Directors Report of PCBL Ltd.
Mar 31, 2023
Your Directors have the pleasure of presenting the 62nd Annual Report on the business and operations of PCBL Limited and the Audited Accounts for the financial year ended 31 March, 2023.
FINANCIAL HIGHLIGHTS
|
(Amount in '' Crores) |
||
|
Year ended |
Year ended 31 March, 2023 |
Year ended 31 March, 2022 |
|
Revenue from operations |
5,873.89 |
4,446.42 |
|
PBDIT |
774.84 |
682.31 |
|
Less: Finance cost |
53.41 |
29.09 |
|
pbdt |
721.43 |
653.22 |
|
Less: Depreciation |
136.60 |
120.88 |
|
pbt |
584.83 |
532.34 |
|
Tax expense |
140.74 |
105.20 |
|
PAT |
444.09 |
427.14 |
|
Earnings Per Equity Share (FV Re. 1/- Per Sh.)(EPS) (in '') |
11.76 |
11.84 |
The financial statements for the year ended 31 March, 2023 have been prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Companies Act, 2013 ("the Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The Board of Directors of the Company at its meeting held on Tuesday, 31 January, 2023 had declared an Interim Dividend @ 550%, i.e. '' 5.50 /-per equity share on the face value of Re. 1/- per equity share, for the financial year ended 31 March, 2023. The said Interim Dividend was paid on and from 21 February, 2023. The dividend recommendation is in accordance with the Dividend Distribution Policy of the Company which is annexed hereto and forms part of the Annual Report and the same is available on the Companyâs website and can be accessed at www.pcblltd.com/investor-relation/ general-policies. There has been no change in the dividend distribution policy during the year. The Notice convening the ensuing Annual General Meeting ("AGMâ) of the Members of the Company includes an item for confirmation of the said interim dividend.
PERFORMANCE OVERVIEW Carbon Black
Your Companyâs FY23 EBITDA was '' 775 Crores as against '' 682 Crores in the previous year. PAT for the year was '' 444 Crores, as against previous yearâs PAT
of '' 427 Crores.
Your Companyâs power segment revenue (excluding inter segment revenue) in FYâ23 was at '' 142 Crores as compared to '' 93 Crores in FYâ22, which is an increase by '' 49 Crores due to higher sales volume as well as higher realisation.
A detailed review of the operations of the Company for the financial year ended 31 March, 2023 is given in the Management Discussion and Analysis Report, which forms a part of this Report.
manufacturing
Carbon Black production during FY23 was 4,47,003 MT as compared to 4,56,484 MT in FY22. However, we are focusing on the production of value-added products in the performance and specialty chemical segment, which is having higher contribution margin.
As a manifestation of our commitment to sustainability, we are continuously working towards a reduction in water and power consumption. We are endlessly strategising towards conversion cost reduction through inventory and spare management as well as improving our reliability by strengthening preventive measure compliances, condition-based monitoring and periodic reviews of SOPs.
First phase commercial production 63,000 MTPA of 147,000 MTPA Greenfield carbon black manufacturing facility in the state of Tamil Nadu being set up by PCBL (TN) Limited, (a wholly owned subsidiary of the Company) has commenced w.e.f. 14 April, 2023. Upon its full completion expected in FYâ24, this project will augment the Companyâs Carbon Black capacity by 1,47,000 MPTA and contribute an additional 24 MW green power. The brown-field expansion at our existing facility in Mundra plant to produce specialty chemicals is in full swing.
During the year the Company commissioned a green power plant at Kochi, in Kerala with a capacity of 7 MW. With this, the total green power capacity of the Company has reached 98 MW.
With its strategically located plants, PCBL Limited is well equipped to service customers in India as well as all over the globe. Proximity to seaports reduces logistics costs.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
With its continuous commitment towards sustainability, the Company has been working on enhancing its ESG efforts by undertaking a comprehensive and independent ESG strategy and assessment exercise by adhering to certain Key Performance Indicators (KPIs) derived out of materiality targets. Key material factors have been sharply defined in alignment with the context of the business. These are Greenhouse Gas (GHG) emissions and energy management, Water management, Solid waste management, Health and safety, Human rights and community engagement, Product stewardship, Leadership and Governance.
For the FY 2022-23, the Company had conducted a carbon footprint accounting process across all manufacturing plants and offices. The GHG emissions covered by the report includes both direct and indirect emissions generated by the business under Scope1, 2 and 3. The GHG emission intensity (tCO2 emission/MT production of carbon black) was 1.94 tCO2e/MT) in FY 2022-23.
The Companyâs specific key risks and opportunities relating to ESG material issues have been identified. Implementation of some of the action plans to mitigate these risks and exploring the opportunities may have long lead times, but PCBL is committed to this.
Your Company is now in the process of reviewing its ESG strategy by balancing business needs with sustainability needs and fine-tuning future KPIs. To achieve the goals, the Company is identifying remedial action plans for environmental, social and governance specific issues.
qualified institutional placement (qip)
During the year ended 31 March, 2022, on 5 October, 2021, the Company had allotted and issued 1,63,93,442 equity shares of '' 2 each at an issue price of '' 244/-per equity share, aggregating to '' 399.99 Crores (including securities premium of '' 396.71 Crores). The aforesaid issuance of equity shares was made through a Qualified Institutions Placement (QIP) in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI Regulations) as amended, Section 42, Section 62, and other relevant provisions of the Companies Act, 2023.
The amount raised through the QIP, has been fully utilised by the Company on 19 October, 2022 for the purposes for which the funds were raised as mentioned in Placement Document dated 5 October, 2021 ("Placement Documentâ) and that there was no deviation(s) or variation(s) in the use of proceeds of the QIP.
During the year under review, the Company had received its credit ratings from ICRA, CARE and CRISIL Ratings. The Rating Committee of ICRA Limited, after due consideration, has reaffirmed the long-term rating at [ICRA]AA (pronounced ICRA double A) relating to '' 400 Crores Bank Facilities of the Company. The outlook on the long-term rating is Stable. Besides, the Rating Committee of ICRA Limited, after due consideration has reaffirmed the short-term Rating of [ICRA]A1 (pronounced ICRA A one plus) for '' 500 Crores Commercial Paper of the Company. Instruments with [ICRA]A1 rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk. The Rating Committee of CARE Ratings Limited, after due consideration, has reaffirmed the rating related to Long term bank facilities of '' 550 Crores at CARE AA, Stable (pronounced CARE Double A; Outlook: Stable) and the rating related to Long Term/Short Term Bank facilities of '' 1,850 Crores at CARE AA, Stable/ CARE A1 (pronounced CARE Double A; Outlook: Stable /A One Plus). Further, the Rating Committee of CRISIL Ratings, after due consideration, has reaffirmed its CRISIL A1 (pronounced as CRISIL A one plus rating) relating to '' 550 Crores Commercial Paper. Instruments with this rating are considered to have very strong
degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
The Company has 3 unlisted subsidiaries as on date, namely Phillips Carbon Black Cyprus Holdings Limited, PCBL (TN) Limited and PCBL Europe SRL and 1 step-down subsidiary namely, Phillips Carbon Black Vietnam Joint Stock Company. The Company has incorporated a wholly owned subsidiary company in the name of "PCBL EUROPE SRLâ at Belgium, Europe on 14 April, 2023. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Act.
The Company has prepared a Consolidated Financial Statement of the Company and its subsidiaries, namely, PCBL (TN) Limited, Phillips Carbon Black Cyprus Holding Limited and Phillips Carbon Black Vietnam Joint Stock Company in the form and manner as that of its own, duly audited by M/s. S R Batliboi & Co. LLP, the statutory auditors in compliance with the applicable accounting standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (hereinafter referred to as the âSEBI Listing Regulations.â)
The Consolidated Financial Statements for the FY 2022-23 form a part of the Annual Report and Accounts and shall be laid before the Members of the Company at the forthcoming AGM while laying its financial statements under sub-section (2) of the said section. Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companyâs subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company at www.
pcblltd.com under the segment âInvestor Relationsâ. Shareholders desirous of obtaining the Accounts of the Companyâs subsidiaries may obtain the same upon request by email to the Companyâs email i.d. -[email protected] .
The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per Regulation 16 of the SEBI Listing Regulations, the Company has adopted the policy for determining âmaterialâ subsidiaries, which states that a âmaterialâ subsidiary means a subsidiary, whose income or net worth exceeds 10% of the consolidated income or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year.
A Policy on âmaterial subsidiariesâ was formulated by the Audit Committee of the Board of Directors of the Company and the same is also posted on the Companyâs website and may be accessed at the link:. www.pcblltd.com/investor-relation/general-policies.
Your Companyâs paid-up Equity Share Capital as on 31 March, 2023 stood at '' 37.75 Crores. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31 March, 2023, none of the Directors of the Company hold shares or convertible instruments of the Company.
MANAGEMENT DiSCUSSiON AND ANALYSiS
In compliance with Regulation 34 of the SEBI Listing Regulations, a separate section on the Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company is given in âAnnexure-Aâ, which is annexed hereto and forms a part of the Boardâs Report.
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return of the Company as on 31 March, 2023 is available on the website of the Company at the following link: https://www.pcblltd. com/investor-relation/compliances-under-sebi-regulations/general-meetings .
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3) (m) of Section 134 of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in âAnnexure-Bâ, which is annexed hereto and forms a part of the Boardâs Report.
The Company does not have any Public Deposits under Chapter V of the Act and has repaid all Public Deposits that matured and were claimed by the depositors under the earlier Public Deposit Schemes. There is no outstanding balance as on 31 March, 2023.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the Company that have occurred between the close of the financial year ended 31 March, 2023 and the date of this Boardâs Report.
details of significant and material
ORDERS PASSED BY THE REGULATORS, COURTS AND TRiBUNALS
No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and the Companyâs operations in future.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A detailed section on the Companyâs internal financial controls with reference to financial statements and its adequacy is a part of the Management Discussion and Analysis Report, which forms a part of the Boardâs Report.
particulars of loans, guarantees or
Details of Loans, Guarantees and Investments are given in the notes to the financial statements.
Currently, the Board has six committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee,
Corporate Social Responsibility Committee, Independent Directorsâ Committee and the Sustainability and Risk Management Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this Report.
CORPORATE SOCiAL RESPONSiBiLiTY
The Companyâs commitment to create significant and sustainable societal value is manifested in its Corporate Social Responsibility (CSR) initiatives and its sustainability priorities are deeply intertwined with its business imperatives. Over the period of its long existence, the Company has upheld its tradition of community service and tried to reach out to the underprivileged in order to empower them and provide holistic development. The Companyâs focus areas are concentrated in the realms of healthcare, education, community development, promoting agricultural and rural development, promoting sports and environment sustainability with a focus on the underprivileged people living around its manufacturing units and other establishments. In accordance with Section 135 of the Act, as amended read with the Notification issued by the Ministry of Corporate Affairs and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which, along with the required disclosures, is given in âAnnexure-Câ, which is annexed hereto and forms a part of the Boardâs Report.
The Company, along with other companies of the Group, has set up the RP-Sanjiv Goenka Group CSR Trust to carry out CSR activities. During the FY 2022-23, the Company has undertaken the CSR initiatives in the fields of promoting education, healthcare, community development, promoting agricultural and rural development, promoting sports and environment sustainability thereby helping in the upliftment of the underprivileged and disadvantaged sections of the society. All the CSR activities fall within the purview of Schedule VII of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The detail of the CSR Policy is also posted on the Companyâs website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Act and SEBI Listing Regulations,
the Company has framed a Whistle blower Policy / Vigil Mechanism for Directors, employees and stakeholders for reporting genuine concerns about any instance of any irregularity, unethical practice and/or misconduct. Besides, as per the requirement of Clause 6 of Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations as amended by SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company ensures to make employees aware of such Whistle blower Policy to report instances of leak of unpublished price sensitive information. The Vigil Mechanism provides for adequate safeguards against victimisation of Directors or Employees or any other person who avail the mechanism and also provide direct access to the Chairperson of the Audit Committee. The details of the Vigil Mechanism / Whistle blower Policy are also posted on the Companyâs website and may be accessed at the following link: www. pcblltd.com/responsibility/policy .
During the financial year ended 31 March, 2023, the Company has not received any complaint under the vigil mechanism / whistle blower policy.
The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluationâ) which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other directors, Member of the Board or Committee of the Board. The Independent Directors carried out annual performance evaluation of the Chairman and Executive Directors. The Board carried out annual performance evaluation of its own performance. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees.
During the financial year ended 31 March, 2023, the Company engaged a leading HR Consulting Firm for carrying out and implementation of the Board Evaluation survey. With regard to the same, the leading HR Consulting Firm has been engaged in the process of compilation of the report and feedback received from the Board Members, Committee Members and Directors in the questionnaires circulated and for identifying key inferences and observations with respect to Performance Evaluation of the Directors. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for the selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy and the details pertaining to the remuneration paid during the year are furnished in the Corporate Governance Section of the Annual Report.
The Remuneration Policy is also posted on the Companyâs website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies.
All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. Hence, the provisions of Section 188 of the Act are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review made by the Company with its 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 for approval.
The Policy on Related Party Transactions duly approved by the Board of Directors of the Company is posted on the Companyâs website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies.
Risk Management is the process of identification, assessment and prioritisation of risks followed by coordinated efforts to minimise, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. Risk Management Policy enables the Company to proactively manage uncertainties and changes in the internal and external environment to limit negative impacts and capitalise on opportunities. The Company has laid down a comprehensive Risk Assessment and Minimisation Procedure in accordance with the requirements
of the Act and the SEBI Listing Regulations, which is reviewed by the Sustainability and Risk Management Committee and approved by the Board from time to time. This procedure is reviewed to ensure that the executive management controls risk through means of a properly defined framework. Detailed discussion on Risk Management is covered in the Management Discussion and Analysis Report (âAnnexure - Aâ) which forms a part of the Annual Report. In view of its importance, the Company makes efforts on an ongoing basis to strengthen the internal financial control system.
As required under the provisions of Section 197 of the Act and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of the Boardsâ Report. Having regard to the provisions of Section 136 of the Act, the Annual Report and Accounts, excluding the aforesaid information are being sent to the Members of the Company by e-mail. Any Member interested in obtaining such particulars may write to the Company Secretary of the Company at [email protected] .
During the year, there was no change in the Key Managerial Personnel of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as âAnnexure - Dâ, which is annexed hereto and forms a part of the Boardsâ Report.
The equity shares of the Company continue to be listed on the National Stock Exchange (NSE) and BSE Limited (BSE). The Company has paid the requisite listing fees to all the Stock Exchanges upto the financial year 2023-24.
A separate Report on Corporate Governance as prescribed under the SEBI Listing Regulations,
together with a certificate from the Companyâs Auditors confirming compliance, is set out in the Annexure forming part of this Annual Report.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the FY 2022-23, the Board of Directors met five times. The details of the number of meetings of the Board of Directors held during FY 22-23 have been detailed in the Corporate Governance Section of the Annual Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meeting.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Act, the Directors, to the best of their knowledge and belief, confirm that:
i) I n the preparation of the annual accounts for the financial year ended 31 March, 2023, the applicable accounting standards have been followed and there are no material departures;
ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made 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 of the Company for the period;
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) Internal financial controls laid down by the Directors have been followed by the Company and such internal financial controls are adequate and are operating effectively; and
VI) Proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.
DECLARATION BY iNDEPENDENT DiRECTORS
The Company has received the necessary declarations from each Independent Director under Section 149(7) of the Act, that he/she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1)(b) read with Regulation 25(8) of the SEBI Listing Regulations. The Board has taken on record these declarations after undertaking the due assessment of the veracity of the same.
STATUTORY AUDITORS AND AUDITORâS REPORT
At the AGM of the Shareholders of the Company held on 28 June, 2022, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, having Firm Registration No. 301003E/E300005, have been re-appointed as the Statutory Auditors of the Company to hold office for the 2nd term of five consecutive years from the conclusion of the sixty first (61st) AGM till the conclusion of the 66th AGM of the Company to be held in the year 2027, at a remuneration as may be decided by the Board of Directors in consultation with the Statutory Auditors of the Company.
The Report given by M/s. S R Batliboi and Co. LLP, Chartered Accountants on the financial statement of the Company for the FY 2022-23 is part of the Annual Report. The Notes on financial statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments.
The Auditorsâ Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.
COST ACCOUNTS AND COST AUDITORS
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Cost Audit records maintained by the Company relating to manufacturing of Carbon Black and generation and transmission of electricity at its plants located at Durgapur in West Bengal, Kochi in Kerala, Mundra and Palej in Gujarat, is required to be audited. Accordingly, the Directors of the Company had, on the recommendation of the Audit Committee of the Board of Directors of the Company,
appointed Messrs Shome & Banerjee, to audit the cost accounts for the FY 23-24 at a remuneration of '' 5,50,000/- (Rupees Five Lakhs Fifty Thousand only). As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking ratification of the Members for the remuneration payable to Messrs Shome & Banerjee, Cost Auditors is included at Item No. 4 of the Notice convening the AGM.
The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Cost Auditors have confirmed that they are not disqualified to be appointed as the Cost Auditors of the Company for the financial year ending 31 March, 2024.
The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.
SECRETARIAL AUDITORS AND SECRETARIAL STANDARDS
The Secretarial Audit was carried out by M/s. Anjan Kumar Roy & Co., Company Secretaries (Membership No. FCS 5684) for the financial year ended on 31 March, 2023.
The Report given by the Secretarial Auditors is marked as âAnnexure -Eâ and forms a part of the Boardâs Report. The Secretarial Audit Report is self-explanatory and do not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.
During the Financial Year, the Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directorsâ and "General Meetingsâ, respectively.
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 requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 covering all employees of the Company. The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
In terms of Regulation 34 of the SEBI Listing Regulations read with the relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Reportâ (âBRSRâ). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conductâ (âNGRBCsâ). As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the financial year ended 31 March, 2023, the Company has published the BRSR, marked as âAnnexure-Fâ, which is annexed hereto and forms a part of the Boardâs Report.
qualification, reservation or adverse
There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.
Dr. Sanjiv Goenka retires by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment.
Details of the proposal of re-appointment of Dr. Sanjiv Goenka is mentioned in the Statement u/s 102 of the Act of the Notice of the 62nd AGM of the Company.
Dr. Sethurathnam Ravi has been appointed as a Non-Executive Independent Director in the Board of Directors of the Company to hold office for the first term of 5 (five) consecutive years with effect from 15 March, 2023 vide the Special Resolution passed by the Shareholders of the Company by way of Postal Ballot through electronic means on 9th March, 2023.
The Board is of the opinion that Dr. Sethurathnam Ravi, the Independent Director of the Company, appointed during the year possesses requisite qualifications, experience and expertise and he holds highest standards of integrity.
The Policy on Directorsâ appointment and remuneration, including the criteria for determining the qualifications, positive attributes and independence of Director forms a part of the Corporate Governance Section of the Annual Report.
CHANGE IN THE NATuRE OF BuSINESS
During the year under review, there was no change in the nature of the business of the Company.
A detailed section on the Companyâs Human Resource Development is a part of the Management Discussion and Analysis Report, which forms a part of the Boardâs Report.
Key Financial Ratios for the financial year ended 31 March, 2023, are provided in the Management Discussion and Analysis Report given in "Annexure - Aâ, which is annexed hereto and forms a part of the Boardâs Report.
As a responsible corporate citizen, the Company supports the âGreen Initiativeâ undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report etc. to Shareholders at their e-mail address previously registered with the DPs and RTAs.
To support the âGreen Initiativeâ, Members who have not registered their email addresses are requested to register the same with the Companyâs Registrar and Share Transfer Agent/Depositories for receiving all
communications, including Annual Report, Notices, Circulars, etc., from the Company electronically.
Pursuant to the MCA Circulars and SEBI Circulars, copies of the Notice of the 62nd AGM and the Annual Report of the Company for the financial year ended 31 March, 2023 including therein the Audited Financial Statements for the FY 2022-23, are being sent only by email to the Members.
Your Company has been able to operate responsibly and efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas of its operations as well as the efficient utilisation of your Companyâs resources for sustainable and profitable growth.
Your Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by each and every employee, without whose whole-hearted efforts, the overall satisfactory performance would not have been possible. Your Directors also record their grateful appreciation for the encouragement, assistance and co-operation received from members, government authorities, banks, customers and all other stakeholders. Your Directors look forward to the long-term future with confidence.
For and on behalf of the Board
Place: Kolkata Chairman
Date: 15 May, 2023 (DIN: 00074796)
Mar 31, 2022
Your Directors have pleasure in presenting the 61st Annual Report on the business and operations of PCBL (formerly known as Phillips Carbon Black Limited) and the Audited Accounts for the financial year ended 31st March 2022.
FINANCIAL HIGHLIGHTS
|
(Amount in '' crores) |
||
|
Year ended |
Year ended 31.03.22 |
Year ended 31.03.21 |
|
Revenue from operations |
4446.42 |
2659.52 |
|
PBDIT |
660.09 |
524.12 |
|
Less: Finance and hedging cost including foreign currency fluctuation (net) |
6.87 |
23.64 |
|
PBDT |
653.22 |
500.48 |
|
Less: Depreciation & Amortisation |
120.88 |
110.12 |
|
PBT |
532.34 |
390.36 |
|
Tax expense |
105.20 |
78.09 |
|
PAT |
427.14 |
312.27 |
|
Earnings Per Equity Share (FV L 1/- Per Sh.) (EPS) (in L)* |
11.84 |
9.06 |
*Pursuant to the Special Resolution passed by the Shareholders of the Company by way of Postal Ballot through electronic means on 17th March, 2022, the Company has sub-divided its equity shares of face value of '' 2/- each fully paid up into 2 equity shares of the face value of '' 1/- per share effective from 13th April, 2022. Accordingly, earnings per equity share for the financial year ended 31st March, 2021 and 31st March, 2022 has been computed on the basis of '' 1/- per share, as per the requirement of IND AS - 33.
The financial statements for the year ended 31st March 2022 have been prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Companies Act, 2013 ("the Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The Board of Directors of the Company at its Meeting held on Thursday, 20th January, 2022 has declared an Interim Dividend @ 500 %, i.e. '' 10 /- per equity share on the face value of '' 2/- per equity share, for the financial year ended 31st March, 2022. The said Interim Dividend was paid on and from 11th February, 2022. The dividend recommendation is in accordance with the Dividend Distribution Policy of the Company which is annexed and forms part of the Annual Report and the same is available on the Company''s website and can be accessed at www.pcblltd.com/investor-relation/general-policies. There has been no change in the policy during the year. The Notice convening the ensuing Annual General Meeting ("AGMâ) of the Members of the Company includes an item for confirmation of the said interim dividend.
PERFORMANCE OVERVIEW Carbon Black
Your Company''s FY22 EBITDA was '' 660 crores as against '' 524 crores in the previous year. PAT for the year was '' 427 crores, which is around 1.37 times that of previous year''s PAT of '' 312 crores even with the continued global recession in the automobile industry as the backdrop, further aggravated by the COVID-19 pandemic.
Your Company''s power segment revenue (excluding inter segment revenue) in FY22 was at '' 93 crores as compared to '' 67 crores in FY21, which is an increase by '' 26 crores due to higher sales volume as well as higher realisation.
A detailed review of the operations of the Company for the financial year ended 31st March 2022 is given in the Management Discussion and Analysis Report, which forms a part of this Report.
During the current year ended March 31, 2022, the operations of the Company were slightly impacted due to regional lockdowns caused by the COVID-19 pandemic. The Company has made an assessment of the recoverability and carrying values of its assets
comprising property, plant and equipment, inventories, receivables and other current/non-current assets as of March 31, 2022 and on the basis of evaluation, has concluded that no material adjustments are required in the financial statements. The Company is taking all the necessary steps and precautionary measures to ensure smooth functioning of its operations and to ensure the safety and well-being of all its employees. Given the criticalities associated with nature, condition and duration of COVID-19, the assessment on recoverability of the Company''s assets will be continuously made and provided for as required.
Carbon black production during FY22 was 4,56,484 MT as compared to 3,84,786 MT in FY21, which is 18.6% more on YOY basis.
As a manifestation of our commitment to sustainability, we are continuously working towards reduction in water and power consumption. We are endlessly strategising towards conversion cost reduction through inventory and spare management as well as improving our reliability by strengthening preventive measure compliances, condition-based monitoring and periodic reviews of SOPs.
The greenfield project, spread over 60 acres of land in Tamil Nadu, will have a carbon black manufacturing capacity of 147 KTPA, along with a green power plant, is in the process of being set-up and is expected to be ready for production by the end of this current fiscal year. Green power plant of 7.3 MW at Palej and 8 MW in Mundra, respectively, got commissioned in FY22. Subsequently, a 7 MW power plant at Kochi will be commissioned within the first half of FY23.
With its strategically located four plants, PCBL is well equipped to serve customers in India as well as all over the globe. Proximity to seaports reduces logistics costs both within India as well as abroad.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
With its continuous commitment towards sustainability, the Company has been working on enhancing its ESG efforts by undertaking a comprehensive and independent ESG strategy and assessment exercise by adhering to certain Key Performance Indicators (KPIs) derived out of materiality targets. Key material factors have been sharply defined in alignment with the context of the business. These are Greenhouse Gas (GHG) emissions, energy and air quality management, management of water use, solid waste management, health and safety (across the value chain), product stewardship, human rights and community development.
For the year 2021-22, the Company has conducted a carbon footprint accounting process across all
manufacturing plants and offices. The GHG emissions covered by the report includes both direct and indirect emissions generated by the business. The GHG intensity (tCO2 emission/MT production of carbon black) was 1.76 in 2021-22.
The Company''s specific key risks and opportunities relating to ESG material issues have been identified. Action plans to mitigate these risks and exploring the opportunities may have long lead times, but PCBL is committed to this.
Your Company is now in the process of reviewing its ESG strategy by balancing business needs with sustainability needs and fine-tuning future KPIs. To achieve the goals, the Company is identifying remedial action plans for environmental, social and governance specific issues.
CHANGE OF NAME OF THE COMPANY
The name of the Company has changed from ''Phillips Carbon Black Limited'' to ''PCBL Limited'', pursuant to the fresh Certificate of Incorporation dated 29th December, 2021 issued by the Ministry of Corporate Affairs, Office of the Registrar of Companies, Nizam Palace, 2nd MSO Building 2nd Floor, Kolkata - 700020.
CHANGE OF LOGO OF THE COMPANY
During the year, Company has changed its logo i.e. the brand identity. The elephant, which has been the company''s icon since inception has been re-imagined using lines and dots inspired from chemical bonds, the domain in which PCBL operates and symbolise the organisation''s digital approach. The stance reflects dynamism, agility and moving forward with a future-facing outlook. The raised trunk is symbolic of PCBL''s respect towards customers and stakeholders and echoes the philosophy of nurturing relationships. The green hexagon, inspired from carbon''s molecular structure, and the elephant reaching out for it, embodies PCBL''s commitment towards sustainability.
The purple logo is arrived at by mixing the energy of red and the stability of blue. It reflects the fine balance of PCBL''s rich legacy and future-facing outlook. The colour also takes inspiration from the palette of the mother brand RP-Sanjiv Goenka Group.
The green is symbolic of sustainability and resonates the company''s philosophy of pursuing growth in harmony with the environment.
QUALIFIED INSTITUTIONAL PLACEMENT (QIP)
In accordance with SEBI Guidelines and Shareholders approval, the Company has allotted and issued 1,63,93,442 equity Shares to qualified institutional buyers at the issue price of '' 244.00 per Equity Share (including a premium of '' 242 per Equity Share) on 5th October, 2021.
SUB- DIVISION OF EQUITY SHARES OF THE COMPANY
Pursuant to the Special Resolution passed by the shareholders of the Company by way of Postal Ballot through electronic means on 17th March, 2022, the Company had sub-divided its equity share of the face value of ''2/- per share fully paid up to into 2 (two) equity shares of the face value of ''1/- per share, fully paid up effective from 13th April, 2022.
CREDIT RATINGS
During the year under review, the Company had received its credit ratings from ICRA, CARE and CRISIL. The Rating Committee of ICRA Limited, after due consideration, assigned a short-term rating of [ICRA]A1 (pronounced ICRA A one plus) for '' 500 crores Commercial Paper (CP) Programme. The Rating Committee of CARE Ratings Limited, after due consideration, assigned the rating of CARE AA; Stable (Double A; Outlook: Stable) for '' 550 crores Long Term Bank Facilities and a rating of CARE AA; Stable/CARE A1 (Double A; Outlook: Stable / A One Plus) for '' 1850 crores Long Term / Short Term Bank Facilities. The Rating Committee of CRISIL, after due consideration, assigned a rating of CRISIL A1 (pronounced as CRISIL A one plus rating) for '' 550 crores Commercial Paper.
SUBSIDIARY COMPANIES
The Company has 2 unlisted subsidiaries as on date, namely, Phillips Carbon Black Cyprus Holdings Limited and PCBL (TN) Limited and 1 step-down subsidiary namely, Phillips Carbon Black Vietnam Joint Stock Company. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Act.
The Company has prepared a Consolidated Financial Statement of the Company and of all the subsidiaries, namely, PCBL (TN) Limited, Phillips Carbon Black Cyprus Holding Limited and Phillips Carbon Black Vietnam Joint Stock Company in the form and manner as that of its own, duly audited by M/s. S R Batliboi & Co., LLP, the statutory auditors in compliance with the applicable accounting standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (hereinafter referred to as the ''SEBI Listing Regulations.'')
The Consolidated Financial Statements for the year 2021-22 form a part of the Annual Report and Accounts and shall be laid before the Members of the Company at the AGM while laying its financial statements under sub-section (2) of the said section. Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Further pursuant to the provisions of Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Company at www. pcblltd.com under the segment ''Investor Relations''. Shareholders desirous of obtaining the financial statements of the Company''s subsidiaries may obtain the same upon request by email to the Company''s email id: [email protected].
The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per Regulation 16 of the SEBI Listing Regulations, the Company has adopted the policy for determining ''material'' subsidiaries, which states that a ''material'' subsidiary means a subsidiary, whose income or net worth exceeds 10% of the consolidated income or net worth respectively, of the Company and its subsidiaries in the immediately preceding accounting year.
A Policy on ''material subsidiaries'' was formulated by the Audit Committee of the Board of Directors of the Company and the same is also posted on the Company''s website and may be accessed at the link: www.pcblltd.com/i nvestor-relation/general-policies
SHARE CAPITAL
Your Company''s paid-up Equity Share Capital as on 31st March 2022 stood at '' 37.75 crores. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March 2022, none of the Directors of the Company hold shares or convertible instruments of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
In compliance with Regulation 34 of the SEBI Listing Regulations, a separate section on the Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company is given in ''Annexure-A'', which is annexed hereto and forms a part of the Board''s Report.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return of the Company as on 31st March, 2022 is available on the website of the company at the following link: https://www. pcblltd.com/investor-relation/compliances-under-sebi-regulations/general-meetings.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3) (m) of Section 134 of the Act read with Rule 8(3) of
the Companies (Accounts) Rules, 2014 are given in ''Annexure-B'', which is annexed hereto and forms a part of the Board''s Report.
PUBLIC DEPOSITS
The Company does not have any Public Deposits under Chapter V of the Act. There is no outstanding balance as on 31st March 2022.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the Company that have occurred between the close of the financial year ended 31st March 2022 and the date of this Board''s Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and the Company''s operations in future.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A detailed section on the Company''s internal financial controls with reference to financial statements and its adequacy is a part of the Management Discussion and Analysis Report, which forms a part of the Board''s Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments are given in the notes to the financial statements.
COMMITTEES OF THE BOARD
Currently, the Board has six committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Independent Directors'' Committee, and the Risk Management Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company''s commitment to create significant and sustainable societal value finds manifestation in its Corporate Social Responsibility (CSR) initiatives, and its sustainability priorities are deeply intertwined with its business imperatives. Over six decades of its existence, the Company has upheld its tradition of community service and tried to reach out to the underprivileged in order to empower their lives and provide holistic development. The Company''s
focus areas are concentrated in the realms of health, education, environment sustainability, and community development with a focus on underprivileged living around its manufacturing units and other establishments. In accordance with Section 135 of the Act, as amended read with Notification issued by the Ministry of Corporate Affairs (''MCA'') dated 22nd January 2021 and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which, along with the required disclosures, is given in ''Annexure-C'', which is annexed hereto and forms a part of the Board''s Report.
The Company, along with other companies of the Group, has set up the RP-Sanjiv Goenka Group CSR Trust to carry out CSR activities. During the year 2021 -22, the Company has undertaken CSR initiatives in the fields of education, rural development, sports, environmental sustainability and community development thereby helping in the upliftment of the underprivileged and underserved sections of the society. All the CSR activities fall within the purview of Schedule VII of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The details of the CSR Policy are posted on the Company''s website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies
The Company runs its own socio-economic development initiatives in and around its manufacturing units. The Company continued to do its best to support communities through the current pandemic and assist those impacted by COVID-19, alongside healthcare professional and frontline warriors who played a key role in combating the virus.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Act and SEBI Listing Regulations, the Company has framed a Whistle Blower Policy/Vigil Mechanism for Directors, employees, and stakeholders for reporting genuine concerns about any instance of any irregularity, unethical practice and/or misconduct. Besides, as per the requirement of Clause 6 of Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations as amended by SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company ensures to make employees aware of such Whistle Blower Policy to report instances of leak of unpublished price sensitive information. The Vigil Mechanism provides for adequate safeguards against victimisation of Directors or employees or any other person who avails the mechanism and provides direct access to the Chairperson of the Audit Committee. The details of the Vigil Mechanism/Whistle Blower Policy are also posted on the Company''s website and may be accessed at the following link: www.pcblltd. com/responsibility/policy.
BOARD EVALUATION
The Company has devised a formal process for annual evaluation of performance of the Board, its Committees and Individual Directors ("Performance Evaluationâ) which include criteria for performance evaluation of Non-Executive Directors and Executive Directors as laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. It covers the areas relevant to the functioning as Independent Directors or other Directors, Member of the Board or Committee of the Board. The Independent Directors carried out annual performance evaluation of the Chairman and Executive Directors. The Board carried out annual performance evaluation of its own performance. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for the selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy and the details pertaining to the remuneration paid during the year are furnished in the Corporate Governance Section of the Annual Report.
The Remuneration Policy is also posted on the Company''s website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies
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. Hence, the provisions of Section 188 of the Act are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review made by the Company with its 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 for approval.
The Policy on Related Party Transactions duly approved by the Board of Directors of the Company is posted on the Company''s website and may be accessed at the link: www.pcblltd.com/investor-relation/general-policies
RISK MANAGEMENT
Risk Management is the process of identification, assessment and prioritisation of risks followed
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the year 2021-2022 the Board of Directors met eight times. The details of the number of meetings of the Board of Directors held during FY 21-22 have been detailed in the Corporate Governance Section of the Annual Report.
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Act, the Directors, to the best of their knowledge and belief, confirm that:
i) I n the preparation of the annual accounts for the financial year ended 31st March 2022, the applicable accounting standards have been followed and there are no material departures;
ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made 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 of the Company for the period;
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) Internal financial controls laid down by the Directors have been followed by the Company and such internal financial controls are adequate and are operating effectively; and
vi) Proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declarations from each Independent Director under Section 149(7) of the Act, that he/she meets the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1 )(b) read with Regulation 25(8) of the SEBI Listing Regulations. The Board have taken on record these declarations after undertaking the due assessment of the veracity of the same.
by coordinated efforts to minimise, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. Risk Management Policy enables the Company to proactively manage uncertainties and changes in the internal and external environment to limit negative impacts and capitalise on opportunities. The Company has laid down a comprehensive Risk Assessment and Minimisation Procedure in accordance with the requirements of the Act and the SEBI Listing Regulations, which is reviewed by the Risk Management Committee, and approved by the Board from time to time. This procedure is reviewed to ensure that the executive management controls risk through means of a properly defined framework. Detailed discussion on Risk Management is covered in the Management Discussion and Analysis Report (Annexure - A'') which forms a part of the Annual Report. In view of its importance, the Company makes efforts on an ongoing basis to strengthen the internal financial control system.
As required under the provisions of Section 197 of the Act and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of the Boards'' Report. Having regard to the provisions of Section 136 of the Act, the Annual Report and Accounts, excluding the aforesaid information are being sent to the Members of the Company by e-mail. Any Member interested in obtaining such particulars may write to the Company Secretary of the Company at [email protected].
During the year, there was no change in the Key Managerial Personnel of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as ''Annexure - D'', which is annexed hereto and forms a part of the Boards'' Report.
The equity shares of the Company continue to be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange Ltd (BSE). The Company has paid the requisite listing fees to all the Stock Exchanges for FY 2022-23.
A separate Report on Corporate Governance as prescribed under the SEBI Listing Regulations, together with a certificate from the Company''s Auditors confirming compliance, is set out in the Annexure forming part of this Annual Report.
STATUTORY AUDITORS AND AUDITOR''S REPORT
In terms of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Members of the Company in its 56th Annual General Meeting held on 21st September, 2017, approved the appointment of M/s. S R Batliboi and Co. LLP, Chartered Accountants (ICAI Registration No. 301003E/E300005), as the Statutory Auditors of the Company for an initial term of five consecutive years, i.e. from the conclusion of the 56th AGM till the conclusion of the 61st AGM of the Company to be held in the year 2022. The Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company.
The Board of Directors of the Company (''the Board''), on the recommendation of the Audit Committee, has approved in their Meeting held on 19th April, 2022, re-appointment of Messrs. S. R. Batliboi & Co. LLP, Chartered Accountants, having registration No. 301003E/E300005 as Statutory Auditors of the Company for 2nd term of five consecutive years from the conclusion of the 61st Annual General Meeting till the conclusion of the 66th Annual General Meeting to be held in the year 2027 on such remuneration as may be decided by the Board of Directors in consultation with the Statutory Auditors of the Company.
Accordingly, consent of the Members is sought for passing an Ordinary Resolution as set out under Item No. 4 of the Notice for re-appointment of Messrs. S. R. Batliboi & Co. LLP, Chartered Accountants, having registration No. 301003E/E300005 as Statutory Auditors of the Company for 2nd term of five consecutive years from the conclusion of the sixty first (61st) Annual General Meeting till the conclusion of the sixty sixth (66th) Annual General Meeting to be held in the year 2027 on such remuneration as may be decided by the Board of Directors in consultation with the Statutory Auditors of the Company.
The Report given by M/s. S R Batliboi and Co. LLP, Chartered Accountants on the financial statement of the Company for the year 2021-2022 is part of the Annual Report. The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.
COST ACCOUNTS AND COST AUDITORS
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Cost Audit records maintained by the Company relating to manufacturing of carbon black and generation and transmission of electricity at its plants located at Durgapur in West Bengal, Kochi in Kerala, Mundra and Palej in Gujarat, is required to
Mr. K. Jairaj has been appointed as a Non-executive Independent Director in the Board of Directors of the Company to hold office for the first term of five consecutive years with effect from 8th March 2022 vide the Special Resolution passed by the Shareholders of the Company by way of Postal Ballot through electronic means on 26th February 2022.
The Board is of the opinion that the Independent Directors of the Company possesses requisite qualifications, experience and expertise and they hold highest standards of integrity. The Policy on Directors'' appointment and remuneration, including the criteria for determining the qualifications, positive attributes and independence of Director forms a part of the Corporate Governance Section of the Annual Report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business of the Company.
HUMAN RESOURCES
A detailed section on the Company''s Human Resource Development is a part of the Management Discussion and Analysis Report, which forms a part of the Board''s Report.
KEY FINANCIAL RATIOS
Key Financial Ratios for the financial year ended 31st March 2022, are provided in the Management Discussion and Analysis Report given in "Annexure -Aâ, which is annexed hereto and forms a part of the Board''s Report.
GREEN INITIATIVES
As a responsible corporate citizen, the Company supports the ''Green Initiative'' undertaken by the Ministry of Corporate Affairs, Government of India,
be audited, the Directors of the Company had, on the recommendation of the Audit Committee of the Board of Directors of the Company, appointed M/s. Shome & Banerjee, to audit the cost accounts for the FY 22-23 at a remuneration of '' 5,50,000/-(Rupees Five Lacs Fifty Thousand only). As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking ratification of the Members for the remuneration payable to M/s. Shome & Banerjee, Cost Auditors is included at Item No. 5 of the Notice convening the AGM.
The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Cost Auditors have confirmed they are not disqualified to be appointed as the Cost Auditors of the Company for the year financial year ending 31st March 2023.
The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.
SECRETARIAL AUDITORS AND SECRETARIAL STANDARDS
The Secretarial Audit was carried out by M/s. Anjan Kumar Roy & Co., Company Secretaries (Membership No. FCS 5684) for the financial year ended on 31st March 2022.
The Report given by the Secretarial Auditors is marked as Annexure -E'' and forms a part of the Board''s Report. The Secretarial Audit Report is self-explanatory and do not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.
During the Financial Year, your Company has complied with applicable Secretarial Standards i.e. SS-1 and SS-2, relating to "Meetings of the Board of Directorsâ and "General Meetingsâ, respectively.
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 requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 covering all employees of the Company. The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
A detailed Business Responsibility and Sustainability Reporting as required under SEBI Listing Regulations is marked as ''Annexure - F'', which is annexed hereto and forms a part of the Board''s Report.
QUALIFICATION, RESERVATION OR ADVERSE REMARK IN THE AUDIT REPORTS
There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.
DIRECTORS
Mr. Shashwat Goenka retires by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment.
Details of the proposal of re-appointment of Mr. Shashwat Goenka is mentioned in the Statement u/s 102 of the Act of the Notice of the 61st AGM of the Company.
The term of office of Mr. O P Malhotra and Mr. K S B Sanyal as Independent Directors of the Company has come to an end on 29th July 2021 and consequently they have ceased to be Directors of the Company with effect from close of business hours on 29th July, 2021.
The Board of Directors placed on record its deep appreciation for the invaluable support and guidance received from Mr. O P Malhotra and Mr. K S B Sanyal during their long association as Directors of the Company.
Mrs. Rusha Mitra has been appointed as a NonExecutive Independent Director in the Board of Directors of the Company to hold office for the first term of five consecutive years with effect from 8th April 2021 and her appointment got regularised vide the Ordinary Resolution passed by the Shareholders of the Company at its Annual General Meeting held on 22nd June 2021.
Mr. R. K. Agarwal has been appointed as a NonExecutive Independent Director in the Board of Directors of the Company to hold office for the first term of five consecutive years with effect from 26th July 2021 and his appointment got regularised vide the Ordinary Resolution passed by the Shareholders of the Company by way of Postal Ballot through electronic means on 2nd December 2021.
Mr. T. C. Suseel Kumar has been appointed as a Non-Executive Independent Director in the Board of Directors of the Company to hold office for the first term of five consecutive years with effect from 27th October 2021 and his appointment got regularised vide the Ordinary Resolution passed by the Shareholders of the Company by way of Postal Ballot through electronic means on 2nd December 2021.
enabling electronic delivery of documents including the Annual Report etc. to Shareholders at their e-mail address previously registered with the DPs and RTAs.
To support the ''Green Initiative'', Members who have not registered their email addresses are requested to register the same with the Company''s Registrar and Share Transfer Agent/Depositories for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically.
Pursuant to the MCA Circulars and SEBI Circulars, copies of the Notice of the 61st AGM and the Annual Report of the Company for the financial year ended 31st March 2022 including therein the Audited Financial Statements for the year 2021-2022, are being sent only by email to the Members.
ACKNOWLEDGEMENT
Your Company has been able to operate responsibly and efficiently because of the culture of professionalism, creativity, integrity, ethics, good governance and continuous improvement in all functions and areas as well as the efficient utilisation of the Company''s resources for sustainable and profitable growth.
The Directors hereby wish to place on record their appreciation of the efficient and effective services rendered by each and every employee, more particularly during this challenging time, without whose wholehearted efforts, the overall satisfactory performance would not have been possible. Your Directors also record their grateful appreciation for the encouragement, assistance and co-operation received from members, government authorities, banks, customers and all other stakeholders. Your Directors look forward to the long term future with confidence.
Mar 31, 2018
The Directors have pleasure in presenting the fifty-seventh Annual Report on the business and operations of Phillips Carbon Black Limited and the Audited Accounts for the financial year ended 31st March 2018.
FINANCIAL HIGHLIGHTS
(Amount in Rs. Crore)
|
Year ended |
31.03.18 |
31.03.17 |
|
Total Revenue |
2600.31 |
2131.27 |
|
PBDIT |
424.07 |
305.02 |
|
Less: Finance and hedging cost |
59.73 |
78.88 |
|
PBDT |
364.34 |
226.14 |
|
Less: Depreciation |
60.52 |
60.62 |
|
PBT |
303.82 |
165.52 |
|
Tax expense |
74.04 |
96 |
|
PAT |
229.78 |
69.52 |
|
Balance brought forward |
684.78 |
652.77 |
|
Remeasurement of postemployment benefit obligation, net of tax |
(1.94) |
(0.16) |
|
Transferred from OCI |
- |
(2.09) |
|
Profit available for appropriation |
912.62 |
720.04 |
|
Proposed dividend, including tax on dividend |
(27.25) |
(35.26) |
|
Balance carried forward to the Balance Sheet |
885.37 |
684.78 |
The financial statements for the year ended 31st March, 2018 have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
DIVIDEND
The Board of Directors, at its meeting held on 24th October 2017, declared an interim dividend of 60% i.e. Rs.6/- per equity share on the face value of Rs.10/- per equity share. This interim dividend was paid during FY 17-18.
Based on the Companyâs annual performance, your Directors are happy to recommend a final dividend of 60% i.e. Rs.1.20 /- per equity share on the face value of Rs.2/- per equity share for approval of the Members at the ensuing Annual General Meeting (AGM) of the Company.
During the year under review, the Company has adopted a Dividend Distribution Policy and the same is annexed herewith.
PERFORMANCE OVERVIEW Carbon Black
Your Companyâs FY18 EBITDA rose to Rs.424.07 crore as against Rs.305.02 crore in the previous year. PAT for the year was Rs.229.78 crore, which is almost 3.30 times that of previous yearâs PAT of â69.52 crore.
Power
Your Companyâs power segment revenue (excluding inter segment revenue) was at Rs.84.60 crore, marginally lower as compared to Rs.85.10 crore in FY17, a result of lower availability of co-generation power plant primarily on account of debottlenecking activities.
A detailed review of the operations for the financial year ended 31st March 2018 is given in the Management Discussion and Analysis Report, which forms a part of this Report.
MANUFACTURING
Carbon Black production during FY18 rose to 3,99,904 MT as compared to 3,83,316 MT in the previous year.
The improvement in capacity utilisation was due to higher market demand and a rise in consumption trend of the automobile sector. With its strategically located four plants, your Company is well poised to service customers in India and overseas. The vicinity of seaports to a couple of the Companyâs plants should facilitate logistic costs within India and abroad.
CREDIT RATINGS
During the year under review, the Company had received its credit ratings from the agencies ICRA and CARE. The credit rating received from ICRA on 14th November 2017 stated that after due consideration, the Rating Committee of ICRA retained the rating of [ICRA] A (pronounced ICRA A Plus) for Rs.400 crore line of credit. The outlook on the long-term rating was revised from âStableâ to âPositiveâ. The credit ratings received also from CARE on 2nd February 2018 stated that the rating for the long-term bank facilities aggregating to Rs.554 crore was revised to CARE AA-: Stable (Double A Minus; Outlook: Stable), long-/short-term bank facilities aggregating to Rs.1,850 crore was revised to CARE AA- : Stable/CARE A1 (Double A Minus; Outlook: Stable /A One Plus) and commercial paper issue amounting to Rs.500 crore was upgraded to CARE A 1 (A One Plus)-Reaffirmed. Further, on 5th February 2018, the Rating Committee of ICRA, revised the rating from [ICRA] A (pronounced ICRA A Plus) to [ICRA] AA - (pronounced ICRA double A Minus) for Rs.400 crore line of credit. The outlook on the long-term rating was revised from âPositiveâ to âStableâ.
AMALGAMATION ORDER
The Company has received from the National Company Law Tribunal (NCLT), Kolkata Bench, the certified true copy of the Order sanctioning the Scheme of Amalgamation of Goodluck Dealcom Private Limited, a wholly owned subsidiary of Phillips Carbon Black Limited, with Phillips Carbon Black Limited and filed the certified true copy of the Order vide E-form INC-28 with the Registrar of Companies, West Bengal.
The Scheme of Amalgamation became effective from 1st April 2016.
SUB-DIVISION OF EQUITY SHARES OF THE COMPANY
Pursuant to the Special Resolution passed by the Shareholders of the Company by way of Postal Ballot / E-voting on 3rd April 2018, the Company had sub-divided 1 Equity Share of the face value of Rs.10/- per share, fully paid up, to 5 Equity Shares of the face value of Rs.2/- per share, fully paid up, effective from 21st April 2018.
SUBSIDIARY COMPANIES
The Company has three subsidiaries as on date, namely, Phillips Carbon Black Cyprus Holding Limited, PCBL Netherlands Holdings B.V. and Phillips Carbon Black Vietnam Joint Stock Company. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (âthe Actâ).
The Company has prepared a Consolidated Financial Statement of the Company and of all the subsidiaries, namely, Phillips Carbon Black Cyprus Holding Limited, PCBL Netherlands Holdings B.V. and Phillips Carbon Black Vietnam Joint Stock Company in the form and manner as that of its own, duly audited by M/s. S R Batliboi & Co., LLP, the statutory auditors in compliance with the applicable accounting standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the âSEBI Listing Regulations.â)
The Consolidated Financial Statements for the year 2017-18 form a part of the Annual Report and Accounts and shall be laid before the Members of the Company at the AGM while laying its financial statements under sub-section (2) of the said section. Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companyâs subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Further, pursuant to the provisions of Section 136 of the Act as amended by the Companies Amendment Act, 2017, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.
The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per revised SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI has made it mandatory for all listed companies to formulate a policy for determining âmaterialâ subsidiaries. Accordingly, a policy on âmaterialâ subsidiaries was formulated by the Audit Committee of the Board of Directors and the same is also posted on the Companyâs website and may be accessed at http:// pcblltd.com/investorrelations/investorrelations.php.
MANAGEMENT DISCUSSION AND ANALYSIS
In compliance with Regulation 34 of the SEBI Listing Regulations, a separate section on the Management Discussion and Analysis, which includes details on the state of affairs of the Company is given in âAnnexure-Aâ, which is annexed hereto and forms a part of the Boardsâ Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of Annual Return in the prescribed format is given in âAnnexure-Bâ, which is annexed hereto and forms a part of the Boardsâ Report.
SHARE CAPITAL
Your Companyâs paid-up Equity Share Capital as on 31st March 2018 stood at Rs.34.47 crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March 2018, none of the Directors of the Company hold shares or convertible instruments of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in âAnnexure-Câ, which is annexed hereto and forms a part of the Boardsâ Report.
PUBLIC DEPOSITS
The Company does not have any Public Deposit Scheme and has repaid all Public Deposits that matured and were claimed by the depositors under the earlier Public Deposit Schemes. There is no outstanding balance as on 31st March 2018.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the Company that have occurred between the close of the financial year ended 31st March 2018 and the date of this Boardsâ Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and the Companyâs operations in future.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A detailed section on the Companyâs internal financial controls with reference to financial statements and its adequacy is a part of the Management Discussion and Analysis Report, which forms a part of the Boardsâ Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: Audit Committee, Nomination and Remuneration Committee, Stakeholdersâ Relationship Committee, Corporate Social Responsibility Committee and the Independent Directorsâ Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Act and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which, along with the required disclosures, is given in âAnnexure-Dâ, which is annexed hereto and forms a part of the Boardsâ Report.
The Company, along with other companies of the Group, has set up the RP-Sanjiv Goenka Group CSR Trust to carry out CSR activities.
The detail of the CSR Policy is also posted on the Companyâs website and may be accessed at http://pcblltd.com/investorrelations/ investorrelations.php.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act, 2013 and SEBI Listing Regulations, the Company has framed a Whistle Blower Policy / Vigil Mechanism for Directors, employees and stakeholders for reporting genuine concerns about any instance of any irregularity, unethical practice and/ or misconduct. The details of the Vigil Mechanism / Whistle Blower Policy are also posted on the Companyâs website and may be accessed at http://pcblltd.com/investorrelations/ investorrelations.php.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013, SEBI Listing Regulations and Circulars and Guidance Notes issued by SEBI in this regard, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which is annexed hereto.
At a separate meeting of Independent Directors, the performances of Non-independent Directors, the Board as a whole and the Chairman were evaluated, taking into account the views of Executive Directors and Non-executive Directors. The same was also discussed in the Board Meeting. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for the selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy and the details pertaining to the remuneration paid during the year are furnished in the Corporate Governance Report which is annexed hereto.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. Hence, the provisions of Section 188 of the Companies Act, 2013 as amended are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review 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 for approval.
The policy on Related Party Transactions as approved by the Board is posted on the Companyâs website and may be accessed at http://pcblltd.com/investorrelations/investorrelations.php.
RISK MANAGEMENT
Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. The Company has laid down a comprehensive Risk Assessment and Minimization Procedure, which is reviewed by the Audit Committee and approved by the Board from time to time. This procedure is reviewed to ensure that the Executive Management controls risk through means of a properly defined framework.
PARTICULARS OF EMPLOYEES
As required under the provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of the Boardâs Report. Having regard to the provisions of Section 136 of the Companies Act, 2013, the Annual Report and Accounts, excluding the aforesaid information, are being sent to the Members of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary of the Company. The said information is also available for inspection at the Registered Office during normal business hours (10 a.m. to 6 p.m.) on all working days, up to the date of the AGM and shall also be available at the venue of the AGM of the Company.
KEY MANAGERIAL PERSONNEL
During the year, there was no change in the Key Managerial Personnel of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as âAnnexure-Eâ ,which is annexed hereto and forms a part of the Boardâs Report.
BUSINESS RESPONSIBILITY REPORT
A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of the SEBI Listing Regulations is available as a separate section in this Annual Report.
LISTING
The equity shares of the Company continue to be listed on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Calcutta Stock Exchange (CSE). The Company has paid the requisite listing fees to all the Stock Exchanges for FY 2018-19.
CORPORATE GOVERNANCE
A separate Report on Corporate Governance as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, together with a certificate from the Companyâs Auditors confirming compliance, is set out in the Annexure forming part of this Annual Report.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
The details of the number of meetings of the Board of Directors held during FY17-18 form a part of the Corporate Governance Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, confirm that:
i) In the preparation of the annual accounts for the financial year ended 31st March 2018, the applicable accounting standards have been followed and there are no material departures;
ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made 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 of the Company for the period;
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) Internal financial controls laid down by the Directors have been followed by the Company and such internal financial controls are adequate and were operating effectively; and
vi) Proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulations 16(b) and 25 of the SEBI Listing Regulations.
AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendation made by the Audit Committee of the Board of Directors of the Company, Messers S R Batliboi & Co. LLP, having Registration No. 301003E/E300005 allotted by The Institute of Chartered Accountants of India (ICAI), was appointed as the Statutory Auditors of the Company from the conclusion of the 56th AGM of the Company held on 21st September 2017 till the conclusion of the 61st AGM to be held in the year 2022, subject to ratification of their appointment at every AGM. Accordingly, a Resolution seeking the ratification of the Members for their appointment is included at Item No. 4 of the Notice convening the AGM.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 as amended by the Companies Amendment Act, 2017 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company relating to manufacture of Carbon Black and generation and transmission of electricity at the plants located at Durgapur in West Bengal, Kochi in Kerala, Mundra and Palej in Gujarat, is required to be audited. Your Directors had, on the recommendation of the Audit Committee of the Board of Directors of the Company, appointed Messrs Shome & Banerjee, to audit the cost accounts for the FY18-19 on a remuneration ofRs.4,50,000/- (rupees four lacs fifty thousand only). As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking ratification of the Members for the remuneration payable to Messrs Shome & Banerjee, Cost Auditors is included at Item No. 6 of the Notice convening the AGM.
The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Anjan Kumar Roy & Co., Company Secretaries (Membership No. FCS 5684) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31st March 2018 is marked as âAnnexure-Fâ, which is annexed hereto and forms a part of the Boardâs Report.
QUALIFICATION, RESERVATION OR ADVERSE REMARK IN THE AUDIT REPORTS
There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.
DIRECTORS
Mr. Sanjiv Goenka retires by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment.
Mr. C R Paul resigned from Directorship with effect from 20th April, 2018 due to his advancing age and declining health. The Board has placed on record its deep appreciation for the invaluable support and guidance received from Mr. C R Paul during his long association since 1989 as Director of the Company.
The policy on Directorsâ appointment and remuneration, including the criteria for determining the qualifications and positive attributes, forms a part of the Corporate Governance section of the Annual Report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business of the Company.
HUMAN RESOURCES
A detailed section on the Companyâs Human Resource Development is a part of the Management Discussion and Analysis Report, which forms a part of the Boardâs Report.
GREEN INITIATIVES
To support the âGreen Initiativeâ, Members who have not registered their email addresses are requested to register the same with the Companyâs Registrar and Share Transfer Agent/Depositories for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically. With regard to the same, Members whose email IDs are registered with our Registrar and Share Transfer Agent, viz. Link Intime India Pvt. Ltd, shall also receive a communication from our Registrar wherein Members shall be informed about the Service of Documents to them in electronic mode and in case, they wish to register a different email ID, they can update the same with their Depository Participant in case of shares held in demat mode and with the Registrar and Share Transfer Agent in case of shares held in physical mode.
ACKNOWLEDGEMENT
Your Directors record their appreciation for the encouragement, assistance and co-operation received from members, government authorities, banks, customers and all other stakeholders. They also thank them for the trust reposed in the Management and wish to thank all employees for their commitment and contribution.
For and on behalf of the Board
Sanjiv Goenka
Kolkata Chairman
4th May, 2018 (DIN: 00074796)
Mar 31, 2017
The Directors have pleasure in presenting the fifty - sixth Annual Report on business and operations of Phillips Carbon Black Limited and the Audited Accounts for the financial year ended 31st March, 2017,
FINANCIAL HIGHLIGHTS
(Amount in Rs. Crore)
|
Year ended |
31.03.17 |
31.03.16 |
|
Total Revenue |
2131.27 |
2115.47 |
|
PBDIT |
305.02 |
217.30 |
|
Less: Finance and hedging cost |
78.88 |
106.76 |
|
PBDT |
226.14 |
110.54 |
|
Less: Depreciation |
60.62 |
62.15 |
|
PBT |
165.52 |
48.39 |
|
Tax Expense |
96 |
31.48 |
|
PAT |
69.52 |
16.91 |
|
Balance brought forward |
652.77 |
640.35 |
|
Remeasurement of postemployment benefit obligation, net of tax |
(1.55) |
(0.33) |
|
Transferred from OCI |
(2.09) |
(0.01) |
|
Profit available for |
718.65 |
656.92 |
|
Appropriation |
||
|
Proposed Dividend including tax on dividend |
(35.26) |
(4.15) |
|
Balance carried forward to Balance Sheet |
683.39 |
652.77 |
The financial statements for the year ended 31st March, 2017 have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements for the year ended 31st March, 2016 have been restated in accordance with IND AS for comparative information.
DIVIDEND
The Board of Directors at its meeting held on 1st March, 2017 declared an interim dividend of 60% i.e, Rs.6/- per equity share. The above interim dividend has been paid during the financial year 2016-2017,
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of annual return in the prescribed format is given in âAnnexure -Aâ, which is annexed hereto and forms a part of the Boardâs Report.
CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the âAnnexure - Bâ, which is annexed hereto and forms a part of the Boardsâ Report.
PUBLIC DEPOSITS
The Company does not have any Public Deposit Scheme and has repaid all Public Deposits that matured and were claimed by the depositors under the earlier Public Deposit Schemes. There is no outstanding balance as on 31st March, 2017.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the close of the financial year ended 31st March, 2017 and the date of this Boardsâ Report.
The amalgamation of Goodluck Dealcom Private Limited, an erstwhile wholly owned subsidiary of the Company with the Company has been given effect in the Accounts for the year ended 31st March, 2017
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and companyâs operations in future.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial Statements.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: Audit Committee, Nomination and Remuneration Committee, Stakeholdersâ Relationship Committee, Corporate Social Responsibility Committee and the Independent Directorsâ Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report Section of this Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with Section 135 of the Act and the rules made thereunder, the Company has formulated a Corporate Social Responsibility Policy, a brief outline of which along with the required disclosures is given in âAnnexure - Câ, which is annexed hereto and forms a part of the Boardâs Report.
The Company along with other companies of the Group has set up RP- Sanjiv Goenka Group CSR Trust, to carry out CSR activities.
The detail of the CSR Policy is also posted on Companyâs website and may be accessed at link-http://pcblltd.com/ investorrelations/investorrelations.php.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
In compliance with provisions of Section 177(9) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulation, 2015, the Company has framed a Whistle Blower Policy / Vigil Mechanism for directors, employees, and stakeholders for reporting genuine concerns about any instance of any irregularity unethical practice and/or misconduct. The details of the Vigil Mechanism/ Whistle Blower Policy are also posted on the Companyâs website and may be accessed at link-http://pcblltd.com/investorrelations/investorrelations. php.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
At a separate meeting of Independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non - executive directors. The same was also discussed in the Board Meeting. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.
REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy and the details pertaining to the remuneration paid during the year are furnished in the Corporate Governance Section of the Annual Report.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. Hence, the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review 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 for approval.
The policy on Related Party Transactions as approved by the Board is posted on the Companyâs website and may be accessed at link http://pcblltd.com/investorrelations/ investorrelations.php.
RISK MANAGEMENT
Risk Management is the process of identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/ control the probability and/or impact of unfortunate events or to maximize the realisation of opportunities. The Company has laid a comprehensive Risk Assessment and Minimisation Procedure, which is reviewed by the Audit Committee and approved by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework.
PARTICULARS OF EMPLOYEES
As required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of the Boardsâ Report. Having regard to the provisions of Section 136 of the Companies Act, 2013, the Annual Report and Accounts, excluding the aforesaid information are being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company. The said information is also available for inspection at the Registered Office during normal business hours (10.00 am to 6.00 pm) on all working days, up to the date of Annual General Meeting and shall also be available at the venue of the Annual General Meeting of the Company
KEY MANAGERIAL PERSONNEL
During the year, there was no change in the Key Managerial Personnel of the Company
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as âAnnexure -Dâ ,which is annexed hereto and forms a part of the Boardsâ Report.
LISTING
The equity shares of the Company continue to be listed on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Calcutta Stock Exchange (CSE). The Company has paid the requisite listing fees to all the Stock Exchanges for the financial year 2017-18.
CORPORATE GOVERNANCE
A separate Report on Corporate Governance as prescribed under the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, together with a certificate from the Companyâs Auditors confirming compliance is set out in the Annexure forming part of this Annual Report.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
The details of the number of meetings of the Board of Directors held during the financial year 2016-17 form a part of the Corporate Governance Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, confirm that:
i) in the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed and there are no material departures:
ii) appropriate accounting policies have been selected and applied 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 financial year and of the profit and loss of the Company for the period;
iii) proper and sufficient care have been taken, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
v) internal financial controls laid down by the Directors have been followed by the Company and such internal financial controls are adequate and were operating effectively.
vi) proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director under Setion 149(7) of the Companies Act, 2013 , that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act,2013 and Regulations 16(b) and 25 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.
AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendation made by the Audit Committee of the Board, Messers S R Batliboi & Co. LLP, having Registration No. 301003E/E300005 allotted by The Institute of Chartered Accountants of India (ICAI) be and are hereby appointed as the Statutory Auditors of the Company in place of the retiring Auditors, Messers Price Waterhouse, Chartered Accountants, having registration No. 301112E allotted by ICAI, who shall hold office from the conclusion of this 56th Annual General Meeting for a term of five consecutive years till conclusion of the 61st Annual General Meeting to be held in the year 2022, subject to ratification of their appointment by the Members at every Annual General Meeting held after this Annual General Meeting till the 61st Annual General Meeting, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors. Accordingly, a Resolution seeking the approval of the Members and ratification thereafter, is included at Item No. 4 of the Notice convening the Annual General Meeting.
COST AUDIT
Pursuant to Section 148 of the Companies act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company relating to manufacture of Carbon Black and generation and transmission of electricity at the plants located at Durgapur, Kochi, Mundra and Palej is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs Shome & Banerjee, to audit the cost accounts for the financial year 2017 -2018 on a remuneration of Rs.4,50,000/-(Rupees Four lacs fifty thousand only). As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to Messers Shome & Banerjee, Cost Auditors is included at Item no. 6 of the Notice convening the Annual General Meeting.
The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Anjan Kumar Roy & Co., Company Secretaries (Membership No. FCS 5684) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year ended 31st March, 2017 is marked as âAnnexure -Eâ , which is annexed hereto and forms a part of the Boardâs Report.
QUALIFICATION, RESERVATION OR ADVERSE REMARK IN THE AUDIT REPORTS
There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.
DIRECTORS
Mr. Shashwat Goenka retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment.
There have been 2 changes in the composition of the Board of Directors of the Company during the financial year ended 31st March, 2017. Mr. Paras K Chowdhary,a Non-Executive Director of the Company, was appointed as an Independent Director of the Company and the approval of the shareholders was obtained in the Annual General Meeting of the Company held on 22nd July, 2016.
In addition to the above, Mr. Pradip Roy was inducted in the Audit Committee of the Board of Directors of the Company at its Board Meeting held on 13th May, 2016.
The policy on Directorsâ appointment and remuneration including the criteria for determining the qualifications and positive attributes forms a part of the Corporate Governance Section of the Annual Report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business of the Company
GREEN INITIATIVES
As in the previous years, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Physical copies of the Notice convening the 56th Annual General Meeting (AGM) have been sent to all the Members of the Company. Besides, the electronic copies of the Notice have also been sent to all the Members whose email IDs are registered with the Companyâs Registrar and Share Transfer Agent / Depository Participants for communication purposes. The electronic copies of the Annual Report 2016-17 are being sent to all Members whose email IDs are registered with the Companyâs Registrar and Share Transfer Agent / Depository Participants. For Members who have not registered their email addresses, physical copies of Annual Report are being sent in the permitted mode.
To support the âGreen Initiativeâ, Members who have not registered their e-mail addresses are requested to register the same with the Companyâs Registrar and Share Transfer Agent/Depositories for receiving all communication including Annual Report, Notices, Circulars etc. electronically
FORWARD - LOOKING STATEMENT
This Report contains forward-looking statements that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Significant factors that could make a difference to the Companyâs operations include domestic and international economic conditions affecting demand-supply and price conditions, foreign exchange fluctuations, changes in government regulations, tax regimes and other statutes.
ACKNOWLEDGEMENT
Your Directors record their grateful appreciation for the encouragement, assistance and co-operation received from members, government authorities, banks and customers. They also thank them for the trust reposed in the Management and wish to thank all employees for their commitment and contribution.
For and on behalf of the Board
Sanjiv Goenka
Kolkata Chairman
10th August, 2017 (DIN: 00074796)
Mar 31, 2015
Dear Members,
The Directors of your Company have pleasure in presenting their fifty -
fourth Annual Report on business and operations of the Company and the
audited accounts for the financial year ended 31st March, 2015.
FINANCIAL HIGHLIGHTS
(Rs. in crore)
Year ended 31.03.15 31.03.14
Total Revenue 2484.61 2297.97
PBDIT 210.21 104.48
Less: Finance and hedging cost 138.35 138.65
PBDT 71.86 (34.17)
Less: Depreciation 57.53 53.74
PBT 14.33 (87.91)
Tax Expense 1.69 (131)
PAT 12.64 (86.60)
Balance brought forward 168.97 255.57
Less: Adjustment consequent to 0.72 ---
revision of useful life of certain
assets pursuant to Schedule II of the
Companies Act, 2013
Balance brought forward 168.25 255.57
(net of adjustment)
Profit available for Appropriation 180.89 168.97
Proposed Dividend 3.45 ---
Tax on aforesaid Dividend 0.70 ---
Balance carried forward to 176.74 168.97
Balance Sheet
DIVIDEND
For approval of members at the ensuing Annual General Meeting your
Directors are happy to recommend a dividend of 10 %
i.e., @ Re. 1/- per share which will absorb Rs. 3.45 crore. The tax on
aforesaid dividend, to be borne by the Company, will be Rs. 0.70 crore.
INDUSTRY STRUCTURE & DEVELOPMENT
Led by the recovery in US market, the global automobile industry in
FY15 grew by 3 %. Passenger car output in Western Europe was up by 4%
largely driven by a rise in passenger car output in Germany and Spain.
Sales of heavy truck in Western Europe declined by 6%, while light
vehicle sales declined by 10%. Growth in vehicle sales in the world's
largest car market, China, halved to 7% as the country's economic
expansion slowed. Indian automobile sales grew by an estimated 9%,
driven by export sales 17% and domestic sales 8%. The estimated
European passenger car and light truck tyre market increased marginally
by around 1% in the replacement market and by 3%
in the OEM market with depressed demand in Russia. The US truck tyre
market was up by 9-10%. In the Indian Tyre market, domestic demand grew
by 6-7% driven by a 5-6% rise in the OEM segment and 6-7% in the
replacement segment.
Estimated global annual demand in FY15 for carbon black was 12 million
tons, against estimated capacity of 15 million tons. In India, total
production capacity was around 1 million tons p.a. while FY15
consumption was approx. 700 KT leading to lower capacity utilization.
The national carbon black industry continues to reel under pressure by
unabated dumping of the product by China and South Korea. Estimated FY
15 import of carbon black to India was 105 KT. Import from China and
South Korea accounts for 84% of the total import. Due to dumping,
procurement of carbon black from national sources was affected and
indian carbon black companies had to resort to production cuts during
the year.
PERFORMANCE Carbon Black
Your Company's operating profit during FY15 was Rs. 210 crore, a
significant jump over Rs.105 crore achieved in the previous year. This
was mainly on account of improvement in operational efficiency. While
global carbon black demand rose by 4-5%, your company achieved better
growth on account of higher national market share and venturing out to
new segments in international markets. However, operating efficiency
and rise in market share was largely offset by the crash in crude
prices resulting in significant inventory write-down.
After a gap of two years, PBT and PAT for the year were in positive
trajectory at Rs.14.33 crore and Rs.12.64 crore respectively.
Power
Your Company's power segment revenue (excluding inter segment
revenue) was higher at Rs.69 crore vis-a-vis Rs.65 crore last year on
account of higher realization.
Manufacturing
Production during FY15 was 311,823 MT compared to 288,676 MT in the
previous year.
Capacity utilization is expected to improve further this year with
higher volume demand expected from the market and the rise in
consumption trend of the automobile sector. With the strategic location
of its four plants, your Company is well poised to service the demand
from various customers in India and overseas. The close vicinity of
seaports to a couple of plants should facilitate logistic costs within
India and abroad.
Research and Development
The Research and Development (R&D) units located at Durgapur, Kochi,
Palej and Mundra continued to receive recognition as in-house Research
and Development units from
the Department of Scientific and Industrial Research, Ministry of
Science and Technology.
During the year your Company successfully - i) developed new grades of
carbon black for domestic and international markets,
ii) improved product characteristics to meet more stringent customer
specifications, iii)continued recasting of Standard Operating
Procedures, iv) established state of the art rubber application
laboratory v) and modified reactor design operating conditions to
improve yield.
Environment, Health, Safety and Social Responsibility
The Company's commitment to preserve and enrich environment by
conducting all operations in an environment-friendly and safe manner
continues. We are continuing our initiatives to touch the lives of
communities in and around our manufacturing units by supporting
environmental and health care projects as also educational programs.
Every plant is focussed on driving safe workplace initiatives, which
resulted in achieving a no-fatal accident record. Regarding
environmental performance, we continued to strictly adhere to all
environmental conformances.
Human Resource Development
Focus on Human Resource Development gives an edge to every
international business in this era of global competition. We
endeavoured to achieve this through promoting a continuous culture of
coaching, undertaking various Learning and Development initiatives
aimed at providing support to employee building capabilities and
helping people to succeed.
One of the initiatives, Nirantar Gyan Vardhan (Continuous Knowledge
Enhancement) is focussed on skill development to make your company a
great learning organization. This initiative also enhanced both
theoretical and operational domain/industry knowledge. Your Company
recognizes that in today's fast-paced, competitive business
environment, continuous learning is a key to success.
During the year, your Company provided various training programs for
its employees across the organization.
The Company also took strong steps in its transformation journey, aimed
at driving a cultural change and embracing strategic imperatives.
A Young Executive Board (YEB), an aspirational forum for young
managers, supports the Management Committee in strategic issues
pertaining to the Company's vision and growth.
Some of the significant progress made during FY15 are :
- Implemented process for employee goal setting, aimed at better
alignment of Organizational and Individual performance and rewards.
- Implemented effective Talent Management Process.
- Automated two more processes in "HR Connect - Employee Portal".
- Industrial relation scenario at all the units continued to remain
healthy and forward looking.
Internal Control System and Adequacy
Your Company maintains adequate internal control systems in all areas
of operation. Services of internal and external auditors are utilized
from time to time, as also in-house expertise and resources. The
Company continuously upgrade these systems in line with the best
available practices.
These reports and deviations are regularly discussed with Management
Committee Members and actions taken whenever necessary.
An independent Audit Committee of the Board reviews the adequacy of
internal control.
Opportunities and Threats
Your Company is always on the lookout for opportunities that may arise
while keeping tab on the likely threats to its business.
Opportunities
- In India, major tyre companies have expansion plans that are
currently underway and may go on stream during next 2 to 3 years.
Carbon black demand in the domestic market in the coming years is
expected to rise.
- Thrust on infrastructure, mining sector development and the Make in
India initiative is expected to provide a major boost to Automobile &
Tyre Industries.
- Moderation in inflation and likely reduction in interest rate, may
revive the automobile sector and raise the demand for tyres / carbon
black from the OEM segment.
Threats
- Import of carbon black from China and South Korea continues to be a
threat for the national carbon black industry.
- Volatility in raw material price which is linked with the global
crude price movement.
- Volatility in Rupee exchange rate vis-a-vis US$.
- Inadequate infrastructure at ports, causing detention of vessels
and higher freight cost.
Segment wise Performance
The performance of carbon black and power segments have been covered in
this Report earlier.
Risks and Concern
Major raw material for your Company viz., carbon black feedstock (CBFS)
is a residue from the distillation process and is subject to daily
volatility, whereas the selling price of finished carbon black is
revised on a monthly/quarterly basis. In the event the Company is
unable to pass on the increase in CBFS cost, it may have an adverse
impact on profit.
In view of long transit time in import of CBFS, a sudden crash
in the CBFS price may lead to loss of profit. Increase in import or
drop in demand for carbon black may also have significant impact on the
Company's bottom-line.
The Company is also exposed to risks from fluctuation of Indian Rupee
vis-a-vis other currencies, interest rate, realisation for power and
regulations relating to environment.
Major Expansion Plans
Projects are proceeding at a pace considered appropriate in the
prevailing economic situation, global scenario and the Company's
business strategy.
Subsidiary Companies
In accordance with the provisions of Section 129(3) of the Companies
Act, 2013, the Company has prepared a Consolidated Financial Statement
of the Company and of all the subsidiaries namely, Phillips Carbon
Black Cyprus Holding Limited, PCBL Netherlands Holdings B.V, Phillips
Carbon Black Vietnam Joint Stock Company and Goodluck Dealcom Private
Limited, in the form and manner as that of its own, duly audited by
M/s. Price Waterhouse, the auditors, in compliance with the applicable
accounting standards and the listing agreement with the Stock
Exchanges. The Consolidated Financial Statement for the year 2014-15
form a part of the Annual Report and Accounts and shall be laid before
the Annual General Meeting while laying its financial statements under
sub-section (2) of the said section. A report on the performance and
the financial position of the Subsidiary Companies in form AOC-1, forms
a part of the Consolidated Financial Statement.
The Company does not have any material subsidiary in the immediately
preceding accounting year. However, as per revised Clause 49 of the
Listing Agreement, SEBI has made it mandatory for all listed companies
to formulate a policy for determining 'material' subsidiaries.
Accordingly, a policy on 'material' subsidiaries was formulated by
the Audit Committee of the Board of Directors and the same is also
posted on the website of the Company and may be accessed at the link
http://pcblltd.com/investorrelations/investorrelations.php .
FUTURE OUTLOOK
Carbon Black
Demand for carbon black in India is expected to grow @ 6-7% during the
next couple of years and is likely to receive boost when new capacity
for tyre manufacturing hits the market. Your Company is well poised to
cater to higher demand as and when such need arises in the national
market.
Overseas demand for carbon black is expected to grow @4-4.5%. Your
Company has established offices and logistics network overseas to widen
its presence and reduce the delivery period in the international
market. This will continue to be a major thrust area for your Company
in the coming years.
Steps in Manufacturing and Procurement
Your Company continues to focus on various initiatives to
improve operational efficiencies like improving yield, exploring new
geographies for feedstock sourcing as well as investing in technical
capabilities for developing new grades particularly for non-rubber
applications.
Share Capital
The paid up Equity Share Capital as on 31st March, 2015 was Rs. 34.46
crore. During the year under review, the Company has not issued shares
with differential voting rights, neither granted stock options nor
sweat equity. As on 31 st March, 2015, none of the Directors of the
Company hold shares or convertible instruments of the Company.
Conservation Of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
As required under provisions of Section 134 of the Companies Act, 2013
and read with Rule 8(3) of the Companies (Accounts) Rules, 2014,
details relating to Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo are given in the 'Annexure -
B', which is annexed hereto and forms part of the Board's Report.
Public Deposits
The Company does not have any Public Deposit Scheme and has repaid all
Public Deposits that matured and were claimed by the depositors under
the earlier Public Deposit Schemes. Matured unclaimed deposits
amounted to Rs. 45,000/- have been transferred to Investor Education
and Protection Fund during the year and there is no outstanding balance
as on 31st March, 2015.
Details of significant and material orders passed by the Regulators,
Courts and Tribunals
No significant and material order has been passed by the regulators,
courts, tribunals impacting the going concern status and company's
operations in future.
Particulars of Loans, Guarantees and Investments
Details of loans, guarantees and investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the financial statement.
Audit Committee
The Audit Committee of the Board of Directors of the Company comprises
Mr. K S B Sanyal as Chairman and Mr. C R Paul, Mr. O P Malhotra, Dr.
Ram S Tarneja, Mr. Paras K Chowdhary as members. The Company Secretary
is the Secretary of the Committee. The Managing Director and Chief
Financial Officer are permanent invitees to the meeting. The details of
all related party transactions, if any are placed before the Audit
Committee. During the year there was no instance where the Board had
not accepted the recommendations of the Audit Committee.
The Audit Committee has also been delegated the responsibility of
monitoring and reviewing risk management assessment and minimization
procedures, implementing and monitoring the risk management plan and
identifying, reviewing and mitigating all elements of risks which the
Company may be exposed to.
The details of terms of reference of the Audit Committee, number and
dates of meetings held, attendance of the Directors and remuneration
paid to them are given separately in the attached Corporate Governance
Report.
Stakeholders Relationship Committee
A Stakeholders Relationship Committee was constituted with Mr. C R Paul
as Chairman and Mr. K S B Sanyal as Member of the Committee. The
Company Secretary act as the Secretary to this Committee. The Committee
has delegated the responsibility for share transfers and other routine
share maintenance work to the Company Secretary and to M/s. Link Intime
India Pvt. Ltd., the Registrar and Share Transfer Agent of the Company.
All requests for dematerialization and rematerialisation of shares,
transfer or transmission of shares and other share maintenance matters
are completed within 10 days of receipt of valid and complete
documents. Minutes of the Committee meetings are circulated to all
Directors and discussed at the Board meetings. The details of the
member and dates of meetings of this Committee which were held during
the year ended 31st March, 2015, attendance of the Directors and
remuneration paid to them are given separately in the attached
Corporate Governance Report.
Nomination and Remuneration Committee
A Nomination and Remuneration Committee was constituted with Mr. K S B
Sanyal as Chairman, Mr. C R Paul and Mr. O P Malhotra as Members of the
Committee. The Company Secretary acts as the Secretary of this
Committee.
The details of terms of reference of the Nomination and Remuneration
Committee, number and dates of meetings held, attendance of the
Directors and remuneration paid to them are given separately in the
attached Corporate Governance Report.
Corporate Social Responsibility Committee
A Corporate Social Responsibility Committee was constituted with Mr. K
S B Sanyal as Chairman, Mr. Kaushik Roy and Mr. Shashwat Goenka as
Members of the Committee.
The terms of reference of the Corporate Social Responsibility
Committee, number and the date of the meeting held, attendance of the
Directors and remuneration paid to them are given separately in the
attached Corporate Governance Report.
The detail of the CSR Policy is also posted on the website of the
Company and may be accessed at the link
http://pcblltd.com/investorrelations/investorrelations.php .
Pursuant to the requirement under Section 135 of the Companies Act,
2013 and Rules made thereunder, a Report on CSR activities in the
prescribed format is given in 'Annexure - C', which is annexed
hereto and forms part of the Board's Report.
Vigil Mechanism /Whistle Blower Policy
In compliance with provisions of Section 177(9) of the Companies Act,
2013 and Clause 49 of the Listing Agreement, the Company
has framed a Whistle Blower Policy / Vigil Mechanism to report concerns
about the Company's working or about any violation of its policies. The
details of the Vigil Mechanism/ Whistle Blower Policy is also posted on
the website of the Company and may be accessed at the link
http://pcblltd.com/investorrelations/ investorrelations.php .
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination and
Remuneration and other Committees. The manner in which the evaluation
has been carried out has been explained in the Corporate Governance
Report.
Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The extract of Remuneration
Policy is stated in the Corporate Governance Report.
Related Party Transactions
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. Hence, the provisions of Section 188 of the
Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2
is not required. Further, there are no materially significant Related
Party Transactions during the year under review made by the Company
with Promoters, Directors, Key Managerial Personnel or other designated
persons.
All Related Party Transactions are placed before the Audit Committee
for approval.
The policy on Related Party Transactions as approved by the Board is
uploaded on the website of the Company and may be accessed at the link
http://pcblltd.com/investorrelations/ investorrelations.php .
Risk Management
Risk Management is the process of identification, assessment, and
prioritization of risks followed by coordinated efforts to minimize,
monitor and mitigate/control the probability and/or impact of
unfortunate events or to maximize the realization of opportunities. The
Company has laid a comprehensive Risk Assessment and Minimization
Procedure, which is reviewed by the Audit committee and approved by the
Board from time to time. These procedures are reviewed to ensure that
executive management controls risk through means of a properly defined
framework.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form
MGT - 9 as required under Section 92 of the Companies
Act, 2013, is marked as 'Annexure - A', which is annexed hereto and
forms a part of the Boards' Report.
Particulars of Employees
As required under provisions of the Companies Act, 2013 and Rule 5(2)
and 5(3) of the Companies(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, particulars of the employees concerned forms a
part of the Board's Report. Having regard to the provisions of
Section 136 of the Companies Act, 2013, the Annual Report excluding the
aforesaid information is being sent to the members of the Company. Any
member interested in obtaining such particulars may write to the
Company Secretary of the Company.
Details relating to Remuneration of Directors, Key Managerial Personnel
and employees
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is marked as 'Annexure - D', which is annexed hereto
and forms a part of the Board's Report.
Corporate Governance
Under Clause 49 of the Listing Agreement with the Stock Exchanges, a
section on Corporate Governance together with a certificate from the
Company's Auditors confirming compliance is set out in the Annexure
forming part of this Annual Report.
Number of meetings of Board of Directors
The details of the number of meetings of the Board of Directors held
during the financial year 2014-15 forms a part of the Corporate
Governance Report.
Directors' Responsibility Statement
Pursuant to Section 134(3) (c) of the Companies Act, 2013, the
Directors to the best of their knowledge and belief confirm that:
i) in the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards have been
followed;
ii) appropriate accounting policies have been selected and applied
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 financial year and of the profit and loss of
the Company for the period;
iii) proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis;
v) Internal financial controls laid down by the Directors have been
followed by the Company and such internal financial controls are
adequate and were operating effectively.
vi) proper systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
Declaration by Independent Directors
Mr. C R Paul, Mr O P Malhotra, Dr. Ram S Tarneja, Mr. K S B Sanyal, Mr.
Pradip Roy and Mrs. Kusum Dadoo, are Independent Directors on the Board
of the Company. The Company has received declarations from all the
Independent Directors of the Company confirming that they meet the
criteria of Independence as prescribed both under the Companies Act,
2013 and Clause 49 of the Listing Agreement.
Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the rules framed thereunder, M/s. Price Waterhouse (Firm
Registration No. 301112E), Chartered Accountants, were appointed as
Statutory Auditors of the Company from the conclusion of the 53rd
Annual General Meeting (AGM) of the Company held on 30th July, 2014
till the conclusion of 56th AGM to be held in the year 2017, subject to
ratification of their appointment at every AGM. Accordingly, a
Resolution seeking Members ratification for their appointment is
included at item no. 4 of the Notice convening the Annual General
Meeting.
Cost Audit
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost
Audit records maintained by the Company relating to manufacture of
Carbon Black and generation and transmission of electricity at the
plants located at Durgapur, Cochin, Palej and Mundra, of the Company is
required to be audited. Your Directors had, on the recommendation of
the Audit Committee, appointed Messrs Shome & Banerjee, to audit the
cost accounts of the Company for the financial year 2015-2016 on a
remuneration of Rs. 3,50,000/- (Rupees three lacs fifty thousand only).
As required under the Companies Act, 2013, the remuneration payable to
the Cost Auditors is required to be placed before the members in a
Annual General Meeting for their ratification. Accordingly, a
Resolution seeking Members ratification for the remuneration payable to
Messrs Shome & Banerjee, Cost Auditors is included at item no. 8 of the
Notice convening the Annual General Meeting.
The Company submits its Cost Audit Report with the Ministry of
Corporate Affairs within the stipulated time period.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Anjan Kumar Roy &
Co., Company Secretaries (Membership No. FCS 5684) to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report for the
Financial Year ended 31st March, 2015 is annexed herewith and marked as
'Annexure - E'.
Directors
Mr. Altaf Jiwani, who was a Whole Time Director and Chief Financial
Officer of the Company, resigned from the services of the Company at
the close of the business on 30th January, 2015. The Board has placed
on record its appreciation for the invaluable support and guidance
received from Mr. Altaf Jiwani during his association with the Company.
Mr. Shashwat Goenka, was appointed by the Board of Directors at its
meeting held on 30th July, 2014 as an Additional Director of the
Company with effect from 1st September, 2014. Mr. Shashwat Goenka
holds office as an Additional Director of the Company upto the date of
the ensuing Annual General Meeting. The Company has received a notice
pursuant to Section 160 of the Companies Act, 2013 along with
prescribed deposit from a member of the Company signifying his
intention to propose the candidature of Mr. Shashwat Goenka for the
office of the Director of the Company. Details of the proposal for
appointment of Mr. Shashwat Goenka is mentioned in the Explanatory
Statement under Section 102 of the Companies Act, 2013 of the Notice of
the 54th Annual General Meeting.
The Companies Act, 2013 and the revised Clause 49 of the Listing
Agreement require that a Woman Director should be a member of the Board
of Directors. Mrs. Kusum Dadoo was appointed by the Board of Directors
at its meeting held on 22nd January, 2015 as an Additional Director of
the Company with effect from 1st April, 2015. Mrs. Kusum Dadoo holds
office as an Additional Director of the Company up to the date of the
ensuing Annual General Meeting. The Company has received a notice
pursuant to Section 160 of the Companies Act, 2013 along with
prescribed deposit from a member of the Company signifying his
intention to propose the candidature of Mrs. Kusum Dadoo for the office
of a Director of the Company. Details of the proposal for appointment
of Mrs. Kusum Dadoo is mentioned in the Explanatory Statement under
Section 102 of the Companies Act, 2013 of the Notice of the 54th Annual
General Meeting.
Mr. Paras K Chowdhary, retires by rotation at the forthcoming Annual
General Meeting and being eligible offers himself for re-appointment.
Key Managerial Personnel
The following persons were formally appointed as Key Managerial
Personnel of the Company effective from 1st April, 2014 in compliance
with the provisions of Section 203 of the Companies Act, 2013:
a) Mr. Kaushik Roy, Managing Director.
b) Mr. Kaushik Mukherjee, Company Secretary.
c) Mr. Altaf Jiwani, Chief Financial Officer (till 30th January, 2015).
d) Mr. Raj Kumar Gupta, Chief Financial Officer (w.e.f 1st February,
2015).
Mr. Altaf Jiwani having resigned at the close of business on 30th
January, 2015, Mr. Raj Kumar Gupta was appointed as the Chief Financial
Officer and Key Managerial Personnel effective from 1st February, 2015.
Remuneration and other details of the Key Managerial Personnel for the
year ended 31st March, 2015 are mentioned in the extract of the Annual
Return, which is attached as 'Annexure - A' and forms a part of the
Board's Report.
Forward - looking Statement
This Report contains forward-looking statements that involve risks and
uncertainties. Actual results, performance or achievements could differ
materially from those expressed or implied in such forward-looking
statements. Significant factors that could make a difference to the
Company's operations include domestic and international economic
conditions affecting demand-supply and price conditions, foreign
exchange fluctuations, changes in government regulations, tax regimes
and other statutes.
Acknowledgement
Your Directors record their deep appreciation for the encouragement,
assistance and co-operation received from members, government
authorities, banks and customers. They also thank them for the trust
reposed in the Management and wish to thank all employees for their
commitment and contribution.
For and on behalf of the Board
Sanjiv Goenka
Kolkata Chairman
6th May, 2015 (DIN: 00074796)
Mar 31, 2013
The Directors have pleasure in presenting the Fifty-second Report and
Accounts of Phillips Carbon Black Limited for the financial year ended
31st March, 2013.
FINANCIAL HIGHLIGHTS
(Rs. in crore)
Year ended 31.03.13 31.03.12
Revenue -
- Carbon Black 2192.14 2096.97
- Power 88.58 83.69
- Other Income 9.27 10.44
- Other Operating Revenues 4.19 6.12
Total Revenue 2294.18 2197.22
PBDIT 74.97 210.29
Less: Interest 64.22 58.28
PBDT 10.75 152.01
Less: Depreciation 50.79 48.59
PBT (40.04) 103.42
Provision for Taxation (19.39) 16.30
(Net of deferred tax)
PAT (20.65) 87.12
Balance brought forward 278.23 215.85
Profit available for Appropriation 257.58 302.97
Proposed Dividend 1.72 13.79
Tax on aforesaid Dividend 0.29 2.24
Transfer to General Reserve -- 8.71
Balance carried forward to 255.57 278.23
Balance Sheet
DIVIDEND
Your Directors recommend for approval of Members at the ensuing Annual
General Meeting, a dividend of 5% i.e. @ Re. 0.50/- per share out of
past profits, in view of the absence of profit during the year under
review, which will absorb Rs. 1.72 crore. The tax on aforesaid dividend
to be borne by the Company will be Rs. 0.29 crore.
INDUSTRY STRUCTURE & DEVELOPMENT
While global demand for carbon black remained stable during 2012 at
11.3 million MT, global capacity stood as 14.8 million MT - capacity
utilization was 76%.
In India, consumption of carbon black increased 3.9% from 6,70,000 MT
in 2011 to 6,95,000 MT in 2012. Total production during 2012 was
6,76,000 MT. Total capacity of the Indian carbon black industry stood
at 10,27,000 MT during 2012, with a capacity utilization of 66%.
The domestic carbon black industry was impacted by a
slowdown within the automobile sector as well as by increased dumping
of carbon black into India by China and other countries. Total imports
of carbon black in India rose to 1,28,000 MT during FY13 from 1,17,000
MT in the earlier year, the major chunk of imports was from China, at
88,000 MT. As a result, domestic sales of carbon black were impacted
and all carbon black companies had to undertake production cuts during
the second half of the year.
Your Company completed expansion of its 8 MW co-generation power plant
at Mundra within the scheduled time and expects to commission shortly
the second line of 50,000 MT capacity at Kochi.
PERFORMANCE
Carbon Black
Your Company, made operating profit (PBDIT) of Rs. 74.97 crore in FY 13
vis-Ã -vis Rs. 210.29 crore in the previous year. Amongst the major
reasons for this swing in operating profit are --
1. Drop in domestic contribution per MT due to dumping by China,
coupled with the inability to pass on the cost increase.
2. Drop in export volume and contribution due to slowdown in Europe,
as well as dumping by China in South East Asia.
Power
Revenue from sale of power was higher in FY13 - Rs. 88.58 crore
vis-Ã -vis Rs. 83.69 crore in FY12.The Company''s overall power
generation capacity rose to 76 MW with the commissioning of the 8 MW
co-generation power plant at Mundra.
Manufacturing
Your Company improved its global ranking to No. 6 (based on year end
capacity) during the year. The strategic location of its four plants in
different parts of India should facilitate your Company and optimize
logistics costs within India and outside.
Research and Development
All the R & D units located at Durgapur, Kochi, Palej and Mundra
continue to receive recognition as in-house Research and Development
units from the Department of Scientific and Industrial Research,
Ministry of Science and Technology.
Your Company successfully - i) developed more new grades for domestic
and international markets, ii) improved product characteristics to meet
more stringent customer specifications, iii) continued recasting of
Standard Operating Procedures iv) State of the Art Rubber Application
Laboratory established, v) Reactor design and operating conditions
suitably modified to improve yield.
Environment, Health, Safety and Social Responsibility
PCBL is committed to preserve and enrich environment by conducting all
its operations in an environment friendly and safe manner. The CSR
initiatives are also focused to touch the lives of the communities in
and around our manufacturing units by supporting environmental, health
care and educational programmes.
The CSR team at Kochi has completed five years in providing evening
tuition classes to below poverty line children. The CSR team at
Durgapur in association with Rotary club of Durgapur has started a
computer literacy program for housewives and students of nearby
communities.
The Kochi team has bagged awards in safety and CSR area: State Safety
Award for 2012 in the Large Factories category in the
Chemical/Petro-Chemical Sector and Global CSR Award. The Palej unit has
received Greentech Environment award in Gold category.
Human Resource Development
Focus on Human Resource Development continues to give an edge to the
business in this era of global competition. We are marking our presence
across geographies by putting teams at USA, Europe, South East Asia and
Japan.
We continue with our efforts to enhance the transparency and
accessibility of all HR processes to our people across locations by
adding new features like online suggestion system, online access to PF
account and online health insurance system on the employee portal.
These efforts have been recognized by Greentech Foundation who has
awarded PCBL its Greentech HR Award 2013 for "Technology Excellence in
HRÂ in Platinum Category.
Industrial relation scenario at all the units has remained healthy and
forward looking. The Palej Team has received prestigious Greentech HR
Award 2013 for "Best IR Strategy in Silver Category.
Internal Control System and Adequacy
Your Company has adequate internal control systems in every area of
operation. Services of internal and external auditors are utilized from
time to time, as also its in-house expertise and resources. The Company
continuously upgrades these systems in line with the best available
material practices.
These reports and deviations are regularly discussed with members of
Management Committee and actions taken whenever necessary.
An independent Audit Committee of the Board reviews the adequacy of
Internal Control.
Opportunities and Threats
Your Company is always on the lookout for opportunities that exist in
its business.
Opportunities
- Major tyre companies had expanded their capacity and capacity
utilization is expected to improve further during FY 14/15.
- Government''s thrust on development of infrastructure continues. While
the short term growth outlook in India suffered a setback during FY13,
the fundamentals of the economy remain strong. With the RBI expected to
step in to lower interest rates during the coming year, investments are
expected to pick up and the growth story would come back on track.
- Power continues to be an attractive segment for your company for
improving profitability.
Threats
- Imports of carbon black from China continue to be a major threat for
the entire domestic industry.
- Simulltaneous expansion of carbon black manufacturing capacities by
all domestic competitors.
- Inadequate infrastructure at ports, causing detention of vessels and
higher freight cost.
- Continuing high inflation which may put a dampner on the purchasing
power of customers.
- Fluctuation of Rupee and increase in financing cost.
Segment wise Performance
The Performance of Carbon Black and Power segment has been covered in
this Report earlier.
Risks and Concern
The main raw material for the Company - Carbon Black Feedstock (CBFS)
is residual oil from distillation process of crude and is subject to
frequent volatility, whereas the price of finished carbon black is
revised every quarter. In the event the Company is unable to timely
pass on increased CBFS cost, it may have adverse impact on the
Company''s profit. Increase in carbon black import or drop in carbon
black demand may have serious implications on the activity level of the
carbon black segment and consequently the availability of lean gas for
the power segment.
The Company is also exposed to risks from fluctuation of Indian Rupee
vis-Ã -vis other currencies, interest rate, realisation for surplus
power and regulations relating to environment.
Major Expansion Plans
Your Company expects to commission the 8 MW co-generation power plant
at its Palej facility, which will take its total power generation
capacity from 76 MW to 84 MW.
Your company is also planning to set up a greenfield carbon black plant
of capacity 140,000 MT at Chennai along with a 28 MW power plant, and
is in the process of obtaining all approvals for the same. A Memorandum
of Understanding (MOU) for the same has been signed with the Tamilnadu
Government.
The company''s global footprint plan is in place with the greenfield
plant at Vietnam. The project is proceeding at a pace considered
appropriate in view of the current global economic scenario and the
Company''s business strategy.
The Company''s new carbo-chemical business will be in place with setting
up of a new coal tar distillation plant in Orissa with capacity of
1,50,000 mtpa coal tar processing and 50,000 mtpa soft pitch
processing. The plant is expected to be commissioned within 12 months
from the date of receipt of environment clearance.
Subsidiaries
In accordance with the general exemption granted by Ministry of
Corporate Affairs under section 212(8) of the Companies Act, 1956,
(''the Act'') the accounts of the subsidiaries namely, Phillips Carbon
Black Cyprus Holdings Limited, PCBL Netherlands Holdings B.V., Phillips
Carbon Black Vietnam Joint Stock Company and Goodluck Dealcom Private
Limited for the year 2012-13 and the related detailed information will
be made available to the holding and subsidiary companies investors
seeking such information at any point of time. Hence, accounts of such
subsidiaries are not attached. Copies of the annual accounts of the
subsidiary companies will also be kept open for inspection by any
investor in the Registered Office of the Company and of the subsidiary
companies concerned. The Company shall furnish a hard copy of accounts
of subsidiaries to any shareholder on demand. The Company publishes
Consolidated Financial Statements of the Company and its subsidiaries
duly audited by Messrs Price Waterhouse, Kolkata, Auditors, prepared in
compliance with the applicable Accounting Standards and the Listing
Agreement with the Stock Exchanges. The Consolidated Financial
Statements for the year 2012-13 form part of the Annual Report and
Accounts.
FUTURE OUTLOOK
Carbon Black
Demand growth for carbon black continues to be robust with the global
demand expected to grow at a CAGR of 4.8 % from 2011 to 2015. Expansion
plans of all tyre manufacturers in India as well as a few global majors
are on track and are expected to be completed within FY14-FY15.
Domestic demand for carbon black is expected to grow at a CAGR of 6.6%
during FY 11 to FY 15. With the expansion plans as detailed in this
respect, your Company is well poised to meet the increasing demand in
the domestic market.
Overseas demand for carbon black is expected to grow further during
FY14. Your Company has made significant forays into overseas markets
such as Europe, South East Asia and US. The company will continue to
place emphasis
on exports during FY14 to mitigate any possible situation of excess
supply in domestic markets.
Power
Your Company''s initiative to create additional revenue from power is
likely to grow further in the coming years. With the commissioning of
8 MW CPP at Palej, the total installed capacity will reach 84 MW.
Steps in manufacturing and procurement
To remain competitive in the current challenges of economy and
industry, the Company has taken following steps in manufacturing and
procurement:
a. Improve yields.
b. Develop new sources for procurement of raw materials like CBFS and
CBO which are contributing by way of better yields and lower prices.
c. Strengthen marketing and technical functions.
d. Undertaken initiatives in manufacturing to reduce variability in
process.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required under
Section 217(1)(e) of the Companies Act, 1956 read with Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 is annexed. This forms an integral part of this Report.
Public Deposits
The Company does not have any Fixed Deposit Scheme and has repaid all
Fixed Deposits that matured and were claimed by the depositors under
the earlier Fixed Deposit Schemes. Matured unclaimed deposits as on
31st March, 2013 amounted to Rs. 45,000/- Apart from matured unclaimed
deposits, no amount is outstanding as on 31st March, 2013. Reminders
have been sent to depositors who have not claimed repayment of matured
deposits.
Particulars of Employees
The information as required in accordance with Section 217(2A) of the
Act read with the Companies (Particulars of Employees) Rules,1975, as
amended, is set out in an annexure to this Report. However, as per the
provisions of Section 219(1)(b)(iv) of the Act, the Report and the
Accounts are being sent to all the Shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such information may write to the Company Secretary at the
Registered Office of the Company. The said information is also
available for inspection at the Registered Office during working hours
up to the date of the Annual General Meeting.
Corporate Governance
Under Clause 49 of the Listing Agreement with the Stock Exchanges, a
section on Corporate Governance together with a certificate from the
Company''s Auditors confirming compliance is set out in the Annexure
forming part of this Annual Report.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
to the best of their knowledge and belief confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii) appropriate accounting policies have been selected and applied
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 financial year and of profit or loss of the
Company for the period;
iii) proper and sufficient care have been taken, for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
Auditors
The Auditors, Messrs Price Waterhouse, retire at the ensuing Annual
General Meeting and are eligible for re-appointment.
Cost Audit
The Central Government has approved the appointment of Messrs Shome &
Banerjee, Cost Accountants, for conducting cost audit for the financial
year ended 31st March, 2013.
Messrs Shome & Banerjee, Cost Accountants, have given their consent
along with their Certificate of Independence for conducting the audit
of the cost accounts for the financial year ending 31st March, 2014, if
appointed.
Cost Audit Report for the financial year ended 31st March, 2012 was
filed on 30th January, 2013.
Directors
Mr. C R Paul and Mr. Paras K Chowdhary, retire by rotation and being
eligible offer themselves for re-appointment.
Dr. R P Goenka, Chairman Emeritus, passed away on 14th April, 2013.
Forward - looking Statement
This Report contains forward-looking statements that involve risks and
uncertainties. Actual results, performance or achievements could differ
materially from those expressed or implied in such forward-looking
statements. Significant factors that could make a difference to the
Company''s operations include domestic and international economic
conditions affecting demand-supply and price conditions, foreign
exchange fluctuations, changes in government regulations, tax regimes
and other statutes.
Acknowledgement
Your Directors record their grateful appreciation for the
encouragement, assistance and co-operation received from members,
government authorities, banks and customers. They also thank them for
the trust reposed in the Management and wish to thank all employees for
their commitment and contributions.
For and on behalf of the Board
Kolkata Sanjiv Goenka
23rd May, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the Fifty first Report and
Accounts of Phillips Carbon Black Limited for the financial year ended
31st March, 2012.
FINANCIAL HIGHLIGHTS
(Rs. in crore)
Year ended 31.03.12 31.03.11
Revenue -
- Carbon Black 2,096.97 1,614.11
- Power 83.69 76.04
- Other Income 10.44 20.91
- Other Operating Revenues 6.12 5.57
Total Revenue 2,197.22 1,716.63
PBDIT 210.29 238.59
Less: Interest (net) 58.28 35.66
PBDT 152.01 202.93
Less: Depreciation 48.59 38.58
PBT 103.42 164.35
Provision for Taxation 16.30 48.07
PAT 87.12 116.28
Balance brought forward 215.85 133.41
Profit available for Appropriation 302.97 249.69
Proposed Dividend 13.79 16.61
Tax on aforesaid Dividend 2.24 2.69
Dividend including taxes - 2.89
on dividend paid on 4,964,376 shares to
Qualified Institutional Buyers allotted
during the year
Transfer to General Reserve 8.71 11.65
Balance carried forward to
Balance Sheet 278.23 215.85
DIVIDEND
For approval of Members at the ensuing Annual General Meeting, your
Directors recommend a dividend of 40% i.e, @ Rs. 4/- per share which
will absorb Rs.13.79 crore. The tax on aforesaid dividend, to be borne
by the Company, will be Rs. 2.24 crore.
INDUSTRY STRUCTURE & DEVELOPMENT
Global demand for carbon black rose by 5.8 % during 2011 from 10.2
million MT to 10.8 million MT. Global capacity for carbon black was
13.9 million MT and capacity utilization was 77% during 2011. The
demand growth was led by North America (9.0%), European Union (11.0%)
and Eastern Europe (14.7%), while Asia (excluding China) saw a modest
growth of 5.2% compared to last year YOY growth of 18%.
In India, the demand for carbon black during FY12 was 657,000 MT
vis-a-vis 641,000 MT in FY11, i.e., a growth of 2.5%. Total production
during FY12 was 694,000 MT, which is at the same level as FY11. The
total capacity of the Indian carbon black industry stood at 935,000 MT,
with capacity utilization of 74%.
The domestic carbon black industry was impacted by a slowdown within
the automobile sector as well as by the increasing dumping of carbon
black into India by China and other countries. Total imports of carbon
black in India rose to 117,000 MT during FY12 from 70,000 MT in the
earlier year, and the major chunk of mjogep was from China, at 83,000
MT. As a result of this, domestic sales of carbon black were impacted
and all carbon black companies resorted to production cuts during the
second half of the year.
Your Company completed expansion of carbon black plant of 50,000 MT at
Mundra and 10 MW Co-generation Power Plant at Kochi within the
scheduled time. Your Company also debottlenecked capacity at its
Durgapur facility by 11,000 MT and expects to shortly commission the
second line of 50,000 MT capacity at Kochi. With this the total
installed carbon black capacity of your Company will stand at 471,000
MT. PERFORMANCE Carbon Black
Your Company achieved profit before tax (PBT) of Rs. 103.42 crore in
FY12 and Operating Profit (PBDIT) of Rs. 210.29 crore. The profit is
lower compared to last year's PBT and PBDIT of Rs. 164.35 crore and Rs.
238.59 crore respectively.
Power
Revenue from sale of power was higher in FY12 Rs. 83.69 crore vis-a-vis
Rs. 76.04 crore during FY11. The Company's overall power generation
capacity rose to 68 MW with the commissioning of the 10 MW captive
power plant at Kochi.
Manufacturing
Your Company improved its global ranking to No. 7 during the year. The
strategic location of its four plants in different parts of India
should facilitate your Company to optimize logistic costs within India
and outside.
Research and Development
All the 4 R&D units located at Durgapur, Kochi, Palej and Mundra
continue to receive recognition as in-house Research and Development
units from the Department of Scientific and Industrial Research,
Ministry of Science and Technology.
Special carbon black grades for non rubber applications continue to be
accepted well by customers in the domestic market, as their performance
is comparable to international standard. While the contribution of
these grades in the overall top line of the Company was modest during
FY12, the Company has chalked out plans to raise sales from this
segment in the coming years.
Environment, Health, Safety and Social Responsibility
During the year, your Company took various initiatives to achieve
greater heights in Environment, Health and Safety. New policies have
been adopted for greener surroundings. The Company continues to work
closely with India Trees Foundation, while strictly adhering to
Environment, Health and Safety norms at all its manufacturing
locations.
Concerted efforts in corporate social responsibility (CSR) continued
during FY12 for e.g., eye check up camps, support in cataract
surgeries, rural area development, free distribution of educational
kits to Below Poverty Line (BPL) students. The CSR Team at Kochi
completed the third & fourth batch of Computer Literacy Programme
offered by IGNOU for house-wives from the local community. Our CSR
Volunteers also provide regular educational support e.g. tuition to
class VII and IX students from the local community. The CSR Team at
Durgapur conducted computer literacy course for the underprivileged
jointly with Rotary Club of Durgapur.
Human Resource Development
Human Resource Development continues to remain a focus area for
sustainable growth of your company. A number of special initiatives
were taken to facilitate the growth of all employees at all locations.
To enhance the effectiveness of Performance Management System the
entire PMS has been further redesigned to capture the entire process
through on line e-system.
Employee engagement score has also improved substantially indicating
higher retention of talent and commitment to excel in all aspects of
your company's operations.
The Company's manpower requirements for the greenfield project at
Vietnam and all units across India have been carefully planned.
Industrial relations scenario at all the units continue to remain
healthy and forward looking.
Internal Control System and Adequacy Your Company has adequate internal
control systems in every area of operation. Services of internal and
external auditors are utilized from time to time as also its in-house
expertise and resources. The Company continuously upgrades these
systems in line with the best available material practices. These
reports and variance analysis are regularly discussed with members of
Management Committee and actions taken whenever necessary.
An independent Audit Committee of the Board reviews the adequacy of
Internal Control.
Opportunities and Threats
Your Company is always on the lookout for opportunities that exist in
its business.
Opportunities
- Expansion plans of all major tyre companies in India are on track and
their plants are expected to come up during FY13 - FY15. JK Tyres
commissioned its new plant during the year at Chennai, Tamil Nadu.
- Government's thrust on development of infrastructure continues. While
the short term growth outlook in India suffered a setback during FY12,
the fundamentals of the economy remain strong. With the RBI expected to
step in to lower interest rates during the coming year, investments are
expected to pick up and the growth story would come back on track.
- Power continues to be an attractive segment for your company for
improving profitability.
Threats
- Imports of carbon black from China continues to be a major threat for
the entire domestic industry.
- Expansion of carbon black manufacturing capacities simultaneously by
all domestic competitors.
- Withdrawal of Anti Dumping Duty on carbon black.
- Inadequate infrastructure at ports, causing detention of vessels and
higher freight cost.
- Continuing high inflation which may put a dampner on the purchasing
power of customers.
- Depreciation of Rupee, increase in financing cost.
Segmentwise Performance
The Performance of Carbon Black and Power segment has been covered in
this Report earlier.
Risks and Concern
The main raw material for the Company - Carbon Black Feedstock (CBFS)
is residual oil from distillation process of crude and is subject to
frequent volatility, whereas the price of finished carbon black is
revised every quarter. In the event the Company is unable to timely
pass on increased CBFS cost, it may have adverse impact on the
Company's profit. Increase in carbon black import or drop in carbon
black demand may have serious implications on the activity level of the
carbon black segment and consequently the availability of lean gas for
the power segment.
The Company is also exposed to risks from fluctuation of Indian Rupee
vis-a-vis other currencies, interest rate, realisation for surplus
power and regulations relating to environment.
Major Expansion Plans
Your Company expects to shortly commission the 8 MW capacity captive
power plant at its Mundra facility, which will take its total power
generation capacity from 68 MW to 76 MW.
Your Company is also planning to set up a greenfield carbon black plant
of capacity 140,000 MT at Chennai along with a 25 MW power plant, and
is in process of obtaining all approvals for the same. Memorandum of
Understanding (MoU) for the same has been signed with the Tamilnadu
Government.
The Company's global footprint plan is in place with the greenfield
plant at Vietnam expected to be commissioned in FY14.
The Company's new carbo-chemical business will start by the end of the
coming year with setting up of a new coal tar distillation plant in
Orissa with capacity of 1,50,000 mtpa coal tar processing and 50,000
mtpa soft pitch processing. The plant is expected to be commissioned in
FY14.
Qualified Institutional Placement (QIP) and Preferential Warrants issue
Pursuant to SEBI Guidelines and necessary approval of the members,
12,50,000 convertible warrants of Rs. 196/- each which were allotted on
30th April, 2010, were converted into 12,50,000 Equity Shares of Rs.
10/- each at a premium of Rs. 186/- per share fully paid up on 28th
October, 2011. Subsidiaries
In accordance with the general exemption granted by Ministry of
Corporate Affairs under Section 212(8) of the Companies Act, 1956,
('the Act') the accounts of the subsidiaries namely, Phillips Carbon
Black Cyprus Holdings Limited, PCBL Netherlands Holdings B.V, Phillips
Carbon Black Vietnam Joint Stock Company and Goodluck Dealcom Private
Limited for the year 2011-12 and the related detailed information will
be made available to the holding and subsidiary companies investors
seeking such information at any point of time and are not attached.
Copies of the annual accounts of the subsidiary companies will also be
kept open for inspection by any investor in the Registered Office of
the Company and of the subsidiary companies concerned. The Company
shall furnish a hard copy of accounts of subsidiaries to any
shareholder on demand. The Company publishes Consolidated Financial
Statements of the Company and its subsidiaries duly audited by Messrs
Price Waterhouse, Kolkata, Auditors, prepared in compliance with the
applicable Accounting Standards and the Listing Agreement with the
Stock Exchanges.
The Consolidated Financial Statements for the year 2011-12 form part of
the Annual Report and Accounts.
FUTURE OUTLOOK Carbon Black
Demand growth for carbon black continues to be robust with the global
demand expected to grow at a CAGR of 4.6% from 2010 to 2015. Expansion
plans of all tyre manufacturers in India as well as a few global majors
are on track and are expected to be completed within FY13-FY14.
Domestic demand for carbon black is expected to grow @ 7-8% during
FY13. With the expansion plans as detailed in this respect, your
Company is well poised to meet the increasing demand in the domestic
market. Overseas demand for carbon black is expected to grow further
during FY13. Your Company has made significant forays into overseas
markets such as South East Asia and US. The Company will continue to
place emphasis on exports during FY13 to mitigate any possible
situation of excess supply in domestic markets. Power
Your Company's initiative to create additional revenue from power is
likely to grow further in the coming years, with the forthcoming
commissioning of 8 MW CPP at Mundra and further 8 MW planned at Palej,
the total installed capacity is expected to reach 84 MW.
Conservation Of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required under
Section 217(1)(e) of the Companies Act, 1956 read with Companies
(Disclosure of Particulars in the Report of the Board of Directors)
Rules, 1988 is annexed. This forms an integral part of this Report.
Public Deposits
The Company does not have any Fixed Deposit Scheme and has repaid all
Fixed Deposits that matured and were claimed by the depositors under
the earlier Fixed Deposit Schemes. Matured unclaimed deposits as on
31st March, 2012 amounted to Rs. 1.87 lakh. Apart from matured
unclaimed deposits, no amount is outstanding as on 31st March 2012.
Reminders have been sent to depositors who have not claimed repayment
of matured deposits.
Particulars of Employees
The information as required in accordance with Section 217(2A) of the
Act read with the Companies (Particulars of Employees) Rules,1975, as
amended, is set out in an annexure to this Report. However, as per the
provisions of Section 219(1)(b)(iv) of the Act, the Report and the
Accounts are being sent to all the Shareholders of the Company
excluding the aforesaid information. Any shareholder interested in
obtaining such information may write to the Company Secretary at the
Registered Office of the Company. The said information is also
available for inspection at the Registered Office during the working
hours up to the date of the Annual General Meeting.
Corporate Governance
Under Clause 49 of the Listing Agreement with the Stock Exchanges, a
section on Corporate Governance together with a certificate from the
Company's Auditors confirming compliance is set out in the Annexure
forming part of this Annual Report.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
to the best of their knowledge and belief confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed, and that there are no material
departures;
ii) appropriate accounting policies have been selected and applied
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 financial year and of profit or loss of the
Company for the period;
iii) proper and sufficient care have been taken, for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
Auditors
The Auditors, Messrs Price Waterhouse, retire at the ensuing Annual
General Meeting and are eligible for re-appointment. Cost Audit
The Central Government has approved the appointment of Messrs Shome &
Banerjee, Cost Accountants, for conducting cost audit for the financial
year ended 31st March, 2012. Messrs Shome & Banerjee, Cost
Accountants, have given their consent along with their Certificate of
Independence for conducting the audit of the cost accounts for the
financial year ending 31st March, 2013, if appointed.
Cost Audit Report for the financial year ended 31st March, 2011 was
filed on 26th September, 2011.
Directors
Mr. K. S. B. Sanyal and Mr. Sanjiv Goenka retire by rotation and being
eligible offer themselves for re-appointment. Forward - looking
Statement
This Report contains forward-looking statements that involve risks and
uncertainties. Actual results, performance or achievements could differ
materially from those expressed or implied in such forward-looking
statements. Significant factors that could make a difference to the
Company's operations include domestic and international economic
conditions affecting demand- supply and price conditions, foreign
exchange fluctuations, changes in government regulations, tax regimes
and other statutes.
Acknowledgement
Your Directors record their grateful appreciation for the
encouragement, assistance and co-operation received from members,
government authorities, banks and customers. They also thank them for
the trust reposed in the Management and wish to thank all employees for
their eager commitment and contributions.
For and on behalf of the Board
Kolkata Sanjiv Goenka
29th May, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the Fiftieth Report and
Accounts of Phillips Carbon Black limited for the financial year ended
31st March, 2011.
FINANCIAl HIGHlIGHTS (Rs. in crore)
Year ended 31.03.11 31.03.10
Revenue
Carbon black 1,614.11 1,178.05
Power 76.04 54.52
Other Income 8.91 2.81
Total Revenue 1,699.06 1,235.38
PBDIT 234.49 190.67
less: Interest (net) 31.56 28.94
PBDT 202.93 161.73
less: Depreciation 38.58 31.15
PBT 164.35 130.58
Provision for Taxation 48.07 7.89
PAT 116.28 122.69
Balance brought forward 133.41 39.49
Profit available for
Appropriation 249.69 162.18
Proposed Dividend 16.61 11.30
Proposed Golden Jubilee
Year Dividend - - 2.83
Tax on aforesaid Dividends 2.69 2.34
Dividend including taxes 2.89 -
on dividend paid on 4,964,376
shares to Qualified
Institutional Buyers
alloted during the year
Transfer to General Reserve 11.65 12.30
Balance carried forward to
Balance Sheet 215.85 133.41
DIVIDEND
For approval of Members at the ensuing Annual General Meeting, your
Directors recommend a dividend of 50% i.e, @ Rs. 5/- per share which
will absorb Rs. 16.61 crore. The tax on aforesaid dividend, to be borne
by the Company, will be Rs. 2.69 crore. Dividend, including taxes on
dividend aggregating to Rs. 2.89 crore, has been paid on 4,964,376
equity shares of Rs. 10/- each allotted to Qualified Institutional
Buyers during the year.
Public Deposits
The Company does not have any Fixed Deposit Scheme and has repaid all
Fixed Deposits that matured and were claimed by the depositors under
the earlier Fixed Deposit Schemes. Matured unclaimed deposits as on
31st March, 2011 amounted to Rs 2.93 lakh. Apart from matured unclaimed
deposits, no amount is outstanding as on 31st March 2011. Reminders
have been sent to depositors who have not claimed repayment of matured
deposits.
Particulars of Employees
Pursuant to the provision of section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, as
amended, the Particulars of Employees, though forming part of this
Report is not being mailed to members pursuant to the provision of
Section 219(1)(b)(iv) of the Companies Act,1956. The said statement is
available for inspection at the Registered Office of the Company during
working hours for a period of twentylone days before the date of Annual
General Meeting. Any member interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office.
Corporate Governance
Under Clause 49 of the listing Agreement with the Stock Exchanges, a
section on Corporate Governance together with a certificate from the
Company's Auditors confirming compliance is set out in the Annexure
forming part of this Annual Report.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
to the best of their knowledge and belief confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed, and that there are no material
departures;
ii) appropriate accounting policies have been selected and applied
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 financial year and of profit or loss of the
Company for the period;
iii) proper and sufficient care have been taken, for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
Auditors
The Auditors, Messrs Price Waterhouse, retire at the ensuing Annual
General Meeting and are eligible for relappointment.
Cost Audit
The Central Government has approved the appointment of Messrs Shome &
Banerjee, Cost Accountants, for conducting cost audit for the financial
year ended 31st March, 2011.
Messrs Shome & Banerjee, Cost Accountants, have given their consent
along with their Certificate of Independence for conducting the audit
of the cost accounts for the financial year ending 31st March, 2012, if
appointed.
Cost Audit Report for the financial year ended 31st March, 2010 was
filed on 10th September, 2010.
Directors
Mr. Pradip Roy holds office as an Additional Director of the Company
upto the date of the ensuing Annual General Meeting. The Company has
received a notice pursuant to Section 257 of the Companies Act,1956
along with prescribed deposit from a member of the Company signifying
his intention to propose the candidature of Mr. Pradip Roy for the
office of the Director of the Company.
Mr. B M Khaitan resigned from Directorship with effect from 11th
February, 2011. The Board has placed on record its deep appreciation
for the invaluable support and guidance received from Mr. B M Khaitan
during his long association as Director of the Company.
Dr. Ram S Tarneja and Mr. O P Malhotra retire by rotation and being
eligible offer themselves for relappointment.
Forwardllooking Statement
This Report contains forwardÃlooking statements that involve risks and
uncertainties. Actual results, performance or achievements could differ
materially from those expressed or implied in such forwardÃlooking
statements. Significant factors that could make a difference to the
Company's operations include domestic and international economic
conditions affecting demandlsupply and price conditions, foreign
exchange fluctuations, changes in government regulations, tax regimes
and other statutes.
Acknowledgement
Your Directors record their grateful appreciation for the
encouragement, assistance and coloperation received from members,
various state governments where the Company's plants and offices are
located, the central government, banks and customers. They also thank
all stakeholders and customers for the trust reposed in the Management
and wish to thank all employees for their eager commitment and
contributions.
For and on behalf of the Board
Kolkata Sanjiv Goenka
3rd May, 2011 Chairman
Mar 31, 2010
The Directors are pleased to present the Forty-Ninth Report and
Accounts of Phillips Carbon Black Limited for the financial year ended
31st March, 2010.
FINANCIAL HIGHLIGHTS
(Rs. in crore)
Year ended 31.03.10 31.03.09
Revenue -
-Carbon black 1,178.05 1,060.51
-Power 54.52 15.51
-Other Income 2.81 14.44
Total Revenue 1,235.38 1,090.46
PBDIT 190.67 (50.18)
Less: Interest (net) 28.94 27.48
PBDT 161.73 (77.66)
Less: Depreciation 31.15 19.64
PBT 130.58 (97.30)
Provision for Taxation 7.89 (32.46)
PAT 122.69 (64.84)
Balance brought forward 39.49 104.33
Profit available for
Appropriation 162.18 39.49
Proposed Dividend 11.30 -
Proposed Golden Jubilee
Year Dividend 2.83 -
Tax on aforesaid Dividends 2.34 -
Transfer to General Reserve 12.30 -
Balance carried forward to
Balance Sheet 133.41 39.49
DIVIDEND
Your Directors recommend for approval of members at the ensuing Annual
General Meeting a dividend of 40% which will absorb Rs.11.30 crore and
Golden Jubilee Year dividend of 10% on the paid up share capital of the
Company which will absorb Rs.2.83 crore. The tax on aforesaid dividends
to be borne by the Company will be Rs.2.34 crore.
INDUSTRY STRUCTURE & DEVELOPMENT
During 2009, global demand for carbon black dropped 7.5% from 9.78
million MT to 9.05 million MT. Global capacity for carbon black was
12.7 million MT but capacity utilization was 71% during 2009 due to
continuing lower demand in USA, Europe and South East Asian markets.
Defying the global trend, India and China witnessed significant growth
on the
back of strong domestic consumption and stimulus packages implemented
by the Government. A few of the plants in the Asia Pacific region,
which had been moth-balled earlier, were restarted during 2009.
In India, demand for carbon black during FY10 was 605,000 MT vis-a-vis
470,000 MT in FY09, i.e., a growth of 29%. Total production during FY10
was 633,000 MT. Your Company commissioned its 90,000 MT carbon black
plant at Mundra during second half of FY10 and a new entrant commenced
operation with a 40,000 MT plant in eastern region during first half of
FY10. Recently, one of the global players in the carbon black industry
has announced closure of its facility in India. With this development,
total installed carbon black capacity in India now stands at 700,000
MT.
Anti-dumping duty was imposed on import of carbon black from China,
Russia, Australia and Thailand for a period of 5 years. Despite
imposition of anti dumping duty, carbon black imports increased by 30%
during FY10. The threat of dumping will continue to prevail as long as
global carbon black capacity utilization remains lower than that in
India.
PERFORMANCE
Carbon Black
Your Company for the first time since inception achieved triple digit
profit (PAT) of Rs.122.69 crore in FY10 and Operating Profit (PBDIT) of
Rs. 190.67 crore. Factors which contributed significantly to this
healthy turn around in FY10 are higher sales volume of 255,777 MT
vis-a-vis 210,553 MT in FY09 and jump in power revenue as detailed
below.
Power
Your Companys power generation capacity received tremendous boost
during FY10 with the commencement of commercial operation of 30 MW
Co-generation Power Plant (CPP) at Durgapur on 1st April, 2009 and 16
MW CPP at Mundra on 24th December, 2009. Revenue from power sale was
3.5 times higher in FY10 i.e. Rs. 54.52 crore vis-a-vis Rs. 15.51 crore
during FY09. The contribution of power segment to the Companys profit
increased significantly in FY10 with the commissioning of aforesaid
CPPs, coupled with higher unit price realization during FY10.
Manufacturing
The commissioning of the 90,000 MT carbon black plant (greenfield) at
Mundra on 17th October, 2009 helped the Company to move up in the
global ranking from 10th to 8th. The strategic location of its four
plants in different parts of India should facilitate your Company to
optimize logistics costs within India, as well as for export to Europe.
Research and Development
Research and Development activities during FY10 received noticeable
boost with your Company launching special carbon black grades for non
rubber applications. These new grades have been accepted well by
customers in the domestic market, as their performance is comparable to
imported products. While the contribution of these grades in the
overall top line of the Company was modest during FY10, the Company has
chalked out plans to ramp up sales from this segment in the coming
years.
Environment, Health, Safety and Social Responsibility
Your Company took various initiatives to achieve greater heights in
Environment, Health and Safety. It has adopted new policies for greener
surroundings and is currently working with India Trees Foundation,
while strictly adhering to the Environment, Health and Safety norms at
all its manufacturing locations.
Concerted efforts to incorporate Corporate Social Responsibility (CSR)
continued during FY10 for e.g., Health/Eye check up camps, Hepatitis B
& C screening tests, Rural Area Development, Free distribution of
medicines, Aids Awareness Programme and support to a few institutions
engaged in social service were organised.
Sustained emphasis was put on education initiatives. The Company tied
up with SMILE Foundation, an NGO working in 21 states reaching out to
over 100,000 children. The CSR team at Kochi has completed the first
batch of Computer Literacy Programme offered by IGNOU for housewives
from the local community. Educational kits were distributed to under-
privileged children.
Human Resource Development
Human Resources continue to be a focus area for your Company. Several
initiatives were taken to facilitate the performance and developmental
requirements of employees. The efforts to enhance the effectiveness of
Balanced Business Scorecard were strengthened by the newly launched 360
degree appraisal system viz. "EXCEL" and online training through
portal.
Your Companys manpower requirements for the greenfield plant at Mundra
and existing manufacturing units were carefully planned and benchmarked
with global organizations. The recruitment for Mundra was organised
timely, facilitating flawless commissioning of the plant.
Industrial relations scenario at all units continues to be healthy.
Internal Control System and Adequacy
Your Company which has adequate internal control systems in all areas
of operation, utilizes the services of internal and external auditors
from time to time and also its in-house experts and resources. The
Company continuously upgrades these systems in line with the best
available practices. These
reports and variance analysis are regularly discussed with members of
Management Committee and actions taken wherever necessary.
An independent Audit Committee of the Board reviews the adequacy of
Internal Control.
Opportunities and Threats
Your Company is on the lookout for opportunities and threats that exist
in its business and is geared up to make the best of the opportunities
while facing the threats.
Opportunities
- Currently almost all tyre companies in India are executing green
field/brown field expansion projects to meet increasing demand for
tyres from replacement as well as OE segments, particularly for
passenger radial tyres.
- A few major global automakers have announced significant investments
in India which will raise the demand for carbon black in future.
- The thurst on infrastructure development, particularly roads, coupled
with the rise in domestic disposable income should have favourable
impact on demand for tyres and consequently carbon black.
- Launch of the smaller car during FY10 has paved the way for
development of smaller cars by other players in the auto industry,
which should push the four-wheeler population in India. The auto
companies may also cater to demand for smaller car in overseas markets
from their facilities in India resulting in higher demand for carbon
black particularly for OE segment.
- Your Company can generate electricity from lean gases (which are
currently flared in one of its plants) to improve overall
profitability.
Threats
- Carbon black/tyre import.
- Expansion of carbon black manufacturing capacities simultaneously by
domestic competitors.
- Withdrawal of Anti Dumping Duty on carbon black.
- Inadequate infrastructure at ports, resulting into detention of
vessels and higher freight cost.
Segmentwise Performance
The Performance of Carbon Black and Power segment has been covered in
this Report earlier.
Risks and Concern
The raw material for the Company i.e. Carbon Black Feedstock (CBFS) is
residual oil from distillation process of crude and is subject to high
volatility, whereas the price of carbon black is revised once a
quarter. In the event the Company is unable to timely pass on increased
CBFS cost, it may have adverse
impact on the Companys profit. Increase in carbon black import or drop
in carbon black demand may have serious implications on raw material
inventory write down as well as the activity level of the carbon black
segment and consequently the availability of lean gas for the power
segment.
The Company is also exposed to risks from fluctuation of Indian Rupee
vis-a-vis other currencies, interest rate, realisation for surplus
power and regulations relating to environment.
Major Expansion Plans
Your Company has decided to expand carbon black capacity at Mundra by
setting up another 50,000 MT plant, which is expected to be
commissioned during Q3FY11. The Company will also expand cogeneration
power capacity by 8 MW at Mundra which is expected to be commissioned
during next financial year. Further, a 10 MW CPP is being set up at
Kochi for which orders have been placed for critical equipment.
Construction activity is in full swing. This project is expected to be
commissioned during Q4FY11. The existing 2.5 MW CPP at Kochi will be
de-commissioned when the 10 MW CPP commences commercial operation. Upon
completion of aforesaid projects, PCBLs total carbon black
manufacturing capacity will reach 410,000 MT and power generation
capacity 76 MW.
Statutory clearances for proposed 65,000 MT carbon black and 12 MW CPP
at Vietnam are awaited. Project is scheduled to be commissioned within
24 months of receipt of statutory clearances.
Qualified Institutional Placement (QIP) and Preferential Warrants Issue
Pursuant to members approval and in accordance with SEBI Regulations,
the Company has received applications from Qualified Institutional
Buyers for 49.64 lakh shares @ Rs.200/- per share. The allotment
process will be completed shortly.
In accordance with SEBI Regulations and necessary approval of members,
the Company has offered to the promoter group 12,50,000 convertible
warrants @ Rs.196/- each with an option to subscribe to one equity
share of Rs.10/- each at a premium of Rs.186/- per share fully paid up
within 18 months from the date of allotment.
Wholly Owned Subsidiary
In compliance with the requirements of Section 212(2) of the Companies
Act, 1956, the Directors Report, the Balance Sheet and Profit and Loss
Account of the wholly owned subsidiaries viz., Phillips Carbon Black
Cyprus Holdings Limited (PCBL Cyprus) and PCBL Netherlands Holdings
B.V. (PCBL Netherlands) along with the Report of the auditors of PCBL
Cyprus and PCBL Netherlands are annexed to this Annual Report.
The Consolidated Financial Statements of the Company and its aforesaid
subsidiaries duly audited by the statutory auditor
of the Company prepared in compliance with the applicable Accounting
Standards and the Listing Agreements with the stock exchanges is
included in this Annual Report.
FUTURE OUTLOOK
Carbon Black
The quick recovery of the Indian economy and its return to the growth
trajectory, coupled with the revival of auto sector have resulted in
significant demand growth for carbon black. As mentioned earlier,
almost all major customers in tyre segment have either announced or
undertaken major green field/brown field expansion projects which are
expected to commence commercial production during the next 12 to 18
months. A couple of global tyre majors have also announced plans to
initiate manufacturing facilities in India. Domestic demand for carbon
black is expected to grow @ 9% to 10% for FY11. Further, a few major
automobile companies are developing smaller cars for domestic as well
as overseas market, which may see India emerge as an export hub for
smaller cars, resulting into exponential demand growth for carbon black
after 3 to 5 years. With the commissioning of 90,000 MT carbon black
facility at Mundra and further expansion of 50,000 MT at the same
location, your Company is well poised to meet the increasing demand for
carbon black in the domestic market.
Demand for carbon black in overseas markets, particularly USA and
Japan, has started picking up in the recent past, whereas the demand in
Europe may take a little longer to recover. Your Company has already
initiated process for product approval, particularly for the Mundra
facility, with potential customers in Europe and USA. The Company will
lay significant thurst on export during FY11.
Any increase in carbon black import from current level may have adverse
impact on the demand supply situation in the domestic market.
Power
Your Companys initiative to create additional revenue stream from
power received encouraging response during FY10. It is likely to grow
further in the coming years. The full year impact of 16 MW CPP
commissioned at Mundra will be visible in FY11. Further, 10 MW CPP is
expected to be commissioned during Q4FY11 at Kochi and a 8 MW CPP at
Mundra during FY12. Total installed capacity will increase to 68 MW in
FY11 and 76 MW by FY12. The quantum of power available for sale is
expected to double in FY11 and keeping in view the prevailing gap
between demand and supply of electricity the net realization is
expected to be higher in FY11 vis-a-vis FY10.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 217(1)(e) of the Companies Act, 1956 read
with Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 is annexed. This forms an integral part of this
Report.
Public Deposits
The Company does not have any Fixed Deposit Scheme and have repaid all
Fixed Deposits that matured and were claimed by the depositors under
the earlier Fixed Deposit Schemes. Matured unclaimed deposits as on
31st March, 2010 is Rs.5.05 lakh. Apart from matured unclaimed
deposits, no amount is outstanding as on 31st March 2010. Reminders
have been sent to all depositors who have not claimed repayment of
matured deposits.
Notes on Accounts
Regarding the Auditors comments on remuneration to Managing Director,
the Directors draw your attention to Note 2.2 of Schedule 19 forming
part of Accounts. The observations made by auditors should be read
together with the note referred to, which is self explanatory.
Particulars of Employees
Pursuant to the provision of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, as
amended, the Particulars of Employees, though forming part of this
Report is not being mailed to members and the same is available for
inspection at the Registered Office of the Company during working hours
for a period of clear twenty-one days before the date of Annual General
Meeting. Any member interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office.
Corporate Governance
Under Clause 49 of the Listing Agreement with the Stock Exchanges, a
section on Corporate Governance together with a certificate from the
Companys Auditors confirming compliance is set out in the Annexure
forming part of this Annual Report.
Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
to the best of their knowledge and belief confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed, and that there are no material
departures;
ii) appropriate accounting policies have been selected and applied
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 financial year and of profit or loss of the
Company for the period;
iii) proper and sufficient care have been taken, for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
Auditors
The Auditors, Messrs Price Waterhouse, retire at the ensuing Annual
General Meeting and are eligible for reappointment.
Cost Audit
The Central Government has approved the appointment of Messrs Shome &
Banerjee, Cost Accountants, for conducting cost audit for the financial
year ended 31st March 2010.
Messrs Shome & Banerjee, Cost Accountants, have given their consent for
conducting the audit of the cost accounts for the financial year ending
31st March 2011, if appointed.
Directors
Mr. C R Paul and Mr. P K Chowdhary retire by rotation and being
eligible offer themselves for reappointment.
Forward - looking Statement
This Report contains forward-looking statements that involve risks and
uncertainties. Actual results, performance or achievements could differ
materially from those expressed or implied in such forward-looking
statements. Significant factors that could make a difference to the
Companys operations include domestic and international economic
conditions affecting demand-supply and price conditions, foreign
exchange fluctuations, changes in government regulations, tax regimes
and other statutes.
Acknowledgement
Your Directors record their grateful appreciation for the
encouragement, assistance and co-operation received from members,
Government authorities, banks and customers. They also thank them for
the trust reposed in the Management and wish to thank all employees for
their commitment and contributions.
For and on behalf of the Board
Kolkata Sanjiv Goenka
28th April, 2010 Chairman
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