BOARD'S REPORT

To the Members,

Your Directors have the pleasure in presenting their 14th Annual Report along with the audited Balance Sheet and Profit & Loss Account for the financial year ended 31st March 2015 and other allied statements/disclosures as required as per the applicable statute.

Overview on the State of Company's Affairs

Your Company's performance is greatly dependent upon two factors, one, being the dividend received from its subsidiary, Balmer Lawrie & Co. Ltd. (BL) and the other being the interest received from deployment of surplus funds with scheduled commercial banks.

Though during the year under review, i.e., 2014-15, the bank interest rates decreased but due to increase in the amount of dividend, received from BL, the total income of your Company increased as compared to the last fiscal, i.e., 2013-14.

Comparative annual financial results for the year under review, i.e., 2014-15, and the immediately preceding year, i.e., 2013-14, has been furnished below:

Dividend

Your Directors are pleased to recommend for declaration at the ensuing 14th Annual General Meeting of your company a dividend of 125%, i.e., Rs. 12.50/- (Rupees twelve and paise fifty only) per Equity share of the face value Rs. 10/- each (fully paid-up), for the financial year ended 31st March 2015 [as against dividend @ 120%, i.e., Rs. 12/- (Rupees twelve only) per Equity share of the face value of Rs. 10/- each (fully paid-up) recommended and declared in the immediately preceding year, i.e., 2013-14]. Upon declaration by the members, dividend will be paid either by way of warrant, demand draft or NECS mode and will be paid to those Shareholders who would be holding shares in the Company as on the date of commencement of the book closing period i.e., as on 4 September 2015 (End of Day). In respect of shares held electronically, dividend will be paid to the beneficial owners, as per details to be furnished by their respective Depositories, i.e., either Central Depository Services (India) Ltd. or National Securities Depository Ltd.

Appropriation

The amount available for appropriation is the sum total of Profit after Tax (PAT) and the balance Profit brought forward from the previous financial year(s). The amount available for appropriations for the financial year 2014­15 as compared to the immediately preceding financial year 2013-14, are given hereunder:

Deposits with Bank

Surplus funds of the Company have been deployed in various Fixed Deposit Schemes of the scheduled commercial Banks. As on 31 st March 2015, the total amount of deployments in the Fixed Deposit Schemes stood at Rs. 7418 lacs, which in turn has yielded an interest income of Rs. 640.61 lacs.

Management Discussion and Analysis Report

Your Company is not engaged in any other business activity, except, to hold the equity shares of Balmer Lawrie & Co. Ltd. and accordingly matters to be covered under 'Management Discussion and Analysis Report' are not applicable to your Company.

Report on Subsidiary Companies

In terms of Section 2(87) of Companies Act, 2013 ('the Act') your Company has three subsidiary companies, namely, Balmer Lawrie & Co. Ltd., Balmer Lawrie (UK) Ltd. ('BLUK') and Visakhapatnam Port Logistics Park Limited (VPLPL). By virtue of shareholding in BL (61.8%), your Company is the holding Company of BL. BL in turn has 2 subsidiaries BLUK and VPLPL.

Since the control in BL is intended to be temporary and there is no change of such intension, Consolidated financial statements of the Company with BL has not been prepared in terms of para 11(a) of Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India. Statement containing salient features of Financial Statement of subsidiaries as per first proviso to section 129 (3) in FORM AOC-1 is attached to the Financial Statement. However, separate audited accounts in respect of each of its subsidiary are placed on the website of the Company - www.blinv.com . Further, a copy of separate audited financial statements in respect of each of the subsidiary shall be provided to any shareholder of the company who asks for it. Since Financial Statements of the company have not been consolidated with subsidiaries/associates /joint ventures, report on performance and financial position of each of them as per Rule 8(1) of companies (Accounts) Rules 2014 is not required.

The Company has adopted policy for determining 'Material Subsidiaries' w.e.f 28 March 2015. The said policy is uploaded on the website of the Company- www.blinv.com .

Compliance of Right to Information Act, 2005

Information, which are mandatorily required to be disclosed under the RTI Act 2005, have been disclosed on the website of your Company. No applications seeking information under the Right to Information Act, 2005 (RTI Act), has been received during the year.

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

Since the Company does not have any business other than to hold shares of Balmer Lawrie & Co. Ltd. the reporting of Conservation of Energy, Technology Absorption as per Rule 8(3) of Companies(Accounts) Rules 2014 is not applicable for your Company.

The details pertaining to Foreign Exchange Earnings and Outgo are enumerated as under:Nil

Risk Management Policy

The Company does not have any business apart from holding the shares of Balmer Lawrie & Co. Ltd. offloaded by IBP Ltd. and is a Special Purpose Vehicle formed for temporary purpose. Hence, the requirement of laying down procedures for risk assessment and minimization is not applicable. Further, as per Para 4.1 of the Circular of SEBI bearing No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014, the requirement of 49(VI)(C) is not applicable to the Company as it does not fall within top 100 listed Companies by market capitalization.

Corporate Social Responsibility (CSR)

Your Company has not made expenditure in CSR projects as per Section 135 of the Companies Act 2013 and applicable Rules and DPE Guidelines. It may be pertinent to mention in this regard that:

• The Company being a Special Purpose Vehicle was formed for a temporary purpose to hold the shares of Balmer Lawrie & Co. Ltd. (BL) offloaded by IBP Ltd. and does not carry on any business, other than holding 61.80% equity shares of BL and receiving dividend from BL.

• The Company does not have any employees of its own. The services of inter-alia Company Secretary who has been placed on secondment by BL is pursuant to a Service Agreement between the Company and BL.

• The Company does not have any functional directors as all the Directors are part-time non-executive directors. Further, the income of the Company is primarily the dividend received from BL which is a Company governed by Section 135 of Companies Act 2013 on CSR and makes the required expenditure on the same as per the applicable provisions.

• In the given constraints, it is not feasible to draft a Corporate Social Responsibility Policy or Action Plan or to oversee its implementation as the status and nature of the Company does not gel with concept of CSR

Directors' Responsibility Statement

Your Directors acknowledges and confirm that:

(i) In the preparation of the annual accounts, the applicable Accounting Standards had been followed and there was no material departures;

(ii) The Directors had 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 the Company at the end of the financial year and of the profit and loss of the Company for the said financial year;

(iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors had prepared the annual accounts on a going concern basis.

(v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

Corporate Governance

Your Company has been consistently complying with the various regulations of the Securities & Exchange Board of India (SEBI), including regulations on Corporate Governance, which is enumerated under Clause 49 of the Listing Agreement. Pursuant to the said SEBI regulations, a separate section titled 'Corporate Governance Report' is being furnished and marked as Annexure 1.

Your Company being a Government Company is also complying with the corporate governance norms of the Department of Public Enterprise (DPE), to the extent which is not included and does not contradict with SEBI guidelines.

Further, your Company's Statutory Auditors have examined compliance of the aforesaid SEBI Corporate Governance guidelines and issued a certificate, which is annexed to this Report and marked as Annexure 2.

Directors and meetings during the year

There has been considerable change in composition of the Board of Directors during the financial year under review. The details of the meetings of the Board during the year have been enumerated in the Corporate Governance Report Annexure 1.

Directors retired during the year

Shri P Kalyanasundaram had been long associated with the Company since 2008 as Non-Executive, Government Nominee Director. He was acting as the Chairman of the Board Meetings. The Company had received letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that the nomination of Shri P Kalyanasundaram, [the then Joint Secretary in MoP&NG, who had earlier attained the superannuation age on 31st December, 2014 was withdrawn with immediate effect. Accordingly the cessation of Shri P Kalyanasundaram from the Board of Directors of the Company with effect from 5th March, 2015 due to withdrawal of nomination by MoP&NG was taken on record.

Shri Sukhvir Singh had also been long associated with the Company since 2010 as Non-Executive, Government Nominee Director of the Company. Shri Singh was acting as the Chairman of the Stakeholders Relationship Committee. The Company had received letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that the nomination of Shri Sukhvir Singh [the then Director (E&S Division) in MoP&NG who had earlier attained the superannuation age on 30th November, 2014] was withdrawn with immediate effect. Accordingly the cessation of Shri Sukhvir Singh from the Board of Directors of the Company with effect from 5th March, 2015 due to withdrawal of nomination by MoP&NG, was taken on record.

Directors Appointed during the year

Shri Alok Chandra had been appointed Government Nominee Director of the Company with effect from 5th March, 2015 pursuant to the letter bearing reference no. C-31033/1/2012-CA/FTS:18688 dated 5th March, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated to the Company that Shri Alok Chandra who is acting as Adviser (Finance), MoP&NG had been nominated as Government Director on the Board of the Company with immediate effect on co-terminus basis or until further order, whichever is earlier. The brief profile of Shri Chandra has been provided with the notice of the Annual General Meeting and explanatory statement thereof.

Smt Mary Jacob had been appointed as the Government Nominee Director of the Company with effect from 24th June, 2015 pursuant to the letter bearing reference no. C-31034/6/2015-CA-FTS:37868 dated 14th May, 2015 from Ministry of Petroleum & Natural Gas (MoP&NG) vide which it was communicated that Smt. Mary Jacob, Deputy Secretary, MoP&NG having DIN NO. 07208084 had been nominated as Government Director on the Board of the Company with immediate effect or until further order. The brief profile of Smt. Jacob has been provided with the notice of the Annual General Meeting and explanatory statement thereof.

Shri Prabal Basu shall retire by rotation at the ensuing 14th Annual General Meeting of your Company. Your Company has received a communication from Shri Prabal Basu wherein he has expressed his willingness to continue as Director, if re-appointed by the shareholders. Therefore the proposal of re-appointment of Shri Basu on the Board has been included under Ordinary business of the Notice convening the ensuing 14th Annual General Meeting of your Company. Your Directors recommends passing of the requisite resolutions.

Related Party Transactions

The Company had adopted policy on "Materiality of Related Party Transactions and dealing with Related Party Transactions" w.e.f. 28th March, 2015. The said policy has been uploaded on the website of the Company www.blinv.com .

Particulars of contracts and arrangements with related parties referred under section 188 (1)

The particulars of contracts and arrangements with related parties referred under section 188 (1) in the prescribed form as per section 134 (3) (h) of Companies Act, 2013 is as under:

Form No. AOC 2

1. Details of contracts and arrangements or transactions not at arm's length basis - NIL (all the contracts and arrangements or transactions with Related Parties were on arm's length basis)

2. Details of material contracts or arrangement or transactions at arm's length basis - NIL (None of the transactions with related party can be considered as "material" as per the policy on - Materiality of Related Party Transactions and dealing with Related Party Transactions adopted by the Company.

All contracts or arrangement entered into under Section 188(1) has been enumerated in details in Note no. 23 forming part of the financial statement as on 31th March, 2015.

Justification on the Related Party Transactions entered -

• In the year 2002, the Company for the purpose of infrastructure and management support entered into a service contract with its subsidiary Balmer Lawrie & Co. Ltd. (BL), since the Company does not have any infrastructure arrangement or any employee. The said agreement is renewed from time to time pursuant to which the Company receives services in nature of administration, finance, taxation, legal, secretarial, etc from BL.

• The Company was formed as a Special Purpose Vehicle with no regular business activity on 20th September, 2001, with the sole objective of holding the Equity shares of BL, transferred / de-merged from IBP Co. Ltd. (under the scheme of Arrangement & Reconstruction).

• The major source of income of your Company is dividend earned from its subsidiary, BL. Particulars of loans, guarantees or investments under section 186

Details of investments made by Company in other Company is enumerated in Note 7 & 18 of the Financial statement.

Auditors

The Statutory Auditors of your Company (being a 'Government Company'), are appointed/ re-appointed by the Comptroller & Auditor General of India ('CAG'), Section 139 and other applicable provisions of the Companies Act 2013.

Pursuant to Section 142 and other applicable provisions of the Companies Act 2013, the remuneration of the Statutory Auditors for the year 2014-15 is to be determined by the members at the ensuing 14th Annual General Meeting.

Reports of the Auditors

The Report of the Statutory Auditors on Annual Accounts of your Company for financial year ended 31st March 2015 does not have any reservation, qualification or adverse remark.

The office of the Comptroller & Auditor General of India ('CAG') had conducted a supplementary audit of the financial statements of the Company for the year ended 31st March, 2015. On the basis of the audit, CAG states nothing significant has come to its knowledge which would give rise to any comment upon or supplement to statutory auditors' report.

Report of the Statutory Auditors is attached with the Financial Statement. The comments of CAG is annexed and marked as Annexure 3.

CIN: L65999WB2001GOI093759

Adequacy of Internal financial controls

The Company has inter-alia taken the following measures to ensure that an adequate internal financial control exists :

• Appointment of internal auditor as per Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014.

• The Company has adopted the following policies apart from the Code of Conduct applicable to Directors and Senior Management:

u "Materiality of Related Party Transactions and dealing with Related Party Transactions", u Policy for determining 'Material subsidiaries',

u "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" and u "Code of Conduct to Regulate, Monitor and Report Trading by Insider".

Appreciation

Your Directors wish to place on record their appreciation for the continued guidance and support extended by the Ministry of Petroleum & Natural Gas & and other Ministries. Your Directors also acknowledge the valuable support and services provided by BL. Your Directors appreciate and value the trust imposed upon them by the members of the Company.

On behalf of Board of:

Balmer Lawrie Investments Ltd.

Prabal Basu Chairman

Mary Jacob Director

Registered Office: 21, Netaji Subhas Road, Kolkata-700 001