease rental charged to Profit & Loss account in respect of these leases amount to Rs. 3,002,552/- (Previous year Rs. 969,408).


79


27.6 Earnings per share


Rupees Rupees

Basic

27.6.a Net profit for the year from continuing operations attributable to theequity shareholders 80,256,904 46,315,509

Weighted average number of equity shares 2,200 2,200

Par value per share 1,000 1,000

Earnings per share 36,480 21,053

Diluted

27.6.b Net profit for the year from continuing operations attributable to theequity shareholders 80,256,904 46,315,509

Weighted average number of equity shares for Basic EPS 2,200 2,200

Weighted average number of equity shares-for diluted EPS 2,200 2,200

Par value per share 1,000 1,000

Earnings per share- Diluted 36,480 21,053


Rupees Rupee

27.7 Deferred tax (liability)/assetTax effect of items constituting deferred tax liability:On difference between book balance and tax balance of fixed assets (26,320,000) (22,820,000)

Tax effect of items constituting deferred tax assets:Provision for compensated absences, gratuity and other employee benefits 1,820,000 1,890,000

Net deferred tax (liability)/asset (24,500,000) (20,930,000)

27.8 The detailed Transfer Pricing regulations (‘regulations’) for computing the income from “domestic transactions” with specifiedparties and international transactions between ‘associated enterprises’ on an ‘arm’s length’ basis is applicable to the Company.These regulations, inter alia, also require the maintenance of prescribed documents and information including furnishing a reportfrom an Accountant which is to be filed with the Income tax authorities.

The Company has undertaken necessary steps to comply with the Transfer Pricing regulations. The Management is of theopinion that the transactions with associated enterprises and domestic transactions are at arm’s length, and hence theaforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and thatof provision for taxation.

27.9 Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.






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54th Annual Report 2013 - 2014 Report-2013-14.pdf · 13. Pursuant to the Provisions of Section 108...

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Transcript of 54th Annual Report 2013 - 2014 Report-2013-14.pdf · 13. Pursuant to the Provisions of Section 108...