AFFLUENCE

BOARD'S REPORT

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

Share capital

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

Dividend

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

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

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

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

Management Discussion and Analysis Report

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

Consolidated Financial Statements

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

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

Accounts of Subsidiary Companies

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

Report on Subsidiaries

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

The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link :  <http://www.balmerlawrie.com/app/webroot/uploads/> Policy_on_Determining_Material_Subsidiary-BL.pdf.

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

Balmer Lawrie (UK) Ltd. [BLUK]

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

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

Visakhapatnam Port Logistics Park Limited [VPLPL]

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

Report on Joint Ventures

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

For the year 2014-15, AVI-OIL has shown a negative growth as compared to the previous year with only 876 KL of lubricants blended, 18 MT of greases reprocessed and packed and 196 MT of the ester base stocks manufactured.  With the decreased physical performance, the company achieved a gross turnover of Rs. 43 Crore with net sales amounting to Rs. 38.50 Crore which was lower by 3% as compared to the previous year.

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

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

Balmer Lawrie Van-Leer Ltd. [BLVL]

Company's Performance:

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

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

Transafe Services Ltd. [TSL]

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

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

a) off leasing of containers from various customers and

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

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

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

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

Balmer Lawrie (UAE) LLC [BLUAE]

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

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

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

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

Balmer Lawrie Hind Terminals Pvt. Ltd. [BLHTPL]

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

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

Memorandum of Understanding (MoU)

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

Human Resource Management

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

Talent Acquisition

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

Training & Development

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

Managing Performance

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

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

Employment of Special Categories

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

Employee Engagement and Welfare

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

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

Employee Relations

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

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

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

Implementation of Official Language

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

Women Empowerment

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

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

Internal Complaints Committee

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

Corporate Social Responsibility (CSR)

Balmer Lawrie has a legacy of contributing towards community development. As a responsible corporate citizen, several CSR activities are undertaken for the benefit of weaker sections of the society. Our CSR initiative 'Balmer Lawrie Initiative for Self Sustenance (BLISS)' is directed towards providing and improving the long term economic sustenance

of the underprivileged and the other initiative 'Samaj Mein Balmer Lawrie (SAMBAL)' aims at improving the living standards of populations in and around our work-centers. In pursuance of this, several community development projects are undertaken, partnering with various NGOs with a focus to trigger development at the micro-community level and thereby generate the desired developmental impact.

CSR Policy

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

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

• Health & Sanitation

• Education

• Livelihood

• Environmental Sustainability

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

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

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

The Composition of the CSR Committee as on date.

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

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

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

c) Shri Alok Chandra, Government Nominee Director - Member

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

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

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

Responsibility statement of the CSR Committee

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

Employee Health & Safety

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

Environmental Protection and Sustainability

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

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

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

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

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

Communications & Branding Initiatives

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

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

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

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

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

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

• Revamped logos of products and services.

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

• Launch of Hindi Website.

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

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

Implementation of ERP

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

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

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

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

Progress on principles under 'Global Compact'

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

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

Implementation of Right to Information Act, 2005

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

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

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

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

Extract of Annual Return

The details forming part of the extract of the Annual

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

Number of Meetings of the Board

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

Directors' Responsibility Statement

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

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

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year as on 31st March, 2015 and of the profit and loss of your Company for the said financial year;

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

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

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

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

Company's Policy on Directors' Appointment and Remuneration

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

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

Particulars of Loans, Guarantees or Investments

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

Related Party Transactions

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

Justification on the Related Party Transactions entered into

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

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

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

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

<http://www.balmerlawrie.com/app/webroot/uploads/> Related_Party_Transactions_Policy-BL.pdf.

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

Risk Management

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

Deposits

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

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

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

Internal Financial Controls

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

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

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

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

- Procedures to safeguard Company's assets;

- Procedures to prevent and detect frauds and errors;

- Accuracy and completeness of the accounting records.

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

Vigilance

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

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

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

Vigil Mechanism / Whistle Blower Policy

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

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

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

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

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

Board Evaluation and Criteria for evaluation

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

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

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

It may be noted that pursuant to Article 7A of the

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

Declaration by Independent Directors

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

Cessations

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

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

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

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

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

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

Appointments :

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

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

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

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

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

In accordance with the provisions of Section 161 of the Companies Act, 2013 read with Article 9 of the Articles of Association of the Company, Ms. Manjusha Bhatnagar, Shri D. Sothi Selvam and Shri Kalyan Swaminathan would hold office up to the date of the forthcoming Annual General Meeting. Your Company has received due Notice from a member under Section 160 of the Companies Act, 2013 proposing candidatures of Ms. Manjusha Bhatnagar, Shri D. Sothi Selvam and Shri Kalyan Swaminathan for their appointment at the ensuing Annual General

Meeting, as Directors, whose period of office shall be subject to determination by retirement of directors by rotation. Accordingly, particulars relating to the said candidatures have been included in the Notice of the Annual General Meeting, for circulation to the members pursuant to Section 160 of the Act read with Rule 13 of the Companies [Appointment & Qualification of Directors] Rules, 2014.

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

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

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

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

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

Audit Committee

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

Auditors & Auditors' Report Statutory Auditor:

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

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

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

Auditors' Report on Standalone Financial Statements:

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

Auditors' Report on Consolidated Financial Statements:

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

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

Explanatory management response as approved by the Board:

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

Comments of Comptroller & Auditor General of India

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

Secretarial Auditor:

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

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

The Secretarial Auditor has qualified their Report as mentioned below :

Matters of Emphasis:

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

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

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

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

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

Management Response:

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

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

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

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

Cost Auditors:

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

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

Acknowledgement

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

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

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

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

On behalf of the Board of Directors

Prabal Basu

Chairman & Managing Director

D. Sothi Selvam

Wholetime Director

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