CORPORATE INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES Note 1 Corporate information Balmer Lawrie Investments Limited (The Company ) is a Government Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. It's Shares are listed on two stock exchanges in India. The Company is not engaged in any other business activity, except, to hold the Equity Shares of Balmer Lawrie & Co. Ltd. The Company is the holding company of Balmer Lawrie & Co. Limited(BL) by virtue of its acquiring 61.8% Equity Shares of BL from IBP Co. Ltd. through a Scheme of Arrangement and Reconstruction between IBP Co. Ltd., Balmer Lawrie Investments Limited and their respective shareholders and creditors in terms of Section 391 to 394 of the Companies Act,1956. The Scheme became effective on 5th February, 2002 with an appointed date of 15th October, 2001. 1,32,46,098 Equity Shares of the Company are held by President of India ( including its nominees) The Registered office of the Company is situated at 21, Netaji Subhas Road, Kolkata - 700 001. 2 Significant accounting policies 2.1 Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those of brvious year. 2.2 Use of estimates The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 2.3 Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises balances lying with the Banks under the current account and under the fixed/term accounts . Cash equivalents are short-term balances (with an original maturity of less than a year from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. 2.4 Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. 2.5 Revenue recognition Revenue is recognized to the extent it is possible that the economic benefit will flow to the company and the revenue can be reliably measured Interest-on a time proportion basis taking into account the outstanding principal and the relative rate of interest. Dividend from Investment - on establishment of the Company's right to receive. All Expenses, claims, interest and other income to the extent ascertainable and considered payable or receivable as the case may be has been accounted for. 2.6 Investments Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. 2.7 Employee benefits Employee benefits include contribution provident fund, superannuation fund, gratuity fund and encashment of earned leave which was reimbrused to the service provider, who maintains and makes provisions for the aforesaid amounts. 2.8 Borrowing costs Borrowing costs, if any, that are directly attributable to the acquisition, construction or production of assets which take substantial period of time to get ready for its intended use are capitalised as part of the cost of these assets. Other Borrowing costs are recognised as expense in the period in which they are incurred. 2.9 Segment reporting The Company's only business is investment in its subsidiary Balmer Lawrie & Co. Ltd., and hence segment reporting as envisaged by Accounting Standard 17 issued by the Institute of Chartered Accountants of India is not applicable to the Company. 2.10 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 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. 2.11 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 the Income Tax Act, 1961. Deferred tax is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. 2.12 Provisions and contingencies A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Additional information to the financial statements 1 Scheme of Arrangement and Reconstruction (a) A Scheme of Arrangement and Reconstruction ('the Scheme'),made under sections 391 to 394 of the Companies Act, 1956 ('the Act'), was executed by and between IBP Co. Ltd. ('IBP') and Balmer Lawrie Investments Ltd. ('the Company') and their respective creditors and shareholders. The Scheme under notification no. GSR/238 dated 2nd February, 1978, was approved by the erstwhile Department of Company Affairs, Ministry of Law, Justice and Company Affairs, Govt. of India, was approved on 8th January, 2002, with the appointed date of 15th October 2001.Under the Scheme 1,00,64,700 Equity Shares of Rs. 10/- each, fully paid-up, of Balmer Lawrie & Co. Ltd. ('BL'), held by IBP, was transferred to the Company, whereby the Company became holder of 61.8% Equity Shares of BL, with effect from the aforesaid appointed date of the Scheme, i.e., 15th October, 2001. (b) I n consideration of transfer of the aforesaid shares of BL by IBP, the Company had alloted 2,21,47,269 equity shares of Rs. 10/- each, fully paid-up to the shareholders of IBP (consideration other than cash), in the ratio of 1:1. 2 Public Deposit : The Company has not accepted any Public deposit within the meaning of Section 45I(bb) of RBI Act 1934 during the year in question & the company has also passed resolution for non-acceptance of any Public Deposit. 3 Non Banking Financial Company ('NBFC') Balmer Lawrie Investments Limited is a non-banking financial Company as defined under section 45-I(f) of the Reserve Bank of India Act, 1934. On the basis of application given by the Company the RBI in exercise of their power conferred under section 45-NC of the Reserve Bank of India Act, 1934, has exempted the Company to comply with the formalities of registration and minimum net owned funds, under the Notification No. DNBS.153/CGM(LMF)-2001 dated December 10, 2001. 4 During the year the Company has made a provision for Income Tax amounting to Rs. 200.00 lacs under the normal provision of Income Tax Act 1961. (Previous Year Rs. 170 lacs under normal provision of The Income Tax Act. 1961) 5 Investment Details The Company holds 61.8 % equity shares of Balmer Lawrie & Co. Ltd.(BL). Since the control in BL is intended to be temporary and there is no change of such intention, Consoldated Financial Statements of the Company with BL has not been drawn in terms of para 11 (a) of Accounting Standard 21 (AS-21) issued by the Chartered Accountants of India. The Company holds 1,76,13,225 equity shares of Balmer Lawrie & Co. Ltd (PY 1,76,13,225 shares). 6 Agreement for Employee Benefits The Company has entered into Service Agreement with Balmer Lawries & Co. Ltd (BL) on 1st May, 2014 whereby BL shall act as a Service Provider to maintain Books of Accounts, Statutory Regsiters, provide services, in nature of administration, finance, taxation, secretarial and other allied functions., provide office space and other requisite infrastructure. 7 Unpaid Dividend Accounts The Company has to maintain a dividend account from where the dividends are issued to the shareholders, the amount of unclaimed dividend which remains there for more than seven years is then transferd to the Investor Education & Protection Fund Account. For The Financial Year2006-07, the unpaid Final dividend outstanding in the accounts was Rs. 4,64,540.40 which has been transfered to the Investor Education & Protection Fund Account during the year. Also, For the Financial Year 2007-08, the unpaid interim dividend outstanding in the accounts was Rs. 7,70,439, during the year warrents encashed were Rs. 2,100/- thus the remaining balance of Rs. 7,68,339/- has been transfered to the Investor Education & Protection Fund Account during the year. 8. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure. In terms of our report attached. For S.K.NAREDI & Co. Chartered Accountants Registration No. : 003333C Rashmi Chhawchharia Partner Membership No.- 401727 For and on behalf of the Board of Directors Alok Chandra Directors Prabal Basu Directors Abhishek Lahoti Company Secretary Place : Kolkata Date : 27-05-2015 |