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Panasonic Carbon India Company Ltd.

BSE: 508941 Sector: Engineering
NSE: PANCARBON ISIN Code: INE013E01017
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OPEN 505.00
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VOLUME 3755
52-Week high 610.00
52-Week low 420.00
P/E 17.78
Mkt Cap.(Rs cr) 240
Buy Price 499.10
Buy Qty 10.00
Sell Price 500.00
Sell Qty 170.00
OPEN 505.00
CLOSE 504.75
VOLUME 3755
52-Week high 610.00
52-Week low 420.00
P/E 17.78
Mkt Cap.(Rs cr) 240
Buy Price 499.10
Buy Qty 10.00
Sell Price 500.00
Sell Qty 170.00

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 34th Annual Reporttogether with the Audited Financial Statements of the Company for the year ended 31stMarch 2016 and the Auditors’ Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31st March 2016 ascompared with the earlier year are as under:

Particulars 2015-16 2014-15
Gross Income 5491.93 4693.37
Profit Before Interest and Depreciation 2130.07 1466.08
Finance Charges - -
Gross Profit before 2130.07 1466.08
Depreciation
Provision for Depreciation 45.11 65.33
Net Profit Before Tax 2084.96 1400.75
Provision for Tax 738.55 486.63
Net Profit After Tax 1346.40 914.12
Balance of Profit brought forward from previous year 10.42 8.48
Balance available for appropriation 1356.82 922.60
Proposed Dividend on Equity Shares 480.00 384.00
Tax on proposed 97.71 78.18
Dividend
Transfer to General 750.00 450.00
Reserve
Surplus carried to 29.11 10.42
Balance Sheet

2. DIVIDEND :

Your Directors recommend an increased dividend of Rs10/- per share (i.e.) 100%. Thesame is in line with the financial strategy and policy of the company. This dividend ifapproved by you at the ensuing 34th Annual General Meeting will be paid to theShareholders whose names appear in the Register of Members as on the date of said Meeting.

3. MANAGEMENT DISCUSSION AND ANALYSIS: INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONALAND FINANCIAL PERFORMANCE:

Your Company sold 2668 Mln. Pcs. of Carbon Rod as against 2303 Mln. Pcs. which is116% of Sales of last year. The Domestic Sales Quantity and Value were 1079 Mln. Pcs. andRs16.57 Crores respectively which works out to 99.72% and 100.66% of the Sales of lastyear. The decrease in Domestic Sales was on UM-1 and UM-3 Carbon Rods and increase on UM-4when compared to last year.

The Export Sales Quantity and value were 1588Mln. Pcs. and Rs 31.79 Crores respectivelycompared to last year’s quantity of 1221Mln. Pcs. and Rs 24.13 Crores which works outto 130% by quantity and 132% by value. As informed last year your Company could stabilizethe exports to Panasonic Group Battery Factories in Poland Peru Thailand IndonesiaBrazil Costa Rica and other African customers on regular basis. Though we could not getthe orders from some of the African countries as planned due to political disturbances inthose countries we could get additional export orders from Panasonic group Companies.

During the year though there is steep increase in electricity cost the electricityconsumption reduced by promoting energy conservation activities and by increasing theproductivity. The fuel consumption in tunnel kiln reduced by 5% through usage of in-housemade light weight bricks modified and increased loading capacity refractory cars andstabilization of car loading pattern in tunnel kiln. The usage of alternate fuel in placeof furnace oil for thermic fluid heaters resulted in significant reduction of fuelconsumption cost. The increase in profitability for the current year is mainly due toadditional orders from our Panasonic group companies favorable furnace oil pricereduction of fuel and energy consumption significant improvement in yield productivityand 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 R-6 and R-03 carbon rods byinstalling additional machineries to meet the increased demand in the Domestic andInternational Markets in the years to come.

Your Company is also hopeful in maintaining the Domestic Sales by maintaining thequality and timely supply. In 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 was 34%; Exports Sales was 66%.

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 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 adopted by the Company for ensuring the orderly andefficient 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 considersits human resources as its most valuable assets. Imparting adequate and specializedtraining to its employees is an on going exercise in the Company.

8. STATEMENT PURSUANT TO LISTING AGREEMENTS:

The Company’s Securities are listed with BSE Ltd. The company confirms that it haspaid the Annual Listing Fees to the said stock exchange for the financial year 2015-16 andthere are no arrears.

9. TECHNOLOGY ABSORPTION ENERGY CONSERVATION FOREIGN EXCHANGE EARNINGS AND OUTGO:

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 Annexure-1 tothis report.

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-2 togetherwith Report of the Auditors on the compliance with the said Code.

11. EXPORT HOUSE STATUS:

The Company had obtained the Status of Export House Certificate from Government ofIndia Ministry of Commerce Directorate General of Foreign Trade (DGFT) in recognition ofgood Export performance. The Company continues to enjoy the Export House Certificatestatus.

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 basis yourcompany had observed the June month as "Environment month" and organized the"ECO" relay event on 25th June 2015 at the TADA Village where yourfactory is located. The Company had distributed T-Shirts and Caps with the sloganinscribed on ECO Activities to participants especially students from TADA School. TheCompany actively makes effort to increase awareness among the students about the globalwarming waste reduce reuse recycle and energy saving tips to sustain the environmentand environmental protection. The Company constantly evaluates the new initiatives thatcould reduce waste and emissions within the factories.

13. DIRECTORS:

Mr. Mitsutoshi Shigeta had resigned from the Board of your Company effective 1stJanuary 2016.

Mr. Kunal Jiwarajka had resigned from the Board of your Company effective 21stJanuary 2016.

The Board of Directors places on record their appreciation for the valuablecontribution made by Mitsutoshi Shigeta and Kunal Jiwarajka for the growth of the Companyduring their tenure of Directorship.

Mr. Chiaki Kidani was appointed as an additional Director at the Board Meeting held on12th February 2016.

Mr. R. Senthil Kumar was re-appointed as Managing Director of the Company for a periodof one year with effective from 22nd April 2016.

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 meetings of the Board of Directors were held during the year. For details of themeetings of the Board please refer to the Corporate Governance Report.

15. PERFORMANCE EVALUTION:

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 and administration. Their presence onthe 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 Key Managerial Personnel andother employees.

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 longer terminterest of the Company and its shareholders. It also ensures the effective recognition ofperformance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of executeDirectors which is approved by the Board of Directors subject to the approval ofshareholders whereever necessary. The level and composition of remuneration shall bereasonable and sufficient to attract retain and motivate the directors key managerialpersonnel and other employees of the 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 and 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 ScheduleVII of the Companies Act 2013.

With the applicability of Section 135 of the Act coming into force the Company’sinitiatives towards Corporate Social Responsibility have been suitably focused. The briefoutline of the CSR policy and the CSR initiatives undertaken by the Company during thefinancial year under review are provided in the Annual Report on Corporate SocialResponsibility Activities 2015-16 forming part of this report as Annexure-3. The Policyadopted by the Company can be viewed at www.panasoniccarbo.co.in

19. GREEN INITIATIVE:

During the year 2014-15 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.inElectronic copies of the Annual Report 2015-16 and Notice of the 34th AGM aresent 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 2015-16 and the Notice of the 34th Annual General Meetingare sent in the permitted mode. Members requiring physical copies can send a request tothe Company Secretary M/s. Panasonic Carbon India Co. Limited.

The Company is providing evoting facility to all members to enable them to cast theirvotes 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 evoting are provided in the Notice.

20. EXTRACT OF ANNUAL RETURN:

In compliance with section 134(3)(a) of the Act an extract of the Annual Return in theprescribed 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 HARASMENT OF WOMAN AT WORKPLACE (PREVENTIONPROHIBITION AND REDESSAL) 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 any complaint of sexual harassment during the year 2015-16under review.

24. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered in to by the company during thefinancial year were on an arm’s length basis and in the ordinary course of business.

In compliance with the provisions of the Act and Regulation 23(2) of the SEBIRegulations 2015 all related party transactions had been placed before the AuditCommittee for prior approval. Pursuant to section 134(3) (h) of the Act read with Rule8(2) of the Companies (Accounts) Rules 2014 information pertaining to related parties aregiven in Form AOC-2 as Annexure-7 of this report.

As per Regulation 34(3) of SEBI Regulation 2015 the related party disclosure has beenmade part of this Annual Report.

As per requirements of Regulation 23(8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI Regulation 2015) all existing related partytransactions which are considered as "Material" and entered into prior to thenotification of the above regulation i.e. 2nd September 2015 shall requireapproval of the shareholders in the first Annual General Meeting held subsequent to thenotifications of these regulation.

As per the explanation to Regulation 23(1) a transaction with a related party shall beconsidered "Material" if the transaction(s) to be entered in to individually ortaken together with previous transactions during a financial year exceeds ten percent ofthe annual consolidated turnover of the company as per the last audited financialstatement of the company.

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

Hence resolution No.7 of the notice convening the Annual General Meeting is placedbefore the shareholders seeking their approval for the following related partytransactions which are considered as "Material" and are existing as on 2ndSeptember 2015.

As per requirements of Regulation 23(4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI Regulation 2015) all prospective related partytransactions which are considered as "Material" shall require approval of theshareholders.

Hence it is proposed to secure shareholders approval on resolution No.8 of the noticeconvening the Annual General Meeting for approving the prospective material related partytransactions for the period commencing from 1st April 2016 upto the end of thefinancial year 2016-17 and each subsequent financial year till the termination of the saidarrangement or any modification in the terms thereof.

25. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

In compliance with provisions of Section 177 of the Act the Board of Directors of theCompany has adopted a Vigil Mechanism which comprises Whistle Blower Policy for Directorsemployees and vendors of the Company. The Whistle Blower policy enables the Directorsemployees and vendors to report concerns about unethical actual or suspected fraud orviolation of Company’s code of conduct or ethics policy thereby ensuring that theactivities of the Company are conducted in a fair and transparent manner. The said policyis available at the Company’s website at www.panasoniccarbon.co.in.

We further affirm that no employee has been denied access to the audit committee duringyear 2015-16.

26. STATUTORY AUDITORS:

The Statutory Auditors of the Company M/s.Brahmayya & Co. (Firm Registration No.000511S) Chartered Accountants Chennai retire at the ensuing Annual General Meeting ofthe Company. As per section 139 of the Companies Act 2013 and rules made thereunder it isproposed to appoint M/s. Brahmayya & Co. Chartered Accountants as the StatutoryAuditors of the Company to hold office from the conclusion of this Annual General Meetingto till the conclusion of the next 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.

The re-appointment proposed is within the time frame for transition under the thirdproviso to sub-section (2) of Section 139 of the Companies Act 2013.

The Report given by the Auditors on the financial statement of the Company is part ofthe Annual Report. There has been no qualification reservation or adverse remark ordisclaimer in their Report.

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 products manufactured by the Company andfalling under the specified Central Excise Tariff Act heading are not covered under theambit of mandatory cost audit from the financial years commencing on or after 1stApril 2015.

28. INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149 (7) of the Companies Act 2013 confirming that they meet withthe criteria of 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 theyare also 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 12thFebruary 2016 to review the performance of non- Independent Directors Chairperson of theCompany and the Board as a whole. They had assessed 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 Act Mr. R. Senthil Kumar ManagingDirector & CEO Mr. P. Venkateswara Rao Chief Financial Officer and Mr. R.Manoranjan Company Secretary of the Company are the Key Managerial Personnel (KMP) of theCompany as on date of this report. The remuneration and other details of KMP for the FY2015-16 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 2015-16.

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 fortheir timely and quality supply the Shareholders for the confidence reposed and theBankers State and Central Governments for extending their invaluable support. YourDirectors place on record their appreciation of the dedicated services of the employees ofthe 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 Caron India Co. Limited
Place : Chennai V.R. GUPTE R. SENTHIL KUMAR
Date: 25th May 2016 DIRECTOR MANAGING DIRECTOR

Annexure - 1 to the 34th Annual Report of the Board of Directors

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOETC.

[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. Duringthe year under review 7.80% reduction in consumption of electricity was achieved byre-layout of Crushing process machineries and introducing the Variable Frequency Drivesfor certain machineries. Further power saving was done saving by replacing Fluorescent andMercury Vapor lamps with LED tubes and street lights all over the factory. During the yearunder review reduction in consumption of furnace oil was achieved by 12% by introducingpitch crushing process instead of melting de-hydration and binder aging processmodifying impregnation process operations and by using in house made modified refractorybricks in construction of kiln car.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D activities are carried out by the Company: a.Removal of coal tar pitch melting coal tar dehydration and binder aging processes byintroducing the powder pitch. b. Modification of UM-3 and UM-1 composition for improvingquality and yield. c. Introduction of new source for some of the raw materials. d. Usageof Pyrolysis oil in place of Furnace Oil in Thermic Fluid Heaters (Boilers) e.Productivity improvement in UM-4 carbon rods.

2. Benefits derived as a result of the above R&D activities: a. Significant costreduction achieved due to introduction of powder pitch. b. Modification of Compositionreduced the cost as well as the dependence on imports as some materials are not c.Improving firing efficiency reduction energy cost by using alternate and environmentfriendly fuel oil in Boilers.

d. Improved UM-4 carbon productivity and reduced recycles generation.

3. Future plan of action: a) Removal of Coal Tar usage. b) Develop substitute materialfor Sulphur. c) Improve working and environment conditions in process..

4. Expenditure on R&D:

Total Expenditure - Revenue Rs21.29 lakhs
R&D Expenditure as a percentage to total turnover 0.44%

Technology absorption adaptation and Innovation:

1. Efforts taken to improve upon technology absorption adaptation and innovation.Effective use of alternate material for UM-3 and introduction of coal tar pitch crushingprocess.

2. Benefits derived as a result of the above. Reduction of fuel cost productivityimprovement quality improvement and improved environmental friendly operations.

3. Imported technology (imported during last five years) Except for regularup-gradation of the knowhow 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; developmentof 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 2016 towardsImport of Raw materials and other remittances like Royalty Dividend Commission on Salesetc. was Rs 11.95 Crores. With regard to the earning of Foreign Exchange the directinflow of foreign currency due to Exports worked out to Rs31.79 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 toRs16.57 Crores.

Annexure - 3 to the 34th Annual Report of the Board of Directors

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

1. A brief outline of the company’s CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programs. CSR Policy of the company has been uploaded in the company’swebsite at www.panasoniccarbon.co.in

2. The Composition of the CSR Committee.

1. Mr V.R Gupte Chairman (Independent Director)

2. Mr. K. Subramanian Member (Independent Director)

3. Mr A. Raghavendra Rao Member (Independent Director)

4. Mr. R. Senthil Kumar Member (Managing Director & CEO)

3. Average net profit of the company for last three financial years is Rs119042676/-

4. Prescribed CSR Expenditure (2% of the amount as in item 3 above) The Company isrequired to spend Rs 2380854/- towards CSR.

5. Details of CSR spent during the financial year.

Total amount spent for the financial year is Rs 2406294/- as against Rs 2380854/-

6. Amount unspent if any; NIL

7. Manner in which the amount spent during the financial year is detailed below.

(1) (2) (3) (4) (5) (6) (7) (8)
Sl. No CSR project/activity Sector in which the Project is covered Location Amount outlay (budget) project or programswise (Amount in Rs) Amount spent on the projects or Programswise (Amount in Rs) Cumulative expenditure upto to the reporting period (Amount in Rs) Amount spent: Direct or through implementing agency
1 Laying of 50 mm thick asphault road in Tada village Rural Development Tada Andhra Pradesh Nellore District 1620000 1761829 1761829 Directly
2 Construction of Library for girls at Z.P School Tada. The Library building will be of total two floors. Construction of ground floor for girls has been completed in the year 2015-16. Construction of first Floor for boys has been completed in the current year 2016-17 Education Tada Andhra Pradesh Nellore District 800000 644465 2406294 Directly

 

By Order of the Board of Directors
For Panasonic Caron India Co. Limited
Place : Chennai V.R GUPTE R. SENTHIL KUMAR
Date : 25th May 2016 DIRECTOR MANAGING DIRECTOR

Annexure - 5 to the 34th Annual Report of the Board of Directors

Form No. MR-3

SECRETARIAL AUDIT REPORT

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

FOR THE FINANCIAL YEAR ENDED MARCH 31 2016

To

The Members of PANASONIC CARBON INDIA CO. LIMITED

We were appointed by the Board of Directors

PANASONIC CARBON INDIA CO. LIMITED (hereinafter called the Company) to conductSecretarial Audit for the financial year ended 31st March 2016.

We have conducted the Secretarial Audit in respect of compliance with applicablestatutory provisions and adherence to good corporate practices by the Company. SecretarialAudit was conducted in a manner that provided us a reasonable basis for evaluating thecorporate conducts/statutory compliances and expressing our opinion thereon.

Management’s Responsibility for Secretarial Compliances

The Company’s Management is responsible for preparation and maintenance ofsecretarial records and for devising proper systems to ensure compliance with theprovisions of applicable laws and regulations.

Auditor’s Responsibility

Our Responsibility is to express on the secretarial records standards and proceduresfollowed by the Company with respect to secretarial compliances.

We believe that audit evidence and information obtained from the Company’smanagement is adequate and appropriate for us provide a basis for our opinion.

Opinion

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the company for the financial year ended on March 31 2016 accordingto the provisions of:

i) The Companies Act 2013 (the Act) and the rules made thereunder as applicable;

ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder as applicable;

iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder– Not Applicable iv) Foreign Exchange Management Act 1999 and the rules andregulations made there under to the extent of Foreign Direct Investment Overseas DirectInvestment;

v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):- (As amended from time to time)

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosuresRequirements) 2009 – Not applicable as the Company did not issue any security duringthe financial year under review;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999/ The Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 (Effective 28th October2014) – Not applicable as the Company has not granted any Options to its employeesduring the financial year under review;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 – Not applicable as the Company has not issued any debt securitiesduring the financial year under review;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and

(h) The Securities and Exchange Board of India (Buy back of Securities) Regulations1998 –Not applicable as the Company has not bought back any of its securities duringthe financial year under review.

We have also examined compliance with the applicable clauses of the following:

i) Secretarial Standards (SS-1 and SS-2) as issued by The Institute of Company

Secretaries of India which became effective from 1st July 2015.

ii) The Listing Agreements entered into by the Company with BSE Limited and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (effective 1stDecember 2015).

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit We hereby report that in our opinion the company hasduring the financial year ended on March 31 2016 complied with the aforesaid laws.

Based on information received and records maintained We further report that:

1. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non- Executive Directors Independent Directors and a Woman Director.The changes in the composition of the Board of Directors which took place during thefinancial year under review were carried out in compliance with the provisions of the Actsand the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015.

2. Adequate notice of at least seven days was given to all Directors to schedule theBoard Meetings and Committees thereof. Agenda and detailed notes on agenda were sent inadvance of at least three days before the meeting. There exists a system for Directors toseek and obtain further information and clarification on the agenda items before themeeting and for meaningful participation at the meeting;

3. Majority decision is carried and the views are captured and recorded as part of theMinutes of the Meetings;

4. The Company has proper Board processes.

Based on the compliance mechanism established by the Company and on the basis of theCompliance Certificate(s) issued by the Company Secretary in practice and taken on recordby the Board of Directors at their meeting(s) we are of the opinion that the managementhas:-

(a) Adequate system and process commensurate with its size and operations to monitorand ensure compliance with applicable laws rules regulations and guidelines; and

(b) Complied with the following other laws specifically applicable to the Company:-

1. Employees Provident Fund and Miscellaneous Provisions Act 1952

2. Employees State Insurance Act 1948

3. Environment Protection Act 1986 and other environmental laws

4. Equal Remuneration Act 1976

5. Factories Act 1948

6. Hazardous Wastes (Management and Handling) Rules 1989 and Amendment Rules 2003

7. Indian Contract Act 1872

8. Income Tax Act 1961 and Indirect Tax Laws

9. Indian Stamp Act 1999 10. Maternity Benefits Act 1961 11. Minimum Wages Act 194812. Arms Act and Explosives Act 13. Negotiable Instruments Act 1881 14. Payment of BonusAct 1965 15. Payment of Gratuity Act 1972

16. Payment of Wages Act 1936 and other applicable labour laws

We further report that during the period under review the Company has complied with theprovisions of the Act Rules Regulations Guidelines Standards etc. mentioned above

We further report that during the audit period the company has no instances of:

(i) Public/Right/Preferential issue of shares / debentures/sweat equity etc.

(ii) Redemption / buy-back of securities

(iii) Major decisions taken by the members in pursuance to section 180 of the CompaniesAct 2013.

(iv) Merger / amalgamation / reconstruction etc.

V.NAGARAJAN
FOR V.NAGARAJAN & CO.
COMPANY SECRETARIES
Place : Chennai FCS No: 5626
Date : 25th May 2016 C P No: 3288

Annexure - 6 to the 34th 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’sremuneration of the company for the financial year:

Name Designation Ratio to median remuneration of the employees
Mr. R. Senthil Kumar Managing Director & CEO 10:1

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 17%
Mr. P. Venkateswara Rao Chief Financial Officer 11%
Mr. R. Manoranjan Company Secretary 16%

c) The percentage increase in the median remuneration of employees in the financialyear: 12% d) The number of permanent employees on the rolls of company: 130 e) Theexplanation on the relationship between average increase in remuneration and companyperformance:

The Company’s PAT has grown from Rs 914.12 lakhs to Rs 1346.40 lakhs an increaseof 47 % 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 ManagerialPersonnel against the performance 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 51.72* 17%
Mr. P. Venkateswara Rao Chief Financial Officer 13.28* 11% 1346.40 47%
Mr. R. Manoranjan Company Secretary 6.36* 16%

* 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)
31.03.2015 48000000 229.70 19.04 12.06 11025.60
31.03.2016 48000000 439.80 28.05 15.67 21110.40
Increase/Decrease NIL 210.10 9.01 4.51 10084.80
% Increase/Decrease NIL 91.46 47.32 37.39 91.46
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 12% 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 the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: Not Applicable

k) It is hereby affirmed that the remuneration is as per the Remuneration Policy of theCompany.

By Order of the Board of Directors
For Panasonic Caron India Co. Limited
Place : Chennai V.R GUPTE R. SENTHIL KUMAR
Date : 25th May 2016 DIRECTOR MANAGING DIRECTOR

Annexure - 7 to the 34th Annual Report of the Board of Directors

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 Companuy)

Sl No 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 one common Director 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 7.88 07-05-2015
2 Panasonic energy Poland Fellow Subsidiary under common control one common Director 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 12.34 07-05-2015

 

By Order of the Board of Directors
For Panasonic Caron India Co. Limited
Place : Chennai V.R GUPTE R. SENTHIL KUMAR
Date : 25th May 2016 DIRECTOR MANAGING DIRECTOR