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Directors Report of Panasonic Carbon India Co. Ltd.

Mar 31, 2018

36^th ANNUAL REPORT OF THE BOARD OF DIRECTORS TO THE MEMBERS OF THE COMPANY

The Directors have pleasure in presenting to you their 36^th Annual Report together with the Audited Accounts of the Company for the year ended 31^st March, 2018 and the Auditors'' Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31^st March, 2018 as compared with the earlier year are as under:

(R. in Lakhs)

Particulars	2017-18	2016-17
Gross income	5110.68	5692.28
Profit before depreciation and tax	1885.40	2502.03
Provision for depreciation	132.70	49.64
Net Profit after depreciation but before tax	1752.70	2452.39
Provision for tax	522.29	843.59
Net Profit after tax	1230.41	1608.80
Other comprehensive income (Net of tax)	(10.45)	(29.84)
Total comprehensive income for the year	1219.96	1578.96
Balance of profit brought forward from previous year	608.07	29.11
Balance available for appropriation	1828.03	1608.07
Transfer to General Reserve	-	1000.00
Add: Capital Reserve transferred to retained earnings	10.03	-
Less : Dividend on Equity Shares for year ended 31^st March 2017	480.00	-
Less: Tax on above dividend	97.72	-
Surplus carried to Balance Sheet	1260.34	608.07

2. DIVIDEND :

Your Directors recommend a dividend of Rs.10/- per share (i.e.) 100%. The same is in line with the financial strategy and policy of the Company. This dividend if approved by you at the ensuing 36^th Annual General Meeting will be paid to the Shareholders 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 OPERATIONAL AND FINANCIAL PERFORMANCE:

Our Company sold 2475 mln pieces of Carbon Rod, as against 2632 mln pieces which is 94% Sales of last year. The Domestic Sales Quantity and Value were 892 mln pieces and Rs. 12.99 crores respectively which works out to 85% and 82% of the Sales of last year. The decrease in Domestic Sales was due to the introduction of GST for Batteries at the rate of 28% which impacted heavy drop in sale of Batteries. However, it improved to some extent on revision of the GST rate at 18%.

The Export Sales Quantity and value were 1583 Mln. Pcs. and Rs.29.60 Crores(FOB basis) respectively compared to last year''s quantity of 1576 Mln. Pcs. and Rs. 31.60 Crores which works out to 100 % by quantity and 94 % by value. As informed last year, your Company could stabilize the exports to Panasonic Group Battery Factories in Poland, Peru, Thailand, Indonesia, Brazil, Costa Rica, China and other African customers on regular basis. We could not get the orders from some of the African countries as planned due to political disturbances in those countries and also due to import of cheaper cost batteries from China which resulted in low production by the Battery companies in African countries. However, we could get additional export orders from Panasonic group Companies from other regions.

During the year, the Chinese Government enforced strict Adherence of Environment Rules on the Chinese Factories. This resulted in shutting down/stopping of production of many factories producing the raw materials used by your company. The short supply of these materials resulted in steep price increase in Chinese Market. Consequently the prices of these materials increased steeply in the Indian market also. Further the Crude prices also increased steeply leading to increase of fuel costs and other petroleum based raw materials used by your company. In the current Financial Year Indian Rupee appreciated by about 4% compared to the previous year resulting in reduced realization of Exports. Your Company reduced the impact of these increases through Inhouse Power generation using the 1 MW Solar Plant erected in the end last financial year, which almost met our power requirements. Further, energy conservation activities carried out also reduced energy cost.The fuel consumption in tunnel kiln was reduced by 5% through usage of in-house made light weight bricks and installing auto fuel cut off systems in the kiln.

Further due to provision for depreciation on substantial investment on Solar plant made in March 2017, the depreciation charge for the year under review has gone up to Rs.132.70 lakhs as against Rs.49.64 lakhs.

Thus, inspite of all these efforts , due to reduced sales and the steep increase in material and fuel prices and depreciation provided the Profitability ( excluding exceptional item) compared to previous year reduced by INR 700 lakhs .

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS:

The Company has introduced high speed and high safety mixer machines with variable speed drives. Trials are under progress to reduce the process time using these machines. Your company has increased the production capacity of smaller size Carbon rods in line with the market trend and also introduced on line stacking arrangement to R03 line to reduce the manufacturing time and inventory.

Your Company is also hopeful in maintaining the Domestic Sales by maintaining the quality and timely supply. On the Export Front, the Company is depending on the Battery market trend of various countries. Based on the present indications, your Company is confident of maintaining the current year''s levels of export quantities in the coming years and also initiating efforts for improving the same. The Directors assure that all steps are being taken by the Company to achieve growth in the coming years, in proportion to the growth of the Dry Battery Industry by giving 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.

4. SEGMENT-WISE PERFORMANCE:

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

By value, while Domestic Sales contributed 33% of Sales and Exports Sales constitute the remaining 67%

5. FINANCIAL ARRANGEMENTS:

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in fixed deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits. Our Company had not accepted any Public Deposits under Chapter V of the Companies Act 2013 (Act).

6. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures are being adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically. A firm of experienced Chartered Accountants had carried Internal Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

7. HUMAN RESOURCES:

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

8. STATEMENT PURSUANT TO LISTING AGREEMENTS:

The Company''s Securities are listed with BSE Ltd. The company confirms that it has paid the Annual Listing Fees to the said stock exchange for the financial year 2017-18 in time and there were 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, foreign exchange and technology absorption including R&D have been attached as Annexure herewith.

10. CODE OF CORPORATE GOVERNANCE:

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

11. EXPORT HOUSE STATUS:

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

12. ENVIRONMENT

Your Company has consistently emphasized and worked towards sustainable use of natural resources. In order to promote the Environment Awareness for everybody and everywhere with an objective to create awareness and boost the PCIN brand image on a global basis, your company had observed the June month as "Environment month" and organized the "ECO" relay event emphasizing on Water Conservation on 23^rd June, 2017 at the TADA Village where your factory is located. The Company had distributed T-Shirts and Caps with the slogan inscribed on ECO Activities to participants especially students from TADA School. The Company actively makes effort to increase awareness among the students about the global warming prevention by creation and usage of green energy and energy saving tips to sustain the environment and environmental protection.

Your Company has received an award namely "Panasonic Green Factory certification" issued by Our Collaborators, Panasonic Corporation, Japan on 16^th April, 2018 and also received the "Commemorative Medal" for our excellent performance in promoting environment improvement activities.

The Company has also made substantial investment in Solar panel installation and generated 1.72 million units and contributed to reduce the CO₂. Generation by 1594 tons.

13. DIRECTORS:

Mr. R. Senthil Kumar was re-appointed as Managing Director of the Company for a period of one year with effect from 1^st April 2018 .

Mrs.C. Jayashree was re-appointed as an Independent Women Director at the Board Meeting held on 16^th May, 2018 for a period of three years with effect from 1^st April 2018 .

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

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

14. MEETINGS OF THE BOARD:

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

15. PERFORMANCE EVALUTION:

The Board evaluates the performance of Nonexecutive and Independent Directors every year. All the Non-Executive and Independent Directors are eminent personalities having wide experience in the field of Business, Industry, Law and Administration. Their presence on the Board is advantageous and fruitful in taking business decisions.

16. REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management personnel, Key Managerial Personnel and fixing their remuneration.

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interest of the Company and its Shareholders. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of executive Directors which is approved by the Board of Directors, subject to the approval of Shareholders, where ever necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the Directors and Key managerial personnel of the quality required to run the Company successfully.

1 7. DIRECTORSâ RESPONSIBILITY STATEMENT:

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

1. followed in the preparation of financial Statements, the applicable Accounting Standards and given proper explanation relating to material departures , if any;

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

3. taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act so as to safeguard the Assets of the Company and 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 were operating effectively; and

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

18. CORPORATE SOCIAL RESPONSIBILITY:

As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Health Care, Drinking Water, Rural Development and Sanitation. These projects are largely in accordance with Section 135 read with Schedule VII of the Companies Act, 2013 (Act), the Company''s initiatives towards Corporate Social Responsibility have been suitably focused. The brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the financial year under review are provided in the Annual Report on Corporate Social Responsibility Activities 2017-18 forming part of this report. The Policy adopted by the Company can be viewed at website of the Company.(www.panasoniccarbon.co.in)

19. GREEN INITIATIVE:

During the year 2017-18, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous year, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2017-18 and Notice of the 36^th AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2017-18 and the Notice of the 36^th Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary, Panasonic Carbon India Co. Limited.

The Company is providing remote E voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for remote E voting 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 the prescribed format is appended to this report as Annexure- 4.

21. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Rabi Narayan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as Annexure - 5.

22. 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 and Directors is furnished in Annexure - 6.

23. DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDESSAL) ACT, 2013

The Company has in place an anti Sexual Harassment Policy in line with the requirement of the Prevention of Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. Internal complaints committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The Company has not received any complaint of Sexual harassment during the year 2017-18 under review.

24. RELATED PARTY TRANSACTIONS:

All related party transactions or arrangements were entered in to by the company during the financial year were on an arm''s length basis and were in the ordinary course of business. In Compliance with the provisions of the Act and Regulation 23(2) of the SEBI Regulations, 2015, all related party transactions had been placed before the Audit Committee 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 7 of the report.

As per Regulation 34(3) of the SEBI Regulations 2015 , the related party disclosure has been 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 taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statement of the Company.

The Company sells Carbon rods to Battery manufacturers which are subsidiaries to Parent Company for the past so many years. All such transactions were on an arm''s length basis and in the ordinary course of business.

As per requirements of Regulation 23 (4) of SEBI (Listing Obligations and Disclosure Requirements), Regulations , 2015 [SEBI Regulations, 2015) and the relevant provisions of the Companies Act, 2013 read with related applicable rules and regulations, approval of the Shareholders for related party transactions which are considered as "Material" and entered into by the company in the ordinary course of business and also on arm''s length basis for a sum not exceeding Rs.100 crores (Rupees Hundred Crores only) per annum for the financial year 2016-17 and each subsequent financial year till the termination of the said arrangement or any modification in the terms thereof has been obtained in the Annual General Meeting held on 29^th July, 2016.

25. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

In compliance with provisions of Section 177 of the Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has constituted Vigil Mechanism/Whistle Blower Policy for Directors, employees and vendors of the Company. The Whistle Blower Policy enables the Directors, employees and vendors to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or ethics Policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The said policy is 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 during the year 201718.

26. 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 the Statutory Auditors of the Company at the 35^thAnnual General Meeting of the Company held on 8^th August 2017 to hold office for a term of five years till the conclusion of 40^th Annual General Meeting of the Company. The Board was authorized to fix such a remuneration as may be recommended by the Audit Committee in consultation with the Auditors.

The said appointment was subject to ratification by the Members at every intervening Annual General Meeting held after the said 35^th Annual General Meeting of the Company. By The Companies (Amendment) Act 2017 (vide notification dated 3^rd January 2018) which has already come into force, the requirement relating to such ratification of appointment every year has been omitted.

Accordingly, the existing Statutory Auditors viz M/s.BSR & Co., LLP, Chartered Accountants will continue to be the Statutory Auditors of the Company till the conclusion of 40^th Annual General Meeting of the Company .

27. COST AUDITORS

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

28. INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Directors of the Company under Section 149(7) of the Companies Act 2013, that the Independent Directors of the 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 are introduced to our Company''s culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, board procedures, our major risks and management strategy. The appointment letters of Independent Directors has been placed on the Company''s website.

The Independent Directors of the Company had met during the year on 31^st January 2018 to review the performance of Non- Independent Directors , Chairperson of the Company and the Board as a whole. They had accessed the quality, quantity and timeliness of flow of information between the Company management and the Board.

The term of office of Mrs.C. Jayashree, the Independent Women Director expired by 31^st March 2018. At the Board Meeting held on 31^st January 2018, she has been re-appointed subject to the approval of Shareholders for a term up to 31^st March 2021. The subject of her re-appointment is now placed before you for your approval under item no.4

29. RISK MANAGEMENT:

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

30. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Pursuant to the provisions of Section 203 of the Companies Act 2013, Mr. R. Senthil Kumar, Managing Director & CEO, Mr. Vinayagam Sume, Chief Financial Officer and Ms. PMaheswari, 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 KMP for the FY 2017-18 are provided in Extract of the Annual Return which forms part of this Directors'' report.

31. OTHER DISCLOSURES:

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

There was no change in the nature of business during FY 2017-18.

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

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

32. ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the support, co-operation, guidance and assistance provided by the Foreign Collaborators, M/s. Panasonic Corporation, Japan. Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

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

By Order of the Board of Directors

For Panasonic Carbon India Co. Limited

Place : Chennai V.R. GUPTE R. SENTHIL KUMAR

Date : 16^th May, 2018 DIRECTOR MANAGING DIRECTOR

Mar 31, 2017

The Directors have pleasure in presenting to you their 35^th Annual Report together with the Audited Accounts of the Company for the year ended 31^st March, 2017 and the Auditors'' Report thereon.

1. FINANCIAL RESULTS:

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

(Rs. in Lakhs)

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

2. DIVIDEND:

Your Directors recommend a dividend of Rs.10/- per share (i.e.) 100%. The same is in line with the financial strategy and policy of the Company. This dividend if approved by you at the ensuing 35^th Annual General Meeting will be paid to the Shareholders 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 OPERATIONAL AND FINANCIAL PERFORMANCE:

Our Company sold 2632 MLn. pieces of Carbon Rod, as against 2668 MLn. pieces which is 99% Sales of

last year. The Domestic Sales Quantity and Value were 1055 MLn. pieces and Rs.15.80 crores respectively which works out to 98% and 95% of the Sales of last year. The decrease in Domestic Sales was on UM-1 and UM-3 Carbon Rods and increase of UM-4 Carbon Rods when compared to last year.

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

During the year, though there was increase in electricity cost, the electricity consumption was reduced by promoting energy conservation activities and by increasing the productivity. The fuel consumption in tunnel kiln was reduced by 5% through usage of inhouse made light weight refractory bricks, modified and increased loading capacity refractory cars and stabilization of car loading pattern in tunnel kiln. The usage of alternate fuel in place of furnace oil for thermic fluid heaters resulted in significant reduction of fuel consumption cost. The increase in profitability for the current year is mainly due to additional orders from our Panasonic group companies, favorable material and fuel price, reduction of fuel and energy consumption, significant improvement in yield, productivity and the results of various cost reduction and control measures initiated.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS:

The Company has increased the production capacity of smaller size Carbon rods in line with the market trend by in house modification of the bigger size Carbon rods machineries to meet the increased demand in the Domestic and International Markets in the years to come.

steps are being taken by the Company to achieve growth in the coming years, in proportion to the growth of the Dry Battery Industry by giving 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.

4. SEGMENT-WISE PERFORMANCE:

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

By value, while Domestic Sales contributed 33% of Sales and Exports Sales constitute the remaining 67%.

5. FINANCIAL ARRANGEMENTS:

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in fixed deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits. Your Company had not accepted any Public Deposits under Chapter V of the Companies Act 2013 (Act).

6. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

7. HUMAN RESOURCES:

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

8. STATEMENT PURSUANT TO LISTING AGREEMENTS:

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

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

10. CODE OF CORPORATE GOVERNANCE:

Pursuant to the Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 a detailed report on Corporate Governance as updated with the particulars of this financial year, is annexed to this report as Annexure together with Report of the Auditors on the compliance with the said Code.

11. EXPORT HOUSE STATUS:

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

12. ENVIRONMENT

Your Company has consistently emphasized and worked towards sustainable use of natural resources. In order to promote the Environment Awareness for everybody and everywhere with an objective to create awareness and boost the PCIN brand image on a global basis, your company had observed the June month as "Environment month" and organized the "ECO" relay event emphasizing on Water Conservation on 27^th June, 2016 at the TADA Village where your factory is located. The Company had distributed T-Shirts and Caps with the slogan inscribed on ECO Activities to participants especially students from TADA School. The Company actively makes effort to increase awareness among the students about the global warming, waste reduce, reuse, recycle and energy saving tips to sustain the environment and environmental protection. The Company has also made substantial investment in Solar panel installation to generate power using natural resource and reduce the generation of CO₂.

13. DIRECTORS:

Mr. Chiaki Kidani had resigned from the Board of your Company effective 1^st April, 2017.

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

Mr. Kazuo Tadanobu was appointed as an additional Director at the Board Meeting held on 10^th May, 2017.

Mr. R. Senthil Kumar was re-appointed as Managing Director of the Company for a period of one year with effect from 1^st April 2017 to 31^st March 2018.

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

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under Section 102 of the Companies Act,

2013 under the heading "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 regarding the appointment of the Directors be approved.

14. MEETINGS OF THE BOARD:

15. PERFORMANCE EVALUATION:

The Board evaluates the performance of Non-executive and Independent Directors every year. All the Non-Executive and Independent Directors are eminent personalities having wide experience in the field of Business, Industry, Law and Administration. Their presence on the Board is advantageous and fruitful in taking business decisions.

16. REMUNERATION POLICY:

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the long term interest of the Company and its Shareholders. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of Executive Directors which is approved by the Board of Directors, subject to the approval of Shareholders, where ever necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the Directors and Key managerial personnel 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 to Directors'' Responsibility Statement, your Directors confirm that they have:

1. Followed in the preparation of Financial Statements, the applicable Accounting Standards and given proper explanation relating to material departures, if any;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act so as to safeguard the Assets of the Company and 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 were operating effectively; and

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

18. CORPORATE SOCIAL RESPONSIBILITY:

As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Health Care, Drinking Water, Rural Development and Sanitation. These projects are largely in accordance with Section 135 and Schedule VII of the Companies Act, 2013 (Act). the Company''s initiatives towards Corporate Social Responsibility have been suitably focused. The brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the financial year under review are provided in the Annual Report on Corporate Social Responsibility Activities 2016-17 forming part of this report as Annexure -3. The Policy adopted by the Company can be viewed at website of the Company.(www.panasoniccarbon.co.in)

19. GREEN INITIATIVE:

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

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

20. EXTRACT OF ANNUAL RETURN:

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

21. SECRETARIAL AUDIT:

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

22. 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 and Directors is furnished in Annexure - 6.

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

The Company has in place an anti Sexual Harassment Policy in line with the requirement of the Prevention of Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The Company has not received any complaint of Sexual harassment during the year 2016-17 under review.

24. RELATED PARTY TRANSACTIONS:

All related party transactions or arrangements were entered in to by the Company during the financial year were on an arm''s length basis and were in the ordinary course of business. In Compliance with the provisions of the Act and Regulation 23(2) of the SEBI Regulation,

2015 , all related party transactions had been placed before the Audit Committee 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 7 of the report.

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

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

As per requirements of Regulation 23 (4) of SEBI (Listing Obligations and Disclosure Requirements), Regulations,

2015 [SEBI Regulations, 2015) and the relevant provisions of the Companies Act, 2013 read with related rules thereto approval of the shareholders for related party transactions which are considered as "Material" and entered into by the Company in the ordinary course of business and also on arm''s length basis for a sum not exceeding Rs. 100 crores (Rupees Hundred crores only) per annum for the financial year 2016-17 and each subsequent financial year, till the termination of the said arrangement or any modification in the terms thereof had already been obtained in the last Annual General Meeting held on 29^th July, 2016.

25. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

In compliance with provisions of Section 177 of the Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has constituted Vigil Mechanism/ Whistle Blower Policy for Directors, employees and vendors of the Company. The Whistle Blower Policy enables the Directors, employees and vendors to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or ethics Policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The said policy is 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 during the year 2016-17.

26. STATUTORY AUDITORS:

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

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed there under.

27. COST AUDITORS

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and audits) Rules,

2014, as amended, Carbon Rod manufactured by the Company and falling under the specified Central Excise Tariff Act heading are not covered under the ambit of mandatory cost audit .

28. INDEPENDENT DIRECTORS:

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

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

29. RISK MANAGEMENT:

30. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. R. Senthil Kumar, 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 KMP for the FY 2016-17 are provided in Extract of the Annual Return which forms part of this Directors'' report.

31. OTHER DISCLOSURES:

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

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

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

32. ACKNOWLEDGEMENT:

Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

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

By Order of the Board of Directors

For Panasonic Carbon India Co. Limited

Place: Chennai V.R. GUPTE R. SENTHIL KUMAR

Date: 10^th May, 2017 DIRECTOR MANAGING DIRECTOR

Mar 31, 2016

The Directors have pleasure in presenting to you their 34^th Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March, 2016 and the Auditors'' Report thereon.

1. FINANCIAL RESULTS:

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

Rs. in Lakhs

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 Depreciation	2130.07	1466.08
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 Dividend	97.71	78.18
Transfer to General Reserve	750.00	450.00
Surplus carried to Balance Sheet	29.11	10.42

2. DIVIDEND :

Your Directors recommend an increased dividend of Rs.10/- per share (i.e.) 100%. The same is in line with the financial strategy and policy of the company. This dividend if approved by you at the ensuing 34^th Annual General Meeting will be paid to the Shareholders 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 OPERATIONAL AND FINANCIAL PERFORMANCE:

Your Company sold 2668 Mln. Pcs. of Carbon Rod, as against 2303 Mln. Pcs., which is 116% of Sales of last year. The Domestic Sales Quantity and Value were 1079 Mln. Pcs. and ''16.57 Crores respectively which works out to 99.72% and 100.66% of the Sales of last year. The decrease in Domestic Sales was on UM-1 and UM-3 Carbon Rods and increase on UM-4 when compared to last year.

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

During the year, though there is steep increase in electricity cost, the electricity consumption reduced by promoting energy conservation activities and by increasing the productivity. The fuel consumption in tunnel kiln reduced by 5% through usage of in-house made light weight bricks, modified and increased loading capacity refractory cars and stabilization of car loading pattern in tunnel kiln. The usage of alternate fuel in place of furnace oil for thermic fluid heaters resulted in significant reduction of fuel consumption cost. The increase in profitability for the current year is mainly due to additional orders from our Panasonic group companies, favorable furnace oil price, reduction of fuel and energy consumption, significant improvement in yield, productivity and the results of various cost reduction and control measures initiated.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS:

The Company has increased the production capacity of R-6 and R-03 carbon rods by installing additional machineries to meet the increased demand in the Domestic and International Markets in the years to come.

Your Company is also hopeful in maintaining the Domestic Sales by maintaining the quality and timely supply. In the Export Front, the Company is depending on the Battery market trend of various countries. Based on the present indications, your Company is confident of maintaining the current year''s levels of export quantities in the coming years and also initiating efforts for improving the same. The Directors assure that all steps are being taken by the Company to achieve growth in the coming years, in proportion to the growth of the Dry Battery Industry by giving 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.

4. SEGMENT-WISE PERFORMANCE:

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

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 Working Capital requirements. The surplus funds available with the Company are being invested with Banks in fixed deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits. Your Company had not accepted any Public Deposits under 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 Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically. A firm of experienced Chartered Accountants had carried Internal Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

7. HUMAN RESOURCES:

8. STATEMENT PURSUANT TO LISTING AGREEMENTS:

The Company''s Securities are listed with BSE Ltd. The company confirms that it has paid the Annual Listing Fees to the said stock exchange for the financial year 2015-16 and there 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, foreign exchange and technology absorption including R&D have been attached as Annexure-1 to this report.

10. CODE OF CORPORATE GOVERNANCE:

Pursuant to the Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a detailed report on Corporate Governance as updated with the particulars of this financial year, is annexed to this report as Annexure-2 together with 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 of India, Ministry of Commerce, Directorate General of Foreign Trade (DGFT) in recognition of good Export performance. The Company continues to enjoy the Export House Certificate status.

12. ENVIRONMENT:

Your Company has consistently emphasized and worked towards sustainable use of natural resources. In order to promote the Environment Awareness for everybody and everywhere with an objective to create awareness and boost the PCIN brand image on a global basis, your company had observed the June month as "Environment month" and organized the "ECO" relay event on 25^th June, 2015 at the TADA Village where your factory is located. The Company had distributed T-Shirts and Caps with the slogan inscribed on ECO Activities to participants especially students from TADA School. The Company actively makes effort to increase awareness among the students about the global warming, waste reduce, reuse, recycle and energy saving tips to sustain the environment and environmental protection. The Company constantly evaluates the new initiatives that could reduce waste and emissions within the factories.

13. DIRECTORS:

Mr. Mitsutoshi Shigeta had resigned from the Board of your Company effective 1^st January, 2016.

Mr. Kunal Jiwarajka had resigned from the Board of your Company effective 21^st January, 2016.

The Board of Directors places on record their appreciation for the valuable contribution made by Mitsutoshi Shigeta and Kunal Jiwarajka for the growth of the Company during their tenure of Directorship.

Mr. Chiaki Kidani was appointed as an additional Director at the Board Meeting held on 12^th February, 2016.

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

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under Section 102 of the Companies Act, 2013 under the heading "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 regarding the 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 the meetings of the Board, please refer to the Corporate Governance Report.

15. PERFORMANCE EVALUTION:

The Board evaluates the performance of Nonexecutive and Independent Directors every year. All the Non-executive and Independent Directors are eminent personalities having wide experience in the field of business, industry and administration. Their presence on the Board is advantageous and fruitful in taking business decisions.

16. REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and other employees.

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interest of the Company and its shareholders. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of execute Directors which is approved by the Board of Directors, subject to the approval of shareholders, wherever necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the directors, key managerial personnel 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 to Directors'' Responsibility Statement, your Directors confirm that they have:

1. followed in the preparation of financial Statements, the applicable Accounting Standards and given proper explanation relating to material departures , if any;

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

5. laid down internal financial controls in the company and that are adequate and were operating effectively; and

6. devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

18. CORPORATE SOCIAL RESPONSIBILITY:

With the applicability of Section 135 of the Act coming into force, the Company''s initiatives towards Corporate Social Responsibility have been suitably focused. The brief outline of the CSR policy and the CSR initiatives undertaken by the Company during the financial year under review are provided in the Annual Report on Corporate Social Responsibility Activities 2015-16 forming part of this report as Annexure-3. The Policy adopted 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 going green and minimizing our impact on the environment. Like the previous year, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2015-16 and Notice of the 34^th AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015-16 and the Notice of the 34^th Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary, M/s. Panasonic Carbon India Co. Limited.

The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting 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 the prescribed format is appended to this report as Annexure-4.

21. SECRETARIAL AUDIT:

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

22. PARTICULARS OF EMPLOYEES:

23. DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDESSAL) ACT, 2013

The Company has in place an anti Sexual Harassment Policy in line with the requirement of the Prevention of Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The Company has not received any complaint of sexual harassment during the year 2015-16 under review.

24. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered in to by the company during the financial 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 SEBI Regulations, 2015 all related party transactions had been placed before the Audit Committee for prior approval. Pursuant to section 134(3) (h) 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-7 of this report.

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

As per requirements of Regulation 23(8) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (SEBI Regulation, 2015) all existing related party transactions which are considered as "Material" and entered into prior to the notification of the above regulation i.e. 2^nd September, 2015 shall require approval of the shareholders in the first Annual General Meeting held subsequent to the notifications of these regulation.

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

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

Hence, resolution No.7 of the notice convening the Annual General Meeting is placed before the shareholders seeking their approval for the following related party transactions which are considered as "Material" and are existing as on 2^nd September, 2015.

As per requirements of Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (SEBI Regulation, 2015) all prospective related party transactions which are considered as "Material" shall require approval of the shareholders.

Hence, it is proposed to secure shareholders approval on resolution No.8 of the notice convening the Annual General Meeting for approving the prospective material related party transactions for the period commencing from 1^st April, 2016 up to the end of the financial year 2016-17 and each subsequent financial year till the termination of the said arrangement 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 the Company has adopted a Vigil Mechanism which comprises Whistle Blower Policy for Directors, employees and vendors of the Company. The Whistle Blower policy enables the Directors, employees and vendors to report concerns about unethical, actual or suspected fraud or violation of Company''s code of conduct or ethics policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The said policy is 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 during year 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 of the Company. As per section 139 of the Companies Act, 2013 and rules made there under it is proposed to appoint M/s. Brahmayya & Co., Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting to till the conclusion of the next Annual General Meeting of the Company.

The re-appointment proposed is within the time frame for transition under the third proviso 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 of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

27. COST AUDITORS:

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and audits) Rules, 2014, as amended, Carbon Rod products manufactured by the Company and falling under the specified Central Excise Tariff Act heading, are not covered under the ambit of mandatory cost audit from the financial years commencing on or after 1^st April, 2015.

28. INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 confirming that they meet with the criteria of Independence laid down in Section 149(6).

The Independent Directors of the Company had met during the year on 12^th February, 2016 to review the performance of non- Independent Directors, Chairperson of the Company and the Board as a whole. They had assessed the quality, quantity and timeliness of flow of information between the company management and the Board.

29. RISK MANAGEMENT :

30. DIRECTORS AND KEY MANANGERIAL PERSONNEL :

Pursuant to the provisions of section 203 of the Act Mr. R. Senthil Kumar, Managing Director & CEO, Mr. P. Venkateswara Rao, Chief Financial Officer and Mr. R. Manoranjan, Company Secretary of the Company are the Key Managerial Personnel (KMP) of the Company as on date of this report. The remuneration and other details of KMP for the FY 2015-16 are provided in Extract of the Annual Return which forms part of this Directors'' report.

31. OTHER DISCLOSURES

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 the financial year which would have impacted the going concern status of the Company''s operation in the future.

32. ACKNOWLEDGEMENT:

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

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

By Order of the Board of Directors

For Panasonic Caron India Co. Limited

Place : Chennai V.R. GUPTE R. SENTHIL KUMAR

Date: 25^th May, 2016 DIRECTOR MANAGING DIRECTOR

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting to you their 33rd Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2015 and the Auditors' Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31st March, 2015 as compared with the earlier year are as under:

Rs. in Lakhs

Particulars 2014-15 2013-14

Gross Income 4693.37 4025.31

Profit Before Interest 1466.08 1037.57

and Depreciation

Finance Charges - -

Gross Profit before Depreciation 1466.08 1037.57

Provision for Depreciation 65.33 37.85

Net Profit Before Tax 1400.75 1037.57

Provision for Tax 486.63 353.00

Net Profit After Tax 914.12 684.57

Balance of Profit brought forward (Net of Depreciation of Rs.12.24 Lakhs on those assets for which its usefull life is NIL as on 1st April, 2014 ) 8.48 29.25

Balance available for appropriation 922.60 713.82

Proposed Dividend on Equity Shares 384.00 336.00

Tax on proposed Dividend 78.18 57.10

Transfer to General Reserve 450.00 300.00

Surplus carried to Balance Sheet 10.42 20.72

2. DIVIDEND :

Your Directors recommend an increased dividend of Rs. 8/- per Share (i.e.) 80% which as per the provisions of Income Tax Act presently in force will not be taxed in the hands of the Shareholder. However, the Company will be paying the prescribed tax on the distributed dividend. The same is in line with the financial strategy and policy of the company. This dividend if approved by you at the ensuing 33rd Annual General Meeting will be paid to the Shareholders whose names appear in the Register of Members as on the date of said Meeting.

4. SEGMENT-WISE PERFORMANCE:

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

By value, while Domestic Sales was 41%; Exports Sales was 59%.

5. FINANCIAL ARRANGEMENTS:

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in fixed deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has adequate internal control procedures commensurate with its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. A firm of experienced Chartered Accountants had carried Internal Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

7. HUMAN RESOURCES:

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable assets. Imparting adequate and specialized training to its employees is an on going exercise in the Company.

8 STATEMENT PURSUANT TO LISTING AGREEMENTS:

Your Company's Securities are listed with BSE Ltd. and the Annual Listing Fees has been paid up to date. Madras Stock Exchange Limited (MSE) did not achieve the prescribed turnover before the period stipulated by SEBI and hence has opted to seek voluntary surrender of its recognition. Hence your company's securities have been delisted from Madras Stock Exchange Limited.

9. TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC:

Details regarding conservation of energy, foreign exchange and technology absorption including R&D efforts are given separately in Annexure-A to this Report.

10. CODE OF CORPORATE GOVERNANCE:

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchange, a detailed report on Corporate Governance as updated with the particulars of this financial year, is annexed to this report as Annexure-B together with Report of the Auditors on the compliance with the said Code.

11. AWARDS & RECOGNITIONS:

Your Company continues to be a highly trusted Company for the quality of its products innovation and renovation of products that are based on strong customer insights and ability to engage around the world. During the year, your Company received many honours which reflect its successful strategies and management technique. Some of the key awards and recognitions:

1. Export House Status: Your Company had obtained the Status of Export House Certificate from Government of India, Ministry of Commerce, Directorate General of Foreign Trade (DGFT) in recognition of good Export performance. The Company continues to enjoy the Export House Certificate status.

2. CB-ISAMAE CUP: Your Company had

participated in CB-ISAMAE (India, South Asia, Middel East and Africa) Region Cup competition organized by M/s. Panasonic Corporation, Japan in India for Cost Busters Project and stood first from Group-A, Manufacturing Companies. Your Company also won and received the silver prize at the CB world cup 2014, finals which was organized by M/s. Panasonic Corporation, Japan, in different regions for the theme 'reduction of fuel cost by using Pyrolsis Oil in place of long time used Furnace Oil for thermic fluid heaters'.

3. APAC Green Factory Challenge Special Award:

Your Company had received special award from M/s. Panasonic Corporation, Japan, under Chemical substance Management "Reduction of coal tar consumption in blending composition for all the grades".

12. ENVIRONMENT:

Your Company has consistently emphasized and worked towards sustainable use of natural resources. In order to promote the Environment Awareness for everybody and everywhere and to boost the PCIN brand image on a global basis, the Company had organized the "ECO" relay event on 25th June, 2014 at the TADA Village where your factory is located. The Company had distributed T-Shirts and Caps with the slogan inscribed on ECO Activities to participants especially students from TADA School. The Company actively makes effort to increase awareness among the students about the global warming and energy saving tips to sustain the environment and environmental protection. The Company constantly evaluates the new initiatives that could reduce waste and emissions within the factories.

13. DIRECTORS:

Mr. Hideyuki Okunaga had resigned from the Board of your Company effective 1st January, 2015.

Mr. Motoshige Nishimura had resigned from the Board of your Company effective 1st January, 2015.

Mr. Hitoshi Arata retired from the Board of your Company effective 31st July, 2014 opting not to seek re-appointment.

The Board of Directors places on record their appreciation for the valuable contribution made by Mr. Hideyuki Okunaga, Mr. Motoshige Nishimura and Mr. Hitoshi Arata for the growth of the Company during their tenure of Directorship.

Mr. K.K. Jiwarajka passed away on 31st July, 2014. The Board of Directors expresses their profound grief and deep shock over the sudden and untimely demise of Mr. K. K. Jiwarajka, Promoter Director of the Company. The Directors place on record their deep sense of appreciation for the outstanding contribution made by him as a Promoter Director on the Board and the growth of the Company.

Mr. Kunal Jiwarajka was appointed as an additional Director in the casual vacancy caused on the demise of Mr. K.K Jiwarajka at the Board Meeting held on 30th October, 2014.

Mrs. C. Jayashree was appointed as an additional Director (Independent) at the Board Meeting held on 21st January, 2015 effective from 1st April, 2015.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under Section 102 of the Companies Act, 2013 under the heading "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 regarding the appointment of the Directors be approved.

14. MEETINGS:

In each quarter one Audit Committee Meeting and one Board Meeting were conducted. Notice along with Agenda was circulated in advance to the Directors within the period prescribed under the Companies Act, 2013. During the year four Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

15. PERFORMANCE EVALUTION:

The Board evaluates the performance of Non-executive and Independent Directors every year. All the Non- executive and Independent Directors are eminent personalities having wide experience in the field of business, industry and administration. Their presence on the Board is advantageous and fruitful in taking business decisions.

16. REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration.

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interest of the Company and its shareholders. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of executive Directors and Key Managerial Personnel, which is approved by the Board of Directors, subject to the approval of shareholders, whereever necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the directors, key managerial personnel 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 to Directors' Responsibility Statement, your Directors confirm that they have:

1. followed in the preparation of financial Statements, the applicable Accounting Standards and given proper explanation relating to material departures , if any;

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

3. taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act so as to safeguard the Assets of the Company and 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 were operating effectively; and

6. devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

18. CORPORATE SOCIAL RESPONSIBILITY:

As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Health Care, Drinking Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.

During the year, your Directors have constituted the Corporate Social Responsibility (CSR) Committee comprising Mr. V.R Gupte as the chairman and Mr. A. Raghavendra Rao, Mr. K. Subramanian and Mr. R. Senthil Kumar as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The Annual Report on CSR activities is annexed herewith as Annexure-C. Additionally, the CSR Policy has been uploaded on the website of the Company at www.panasoniccarbon.co.in

19. GREEN INITIATIVE:

During the year 2013-14, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous year, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2014-15 and Notice of the 33rd AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2014-15 and the Notice of the 33rd AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary, Panasonic Carbon India Co. Ltd.

The Company is providing evoting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for evoting are provided in the Notice.

20. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return for the Financial Year ended 31st March 2015 in Form MGT-9 is annexed herewith as Annexure-D

21. SECRETARIAL AUDIT:

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

22. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 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 and Directors is furnished in Annexure-F

23. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval on a quarterly basis for the transactions which are of a foreseen and repetitive nature.

The Board of Directors of the Company has, on recomendation of Audit Committee adopted a policy to regulate the transactions between the company and its related parties in compliance with the applicable provisions of companies Act, 2013 and rules made thereunder and the Listing Agreement. This policy has been uploaded on the website of the company at www.panasoniccarbon.co.in

The Particulars of contracts entered during the year exceeding 10% of annual consolidated turnover as per AOC-2 is enclosed as Annexure-G.

24. WHISTLE BLOWER POLICY/VIGIL MECHANISIM

As per Companies Act, 2013 read with Clause 49 of the Listing Agreement, the Board of Directors of the Company have constituted Vigil Mechanism/Whistle Blower Policy and adopted a policy which aims to provide a channel to the Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or policy. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express those concerns without fear of punishment or unfair treatment.

The mechanism provides for adequate safeguards against victimization of Directors and employees to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. This neither releases employees from their duty of confidentiality in the course of their work nor it can be used as a route for raising malicious or unfounded allegations about a personal situation. We further affirm that no employee has been denied access to the audit committee during year 2014-15.

25. STATUTORY AUDITORS:

The Statutory Auditors of the Company, M/s.Brahmayya & Co., Chartered Accountants, Chennai, retire at the ensuing Annual General Meeting of the Company. As per section 139 of the Companies Act, 2013 and rules made thereunder it is proposed to appoint M/s. Brahmayya & Co., Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting to till the conclusion of the next Annual General Meeting of the Company.

As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Company has received letter to the effect that their re-appointment if made would be within the prescribed limit under section 141(3)(g) of the Companies Act, 2013 and they are not disqualified for re-appointment.

26. COST AUDITORS:

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and audits) Rules, 2014, as amended, Carbon Rod products manufactured by the Company and falling under the specified Central Excise Tariff Act heading, are not covered under the ambit of mandatory cost audit from the financial years commencing on or after 1st April, 2015.

27. INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 confirming that they meet with the criteria of Independence laid down in Section 149(6).

28. TRAINING OF INDEPENDENT DIRECTORS :

Whenever new Non-executive and Independent Directors are inducted in the Board they are introduced to our Company's culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, Board procedures, our major risks and management strategy. The appointment letters of Independent Directors has been placed on the Company's website at www.panasoniccarbon.co.in

29. MEETING OF INDEPENDENT DIRECTORS:

The Independent Directors of the Company had met during the year on 21st January, 2015 to review the performance of non-I ndependent Directors Chairperson of the Company and the Board as a whole. They had assessed the quality, quantity and timeliness of flow of information between the company Management and the Board.

30. RISK MANAGEMENT:

A Risk Management Policy was framed and approved by the Board. The objective of this policy is to minimize the adverse impact of various risks to business goals and objectives and to enhance the value to the stakeholders.

31. DIRECTORS AND KEY MANAGERIAL PERSONNEL :

During the year under review, Mr. R. Senthil Kumar, Managing Director & CEO, Mr. P. Venkateswara Rao , Chief Financial Officer and Mr. R. Manoranjan, Company Secretary of the Company, were re-designated as the Whole Time Key Managerial Personnel (KMP) of the Company under section 203 of the Companies Act, 2013.

32. ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the support, co-operation, guidance and assistance provided by the Foreign Collaborators, M/s. Panasonic Corporation, Japan. Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, and the Bankers, State and Central Governments for extending their invaluable support.

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

Your Directors are especially thankful to the esteemed Shareholders for the confidence reposed and their continued encouragement and support.

By Order of the Board of Directors For Panasonic Caron India Co. Limited

Place: Chennai V.R. GUPTE R. SENTHIL KUMAR Date: 7th May, 2015 DIRECTOR MANAGING DIRECTOR

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting to you their 32nd Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2014 and the AuditorsRs Report thereon.

FINANCIAL RESULTS:

The summarized working results for the year ended 31st March, 2014 as compared with the earlier year are as under:

Year ended Year ended Particulars 31.03.2014 31.03.2013 (Rs in Lakhs) (Rs in Lakhs)

Profit before depreciation 1075.42 1014.44 Less: Depreciation 37.85 39.57 Balance Profit before taxation 1037.57 974.87 Less: Provision for Taxation after 353.00 321.36 adjustment towards deferred tax Balance Profit after Taxation 684.57 653.51 Add: Surplus Brought 29.25 18.84 Forward from Previous year ----- ----- Amount available for Appropriation 713.82 672.35 ----- -----

Your Directors recommend the following Appropriations:

Proposed Dividend 336.00 336.00 Taxation on Dividend 57.10 57.10 Transfer to General Reserve 300.00 250.00 Transfer to Profit and Loss Statement 20.72 29.25

Total 713.82 672.35

DIVIDEND :

Your Directors recommend a dividend of Rs 7/- per Share (i.e.) 70% which as per the provisions of Income-tax Act presently in force will not be taxed in the hands of the Shareholders. However, the Company will be paying the prescribed tax on the distributed dividend. This dividend if approved by you at the ensuing 32nd Annual General Meeting will be paid to the Shareholders whose names appear in the Register of Members as on the date of said Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE:

Your Company sold 2008 Mln. Pcs. of Carbon Rods, as against 2131Mln. Pcs., which is 94% of Sales of last year. The Domestic Sales Quantity and Value were 1125 Mln. Pcs. and Rs 17.21 Crores, which works out to 101% and 100% respectively of the Sales of last year. The increase in Domestic Sales was mainly on UM-3 and UM-4 carbon rods and decrease in UM-1 when compared to the last year

The Export Sales Quantity and value were 883Mln. Pcs. and Rs 17.48 Crores compared to last yearRss quantity of 1021Mln. Pcs. and Rs 17.91 Crores. Compared to last year, export sales quantity works out to 87% and value 98%. As informed last year, your Company could stabilize the exports to Panasonic Group Battery Factories in Poland, Peru, Thailand, Indonesia and other customers in African countries on regular basis.

There is a steep increase of fuel price and the electricity cost resulted in increase of production cost. The furnace oil price increased by 9 % and the electricity cost increased by 17%. However, reduced the fuel consumption by relocating the thermic fluid heater nearer to the process, by closely monitoring and maintaining the kiln temperature pattern, by improving productivity and by using pyrolysis oil as fuel in thermic fluid heater, the impact of increase in fuel price is minimized to the maximum extent. Though we could not get the orders from some of the Panasonic Group Companies as planned, we could get additional orders from African and Asian customers. The increase in profitability for the current year is mainly due to favorable exchange rate, orders from Africa and Asian customers and the various cost control measures initiated.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS:

The Company has higher production capacity to meet any increased demand of Carbon rods in the Domestic and International Markets in the years to come. The company also increased the production capacity especially in smaller size carbon rods to meet the increasing demand by adding one mini screw press and one grinding machine. Your Company is also hopeful in maintaining the Domestic Sales by maintaining the quality and timely supply. In the Export Front, the Company is depending on the Battery market trend of various countries. Based on the present indications, your Company is confident of maintain the current yearRss levels of export quantities in the coming years and also initiating efforts for improving the same. The Directors assure that all steps are being taken by the Company to achieve growth in the coming years, in proportion to the growth of the Dry Battery Industry by taking into consideration the adverse conditions, if any, in the Dry Battery Industry.

There are no materially significant threats, risks or concerns to the Company.

SEGMENT-WISE PERFORMANCE:

The Company operates in only one Segment (i.e.) Carbon Rods as a component of Dry Cell Batteries.

By value, while Domestic Sales was 50%; Exports Sales was 50%.

FINANCIAL ARRANGEMENTS:

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has adequate internal control procedures commensurate wih its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. A firm of experienced Chartered Accountants had carried Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

HUMAN RESOURCES:

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable asset. Imparting adequate and specialized training to its employees is an on going exercise in the Company.

STATEMENT PURSUANT TO LISTING AGREEMENTS:

The CompanyRss Securities are listed with Madras Stock Exchanges Ltd and BSE Ltd and it has paid the respective Annual Listing Fees up-to-date and there are no arrears.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC:

Details regarding conservation of energy, foreign exchange and technology absorption including R&D efforts are given separately in Annexure RsARs to this Report.

CODE OF CORPORATE GOVERNANCE:

A detailed report on Corporate Governance as updated with the particulars of this Financial Year, as per the directions from SEBI is annexed to this report (Annexure "B") together with Report of the Auditors on the compliance with the said Code.

PERSONNEL:

Particulars of employment as required under Section 217(2A) of the Companies Act, 1956 are not furnished as none of the employees were in receipt of remuneration exceeding the limits prescribed under the Companies Act.

EXPORT HOUSE STATUS:

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

ENVIRONMENT:

The Company has consistently has emphasized and worked towards sustainable use of natural resources. In order to promote the "ECO" Ideas for everybody and everywhere with an objective to create awareness and boost the PCIN brand image on a global basis, the Company had organized the "ECO" relay event on 25th June, 2013. The Company had distributed T-Shirts and caps with the slogan inscribed on ECO Activity to participants especially students from TADA School. The Company actively makes effort to increase awareness among the students about the global warming and energy saving tips to sustain the environment and environmental protection. The Company constantly evaluates the new initiatives that could reduce waste and emissions within the factories.

DIRECTORS:

Mr. Hiroyuki Aota had resigned from the Board of your Company effective 23rd January, 2014.

Mr. Kenichi Kudara had resigned from the Board of your Company effective 23rd January, 2014.

Mr. Mitsutoshi Shigeta was appointed as a Director in the casual vacancy caused on the resignation of Mr. Hiroyuki Aota at the Board Meeting held on 23rd January, 2014.

Mr. Hideyuki Okunaga was appointed as a Director in the casual vacancy caused on the resignation of Mr. Kenichi Kudara at the Board Meeting held on 23rd January, 2014.

The Board of Directors places on record their appreciation for the valuable contribution made by Mr. Hiroyuki Aota and Mr. Kenchi Kudara for the growth of the Company during their tenure of Directorship.

In accordance with the Articles of Association of the Company Mr. K.K Jiwarajka retires by rotation at this Annual General Meeting and being eligible seek re-appointment.

In accordance with the Articles of Association of the Company Mr. Hitoshi Arata who retires by rotation and does not seek re-appointment at this Annual General Meeting owing to his busy schedule and commitments on the overseas boards.

Impending notification of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. V.R. Gupte, Mr. A.R. Rao and Mr. K. Subramanian as Independent Directors of the Company for Five consecutive years for a term up to 31st March, 2019.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under Section 102(1) of the Companies Act, 2013 under the heading "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 regarding the appointment of the Directors be approved.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirements u/s 217(2AA) of the Companies Act, 1956 with respect to DirectorsRs Responsibility Statement, your Directors confirm that they had:

1. followed in the preparation of Annual Accounts, the applicable Accounting Standards and given proper explanation relating to material departures, if any;

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

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

4. Prepared the Accounts on a Going Concern basis.

STATUTORY AUDITORS:

The Statutory Auditors of the Company, M/s.Brahmayya & Co., Chartered Accountants, Chennai, retire in accordance with the provisions of Companies Act, 1956 and are eligible for re-appointment. The Company has received letter to the effect that their re-appointment, if made, would be within the prescribed limits under section 141(3)(g) of the companies Act, 2013 and they are not disqualified for re-appointment. The Audit Committee and the Board of Directors recommend the re-appointment of M/s.Brahmayya & Co., Chartered Accountants, as the Auditors of the Company.

COST AUDITORS:

As per the directions of Central Government, the Company has appointed M/s. P. Raj Iyer, M.Pandurangan Associates, practicing Cost Accountants, CHENNAI, as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, to conduct the Audit of Cost Accounting Records maintained by the Company for the Financial Year 2013-14. The Cost Audit Report for the Financial Year 2013-14 will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the support, co-operation, guidance and assistance provided by the Collaborators, M/s. Panasonic Corporation, Japan. Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

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

By Order of the Board of Directors For Panasonic Caron India Co. Limited

Place: Chennai VAR. GUPTA R. SENTHIL KUMAR Date: 08.05.2014 DIRECTOR MANAGING DIRECTOR

Mar 31, 2013

TO THE MEMBERS OF THE COMPANY

The Directors have pleasure in presenting to you their 31st Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2013 and the Auditors'' Report thereon.

FINANCIAL RESULTS

The summarised working results for the year ended 31st March, 2013 as compared with the earlier year are as under:

Particulars Year ended Year ended 31.03.2013 31.03.2012 (Rs.in Lakhs) (Rs.in Lakhs)

Profit before depreciation 1014.44 626.96

Less: Depreciation 39.57 43.79

Balance Profit before taxation 74.87 583.17

Less: Provision for Taxation after adjustment towards 321.36 190.07 deferred tax

Balance profit after Taxation 653.51 393.10

Add: Surplus brought forward 18.84 66.24 from Previous year

Amount available for Appropriation 672.35 459.34

Your Directors recommend the following Appropriations: Proposed

Dividend 336.00 336.00

Taxation on Dividend 57.10 54.51

Transfer to General Reserve 250.00 50.00

Transfer to Profit & Loss Account 29.25 18.83

Total 672.35 459.34

DIVIDEND

Your Directors recommend a dividend of Rs. 7/- per Share (i.e.) 70%, which as per the provisions of Income-tax Act presently in force; will not be taxed in the hands of the Shareholders. However, the Company will be paying the prescribed tax on the distributed dividend. This dividend if approved by you at the ensuing 31st Annual General Meeting will be paid to the Shareholders whose names appear in the Register of Members as on the date of said Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE

Your Company sold 2131 Mln. Pcs. of Carbon Rods, as against 1409 Mln. Pcs., which is 151% of Sales of last year. The Domestic Sales Quantity and Value were 1110 Mln. Pcs. and Rs.17.20 Crores, which works out to 98% and 104% respectively of the Sales of last year. The drop in Domestic Sales was mainly on account of continuous steep reduction in UM-1 variety of carbon rods used in D size batteries. Though the total quantity is less compared to last year, the value is higher due to marginal revision of price of UM-3 Carbon Rods.

The Export Sales Quantity and value were 1021 Mln. Pcs. and Rs. 17.91 Crores compared to last year''s quantity of 270.7 Mln. Pcs. and Rs. 5.59 Crores. Compared to last year, export sales quantity works out to 377% and value 320%. As informed last year, your Company could stabilize the exports to Panasonic Group Battery Factories in Poland, Peru, Costa Rica, Thailand and Indonesia and achieve the above growth.

The steep increase in prices of some of the Raw Materials and fuel have resulted in increase in production cost considerably. Further during this year, due to power shortage in the State of Andhra Pradesh, where your factory is located, the Government has imposed a power cut of 52%. Hence, the Company was forced to use Generator for the balance requirement, but it costs more than three times the Government supplied power. However by restructuring the process operation timings and increasing productivity the impact was minimised to the maximum extent. The increase in profitability for the current year is mainly due to increased export sales in respect of orders from Panasonic Battery Companies and third parties and by the various cost control measures initiated.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company has higher production capacity to meet any increased demand of Carbon rods in the Domestic and International Markets in the years to come. Your Company''s finished product (Carbon Rods) is being supplied as a critical component to the Indian Dry Battery Industry, which is projecting a growth of 1% to 2% in the current year in smaller size Batteries. Accordingly, your Company is also hopeful in maintaining the Domestic Sales by maintaining the quality and timely supply. In the Export Front, the Company is depending on the Battery market trend of various countries. Based on the present indications, your Company is confident of maintaining the current year''s levels of export quantities in the coming years also. The Directors assure that all steps are being taken by the Company to achieve the growth level in the coming years, in proportion to the growth of the Dry Battery Industry by taking into consideration the adverse conditions, if any, in the Dry Battery Industry.

There are no materially significant threats, risks or concerns to the Company.

SEGMENT-WISE PERFORMANCE

The Company operates in only one Segment (i.e.) Carbon Rods as a component of Dry Cell Batteries.

By value, while Domestic Sales was 49%; Exports Sales was 51%.

FINANCIAL ARRANGEMENTS

Your Company continues to be free from debts Â both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has adequate internal control procedures commensurate with its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. A firm of experienced Chartered Accountants had carried Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

HUMAN RESOURCES

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable asset. Imparting adequate and specialised training to its employees is an on going exercise in the Company.

STATEMENT PURSUANT TO LISTING AGREEMENTS

The Company''s Securities are listed with Madras Stock Exchanges Ltd, & BSE Ltd. and it has paid the respective Annual Listing Fees up-to-date and there are no arrears.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC.,

Details regarding conservation of energy, foreign exchange and technology absorption including R&D efforts are given separately in Annexure ''A'' to this Report.

CODE OF CORPORATE GOVERNANCE

A detailed report on Corporate Governance as updated with the particulars of this Financial Year, as per the directions from SEBI is annexed to this report (Annexure "B") together with Report of the Auditors on the compliance with the said Code.

PERSONNEL

Particulars of employment as required under Section 217(2A) of the Companies Act, 1956 are not furnished as none of the employees were in receipt of remuneration exceeding the limits prescribed under the Companies Act.

DIRECTORS

Mr. Hideo Nakano had resigned from the Board of your Company effective 25th May, 2012

Mr. Hitoshi Arata was appointed as a Director in the casual vacancy caused on the resignation of Mr. Hideo Nakano at the Board Meeting held on 25th May, 2012.

The Board of Directors places on record their appreciation for the valuable contribution made by Mr. Hideo Nakano for the growth of the Company during his tenure of Directorship.

In accordance with the Articles of Association of the Company Mr. A. Raghvendra Rao and Mr. K. Subramanian retire by rotation at this Annual General Meeting. They being eligible, offer themselves for re-appointment.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under the heading "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 regarding the appointment of the Directors be approved.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements u/s 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, your Directors confirm that they had:

1. followed in the preparation of Annual Accounts, the applicable Accounting Standards and given proper explanation relating to material departures, if any;

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

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

4. Prepared the Accounts on a Going Concern basis.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of the ensuing 31st Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

As per the directions of Central Government, the Company has appointed M/s. P. Raju Iyer,

M. Pandurangan Associates, practicing Cost Accountants, as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956 to conduct the Audit of our Cost Accounting Records maintained by the company for the Financial Year 2012-13. M/s. P. Raju Iyer, M. Pandurangan Associates, Cost Accountants had given the Cost Compliance Report to the Company for the Financial Year 2011-12.

ACKNOWLEDGEMENT

Your Directors wish to record their sincere appreciation to the support, co-operation, guidance and assistance provided by the Collaborators, M/s.Panasonic Corporation, Japan.

Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

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

By Order of the Board of Directors

For Panasonic Caron India Co. Limited

Place :Chennai V.R. GUPTE R. SENTHIL KUMAR

Date :26th April, 2013 DIRECTOR MANAGING DIRECTOR

Mar 31, 2012

The Directors have pleasure in presenting to you their Thirtieth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2012 and the Auditors' Report thereon.

FINANCIAL RESULTS

The summarised working results for the year ended 31st March, 2012 as compared with the earlier year are as under:

Particulars Year ended 31.03.2012 Year ended 31.03.2011 (Rs in Lakhs) (Rs in Lakhs)

Profit before depreciation 626.96 757.33

Less: Depreciation 43.79 51.12

Balance Profit before taxation 583.17 706.21

Less: Provision for Taxation after adjustment 190.07 236.44 towards deferred tax

Balance profit after Taxation 393.10 469.77

Add: Surplus brought forward from Previous year 66.24 86.98

Amount available for Appropriation 459.34 556.75

Your Directors recommend the following Appropriations:

Proposed Dividend 336.00 336.00

Taxation on Dividend 54.51 54.51

Transfer to General Reserve 50.00 100.00

Transfer to Profit and Loss Account 18.83 66.24

Total 459.34 556.75

DIVIDEND

Your Directors recommend a dividend of Rs 7/- per Share (i.e.) 70%, which as per the provisions of Income-tax Act presently in force will not be taxed in the hands of the Shareholders. However, the Company will be paying the prescribed tax on the distributed dividend. This dividend if approved by you at the ensuing Thirtieth Annual General Meeting will be paid to the Shareholders whose names appear in the Register of Members as on the date of said Meeting.

STATEMENT PURSUANT TO LISTING AGREEMENTS

The Company's Securities are listed with Madras and Mumbai Stock Exchanges and it has paid the respective Annual Listing Fees up-to-date and there are no arrears.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC.

Details regarding conservation of energy, foreign exchange and technology absorption including R&D efforts are given separately in Annexure 'A' to this Report.

CODE OF CORPORATE GOVERNANCE

A detailed report on Corporate Governance as updated with the particulars of this Financial Year, as per the directions from SEBI is annexed to this report (Annexure "B") together with Report of the Auditors on the compliance with the said Code.

PERSONNEL

Particulars of employment as required under Section 217(2A) of the Companies Act, 1956 are not furnished as none of the employees were in receipt of remuneration exceeding the limits prescribed under the Companies Act.

DIRECTORS

Mr. Hideo Nakano had resigned from the Board of your Company effective 25th May, 2012.

Mr. Hitoshi Arata was appointed as a Director in the vacancy caused on the resignation of Mr. Hideo Nakano at the Board Meeting held on 25th May, 2012.

The Board of Directors places on record their appreciation for the valuable contribution made by Mr. Hideo Nakano for the growth of the Company during his tenure of Directorship.

In accordance with the Articles of Association of the Company Mr. Hiroyuki Aota and Mr. V. R Gupte retires by rotation at this Annual General Meeting. They are, being eligible, offer themselves for re-appointment.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under the heading "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 regarding the appointment of the Directors be approved.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements u/s 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, your Directors confirm that they had:

1. followed in the preparation of Annual Accounts, the applicable Accounting Standards and given proper explanation relating to material departures, if any;

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

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

4. Prepared the Accounts on a Going Concern basis.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of the ensuing Thirtieth Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility under Section 224(1 B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation to the support, co-operation and assistance provided by the Collaborators, M/s.Panasonic Corporation, Japan.

Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

By Order of the Board of Directors

For Panasonic Caron India Co. Limited

Place : Chennai V.R. GUPTE R. SENTHIL KUMAR

Date : 25th May, 2012 DIRECTOR MANAGING DIRECTOR

Mar 31, 2011

The Directors have pleasure in presenting to you their Twenty Nineth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2011 and the Auditors Report thereon.

FINANCIAL RESULTS

The summarised working results for the year ended 31st March, 2011 as compared with the earlier year are as under:

Particulars Year ended 31.03.2011 Year ended 31 03.2010 (Rs. in Lakhs) (Rs. in Lakhs)

Profit before depreciation 757.33 1083.06

Less: Depreciation 51.12 67.47

Balance Profit before taxation 706.21 1015.59

Less: Provision for Taxation after adjustment towards 236.44 346.45 deferred tax

Balance profit after Taxation 469.77 669.14

Add. Surplus brought forward from Previous year 86.98 77.00

Amount available for appropriation 556.75 746.14

Your Directors recommend the following Appropriations:

Proposed Dividend 336.00 336.00

Taxation on Dividend 54.51 55.80

Transfer to General Reserve 100.00 267.36

Transfer to Profit and Loss Account 66.24 86.98

Total 556.75 746.14

DIVIDEND

Your Directors recommend a dividend of Rs.7/- per Share (i.e.) 70%, which as per the provisions of Income-tax Act presently in force, will not be taxed in the hands of the Shareholders. However, the Company will be paying the prescribed tax on the distributed dividend. This dividend if approved by you at the ensuing Twenty Nineth Annual General Meeting will be paid to the Shareholders whose names stand in the Register of Members as on the date of said Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE

Your Company sold 1395 Mln. Pes. of Carbon Rods, as against 1414 Mln. Pes., 99% of Sales of last year. The Domestic Sales Quantity and Value were 1231 Mln. Pes. and Rs. 18 Crores, which work out to 97% and 73% respectively of the Sales of the last year. The drop in quantity of Domestic Sales was mainly on account of import of certain variety of Carbon Rods by certain Customers of the Company. Your Company had decreased the prices of certain varieties of Carbon Rods to be competitive compared to the price of imported carbon rods.

The Export Sales Quantity of the Company was 164 Mln. Pes. which works out to 15% more than the Export Sales Quantity of last year.

The increase in prices of some of the Raw Materials and fuel have resulted in increase in production cost considerably. Your Company had continued to implement cost saving, cost control and value engineering methods. The decrease in profitability for the current year is mainly due to decrease in selling price and increase in raw material and fuel costs.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company has higher production capacity to meet any increased demand of Carbon rods in the Domestic and International Markets in the years to come. Your Companys finished product (Carbon Rods) is being supplied as a critical component to the Indian Dry Battery Industry, which is projecting a growth of 2% to 3% in the current year in smaller size Batteries. Accordingly, your Company is also hopeful in achieving growth by maintaining the quality and timely supply. However, in the Export Front,

your Company expects only marginal improvement over the current year due to price and severe competition in the International Markets for Carbon Rods. The Directors assure that all steps will be taken by the Company to increase the growth level in the coming years, in proportion to the growth of the Dry Battery Industry by taking into consideration the adverse conditions, if any, in the Dry Battery Industry.

There are no materially significant threats, risks or concerns to the Company.

SEGMENT-WISE PERFORMANCE

The Company operates in only one Segment (i.e.) Carbon Rods as a component of Dry Cell Batteries.

By value, while Domestic Sales was 82%; Exports Sales was 18%.

FINANCIAL ARRANGEMENTS

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements The surplus funds available with the Company are being invested with Banks in deposits at regular intervals, in line with the policy of the Company. This is reflected in increased deposits.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has adequate internal control procedures commensurate with its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. A firm of experienced Chartered Accountants had carried Audit throughout the year. Whenever it is required, the systems and procedures are upgraded. ,

HUMAN RESOURCES

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable asset. Imparting adequate and specialised training to its employees is an on going exercise in the Company.

STATEMENT PURSUANT TO LISTING AGREEMENTS

The Companys Securities are listed with Madras and Bombay Stock Exchanges and it has paid the respective Annual Listing Fees up-to-date and there are no arrears.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC.,

Details regarding conservation of energy, foreign exchange and technology absorption including Research and Development efforts are given separately in Annexure A to this Report.

CODE OF CORPORATE GOVERNANCE

Adetailed report on Corporate Governance as updated with the particulars of this Financial Year, as per the directions from SEBI is annexed to this report (Annexure "B") together with Report of the Auditors on the compliance with the said Code.

PERSONNEL

Particulars of employment as required under Section 217(2A) of the Companies Act, 1956 are not furnished as none of the employees were in receipt of remuneration exceeding the limits prescribed under the Companies Act.

DIRECTORS

Mr.P Obul Reddy passed away on 30th June, 2010. The Board of Directors places on record their appreciation for the valuable contribution made by Mr. P. Obul Reddy for the growth of the Company during his tenure of Directorship.

Mr. Mikio Morikawa had resigned from the Board of your Company effective 12th October, 2010. The Board of Directors places on record their appreciation for the valuable contribution made by Mr. Mikio Morikawa for the growth of the Company during his tenure of Directorship.

Mr. P. Karthik Anand Reddy was appointed as a Director in the vacancy caused on the demise of Mr. P. Obul Reddy at the Board Meeting held on 23rd July, 2010.

Mr. Kenichi Kudara was appointed as a Director in the vacancy caused on the resignation of Mr. Mikio Morikawa at the Board Meeting held on 12th October, 2010.

In accordance with the Articles of Association of the Company Mr. A. Raghavendra Rao and K. Subramanian retire by rotation at this Annual Genera! Meeting. They, being eligible, offers themselves for re-appointment.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under the heading "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 regarding the appointment of the Directors be approved.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, your Directors confirm that they had:

1. followed in the preparation of annual accounts, the applicable Accounting Standards and given proper explanation relating to material departures if any;

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

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

4. prepared the Accounts on a Going Concern basis.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of the ensuing Twenty Nineth Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility under Section 224(1B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation to the support, co-operation and assistance provided by the Collaborators, M/s.Panasonic Corporation, Japan.

Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

By Order of the Board of Directors For Panasonic Caron India Co Limited

V.R. GUPTE R. SENTHIL KUMAR DIRECTOR MANAGING DIRECTOR

Place : Chennai Date : 29th April, 2011

Mar 31, 2010

The Directors have pleasure in presenting to you their Twenty Eighth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2010 and the Auditors Report thereon.

FINANCIAL RESULTS

The summarised working results for the year ended 31st March, 2010 as compared with the earlier year are as under:

Particulars Year ended 31.03.2010 Year ended 31.03.2009 (Rs in Lakhs) (Rs in Lakhs)

Profit before depreciation 1083.06 986.65

Less: Depreciation 67.47 84.23

Balance Profit before taxation 1015.59 902.42

Less: Provision for Taxation after adjustment towards deferred tax & fringe benefit tax 346.45 312.48

Balance profit after Taxation 669.14 589.94

Add: Surplus brought forward from Previous year 77.00 80.16

Amount available for appropriation 746.14 670.10

Your Directors recommend the following Appropriations:

Proposed Dividend 336.00 336.00

Taxation on Dividend 55.80 57.10

Transfer to General Reserve 267.36 200.00

Transfer to Profit and Loss Account 86.98 77.00

Total 746.14 670.10

DIVIDEND

Your Directors recommend a dividend of Rs.7/- per Share (i.e.) 70%, which as per the provisions of Income-tax Act presently in force, will not be taxed in the hands of the Shareholders. However, the Company will be paying the prescribed tax on the distributed dividend. This dividend if approved by you at the ensuing Twenty Eighth Annual General Meeting will be paid to the Shareholders whose names stand in the Register of Members as on the date of said Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY AND BUSINESS OVERVIEW AND OPERATIONAL AND FINANCIAL PERFORMANCE

Your Company sold 1414 Mln. Pes. of Carbon Rods, as against 1520 Mln. Pes., 93% of Sales of last year. The Domestic Sales Quantity and Value were 1271 Mln. Pes. and Rs.25 Crores, which works out to 94% and 96% respectively of the Sales of the last year. The drop in quantity of Domestic Sales was mainly on account of import of certain variety of Carbon Rods by certain Customers of the Company.

The Export Sales of the Company was 143 Mln. Pes. which works out to 83% of Export Sales of last year. The drop in Quantity of Export Sales was mainly due to closure of some of the Battery Factories in African Region.

Your Company had continued to implement cost saving and cost control methods. These factors had helped to improve the profitability of the Company.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company has higher production capacity to meet any increased demand of Carbon rods in the Domestic and International Markets in the years to come. Your Companys finished product (Carbon Rods) is being supplied as a critical component to the Indian Dry Battery Industry, which is projecting a growth of 2% to 3% in the current year in smaller size Batteries. Your Company has to make adjustments in its selling price to achieve growth in the coming year. In the Export Front, your .

Company expects only marginal improvement over the current year due to price and severe competition in the International Markets for Carbon Rods. Your Company anticipates reduction in profitability significantly for the coming year on account of adjustments of selling price of Carbon Rods. The Directors assure that all steps will be taken by the Company to improve the business in the coming years, in proportion to the growth of the Dry Battery Industry by taking into consideration the adverse conditions, if any, in the Dry Battery Industry.

There are no materially significant threats, risks or concerns to the Company.

SEGMENT-WISE PERFORMANCE

The Company operates in only one Segment (i.e.) Carbon Rods as a component of Dry Cell Batteries. By value, while Domestic Sales was 86%; Exports Sales was 14%.

FINANCIAL ARRANGEMENTS

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in deposits at regular intervals, in line with the policy of the Company. This is reflected in increased deposits.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has adequate internal control procedures commensurate with its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. A firm of experienced Chartered Accountants had carried Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

HUMAN RESOURCES

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable asset. Imparting adequate and specialised training to its employees is an on going exercise in the Company.

STATEMENT PURSUANT TO LISTING AGREEMENTS

The Companys Securities are listed with Madras and Mumbai Stock Exchanges and it has paid the respective Annual Listing Fees up-to-date and there are no arrears.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION, FOREIGN EXCHANGE ETC.,

Details regarding conservation of energy, foreign exchange and technology absorption including Research and Development efforts are given separately in Annexure "A to this Report.

CODE OF CORPORATE GOVERNANCE

A detailed report on Corporate Governance as updated with the particulars of this Financial Year, as per the directions from SEBI is annexed to this report (Annexure "B") together with Report of the Auditors on the compliance with the said Code.

PERSONNEL

Particulars of employment as required under Section 217(2A) of the Companies Act, 1956 are furnished in Annexure C to this Report.

DIRECTORS

Mr.S.R.Jiwarajka had resigned from the Board of your Company effective 22nd October, 2009.

Mr. Haruo Uchida, Whole Time Director (Finance) had resigned from the Board of your Company effective 22nd April, 2010.

Mr.S.K. Khurana had resigned from the Board of your company effective 22nd April, 2010.

The Board of Directors places on record their appreciation for the valuable contribution made by Mr.S.R.Jiwarajka, Mr. Haruo Uchida and Mr. S.K. Khurana for the growth of the company during their service.

Mr.K.K. Jiwarajka was appointed as a Director in the vacancy caused on the resignation of Mr. S.R. Jiwarajka at the Board Meeting held on 22nd October, 2009.

Mr. Hideo Nakano was appointed as a Director in the vacancy caused on the resignation of Mr. Haruo Uchida at the Board Meeting held on 22nd April, 2010.

Mr. Mikio Morikawa was appointed as a Director in the vacancy caused on the resignation of Mr. S.K. Khurana at the Board Meeting held on 22nd April, 2010.

In accordance with the Articles of Association of the Company Mr.V.R. Gupte retires by rotation at this Annual General Meeting. He, being eligible, offers himself for re-appointment.

Information about all the Directors proposed to be appointed/re-appointed is furnished in the Explanatory Statement under the heading "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 regarding the appointment of the Directors be approved.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, your Directors confirm that they had:

1. followed in the preparation of annual accounts, the applicable Accounting Standards and given proper explanation relating to material departures, if any;

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

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

4. prepared the Accounts on a Going Concern basis.

AUDITORS

M/s.Brahmayya & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of the ensuing Twenty Eighth Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility under Section 224(1 B) of the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation to the support, co-operation and assistance provided by the Collaborators, M/s.Panasonic Corporation, Japan.

Your Directors thank the valued Customers for their patronage, the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

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

By Order of the Board of Directors For Panasonic Carbon India Co. Limited Place : Chennai V.R. GUPTE R. SENTHIL KUMAR Date : 22nd April, 2010 DIRECTOR MANAGING DIRECTOR

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