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Phillips Carbon Black Ltd.

BSE: 506590 Sector: Industrials
NSE: PHILIPCARB ISIN Code: INE602A01015
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NSE 15:56 | 23 Nov 973.05 -5.05
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OPEN 985.00
PREVIOUS CLOSE 977.65
VOLUME 62896
52-Week high 1094.95
52-Week low 210.00
P/E 22.92
Mkt Cap.(Rs cr) 3,353
Buy Price 972.65
Buy Qty 84.00
Sell Price 0.00
Sell Qty 0.00
OPEN 985.00
CLOSE 977.65
VOLUME 62896
52-Week high 1094.95
52-Week low 210.00
P/E 22.92
Mkt Cap.(Rs cr) 3,353
Buy Price 972.65
Buy Qty 84.00
Sell Price 0.00
Sell Qty 0.00

Phillips Carbon Black Ltd. (PHILIPCARB) - Director Report

Company director report

Management Discussion and Analysis

The Directors have pleasure in presenting their fifty - fifth Annual Report on businessand operations of Phillips Carbon Black Limited and the Audited Accounts for the financialyear ended 31st March 2016.

FINANCIAL HIGHLIGHTS

(Rs. in crore)

Year ended 31.03.16 31.03.15
Total Revenue 1912.67 2484.61
PBDIT 230.19 210.21
Less: Finance and hedging cost 118.18 138.35
PBDT 112.01 71.86
Less: Depreciation 54.97 57.53
PBT 57.04 14.33
Tax Expense 34.18 1.69
PAT 22.86 12.64
Balance brought forward 176.74 168.97
Less: Adjustment consequent to revision of useful life of certain assets pursuant to Schedule II of the Companies Act 2013 0.72
Balance brought forward (net of adjustment) 176.74 168.25
Profit available for Appropriation 199.60 180.89
Proposed Dividend 8.62 3.45
Tax on aforesaid Dividend 1.75 0.70
Balance carried forward to Balance Sheet 189.23 176.74

DIVIDEND

Based on Company's performance your Directors are happy to recommend a dividend of 25%i.e. @ Rs. 2.50/- per share which will absorb Rs. 8.62 crore for approval of Members atthe ensuing Annual General Meeting. The tax on aforesaid dividend to be borne by theCompany will be Rs. 1.75 crore.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Global economic recovery continues but at an ever slowing and increasingly fragilepace. Major macroeconomic realignments are affecting prospects differentially acrosscountries and regions. These include slowdown in China a decline in oil price withsizable redistributive consequences across sectors and countries slowdown in investmentand trade activities declining capital flows to emerging economies. These realignmentstogether with noneconomic factors such as geopolitical tensions and political discord aregenerating uncertainty.

Amid this uncertain and differential growth global automobile industry witnessed anestimated demand increase of almost 2% in FY16 which is less than FY15 estimated growth of2.7%. Recovering automobile sales in major markets of Europe such as Spain Italy UKFrance and Germany contributed to a growth of 8 - 9% in FY16. Increasing consumerspending low gasoline prices and pent-up demand boosted automobile sales in US. Emergingmarkets of Eastern Europe South America and Africa whose income are dependent oncommodity prices saw a sharp decline in auto sales with demand decreasing by as much as30 to 40% for a few countries. Increased auto demand in Asia continued to be driven byChina and South Asia at a slower pace of approx. 3.2%. As China is moving towardsconsumption driven economy model the same is reflected in the increasing passenger carsales. Japan continues its degrowth in auto sales in a weak economy. Global demand forpassenger car tyre grew by estimated 2% with improved demand in Western Europe NorthAmerica China and India. Global demand for truck tyre declined by estimated 2% with OEMsegment demand decreasing by estimated 7%. Tyre demand in emerging markets continued todecline.

Indian Automobile Industry's domestic market recorded an increase in passenger vehiclesales by 7% commercial vehicle by 11% and muted growth of 1 - 3% in two and three wheelersegments in FY16. Low cost of ownership improving demand from infrastructural activityand better than a normal monsoon should drive the FY17 growth across the segments. Autoexports grew by 1.9% on account of lower sales in two wheeler segment. Tyre Industryrecorded lower production amid exports falling by 13-15% and increased imports by 12-14%in FY16. FY17 growth across segments is expected to improve with improving rural demandand increased infrastructural activity.

Global Carbon black industry continued to operate at capacity utilization of 75 –80% in FY16 against demand supply imbalance. The need for local servicing to the customerand price competitiveness are prompting major players to rationalize and restructure theircapacity across geographies. International Market is witnessing aggressive competitionsfrom low cost carbon black manufacturers.

PERFORMANCE

Carbon Black

Your Company's EBITDA during FY16 was Rs. 230.19 crore as against Rs. 210.21 croreachieved in the previous year. This was mainly on account of higher capacity utilization.While global Carbon Black demand continued to grow by 4-5% your Company achieved bettergrowth. However the impact of this volume growth was marginally offset by steady declinein crude price.

PBT for the year was Rs. 57.04 crore which is almost four times as that of previousyear's PBT of Rs.14.33 crore.

Power

Your Company's power segment revenue (excluding inter segment revenue) was higher atRs. 76.32 crore vis--vis Rs. 69.13 crore in the last year on account of higher volume.

Manufacturing

Production during FY16 was 332038 MT as compared to 311823 MT in the previous year.

Capacity utilization is expected to improve further this year with higher volumeexpected from the market and the rise in consumption trend of automobile sector. With thestrategic location of its four plants your Company is well poised to service the demandfrom various customers in India and overseas. The close vicinity of seaports to a coupleof plants should facilitate logistics costs within India and abroad.

Research and Development

The Research and Development (R&D) units located at Durgapur Kochi Mundra andPalej continued to receive recognition as in-house Research and Development units from theDepartment of Scientific and Industrial Research Ministry of Science and Technology.

During the year your Company successfully - i) developed new grades of carbon black fordomestic and international markets ii) improved product characteristics to meet morestringent customer specifications iii)continued recasting of Standard OperatingProcedures iv) established state of the art rubber application laboratory and v) modifiedreactor design operating conditions to improve yield.

Environment Health Safety and Social Responsibility

Your Company's commitment to Nature and Society leads to preservation and enrichment ofenvironment by conducting all its operations in an environment-friendly and safe manner.We are tirelessly continuing to act upon the initiatives (environmental health careprojects and educational programs) that would enable the Company to touch the lives of thepeople based around its manufacturing units.

Each plant focuses on driving safe workplace initiatives which has resulted in zerofatal accident at the plants. The Company ensures that it always adheres to all theenvironmental conformances.

Human Resource Development

Your Company has embarked upon a major transformational journey by focussing onbuilding capabilities with a strong emphasis on people. While defining the vision theLeadership team deliberated on how to create holistic experiences that the Company wantsits key stakeholders to have with its product service and culture. The Human Resourcesfunction has partnered with the business to drive this initiative and has aligned the HRprocesses to realize its vision: "To become a trusted Global player providing cuttingedge solutions to our Partners and an exciting workplace to our People".

Your Company focussed on translating the vision statement into reality by identifyingthe actions that could be taken – both individually and collectively – toachieve its vision. People capability building also forms an integral part of theseinterventions. Recently a host of Learning and Development initiatives were introducedacross PCBL. One such initiative ‘‘Nirantar Gyan Vardhan'' is aimed at creatingorganization-specific competencies that will provide competitive advantage. Alsointerventions like the Competency Based Interviews aimed at creating an unified methodfor Talent acquisition across the organization. These are conducted as certificationprograms.

Keeping in mind the importance of communication within workplace the Company hasintroduced two significant platforms of internal communication – ‘Mypulse' theinternal blogging space for employees and the ‘Brown Bag Series' that is all aboutconnecting and knowledge sharing.

The internal blogging system ‘Mypulse' is a platform for creative thinkingknowledge sharing and effective communication. It inculcates in people the habit ofwriting journals or blogs which builds the skill of documentation.

‘Brown Bag Series' is a platform where employees connect think and talk businessbroaden horizon and increase awareness. The sessions are attended simultaneously by theemployees across the Head Office Plants and Regional Offices. It is a monthly affair withdiverse topics concerning business global economy and carbon black industry. The Companyis now on the social media platforms like Facebook and Linkedin as well.

Other initiatives include:

An Industry-Academia partnership with a Core Sector University whereby managers teachstudents Carbon Black process and technology in their campus.

The effective implementation of Talent Review process aims at identification ofHi-potential talents and ensures their development for critical positions.

Automation of ‘Travel Management' and ‘New Joinee Onboarding' touchpoints onHR Connect the employees' portal has been introduced. With an onboarding touchpoint HRseeks feedback from new joinees over the period of 180 days. These automated processeshave supported the HR team to provide consistent HR services across the Organisation.

Industrial Relations (IR) situation continues to be harmonious and even non managerialemployees in various locations have shown great understanding of the business situation byaccepting no wage settlement for four years. Not a single man-day was lost in thisfinancial year.

There were 806 permanent employees on the rolls of the Company as on 31st March 2016.

Internal Financial Control System and its Adequacy

Your Company has adequate Internal Financial Control systems in all areas ofoperation.Your Board has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policiessafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial disclosures. Services of internal and external auditors are utilized from timeto time as also in-house expertise and resources. Your Company continuously upgradesthese systems in line with the best available practices.

These reports and deviations are regularly discussed with Management Committee Membersand actions are taken whenever necessary.

An Independent Audit Committee of the Board reviews the adequacy of Internal FinancialControl.

Opportunities and Threats

Your Company is always on the lookout for opportunities that may arise while keepingtab on the likely threats to its business.

Opportunities

Slow but steady recovery of advanced economies should raise the demand forautomobile and tyre and therefore increase the demand for carbon black.

• In line with any capacity addition in Indian Auto Industry the domestic tyreindustry is also aligning accordingly to meet the growing demand from OEM and replacementmarket.

• Better than the normal monsoon low cost of vehicle ownership and thrust oninfrastructure development to drive the Indian Automobile industry growth shall raise thedemand for tyre from the OEM segment.

Threats

Increasing competition from low cost carbon black manufacturers such asRussia China and South Korea.

• Sharp fall in Crude prices leading to inventory price risk.

Segment wise Performance

The performance of Carbon Black and Power segment has been covered in this Reportearlier.

Risks and Concern

Raw material for your Company viz. Carbon Black Feedstock (CBFS) is a residue from thedistillation process and is subject to daily volatility whereas the selling price offinished carbon black is revised on monthly/quarterly basis. In the event the Company isunable to pass on the increase in CBFS cost then it may have an adverse impact on profit.

In view of long transit time in import of CBFS a sudden crash in the CBFS price maylead to loss of profit. Increase in import or drop in demand for carbon black may alsohave significant impact on the Company's bottom-line.

The Company is also exposed to risks from fluctuation of Indian Rupee vis--vis othercurrencies interest rate realisation for power and regulations relating to environment.

Major Expansion Plans

Projects are proceeding at a pace considered appropriate in view of the prevailingeconomic situation global scenario and the Company's business strategy.

Subsidiary Companies

The Company has four subsidiaries as on 31st March 2016. There are no associatecompanies or joint venture companies as per the Companies Act 2013.

In accordance with the provisions of Section 129(3) of the Companies Act 2013 theCompany has prepared a Consolidated Financial Statement of the Company and all thesubsidiaries namely Phillips Carbon Black Cyprus Holdings Limited PCBL NetherlandsHoldings B.V Phillips Carbon Black Vietnam Joint Stock Company and Goodluck DealcomPrivate Limited in the form and manner as that of its own duly audited by M/s. PriceWaterhouse the auditors in compliance with the applicable accounting standards and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheConsolidated financial statements for the year 2015-16 forms a part of the Annual Reportand Accounts and shall be laid before the Annual General Meeting of the Company whilelaying its financial statements under sub-section (2) of the said section. A Statementcontaining sailent features of the financial statements of the Company's subsidiaries inForm AOC-1 is attached to the financial statements of the Company.

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available on the website of theCompany.

The Company does not have any material subsidiary in the immediately precedingaccounting year. Howver as per revised SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 SEBI has made it mandatory for all listed companies toformulate a policy for determining "material subsidiaries". Accordingly apolicy on "material subsidiaries" was formulated by the Audit Committee of theBoard of Directors and the same is also posted on the website of the Company and may beaccessed at the link http://pcblltd.com/investorrelations/investorrelations.php.

FUTURE OUTLOOK

Carbon Black

Demand for carbon black in India is expected to grow @ 6-7% during the next couple ofyears. With its wide product portfolio basket and manufacturing units locatedstrategically near to the customer location your Company is well positioned to cater toincrease in the demand.

Overseas demand for carbon black is expected to grow @4 - 4.5%. Your Company has wellestablished supply chain distribution network to ensure timely delivery service tocustomers and widen its presence in the international market. This will continue to be amajor thrust area for your Company in the coming years. Also moving up the product valuechain is one of the important pillars of your company's business strategy and thereforethe Manufacturing and Technology team is working to add more high value products to itsportfolio.

Steps in Manufacturing and Procurement

Your Company continues to focus on various initiatives to improve operationalefficiencies like improving yield exploring new geographies for feedstock sourcing aswell as investing in technical capabilities for developing new grades particularly fornon-rubber applications.

Share Capital

The paid up Equity Share Capital as on 31st March 2016 was Rs. 34.47 crore. During theyear under review your Company has not issued shares with differential voting rights norgranted stock options nor sweat equity. As on 31st March 2016 none of the Directors ofthe Company hold shares or convertible instruments of the Company.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of annualreturn in the prescribed format is given in ‘Annexure – A' which is annexedhereto and forms a part of the Boards' Report.

Conservation Of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given in the‘Annexure – B' which is annexed hereto and forms a part of the Boards' Report.

Public Deposits

The Company does not have any Public Deposit Scheme and has repaid all Public Depositsthat matured and were claimed by the depositors under the earlier Public Deposit Schemes.There is no outstanding balance as on 31st March 2016.

Details of Significant and Material orders passed by the Regulators Courts andTribunals

No significant and material order has been passed by the regulators courts andtribunals impacting the going concern status and company's operations in future.

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial Statements.

Committees of the Board

Currently the Board has four committees : the Audit Committee the Nomination andRemuneration Committee the Stakeholders Relationship Committee and the Corporate SocialResponsibility Committee. A detailed note on the composition of the Board and itsCommittees is provided in the Corporate Governance Report Section of this Annual Report.

Corporate Social Responsibility

In accordance with Section 135 of the Companies Act 2013 and the rules madethereunder the Company has formulated a Corporate Social Responsibility Policy a briefoutline of which along with the required disclosures is given in ‘Annexure - C'which is annexed hereto and forms a part of the Boards' Report. The Company along withother companies of the Group has set up RP-Sanjiv Goenka Group CSR Trust to carry out CSRactivities.

The detail of the CSR Policy is also posted on the website of the Company and may beaccessed at the link-http://pcblltd.com/investorrelations/investorrelations.php.

Vigil Mechanism /Whistle Blower Policy

In compliance with provisions of Section 177(9) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasframed a Whistle Blower Policy / Vigil Mechanism for directors employees and stakeholdersfor reporting genuine concerns about any instance of any irregularity unethical practiceand/or misconduct. The details of the Vigil Mechanism/ Whistle Blower Policy is alsoposted on the website of the Company and may be accessed at thelink-http://pcblltd.com/investorrelations/investorrelations.php.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination and Remuneration and other Committees.The manner in which the evaluation has been carried out has been explained in theCorporate Governance Report.

In a separate meeting of Indepenedent directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was also discussed in the Board Meeting. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated.

Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Senior Management Personnel and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Related Party Transactions

All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. Hence the provisionsof Section 188 of the Companies Act 2013 are not attracted. Thus disclosure in FormAOC-2 is not required. Further there are no materially significant Related PartyTransactions during the year under review made by the Company with Promoters DirectorsKey Managerial Personnel or other designated persons which may have a potential conflictwith the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval.

The policy on Related Party Transactions as approved by the Board is also posted on thewebsite of the Company and may be accessed at the linkhttp://pcblltd.com/investorrelations/ investorrelations.php.

Risk Management

Risk Management is the process of identification assessment and prioritization ofrisks followed by coordinated efforts to minimize monitor and mitigate/control theprobability and/or impact of unfortunate events or to maximize the realisation ofoppurtunities. The Company has laid a comprehensive Risk Assessment and Minimisation /Mitigation Procedure which is reviewed by the Audit Committee and approved by the Boardfrom time to time. These procedures are reviewed to ensure that executive managementcontrols risk through means of a properly defined framework.

Particulars of Employees

As required under provisions of the Companies Act 2013 and Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 particularsof the employees concerned forms a part of the Boards' Report. Having regard to theprovisions of Section 136 of the Companies Act 2013 the Annual Report excluding theaforesaid information is being sent to the members of the Company. Any member interestedin obtaining such particulars may write to the Company Secretary of the Company.

Details relating to Remuneration of Directors Key Managerial Personnel and Employees

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is marked as ‘Annexure – D'which is annexed hereto and forms a part of the Boards' Report.

Corporate Governance

A separate Report on Corporate Governance as prescribed under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 together with a certificatefrom the Company's Auditors confirming compliance is set out in the Annexure forming partof this Annual Report.

Number of meetings of Board of Directors

The details of the number of meetings of the Board of Directors held during thefinancial year 2015-16 forms a part of the Corporate Governance Report.

Directors' Responsibility Statement

Pursuant to Section 134(3) (c) of the Companies Act 2013 the Directors to the best oftheir knowledge and belief confirm that:

i) In the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed and there are no materialdepartures:

ii) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of financial year andof the profit and loss of the Company for the period;

iii) Proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv) The annual accounts have been prepared on a going concern basis.

v) Internal financial controls laid down by the Directors have been followed by theCompany and such internal financial controls are adequate and were operating effectively.

vi) Proper systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director underSetion 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulations 16(b) and 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Auditors

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s. Price Waterhouse (Firm Registration No. 301112E) CharteredAccountants were appointed as Statutory Auditors of the Company from the conclusion ofthe 53rd Annual General Meeting (AGM) of the Company held on 30th July 2014 till theconclusion of 56th AGM to be held in the year 2017 subject to ratification of theirappointment at every AGM. Accordingly a Resolution seeking Members ratification for theirappointment is included at Item No. 4 of the Notice convening the Annual General Meeting.

Cost Audit

Pursuant to Section 148 of the Companies act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Cost Audit records maintained by the Companyrelating to manufacture of Carbon Black and generation and transmission of electricity atthe plants located at Durgapur Kochi Mundra and Palej of the Company is required to beaudited. Your Directors had on the recommendation of the Audit Committee appointedMessrs Shome & Banerjee to audit the cost accounts of the Company for the financialyear 2016 -2017 on a remuneration of Rs. 450000/- (Rupees Four lacs fifty thousandonly). As required under the Companies Act 2013 the remuneration payable to the CostAuditors is required to be placed before the members in a General Meeting for theirratification. Accordingly a Resolution seeking Members ratification for the remunerationpayable to Messrs Shome & Banerjee Cost Auditors is included at Item No. 7 of theNotice convening the Annual General Meeting.

The Company submits its Cost Audit Report with the Ministry of Corporate Affairs withinthe stipulated time period.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Anjan Kumar Roy & Co. Company Secretaries (Membership No. FCS 5684) toundertake the Secretarial Audit of the Company. The Secretarial Audit Report for theFinancial Year ended 31st March 2016 is marked as ‘Annexure – E' which isannexed hereto and forms a part of the Boards' Report.

Directors

The Board deeply mourns the sad demise of Dr. Ram S Tarneja who expired on 7th August2015 and places on record its appreciation for the services rendered by him as a Director.

Mr. Sanjiv Goenka retires by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for re-appointment.

The Board of Directors of the Company at its Meeting held on 29th January 2016 hasre-appointed Mr. Kaushik Roy as Managing Director of the Company for a further period ofthree years from 5th February 2016 subject to the approval of the members and such otherapprovals as may be necessary.

As per Section 149 and other applicable provisions of the Companies Act 2013 yourDirectors are seeking appointment of Mr. Paras K Chowdhary as an Independent Director forthree consecutive years for a term up to 21st July 2019. The Company has received anotice pursuant to Section 160 of the Companies Act 2013 along with prescribed depositfrom a member of the Company signifying his intention to propose the candidature of Mr.Paras K Chowdhary for the office of an Independent Director of the Company. Details of theproposal for appointment of Mr. Paras K Chowdhary as an Independent Director is mentionedin the Explanatory Statement under Section 102 of the Companies Act 2013 of the Notice ofthe 55th Annual General Meeting.

Green Initiatives

As in the previous years this year too we are publishing only the statutorydisclosures in the print version of the Annual Report. Physical copies of the Notice ofthe 55th Annual General Meeting (AGM) have been sent to all the Members of the Company.Besides the electronic copies of the Notice have also been sent to all the Members whoseemail IDs are registered with the Company's Registrar and Share Transfer Agent/ DepositoryParticipants for communication purposes. The electronic copies of the Annual Report2015-16 are being sent to all Members whose email addresses are registered with theCompany/Depository Participants(s). For members who have not registered their emailaddresses physical copies of Annual Report are being sent in the permitted mode.

Forward - looking Statement

This Report contains forward - looking statements that involve risks and uncertainties.Actual results performance or achievements could differ materially from those expressedor implied in such forward - looking statements. Significant factors that could make adifference to the Company's operations include domestic and international economicconditions affecting demand-supply and price conditions foreign exchange fluctuationschanges in government regulations tax regimes and other statutes.

Acknowledgement

Your Directors record their grateful appreciation for the encouragement assistance andco-operation received from members government authorities banks and customers. They alsothank them for the trust reposed in the Management and wish to thank all employees fortheir commitment and contribution.

For and on behalf of the Board
Sanjiv Goenka
Kolkata Chairman
13th May 2016 (DIN : 00074796)