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Panasonic Carbon India Company Ltd.

BSE: 508941 Sector: Engineering
NSE: PANCARBON ISIN Code: INE013E01017
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OPEN 577.10
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VOLUME 14367
52-Week high 610.00
52-Week low 420.00
P/E 20.01
Mkt Cap.(Rs cr) 270
Buy Price 562.95
Buy Qty 29.00
Sell Price 0.00
Sell Qty 0.00
OPEN 577.10
CLOSE 576.60
VOLUME 14367
52-Week high 610.00
52-Week low 420.00
P/E 20.01
Mkt Cap.(Rs cr) 270
Buy Price 562.95
Buy Qty 29.00
Sell Price 0.00
Sell Qty 0.00

Panasonic Carbon India Company Ltd. (PANCARBON) - Director Report

Company director report

TO THE MEMBERS OF THE COMPANY

Your Directors have pleasure in presenting to you their 35th Annual Reporttogether with the Audited Accounts of the Company for the year ended 31stMarch 2017 and the Auditors' Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31st March 2017 ascompared with the earlier year are as under:

(Rs. in Lakhs)
Particulars 2016-17 2015-16
Gross Income 5494.73 5491.93
Profit Before Interest and Depreciation 2456.39 2130.07
Finance Charges - -
Gross Profit before Depreciation 2456.39 2130.07
Provision for Depreciation 49.64 45.11
Net Profit Before Tax 2406.75 2084.96
Provision for Tax 827.79 738.55
Net Profit After Tax 1578.96 1346.40
Balance of Profit brought forward from previous year 29.11 10.42
Balance available for appropriation 1608.07 1356.82
Proposed Dividend on Equity Shares - 480.00
Tax on proposed Dividend - 97.71
Transfer to General Reserve 1000.00 750.00
Surplus carried to Balance Sheet 608.07 29.11

2. DIVIDEND :

Your Directors recommend a dividend of Rs.10/- per share (i.e.) 100%. The same is inline with the financial strategy and policy of the Company. This dividend if approved byyou at the ensuing 35th Annual General Meeting will be paid to the Shareholderswhose names appear in the Register of Members as on the date of said Meeting.

3. MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE:

Our Company sold 2632 MLn. pieces of Carbon Rod as against 2668 MLn. pieces which is99% Sales of last year. The Domestic Sales Quantity and Value were 1055 MLn. pieces andRs.15.80 crores respectively which works out to 98% and 95% of the Sales of last year. Thedecrease in Domestic Sales was on UM-1 and UM-3 Carbon Rods and increase of UM-4 CarbonRods when compared to last year.

The Export Sales Quantity and value were 1576 MLn. Pcs. and Rs. 31.60 Crores (FOBbasis) respectively compared to last year's quantity of 1588 MLn. Pcs. and Rs.31.79 Croreswhich works out to 99 % by quantity and 99 % by value. As informed last year your Companycould stabilize the exports to Panasonic Group Battery Factories in Poland PeruThailand Indonesia Brazil Costa Rica and other African customers on regular basis.Though we could not get the orders from some of the African countries as planned due topolitical disturbances in those countries we could get additional export orders fromPanasonic group Companies.

During the year though there was increase in electricity cost the electricityconsumption was reduced by promoting energy conservation activities and by increasing theproductivity. The fuel consumption in tunnel kiln was reduced by 5% through usage ofin-house made light weight refractory bricks modified and increased loading capacityrefractory cars and stabilization of car loading pattern in tunnel kiln. The usage ofalternate fuel in place of furnace oil for thermic fluid heaters resulted in significantreduction of fuel consumption cost. The increase in profitability for the current year ismainly due to additional orders from our Panasonic group companies favorable material andfuel price reduction of fuel and energy consumption significant improvement in yieldproductivity and the results of various cost reduction and control measures initiated.

OUTLOOK ON OPPORTUNITIES AND THREATS RISKS AND CONCERNS:

The Company has increased the production capacity of smaller size Carbon rods in linewith the market trend by in house modification of the bigger size Carbon rods machineriesto meet the increased demand in the Domestic and International Markets in the years tocome.

Your Company is also hopeful in maintaining the Domestic Sales by maintaining thequality and timely supply. On the Export Front the Company is depending on the Batterymarket trend of various countries. Based on the present indications your Company isconfident of maintaining the current year's levels of export quantities in the comingyears and also initiating efforts for improving the same. The Directors assure that allsteps are being taken by the Company to achieve growth in the coming years in proportionto the growth of the Dry Battery Industry by giving due consideration to the adverseconditions if any in the Dry Battery Industry. There are no materially significantthreats risks or concerns to the Company.

4. SEGMENT-WISE PERFORMANCE:

The Company operates in only one Segment (i.e.) Carbon Rod as a component of Dry CellBatteries.

By value while Domestic Sales contributed 33% of Sales and Exports Sales constitutethe remaining 67%.

5. FINANCIAL ARRANGEMENTS:

Your Company continues to be free from debts – both on Long Term and on WorkingCapital requirements. The surplus funds available with the Company are being invested withBanks in fixed deposits at regular intervals in line with the policy of the Company. Thisis reflected in increased deposits. Your Company had not accepted any Public Depositsunder Chapter V of the Companies Act 2013 (Act).

6. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Directors had laid down internal financial controls to be followed by the Companyand such policies and procedures are being adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically. A firm of experienced Chartered Accountants had carriedInternal Audit throughout the year. Whenever it is required the systems and proceduresare upgraded.

7. HUMAN RESOURCES:

The relationship with Employees continues to be cordial. The Company always considerits human resources as its most valuable assets. Imparting adequate and specializedtraining to its employees is an ongoing exercise in the Company.

8. STATEMENT PURSUANT TO LISTING AGREEMENTS:

The Company's Securities are listed with BSE Ltd. The company confirms that it has paidthe Annual Listing Fees to the said stock exchange for the financial year 2016-17 in timeand there were no arrears.

9. TECHNOLOGY ABSORPTION ENERGY CONSERVATION FOREIGN EXCHANGE EARNINGS ANDOUTGO:

In compliance with section 134(3) (m) of the Act read with rule 8 of the Companies(Accounts) Rules 2014 the prescribed particulars of conservation of energy foreignexchange and technology absorption including R&D have been attached as Annexureherewith.

10. CODE OF CORPORATE GOVERNANCE:

Pursuant to the Regulation 34(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed report on Corporate Governance as updated withthe particulars of this financial year is annexed to this report as Annexure togetherwith Report of the Auditors on the compliance with the said Code.

11. EXPORT HOUSE STATUS:

The Company had obtained ONE STAR EXPORT HOUSE Certificate from Government of IndiaMinistry of Commerce Directorate General of Foreign Trade (DGFT) in recognition of goodExport performance. The Company continues to enjoy the Export House Certificate status.

12. ENVIRONMENT

Your Company has consistently emphasized and worked towards sustainable use of naturalresources. In order to promote the Environment Awareness for everybody and everywhere withan objective to create awareness and boost the PCIN brand image on a global basisyour company had observed the June month as "Environment month" and organizedthe "ECO" relay event emphasizing on Water Conservation on 27th June2016 at the TADA Village where your factory is located. The Company had distributedT-Shirts and Caps with the slogan inscribed on ECO Activities to participants especiallystudents from TADA School. The Company actively makes effort to increase awarenessamong the students about the global warming waste reduce reuse recycle and energysaving tips to sustain the environment and environmental protection. The Company has alsomade substantial investment in Solar panel installation to generate power using naturalresource and reduce the generation of CO2.

13. DIRECTORS:

Mr. Chiaki Kidani had resigned from the Board of your Company effective 1stApril 2017.

The Board of Directors places on record their appreciation for the valuablecontribution made by Mr.Chiaki Kidani for the growth of the Company during his tenure ofDirectorship.

Mr. Kazuo Tadanobu was appointed as an additional Director at the Board Meeting held on10th May 2017. Mr. R. Senthil Kumar was re-appointed as Managing Director ofthe Company for a period of one year with effect from 1st April 2017 to 31stMarch 2018.

No Director is liable to retire by rotation in this Annual General Meeting.

Information about all the Directors proposed to be appointed/re-appointed is furnishedin the Explanatory Statement under Section 102 of the Companies Act 2013 under theheading "Information about the Directors proposed to be appointed/re-appointed"attached to the Notice of the ensuing Annual General Meeting for your consideration.

The Directors recommend that all the resolutions placed before the Members regardingthe appointment of the Directors be approved.

14. MEETINGS OF THE BOARD:

Four Board Meetings were held during the Financial year and the details of the meetingswere given in the Corporate Governance Report. The intervening gap between the Meetingswas within the period as prescribed under the Companies Act 2013

15. PERFORMANCE EVALUATION:

The Board evaluates the performance of Non-executive and Independent Directors everyyear. All the Non-Executive and Independent Directors are eminent personalities havingwide experience in the field of Business Industry Law and Administration. Their presenceon the Board is advantageous and fruitful in taking business decisions.

16. REMUNERATION POLICY:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management personnelKey Managerial Personnel and fixing their remuneration.

The objective and broad framework of the Remuneration Policy is to consider anddetermine the remuneration based on the fundamental principles of payment forperformance for potential and for growth. The Remuneration Policy reflects on certainguiding principles of the Company such as aligning remuneration with the long terminterest of the Company and its Shareholders. It also ensures the effective recognition ofperformance and encourages a focus on achieving superior operational results. TheNomination and Remuneration Committee recommends the remuneration of Executive Directorswhich is approved by the Board of Directors subject to the approval of Shareholderswhere ever necessary. The level and composition of remuneration shall be reasonable andsufficient to attract retain and motivate the Directors and Key managerial personnel ofthe quality required to run the Company successfully.

17. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements u/s 134(5) of the Companies Act 2013 with respect toDirectors' Responsibility Statement your Directors confirm that they have:

1. followed in the preparation of Financial Statements the applicable AccountingStandards and given proper explanation relating to material departures if any;

2. selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the Financial Year and of the Profit andLoss Account of the Company for that period;

3. taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Act so as to safeguard the Assets of the Companyand to prevent and detect fraud and other irregularities;

4. prepared the Annual Accounts on a Going Concern basis;

5. laid down internal financial controls in the Company that are adequate and wereoperating effectively; and

6. Devised proper systems to ensure compliance with the provisions of all applicablelaws and these are adequate and are operating effectively.

18. CORPORATE SOCIAL RESPONSIBILITY:

As part of its initiatives under "Corporate Social Responsibility (CSR) theCompany has undertaken projects in the areas of Education Health Care Drinking WaterRural Development and Sanitation. These projects are largely in accordance with Section135 and Schedule VII of the Companies Act 2013 (Act). the Company's initiatives towardsCorporate Social Responsibility have been suitably focused. The brief outline of the CSRPolicy and the CSR initiatives undertaken by the Company during the financial year underreview are provided in the Annual Report on Corporate Social Responsibility Activities2016-17 forming part of this report as Annexure -3. The Policy adopted by the Company canbe viewed at website of the Company.(www.panasoniccarbon.co.in)

19. GREEN INITIATIVE:

During the year 2016-17 we started a sustainability initiative with the aim of goinggreen and minimizing our impact on the environment. Like the previous year this year toowe are publishing only the statutory disclosures in the print version of the AnnualReport. Additional information is available on our website www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2016-17 and Notice of the 35th AGMare sent to all members whose email addresses are registered with the Company / DepositoryParticipant(s). For members who have not registered their email addresses physical copiesof the Annual Report 2016-17 and the Notice of the 35th Annual General Meetingare sent in the permitted mode. Members requiring physical copies can send a request tothe Company Secretary Panasonic Carbon India Co. Limited.

The Company is providing remote E voting facility to all members to enable them to casttheir votes electronically on all resolutions set forth in the Notice. This is pursuant tosection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministration) Rules 2014. The instructions for remote E voting are provided in theNotice.

20. EXTRACT OF ANNUAL RETURN:

In compliance with Section 134 (3)(a) of the Act an extract of the Annual Return inthe prescribed format is appended to this report as Annexure- 4.

21. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 (1) of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. V. Nagarajan & Co a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed tothis report as Annexure - 5.

22. PARTICULARS OF EMPLOYEES:

The information required pursuant to section 197(12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andCompanies (Particulars of Employees) Rules 1975 in respect of employees of the Companyand Directors is furnished in Annexure - 6.

23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an anti Sexual Harassment Policy in line with the requirementof the Prevention of Sexual Harassment of Women at Workplace (Prohibition Prevention andRedressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy. The Company has not received anycomplaint of Sexual harassment during the year 2016-17 under review.

24. RELATED PARTY TRANSACTIONS:

All related party transactions or arrangements were entered in to by the Company duringthe financial year were on an arm's length basis and were in the ordinary course ofbusiness. In Compliance with the provisions of the Act and Regulation 23(2) of the SEBIRegulation 2015 all related party transactions had been placed before the AuditCommittee for prior approval. Pursuant to Section 134(3) of the Act read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 information pertaining to related parties are givenin Form AOC-2 as Annexure 7 of the report.

As per Regulation 34(3) of the SEBI Regulations 2015 the related party disclosure hasbeen made part of this Annual Report.

As per the explanation 23(1) a transaction with a related party shall be considered"Material" if the transaction(s) to be entered into individually or takentogether with previous transactions during a financial year exceeds ten percent of theannual consolidated turnover of the Company as per the last audited financial statement ofthe Company.

The Company sells carbon rods to batter y manufacturers which are subsidiaries toParent Company for the past so many years. All such transactions were on an arm's lengthbasis and in the ordinary course of business.

As per requirements of Regulation 23 (4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 [SEBI Regulations 2015) and the relevant provisions ofthe Companies Act 2013 read with related rules thereto approval of the shareholders forrelated party transactions which are considered as "Material" and entered intoby the Company in the ordinary course of business and also on arm's length basis for a sumnot exceeding Rs. 100 crores (Rupees Hundred crores only) per annum for the financial year2016-17 and each subsequent financial year till the termination of the said arrangementor any modification in the terms thereof had already been obtained in the last AnnualGeneral Meeting held on 29th July 2016.

25. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

In compliance with provisions of Section 177 of the Act read with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors of theCompany has constituted Vigil Mechanism/ Whistle Blower Policy for Directors employeesand vendors of the Company. The Whistle Blower Policy enables the Directors employees andvendors to report concerns about unethical behavior actual or suspected fraud orviolation of the Code of Conduct or ethics Policy thereby ensuring that the activities ofthe Company are conducted in a fair and transparent manner. The said policy is availableat the Company's website at www.panasoniccarbon.co.in We further affirm that no employeehas been denied access to the audit committee during the year 2016-17.

26. STATUTORY AUDITORS:

The Statutor y Auditors of the Company M/s. Brahmayya & Co. CharteredAccountants (Firm Registration No.000511S) Chennai retire at the ensuing Annual GeneralMeeting of the Company. As per section 139 of the Companies Act 2013 and rules madethereunder no company shall appoint an audit firm which has completed its term as Auditorfor more than two terms of five consecutive years. Hence it is proposed to appoint BSR& Co. Chartered Accountants (Firm Registration No : 101248W/W-100022 as allotted bythe Institute of Chartered Accountant of India as the Statutory Auditors of the Company tohold office from the conclusion of this Annual General Meeting till the conclusion of thenext Annual General Meeting of the Company.

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors have also confirmed that they hold a valid certificate issued by thePeer Review Board of the Institute of Chartered Accountants of India.

Company has received their written consent and a certificate that they satisfy thecriteria provided under Section 141 of the Act and that the appointment if made shall bein accordance with the applicable provisions of the Act and rules framed thereunder.

27. COST AUDITORS

In terms of Section 148 of the Companies Act 2013 read with Companies (Cost recordsand audits) Rules 2014 as amended Carbon Rod manufactured by the Company and fallingunder the specified Central Excise Tariff Act heading are not covered under the ambit ofmandatory cost audit .

28. INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Directors of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).

Whenever new Non-executive and Independent Directors are inducted in the Board they areintroduced to our Company 's culture through appropriate orientation session and they arealso introduced to our organization structure our business constitution boardprocedures our major risks and management strategy. The appointment letters ofIndependent Directors has been placed on the Company's website.

The Independent Directors of the Company had met during the year on 31stJanuary 2017 to review the performance of Non- Independent Directors Chairperson of theCompany and the Board as a whole. They had accessed the quality quantity and timelinessof flow of information between the Company management and the Board.

29. RISK MANAGEMENT :

The Board of Directors had constituted Risk Management Committee to identify elementsof risk in different areas of operations and to develop policy for actions associated tomitigate the risks. The Committee on timely basis informed members of Board of Directorsabout risk assessment and minimization procedures and in the opinion of the Committeethere was no risk that may threaten the existence of the Company. The details of RiskManagement Committee are included in the Corporate Governance Report.

30. DIRECTORS AND KEY MANANGERIAL PERSONNEL :

Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. R. SenthilKumar Managing Director & CEO Mr. Vinayagam Sume Chief Financial Officer and Ms.P.Maheswari Company Secretary of the Company are the Whole Time Key Managerial Personnel(KMP) of the Company as on date of this report. The remuneration and other details of KMPfor the FY 2016-17 are provided in Extract of the Annual Return which forms part of thisDirectors' report.

31. OTHER DISCLOSURES:

No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which the financialstatements relate and the date of the report.

There was no change in the nature of business during FY 2016-17.

The Company does not have any Subsidiary Joint ventures or associates.

No significant material orders were passed by the regulators or court during thefinancial year which would have impacted the going concern status of the Company'soperation in the future.

32. ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the support co-operationguidance and assistance provided by the Foreign Collaborators M/s. Panasonic CorporationJapan. Your Directors thank the valued

Customers for their patronage the Suppliers for their timely and quality supply theShareholders for the confidence reposed and the Bankers State and Central Governments forextending their invaluable support.

Your Directors place on record their appreciation of the dedicated services of theemployees of the Company at all levels for the growth of the Company.

Your Directors are especially thankful to the esteemed Shareholders for their continuedencouragement and support.

By Order of the Board of Directors
For Panasonic Carbon India Co. Limited
Place : Chennai V.R. GUPTE R. SENTHIL KUMAR
Date : 10th May 2017 DIRECTOR MANAGING DIRECTOR

Annexure - 1 to the 35th Annual Report of the Board of Directors

ANNEXURE- A

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

[Section 134(3) (m) of the Companies Act 2013 read with Rule 8(3) of The CompaniesAccounts) Rules 2014] A.CONSERVATION OF ENERGY

Sustainability is an integral part of the Company's business philosophy. During theyear under review 9.68% reduction in consumption of electricity was achieved byreplacement of transformer with energy saving model by changing exhaust blower capacityfrom 50 to 40HP by improving productivity of ball mill by increasing balls qty byreducing the hammer mill motor capacity from 50 to 40HP by introducing the VFD forgrinding blower and installation of solar power plant in factory. During the year underreview reduction in consumption of furnace oil by 11.40% was achieved byincreasing carbon rod qty in basket and increasing the basket height by 65mm. Reduction inconsumption of furnace oil by 10.12% was also achieved due to reduction of recyclicmaterial generations in mixing & extruding process.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D activities are carried out by the Company:

a. Reduction of coal tar consumption by using 100% Pitch Powder in R6 .

b. Reduction of Graphite by using of needle coke in R6 for improving quality.

c. Introduction of Mini Screw Press instead of Hydraulic Press for R20CP .

d. Inch Carbon productivity increased by introducing new composition.

2. Benefits derived as a result of the above R&D activities:

a. Quality improvement and reduction of Wax absorption in R6 Carbon through improveddensity.

b. Reduced electrolyte penetration and cost reduction.

c. Reduction of Recyles generation and reduction of Wax absorption in R20.

d. Reduction of defects due to reduction of ellipse and critical cracks.

e. Improved breaking strength which resulted in process breakages.

3. Future plan of action:

a) Introduction of Screw press in place of Hydraulic Press for R20CN Grade.

b) Elimination of crushing of Artificial Graphite.

c) Reduction of Mixing process time in R6 Carbon

d) Reduction of Carbon Black in R20BP carbon.

4. Expenditure on R&D:

Total Expenditure - Revenue Rs.21.794lakhs
R&D Expenditure as a percentage to total turnover 0.45%

Technology absorption adaptation and Innovation:

1. Efforts taken to improve upon technology absorption adaptation and innovation.

Effective use of Needle coke in place of amorphous graphite for R6BP Gradeintroduction of coal tar pitch crushing process for improving quality of carbonachievement of reduction in impregnation process nonconformities and fuel consumption. .

2. Benefits derived as a result of the above.

Reduction of Fuel cost productivity improvement quality improvement and improvedenvironmental friendly operations.

3. Imported technology (imported during last five years) Except for regularup-gradation of the know-how no specific technology had been imported in the last fiveyears.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to Exports: Initiatives taken to increase exports;development of new export markets for Products and services and export plans.

2. Total Foreign Exchange used and earned:

Total foreign exchange used in the year ended 31st March 2017 towardsImport of Raw materials and other remittances like Royalty Dividend Commission on Salesetc. was Rs. 12.04 Crores. With regard to the earning of Foreign Exchange the directinflow of foreign currency due to Exports worked out to Rs. 31.60 Crores. Apart from thisthe Company has stopped outgo of substantial amount of Foreign Exchange by indigenouslyproducing Carbon Rods as an import substitute. This saving worked out approximately to Rs.15.80 Crores.

Annexure - 6 to the 35th Annual Report of the Board of Directors

Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

a) The ratio of the remuneration of each director to the median employee's remunerationof the company for the financial year:

Name Designation Ratio to median remuneration of the employees
Mr. R. Senthil Kumar Managing Director & CEO 13:1

b) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Name Designation % increase in remuneration
Mr. R. Senthil Kumar Managing Director & CEO 18%
Mr. P. Venkateswara Rao Chief Financial Officer 12%
Mr. Vinayagam Sume {joined during the year} -
Mr. R. Manoranjan Company Secretary 24%
Ms. P. Maheswari {joined during the year} -

c) The percentage increase in the median remuneration of employees in the financialyear: 18%

d) The number of permanent employees on the rolls of company: 130

e) The explanation on the relationship between average increase in remuneration andcompany performance:

The Company's PAT has grown from Rs. 1346.40 lakhs to Rs. 1578.96 lakhs an increase of17.2 % against which the average increase in remuneration is 15% and this increase is inline with the policy of Company.

f) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:

Name Designation CTC Rs. in Lakhs % Increase in CTC PAT (Rs. in Lakhs) % Increase in PAT
Mr. R. Senthil Kumar Managing Director & CEO 61.24 18%
Mr. P. Venkateswara Rao Chief Financial Officer 12.45 12%
Mr. Vinayagam Sume {joined during the year} 1.46 - 1578.96 17%
Mr. R. Manoranjan Company Secretary 5.11 24%
Ms. P. Maheswari {joined during the year} 1.95 -

* It consists of salary/allowance value of perquisites bonus and retirement benefitsetc. g) Variations in the market capitalisation of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer:

Date Paid up Capital Closing Market Price per shares EPS PE Ratio Market Capitalisation
(Rs. in Lakhs)
31.03.2016 48000000 439.80 28.05 15.67 21110.40
31.03.2017 48000000 487.60 32.90 14.82 23404.80
Increase/(Decrease) NIL 47.80 4.85 (0.85) 2294.40
% Increase/Decrease NIL 10.87 17% (5.42) 10.87
No issue of shares during the year - - - - -

h) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof any exceptionalcircumstances for increase in the managerial remuneration: Average increase in ManagerialRemuneration is 18% for employees other than Key Managerial Personnel and 15% forManagerial Personnel (KMP and Senior Management)

i) The key parameters for any variable component of remuneration availed by thedirectors: The Company has not paid any variable components of remuneration to theManaging Director except remuneration by way of salary and perquisites.

Independent-Non Executive Directors are paid sitting fees and commission as per theirterms of appointment. Non executive Directors are paid sitting fees only.

The Directors nominated by the collaborator are not paid any sitting fees andcommission. j) The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year: Not Applicable k) It is hereby affirmed that the remuneration isas per the Remuneration Policy of the Company.

By Order of the Board of Directors
For Panasonic Carbon India Co. Limited
Place : Chennai V.R GUPTE R. SENTHIL KUMAR
Date : 10th May 2017 DIRECTOR MANAGING DIRECTOR

FORM NO. AOC.2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third provisothereto.

1 Details of contracts or arrangements or transactions not at Arm's length basis: All transactions are at Arm's length basis

2 Details of Material contracts or arrangements or transactions at Arm's lengthbasis : (Exceeding 10% of the annual consolidated turnover of the Company)

Name(s) of the related party Nature of Relationship Nature of contracts/ arrangements/ transactions Duration of the contracts / arrangements / transactions Terms of contracts Justification for entering in to such contracts/arrangements/ transactions Value of Contract (Rs. in Crore) Date(s) of approval by the Board
1 Panasonic Energy India Co. Ltd India Fellow Subsidiary under common control Sale of Carbon Rods Yearly Sale of Goods (Excluding Excise Duty & Sales Tax) Transaction in the Ordinary course of business and on Arm's length basis 6.43 25-05-2016
2 Panasonic energy Poland S.A. Poland Fellow Subsidiary under common control Sale of Carbon Rods Yearly Sale of Goods (Excluding Excise Duty & Sales Tax) Transaction in the Ordinary course of business and on Arm's length basis 11.87 25-05-2016
3 Panasonic Do Brasil Limitada Brazil Fellow Subsidiary under common control Sale of Carbon Rods Yearly Sale of Goods (Excluding Excise Duty & Sales Tax) Transaction in the Ordinary course of business and on Arm's length basis 5.43 25-05-2016