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CABOT INDIA LIMITED
ANNUAL REPORT 2010-2011
DIRECTOR'S REPORT
To the Members
Your Directors' hereby present the Forty-Eighth Annual Report together with
the Audited Accounts of the Company for the eighteen month period ended
March 31, 2011.
FINANCIAL RESULTS: (Rupees in lakhs)
Oct. 2009 to Oct. 2008 to
March 2011 Sept. 2009
Sales & Other Income 227,34.98 237,78.46
Operating Profit/(Loss) (Before
Interest, Depreciation & Tax) (41,06.85) (21,32.20)
Less/(Add):
(i) Financial Charges (8,25.36) (9,53.13)
(ii) Depreciation & Amortization (64,17.76) (9,16.66)
Profit/(Loss) Before Taxation (113,49.97) (40,02.00)
(Provision)/Deferred Tax credit - 6.03
Profit/(Loss) After Taxation (113,49.97) (40,08.03)
(Loss)/Surplus brought forward (77,98.31) (37,90.28)
(Loss) carried to Balance Sheet (191,48.28) (77,98.31)
REVIEW OF OPERATIONS:
During the period under review, production was stopped at Thane Plant in
line with the resolution adopted at the EGM on May 14th, 2010.
All the workmen at the Thane Plant have separated under the VRS scheme
offered post the decision to cease manufacturing. A few members of the
management staff are still engaged in the decommissioning operations, to
ensure compliance with the requirements of applicable laws.
The Company has started importing Carbon Black from overseas, to service
some key segments of the market during the year. The country has seen
strong growth in the IP, inks and plastic segments which value high quality
carbon black. Over a period, it is expected that reasonable profits can be
made via selling into these segments. The Company has made a start and
understanding of the logistics of this trade has been established and
customer acceptance of servicing via imports has now begun.
SHAREHOLDING:
As on date, Cabot Corporation, USA through its holding companies owns
97.79% of the paid up capital of the Company.
FIXEED DEPOSIT:
The Company has not accepted/renewed Fixed Deposit during the year under
review.
DIRECTORS' RESPONSIBILITY:
In compliance of Section 217(2AA) of the Companies Act, 1956, as amended by
the Companies (Amendment) Act, 2000, the Directors of the Company confirm
that:
* the applicable accounting standards have been followed in the preparation
of final accounts and that there are no material departures;
* such accounting policies have been selected and applied consistently and
such judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at March 31,
2011 and the loss of the Company for the eighteen month period ended on
that date;
* proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provision of the Companies Act,
for safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
* the accounts have been prepared on a going concern basis.
SAFETY, HEALTH & ENVIRONMENT:
Cabot accords top priority to Safety, Health and Environmental issues. The
Cabot Safety Health and Environmental Standards are applicable across Cabot
facilities worldwide and its S H & E program covers all employees and
contractors working at every site. In keeping with the excellent record
established with the local Regulatory authorities, Cabot S H & E standards
are being diligently followed during the present de-commissioning
activities at the Thane Plant.
ENERGY CONSERVATION/RESEARCH AND DEVELOPMENT:
With strong support provided by Cabot Corporation's Research & Development
facilities to Cabot India, the Company could achieve better product quality
during the time that the plant was operating.
A statement giving details of conservation of energy and research and
development in accordance with Section 217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure of particulars in the Report of the
Board of Directors) Rules, 1988 is annexed and forms a part of this Report.
HUMAN RESOURCE AND PARTICULARS OF EMPLOYEES:
The Directors wish to place on record their appreciation and recognition of
the wholehearted support and co-operation extended by the ex-employees at
all levels of the organization and the efforts put in by them to ensure a
smooth and safe stoppage of manufacturing operations. The Directors also
thank the current employees for their continuing support.
Information as per Section 217(2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 forms part of this report.
DIRECTORS:
Mr. Arun Khanna would retire at the ensuing Annual General Meeting and
being eligible offers himself for re-appointment.
During the period under review, Dr. H. N. Sethna, who was on the Board of
the Company, since June 30, 1987 resigned effective March 19, 2010.
AUDITORS:
M/s. Deloitte, Haskins & Sells Chartered Accountants, Mumbai, retire at the
ensuing Annual General Meeting and being eligible offer themselves for re-
appointment.
FUTURE OUTLOOK:
In the short-term, dismantling and clearing of the Thane site, is
scheduled. This activity is expected to be completed over the next two
years.
At the moment, sales via imports are small and constrained due to limited
availability of product in overseas manufacturing plants. However, it is
expected that greater volume will be available to be imported into India
once new capacity announced by Cabot in China and Indonesia becomes
available. These capacities will come into place at different stages over
the next 18-24 months. In the meantime, company is continuing to work with
potential customers on market assessment and technical qualification. This
work with customers is planned to be converted to future sales when
adequate supplies become available.
The strong automotive growth in India is likely to continue. It is expected
that a profitable business will be built overtime with high quality Cabot
products.
For and on behalf of the Board
C.R. Dua Director
Arun Khanna Director
Alok Gupta Managing Director
Mumbai May 13, 2011
ANNEXURE TO DIRECTOR'S REPORT
Information under Section 217(1)(e) of the Companies Act 1956, read with
the Companies (Disclosure of particulars in the Report of the Board of
Directors) Rule, 1988 and forming part of the Directors' Report for the
eighteen month period ended March 31, 2011.
FORM A
CONSERVATION OF ENERGY:
Energy conservation measures taken:
The Company is engaged in the continuous process of energy conservation.
Use of LDO was discontinued. During the time the Plant was operating,
efforts were directed to improving its efficiency for economic use of
feedstock and reduction of power, fuel and water per unit of production and
recycling of used water:
October '09 to October '08 to
March '11 September '09
A. Power & Fuel Consumption
1. Electricity
(a) Purchases units (Kwh) 21,74,280 90,87,984
(b) Total Amount (Rs. in lakhs) 105.84 502.07
(c) Rate per Unit (Rs.) 0.00 5.60
(d) Own Generation 15,83,800 90,86,300
2. Coal Nil Nil
3. Furnace Oil Nil Nil
4. Others:
(a) Light Diesel Oil (LDO) Qty. (K. Ltrs.) Nil Nil
Total Amount (Rs. in lakhs) Nil Nil
Average Rate (Rs.) N.A. N.A.
(b) Liquefied Petroleum Gas Qty. (M. Tons) 47.38 58.45
Total Amount (Rs. in lakhs) 29.12 24.74
Average Rate (Rs./Mt.) 61,466.89 42,326.78
B. Consumption per Unit of Production:
(i) Electricity (Kwh/Mt.) 527.349 447.597
(ii) LDO (Ltr./Mt.) N.A. N.A.
(iii) LPG (Kg./Mt.) 1.423 1.564
FORM B
RESEARCH AND DEVELOPMENT (R&D):
1. Specific area in which R&D was carried out by the Company:
(a) Continuous improvements on the handling of carbon black to reduce
emissions and wastage.
(b) Continuous process optimization to achieve consistent quality.
(c) Process improvements to increase the yield.
2. Benefits derived as a result of the above R&D
(a) Use of tail gas for generation of electricity.
(b) Reduction of waste and meeting the world class standards on dust
exposure
(c) Continuous improvement in quality, leading to better customer
satisfaction & reduction in customer complaints.
3. Future Plan of Action:
With the cessation of operations, no actions are being planned in this area
at the moment.
4. Information on Imported Technology during the last 5 years:
(a) Technology Imported - Renewal of the Royalty Agreements with
Cabot Corporation, USA for continuous
Transfer and access to the improved and
updated Cabot Technology for reinforcing
and semi-reinforcing grades of carbon
black.
(b) Year of Import - 1999 & 2003
(c) Has the technology - Yes been fully absorbed
5. Foreign exchange earning/outgo:
The Foreign Exchange earnings from exports during the eighteen month period
ending 31st March, 2011 was equivalent to approximately Rs. 2.52 lacs.
For Foreign Exchange Outgo, refer Item Number 18 of Notes to Accounts.
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