BLOSSOM INDUSTRIES LIMITED

The Directors have pleasure in presenting the Twenty-fifth Annual Report of the Company and the Audited Statement of Accounts for the year ended March 31, 2014.

1.0 FINANCIAL RESULTS:

                                                         (Rs. In Lacs)

Particulars                                        2013-14      2012-13

Sales & Other Income                              18425.22     18363.65

Less:

(1) Depreciation                                    816.15      1076.46

(2) Finance Costs                                   280.13       417.78

Profit before tax                                   547.08       651.71

Provisions for tax                                  189.70       201.84

Profit/ (Loss) for the Year                         357.39       449.87

In view to conserve resources and maintain liquidity, your Board has decided not to recommend any dividend for the financial year 2013-14.

3.0 PERFORMANCE:

During the year under review, though the quantity of sales was more or less constant, the sales revenue has increased compared with previous year. However, the net profit for the year has declined from Rs. 4.49 crores to Rs. 3.57 crores. Increase in raw material cost, utility changes, employee cost and maintenance expenses were the main contributors for the reduction in the Profit. The Management is conscious about the need for cost reduction particularly on maintenance of Plant and Machinery. During the year under review, the Company could develop various parts through new local vendors and procured them locally in lieu of imported costly spares. As a result, the Company could achieve reduction in maintenance cost. Such process of development of new vendors wHI be continued in the current year also.

The Management is concerned about the low capacity utilization and was looking for an appropriate opportunity to utilize the same. The Board is happy to inform that the Management has tied up balance capacity utilisation upto 22.5 lacs cases per annum with "SAB Miller Breweries Limited". With this arrangement, the Company will be able to utilise the balance capacity and improve the performances in the years to come.

3.1 ACHIEVEMENTS:

Mr. Amit Khemani (DIN: 00057283), Managing Director of

the Company received "Asia Pacific International Award" presented by The Economic and Human Resource in the Asia Pacific Achiever Summit in recognition of Sterling Merit Excellent Performance and outstanding contribution for the nation and worldwide.

4.0 CORPORATE SOCIAL RESPONSIBILITY STATEMENT:

We, at Blossom, believe in Four core essentials of Corporate Social Responsibilities-sustainability of environment, ethical functioning, charitable support and care for stakeholders. We focus on reducing our Environmental Footprints by ensuring that the resources are optimally utilised and waste is re-used or properly treated before disposal. The Brewery premises are sited on a working farm. Waste water from the brewing process is treated through Effluent Treatment Plant and re- cycle plant. Waste Water treated through Effluent Treatment Plant is used for the gardening of the plants in the factory premises. Our governance systems are underpinned by Ethics, Transparency and Accountability and non indulgence in any unfair practices. The Company has a long history of supporting charity to welfare centre, associations of blind and cancer patients, education trusts, etc. by associating with Institutions like Lila Poonawalla Foundation, Bulsar District Cricket Association, Blind Organization of India, Mahavir Seva Sadan and Dayanand Hospital. The Company has also made donations to "Oxflam India" for Shelter & Food Support for families who suffered in Uttarakhand Floods, College of Education, Nani Daman, Jayalaxmi Manik Foundation, Foundation of Poor Student Hostel & Hospital, etc. We also provide a workplace to our employees that is safe, hygienic and humane with access to training and development of skills. We believe in being responsive towards all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large, etc. and create value Ý for all of them.

5.0 DIRECTORS:

Mr. Amit Khemani (DIN: 00057283) and Mr. Vincent Vaz (DIN: 02067875), who are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seek re- appointment pursuant to Section 152 of the Companies Act, 2013. Mr. Satan Bharwani (DIN: 00183286), Dr. Pamidi Kotaiah (DIN: 00038420), Mr. Dwarko Khilnani (DIN: 01824655), Dr. S. D. Israni (DIN: 00125532), Ms. Lila Poonawalla (DIN:

Ý 00074392), Mr. Padmanabh Barpande (DIN: 00016214) and Mr. Harsh Vardhan Jajoo (DIN: 00758308), Non-Executive Directors of the Company whose period of office is liable to determination by retirement by rotation, in respect of whom a notice in writing pursuant to Section 160 of the Companies Act, 2013 has been received from a member proposing their candidature for the office of Director of the Company, are proposed to be appointed as Independent Directors of the Company to hold office upto March 31,2019.

6.0 COST AUDITORS:

As per the Notification No. G.S.R. 429(E) dated June 3, 201 I, submission of Cost Compliance Report was applicable to the Company for the financial year 2013-14. The Company has obtained the Cost Compliance Report from Mr. Girikrishna

Maniar, Cost Accountant and the same will be filed within stipulated time. Further, as per Cost Audit Order no. F. No. 52/26/CAB-20I0 dated November 6, 2012, the Company is required to carry out Cost Audit effective from April 1,2013. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and above mentioned Cost Audit Order, the Board of Directors in its meeting held on June 6, 2014 has re- appointed Mr. Girikrishna Maniar, having fellow Membership No. 8202, Practising Cost Accountant, as the Cost Auditor for the financial year 2014-15.

7.0 AUDITORS:

The retiring Auditors, M/s. Deloitte Haskins & Sells LLP (Firm's Registration No. 117366W/W-100018), Chartered Accountants, have given their consent for appointment as Statutory Auditors at the ensuing Annual General Meeting. ' The Company has received a letter from M/s. Deloitte

Haskins & Sells LLR Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013. Your Directors recommend their re-appointment.

8.0 AUDITORS' REPORT:

There are no qualifications contained in the Auditors' Report and therefore, there are no further explanations to be provided for in this Report.

9.0 SERVICE TAX MATTER:

As regards show cause notice received by the Company pertaining to service tax matter, attention is invited to Note No. 25.1(c) of note to accounts which is self explanatory. The petition challenging the levy of such service tax in the Company's case has been filed with the Hon'ble High Court of Bombay and has been admitted. The matter is before the High Court pending hearing. During the year, in respect of payment of the aforesaid service tax, against which, the Company has paid Rs. 209,402,036/- (including interest Rs. 32,750,955/-) under protest and continues to litigate the matter before all appropriate forums. In the opinion of the Company, service tax being an indirect fax, the incidence thereof, if any, would , be on the Service Receiver (Brand Owner) and it will charge the same to the service receiver and will take steps for recovery of the same.

10.0 INSURANCE:

All the assets of your Company have been adequately insured.

11.0 FIXED DEPOSIT:

The Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

12.0 EMPLOYEES:

No employee falls within the purview of the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and Companies (Particulars of Employees) Amendment Rules, 2011.

13.0 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

The information required under Section 2l7(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange eamings/outgo is appended hereto as Annexure I and forms part of this report.

14.0 DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors based on the representations received from the Operating Management confirm that-

(1) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(2) they have, in the. selection of the 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 at end of the financial year and of the profit of the Company for that year;

(3) 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 6f the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(4) they have prepared the annual accounts on a going concern basis.

15.0 ACKNOWLEDGEMENTS:

The Directors express their deep gratitude for the co- operation and support extended to your Company by its customers, suppliers, bankers and various government agencies. Your Directors also place on record the commitment and involvement of the employees at all levels and looks forward to their continued co-operation.

The Directors are also thankful to the Shareholders for their

continued support to the Company.

                            For and on behalf of the Board of Directors 

                                                    Mr. S. S. Bharwani
Mumbai                                                    Chairman
June 6, 2014                                            DIN; 00183286