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Panasonic Carbon India Company Ltd.

BSE: 508941 Sector: Engineering
NSE: PANCARBON ISIN Code: INE013E01017
BSE 00:00 | 24 Sep 385.25 -7.90
(-2.01%)
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389.85

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390.00

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NSE 05:30 | 01 Jan Panasonic Carbon India Company Ltd
OPEN 389.85
PREVIOUS CLOSE 393.15
VOLUME 1581
52-Week high 472.00
52-Week low 226.05
P/E 11.28
Mkt Cap.(Rs cr) 185
Buy Price 382.50
Buy Qty 25.00
Sell Price 385.25
Sell Qty 12.00
OPEN 389.85
CLOSE 393.15
VOLUME 1581
52-Week high 472.00
52-Week low 226.05
P/E 11.28
Mkt Cap.(Rs cr) 185
Buy Price 382.50
Buy Qty 25.00
Sell Price 385.25
Sell Qty 12.00

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 37thAnnual Reporttogether with the Audited Accounts of the Company for the year ended 31stMarch 2019 and the Auditors' Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31st March 2019 ascompared with the earlier year are as under:

Rs. in Lakhs
Particulars 2018-19 2017-18
Gross income 5281.93 5110.68
Profit before depreciation and tax 1884.90 1885.40
Provision for depreciation 133.15 132.70
Net Profit after depreciation 1751.75 1752.70
but before tax
Provision for tax 521.92 522.29
Net Profit after tax 1229.83 1230.41
Other comprehensive income (2.01) (10.45)
(Net of tax)
Total comprehensive income 1227.82 1219.96
for the year
Balance of profit brought forward 1260.34 618.10
from previous year
Balance available for appropriation 2488.16 1838.06
Transfer to General Reserve 1250.00 -
Less : Dividend paid during the (480.00) (480.00)
year for F.Y. 2017-18
Less: Tax on above dividend (98.67) (97.72)
Surplus carried to Balance Sheet 659.49 1260.34

2. DIVIDEND :

Your Directors recommend a dividend ofRs.10/- per share (i.e.) 100%.The same is in linewith the financial strategy and policy of the Company. An amount of Rs.9866541/- wouldbe paid as dividend distribution tax on the dividend. This dividend if approved by you atthe ensuing 37thAnnual General Meeting will be paid to the Shareholders whosenames appear in the Register of Members as on the date of said Meeting.

3. TRANSFER TO RESERVE

The Board of Directors of your company has decided to transfer an amount of Rs. 12.50crores to the Reserves for the year under review.

4. MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE:

Our Company sold 2510.16mln pieces of Carbon Rod as against 2475 mln pieces which is101.42% Sales of last year. The Domestic Sales Quantity and Value were 958.60 mln piecesand Rs.13.66 crores respectively which works out to 107.48% of the Sales by quantity and105.08% by value of last year.

The Export Sales Quantity and value were 1551.49Mln. Pcs. and Rs.30.24 Crores (FOBbasis) respectively in the year under review as compared to last year's quantity of 1583Mln. Pcs. and Rs.29.60 Crores which works out to 98% by quantity and 102% by value. Asinformed last year your Company could stabilize the exports to Panasonic Group BatteryFactories in Poland Peru Thailand Indonesia Brazil Costa Rica China and otherAfrican customers on regular basis.We could not get the orders from some of the Africancountries as planneddue to political disturbances in those countries and also due toimport of cheaper cost batteries from China which resulted in low production by theBattery companies in African countries.

During the year the prices of Raw materials increased steeply in the Indian market .Further the Crude prices also increased steeply leading to increase of fuel costs andother petroleum based raw materials used by your company. In the current Financial YearIndian Rupee depreciated by about 8% compared to the previous year resulting in increasedrealization of Exports. Your Company reduced the impact of the cost increases throughincreased inhouse power generation Energy and fuel usage reduction and improving overallyield and productivity.

By implementing various cost reduction measures the impact of steep increase inmaterial and fuel costs have been offset for the maximum extent resulting in marginaldecrease in net profit before tax by Rs. 0.95 lakhs

OUTLOOK ON OPPORTUNITIES AND THREATS RISKS AND CONCERNS:

The Company introduced high speed and high safety mixer machines replacing the oldmixers. Due to their improved efficiency the Company hope to achieve higher productivityimproved Quality and yield in the current financial year.

Your Company is also hopeful of improving its Domestic sales as its competitive powerhas improved compared to Chinese and Indonesia manufacturers. Further by manufacturingconsistent quality and timely supply your Company is confident of maintaining the exportsales at the current year's level in the coming years .The Company is also initiatingefforts for improving the same by offering suitable cost effective carbon rods.

The Directors assure that all steps are being taken by the Company to achieve greatergrowth in the coming years in proportion to the growth of the Dry Battery Industry bygiving due consideration to the adverse conditions if any in the Dry Battery Industry.There are no materially significant threats risks or concerns to the Company.

5. 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 31%of Sales and Exports Salesconstituted the remaining 69%

6. FINANCIAL ARRANGEMENTS AND DEPOSITS:

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. Our Company had not accepted any Public Deposits underChapter V of the Companies Act 2013 (Act).

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014

Your Company disclose the following details as per regulation 52 of SEBI (LODR)Regulation 2015 amended on 7th May 2019:

(i) Debtors Turnover : 24.7 days
(ii) Inventory Turnover : 22.8 days
(iii) Interest Coverage Ratio : NA
(iv) Current Ratio : 18.4
(v) Debt Equity Ratio : 0.06
(vi) Operating Profit Margin (%) : 25.9%
(vii) Net Profit Margin (%) : 39.8%
(viii) Interest for Debentures/Deposits : Not Applicable
(ix) Due date for payment of : Not Applicable

Interest or Principal of Debentures

7. 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.

The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.

8. HUMAN RESOURCE DEVELOPMENT:

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 ongoing exercise in the Company.

9. 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 2018-19 in timeand there were no arrears.

10. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION 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 herewith.

11. CODE OF CORPORATE GOVERNANCE:

Pursuant to the Regulation 34(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015detailed 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.

12. 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.

13. AEO –T1 Status:

Your Company has been accredited the Authorized Economic Operator (AEO-T1) status byCentral Board of Indirect Taxes and Customs Ministry of Finance Government of India.

14. 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 observed the June month as "Environment month" and organized the"ECO" relay event emphasizing on Water Conservation on 28th June 2018 at theTADA Village where your factory is located. The Company had distributed T-Shirts and Capswith the slogan inscribed on ECO Activities to participants especially students from TADAZP High School (Girls) .The Company actively makes effort to increase awarenessamong the students about the conservation of water and given tips to sustain theenvironment and environmental protection.

Your Company has received an award "Panasonic Green Factory certification"from Our Collaborators Panasonic Corporation Japan on 8th April 2019 andalso received the "Commemorative Medal" for our excellent performance inpromoting environment improvement activities.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Composition of the Board of Directors and Key Managerial Personnel

The Board of Directors of the Company as on 31st March 2019 consisted ofMr.R.Senthil kumar (DIN: 02170079) Managing Director and Independent Directors Mr.V.R.Gupte (DIN: 00309699) Mr.A. R. Rao (DIN: 00171736) Mr.K. Subramanian (DIN: 00019088) andMrs.C. Jayashree (DIN:07055905). The composition of the Board of Directors is incompliance with Section 149 of the Companies Act 2013.

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 2018-19 are provided in Extract of the Annual Return which forms part of thisDirectors' report

b. Changes in Directors and Key Managerial Personnel

The tenure of Mr.R.Senthil Kumar expired on 31/ 03/2019 On the recommendation of ourCollaborators M/s.Panasonic Corporation Japan he was again re-appointed as ManagingDirector of the Company for further period of one year with effect from 1st April 2019 andapproved by the Board of the Directors of the Company at their meeting held on 29th January2019.

Tenure of three Non Executive-Independent Directors Mr.V.R.Gupte (DIN:00309699)Mr.A.R.Rao (DIN:00171736) and Mr.K.Subramanian (DIN:00019088) came to an end on 31stMarch 2019 and they ceased to be Directors of the Company effective that date. The Boardplaces on record its appreciation for their invaluable contribution and guidance. Mr.Kazuo Tadanobu Promoter Director has resigned as Director from the Board of Directors ofthe company at the Board Meeting held on 29th January 2019 and the Board accepted thesame.

Mr.S. Kalyanaraman (DIN:08317984) was appointed as an Additional and IndependentDirector at the Board Meeting held on 29th January 2019 for a period of three years witheffect from 1st April 2019. Mr.Hideyuki Okunaga (DIN: 06792183) was appointed asAdditional Director with effect from 13th May 2019. Information about all the Directorsproposed to be appointed the justification for choosing the proposed appointees forappointment is furnished in the Explanatory Statement under Section 102 of the CompaniesAct 2013 attached to the Notice of the ensuing Annual General Meeting for yourconsideration. The Directors recommend that all the resolutions placed before the Membersregarding the appointment of the Directors are approved.

Pursuant to the provisions of Section 149 of the Act the Independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations").

There has been no change in the circumstances affecting their status as IndependentDirectors of the Company. During the year under review the Non-Executive Directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board/Committee of the Company.

16. MEETINGS OF THE BOARD:

Four meetings of the Board were held during the year under review. For details ofmeetings of the Board please refer to the Corporate Governance Report which is a part ofthis report. The intervening gap between the Meetings was within the period as prescribedunder the Companies Act 2013

17. PERFORMANCE EVALUATION:

The Board of Directors have carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and SEBIListing Regulations. The performance of the board was evaluated by the board after seekinginputs from all the Directors on the basis of criteria such as the Board Composition andstructure effectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. The above criteria are based on the GuidanceNote on Board Evaluation issued by the Securities and Exchange Board of India on January5 2017 In a separate meeting of Independent Directors performance of Non-IndependentDirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of Executive Directors and Non Executive Directors. The Board and theNomination and Remuneration Committee reviewed the performance of individual directors onthe basis of criteria such as the contribution of the individual Director to the Board andcommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the Independent Directors and meetingof Nomination and Remuneration Committee the performance of the Board its Committeesand individual Directors was also discussed. Performance evaluation of IndependentDirectors was done by the entire Board excluding the Independent Director being evaluated

18. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

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 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 ExecutiveDirectors 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 and Key managerialpersonnel of the quality required to run the Company successfully.

The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available on www.panasoniccarbon.co.in

19. 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.

20. 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 read with Schedule VII of the Companies Act 2013 (Act) the Company's initiativestowards Corporate Social Responsibility have been suitably focused. The brief outline ofthe CSR Policy and the CSR initiatives undertaken by the Company during the financial yearunder review are provided in the Annual Report on Corporate Social ResponsibilityActivities 2018-19 forming part of this report. The Policy adopted by the Company can beviewed at website of the Company. (www.panasoniccarbon.co.in)

21 AUDIT COMMITTEE:

The details pertaining to the composition of the Audit Committee are included in theCorporate Governance Report which is a part of this report

22. GREEN INITIATIVE:

During the year 2018-19 we continued the sustainability initiative with the aim ofgoing green and minimizing our impact on the environment. Like the previous year thisyear too we are publishing only the statutory disclosures in the print version of theAnnual Report. Additional information is available on our website www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2018-19 and Notice of the 37th 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 2018-19 and the Notice of the 37thAnnual 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.

23. EXTRACT OF ANNUAL RETURN:

As per the requirements of Section 134 (3)(a) read with Section 92(3) of the Act andRules framed thereunder the extract of the annual return for FY 2018-19 is given in Annexure-4in the prescribed Form No.MGT-9 which is a part of this report. The same is available on www.panasoniccarbon.co.in.

24. 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.Rabi Narayan & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedto this report as Annexure - 5.

There are no qualifications or adverse remarks in the Secretarial Auditors' Reportwhich require any clarification/ explanation.

25. PARTICULARS OF EMPLOYEES:

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

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN 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 2018-19 under review.

27. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable

28. 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 SEBIRegulations 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) of the Companies (Accounts)Rules 2014 information pertaining to related parties are given in Form AOC-2 as Annexure-7of 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 Battery manufacturers which are subsidiariesto Parent Company for the past so many years. All such transactions were on an arm'slength basis and in the ordinary course of business.

As per requirements of Regulation 23 (4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the relevant provisions of the Companies Act 2013read with related applicable rules and regulations 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 year2018-19 and each subsequent financial year till the termination of the said arrangement orany modification in the terms thereof has been obtained in the Annual General Meeting heldon 29th July 2016.

29. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

In compliance with provisions of Section 177 of the

Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Board of Directors of the Company has constituted Vigil Mechanism/Whistle BlowerPolicy for Directors employees and vendors of the Company. The Whistle Blower Policyenables the Directors employees and vendors to report concerns about unethical behaviouractual or suspected fraud or violation of the Code of Conduct or ethics Policy therebyensuring that the activities of the Company are conducted in a fair and transparentmanner. The said policy is available at the Company's website at www.panasoniccarbon.co.inWe further affirm that no employee has been denied access to the audit committee duringthe year 2018-19.

30. STATUTORY AUDITORS:

M/s. BSR & Co. LLP Chartered Accountants (Firm Registration No.101248W/W-100022)allotted by the Institute of Chartered Accountants of India (ICAI) were appointed as theStatutory Auditors of the Company at the 35th Annual General Meeting of theCompany held on 8th August 2017 to hold office for a term of five years tillthe conclusion of 40th Annual General Meeting of the Company. The Board wasauthorized to fix such remuneration as may be recommended by the Audit Committee inconsultation with the Auditors. The existing Statutory Auditors viz. M/s. BSR & Co.LLP Chartered Accountants will continue to be the Statutory Auditors of the Company tillthe conclusion of 40th Annual General Meeting of the Company.

Accordingly no resolution is being proposed for ratification of appointment ofstatutory auditors at the ensuing AGM and the remuneration paid for the financial year2018-19 is as per notes to the financial statement 30 (i).

There are no qualifications or adverse remarks in the Auditors' Report which requireany clarification/ explanation. The Notes on financial statements are self-explanatoryand needs no further explanation.

31. COST AUDITORS

In terms of Section 148 of the Companies Act 2013 read with Companies (Cost recordsand audits) Rules 2014 includes any amendment and notifications thereof Carbon Rodsmanufactured by your Company are not covered under the ambit of mandatory cost audit .

32. 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 29thJanuary2019 to review the performance of Non- Independent Directors Chairperson of the Companyand the Board as a whole. They had assessed the quality quantity and timeliness of flowof information between the Company management and the Board.

33. RISK MANAGEMENT:

As per Regulation 21 of SEBI(LODR) Regulations 2015 amendments regulation wth effectfrom 1/04/2019 the provisions of this regulation shall be applicable to top 100 listedentities determined on the basis of market capitalization as at the end of the immediateprevious financial year. It is not applicable to us since we do not fall under thecategory of top 100 listed entities.

However in the Board of Directors Meeting discussed about the elements of risk indifferent areas of operations and to develop various suitable actions to mitigate therisks .

34. SHARES : a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the financial year2018-19. b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the financial year 2018-19. c.BONUS SHARES

No Bonus Shares were issued during the financial year 2018-19. d. EMPLOYEES STOCKOPTION PLAN

The Company has not provided any Stock Option Scheme to the employees during thefinancial year 2018-19.

35. INFORMATION ABOUT HOLDING / SUBSIDIARY/ JV/ ASSOCIATE COMPANY

Your Company continues to be the subsidiary of

M/s. Panasonic Corporation Japan and the Company does not have any Subsidiary Jointventure or Associate Company

36. OTHER DISCLOSURES:

a) 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.

b) There was no change in the nature of business during FY 2018-19.

c) 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.

d) There is no such fraud required to be reported under section 143(12) of theCompanies Act 2013.

e) The Company has devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating Effectively.

37. ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the supportco-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.

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 S.KALYANARAMAN R. SENTHIL KUMAR
Date: 13th May 2019 DIRECTOR MANAGING DIRECTOR
DIN : 08317984 DIN: 02170079

Annexure - 1 to the 37th 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 6% reduction in consumption of electricity was achieved by improvingproductivity introducing Variable Frequency Drives for both Air compressor and Exhaustblowers and replacing normal motors with Energy efficient Motor IE3.

During the year under review 5% reduction in oil consumption of fuel was achieved bya) introducing Pyrolysis oil 70% in place of Furnace Oil in tunnel kiln b) introducinghigh efficiency Mixers in Mixing process and c) modification of impregnation process andreduced re-processing.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

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

a. Introduction of High efficiency Mixer machines in all grades.

b. Removal of Needle Coke due to steep price increase in R20 BP grade.

c. Usage of Natural graphite in place of higher cost Artificial Graphite in some gradesof carbon rods.

d. Reduction of Carbon Black due to steep price increase in some grades of carbon rods.

e. Introduction of Pet Coke usage in place of Breeze Coke in baking indirect heatingprocess.

f. Reduction of mixing process time in some of the grades of carbon rods by use of highspeed mixers.

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

a. Could achieve direct and indirect material cost reduction which reduced the impactof steep increase in material and fuel prices in the current year.

b. Improved productivity and process yield.

c. Reduced process non-conformity and re-works.

d. Improved environment compliance well above required standards.

3. Future plan of action:

a. Development of R03 low cost carbon for improving exports.

b. Introduction of Screw Press in place of Hydraulic Press for all sizes of carbonrods.

c. Introduce improved mixing technology

d. Development of semi automation in predominantly manually operated processes.

4. Expenditure on R&D:

Total Expenditure - Revenue Rs.2980130/-
R&D Expenditure as a percentage to total turnover 0.68%

Technology absorption adaptation and Innovation:

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

Effective use of Natural Graphite in place of Artificial Graphite usage of Pet Coke inplace of Breeze Coke. More environment friendly operations introduced.

2. Benefits derived as a result of the above

Considerable Reduction of raw material cost productivity improvement qualityimprovement and introduced low cost carbons without compromising the quality.

3. Imported technology (imported during last five years)

Except for regular up-gradation of the know-how and support for introducing alternategrades of cost effective carbons no specific technology had been imported in the lastyears.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to Exports: Initiatives taken to increase exportsinclude development of new export markets for products and services.

2. Total Foreign Exchange used and earned:

Total foreign exchange used in the year ended 31st March 2019 towardsImport of Raw materials and other remittances like Royalty Dividend Brand License Feeetc. was INR 8.71 crores. With regard to the earning of Foreign Exchange the directinflow of foreign currency on our Export sales worked out to INR 30.24 Crores. Apart fromthis the Company has stopped outgo of substantial amount of Foreign Exchange byindigenously producing Carbon Rods as an import substitute. This saving worked outapproximately to INR 13.66 Crores.

.