We take pleasure in presenting the 16th Annual Report and the AuditedAccounts of the Company for the year ended 31st March, 2014.
PERFORMANCE HIGHLIGHTS (Standalone)
| || ||( Rs. In million) |
|Particulars ||FY 2013 - 14 ||FY 2012 - 13 |
|Operating income ||10,963.19 ||10,154.80 |
|Operating Other income ||236.69 ||221.09 |
|Total Operating Income ||11,199.88 ||10,375.89 |
|EBIDTA excluding FOREX impact ||1,994.77 ||2,116.50 |
|Foreign Exchange Gain / (Loss) ||38.27 ||(388.75) |
|EBIDTA ||2,033.04 ||1,727.75 |
|% margin ||18.15% ||16.65% |
|Less: || || |
|Interest Expenses ||696.34 ||731.04 |
|Depreciation ||946.46 ||933.97 |
|Profit before tax ||390.24 ||62.74 |
|Less: || || |
|Income Tax provision || || |
| Current ||62.64 ||42.93 |
| Deferred ||115.73 ||14.30 |
| MAT Credit Entitlement ||(36.07) ||(42.93) |
|Profit /( Loss) After Tax ||247.94 ||48.44 |
|% margin ||2.21% ||0.47% |
|Add: || || |
|Profit brought forward from previous year ||971.77 ||1,019.22 |
|Profit available for appropriation ||1,219.71 ||1,067.66 |
|Appropriation: || || |
|Proposed dividend on Equity Shares ||80.92 ||80.92 |
|Dividend Distribution Tax thereon ||13.75 ||13.75 |
|Transfer to General Reserves || ||1.21 |
|Balance carried to Balance Sheet ||1,125.04 ||971.77 |
|Earnings Per Share (Basic / Diluted) (Rs. ) ||3.06 ||0.60 |
The Board has recommended equity dividend of Rs. 1 per equity share, i.e. @ 10% (sameas previous year ) on 8,09,15,986 equity shares of Rs. 10 each for the financial yearended 31st March 2014. The dividend, if approved by the members at the forthcoming AnnualGeneral Meeting, shall be paid during the period from 22nd July, 2014 to 26th July, 2014.
The total cash outflow on account of dividend payment including dividend distributiontax thereon will be Rs. 94.67 Million (same as previous year).
The Board recommends the above dividend for declaration by the members.
As part of the long term strategy of the Company, we continue to focus on Cosmetics& Perfumery (C&P) segment. During the year this segment grew by 10% from Rs. 8,232Million to Rs. 9,093 Million. We have executed multiple projects for marquee global brandsfrom India this year.
The Specialty Food & Beverages (SF&B) Segment de-grew by 1% from Rs. 3,789Million to Rs. 3,759 Million. This was mainly due to discontinuation of a major brand inUSA.
In the Pharmaceutical segment, we maintained our leadership position in the domesticmarket. During the year this segment grew by 17% from Rs. 4,090 Million to Rs. 4,767Million.
A detailed discussion of operations for the year ended 31st March 2014 isgiven in the Management Discussion and Analysis section.
There was no change in the Share Capital of the Company during the year.
DELISTING OF SHARES
The Board had in its meeting held on 10th February, 2014 considered &recommended the proposal received from The Sri Hari Trust acting through its CorporateTrustee PEL Management Services Private Limited (Acquirer), beingmember of the Promoter Group, to acquire the entire fully paid-up equity shares of theCompany held by public shareholders in accordance and compliance with the Securities andExchange Board of India (Delisting of Equity Shares) Regulations, 2009 (delistingproposal) and for consequential Voluntary Delisting of the equity shares of the Companyfrom all the stock exchanges where such equity shares are presently listed i.e. BSELimited and National Stock Exchange of India Limited. The requisite Special Resolutionseeking shareholders approval for the Delisting Proposal, was duly passed with therequisite majority.
The success of the Delisting Proposal is dependent on the Acquirer deciding in its soleand absolute discretion to accept the Discovered Price or offer an Exit Price, so as tocause the Promoter Group shareholding in the Company to reach a minimum of 90% of theCompanys paid of equity share capital.
Our Company has seven subsidiaries viz. Piramal Glass Ceylon PLC, Piramal GlassInternational Inc., USA, Piramal Glass (UK) Limited, Piramal Glass Europe SARL, PiramalGlass - USA Inc., and its two subsidiaries, Piramal Glass Flat River, LLC and PiramalGlass Williamstown LLC, which are also consequently the subsidiaries of the Company.
Operations of these Companies are discussed below:
Piramal Glass Ceylon PLC
During the year, operation of Piramal Glass Ceylon was impacted due to sluggish localdemand and escalating costs. The Company has made inroads in and began supplies to theAustralian premium market and will build this business over the years. The turnover ofPiramal Glass Ceylon PLC has de-grown by 5.0% from SLR 5,420 million to SLR 5,147 million.The export turnover has increased by 6.0%
Piramal Glass International, Inc. (USA)
This is a wholly owned subsidiary of the Company. The turnover of this subsidiary wasUSD 6.26 million (Previous year USD 7.60 million).
Piramal Glass - USA, Inc.
Piramal Glass - USA Inc. is the Companys wholly owned subsidiary. The sales ofthe company marginally de-grew from USD 85.72 million in the previous year to USD 85.03million in FY2014.
Piramal Glass Flat River, LLC
Piramal Glass - Flat River, LLC, is a wholly owned subsidiary of Piramal Glass - USA,Inc. This Company earns its income by leasing its property to Piramal Glass - USA, Inc. Ithas reported an income of USD 0.26 million in the year under review, which is the same asthe previous year.
Piramal Glass Williamstown, LLC
Piramal Glass -Williamstown, LLC, is also a wholly owned subsidiary of Piramal Glass -USA, Inc. This Company earns its income by leasing its property to Piramal Glass USA, Inc. It has reported an income of USD 0.18 million in the year under review, which isthe same as the previous year.
Piramal Glass (UK) Limited
Piramal Glass (UK) Limited is a wholly owned subsidiary of the Company. Its turnoverduring the year was GBP 0.58 million as compared to GBP 0.52 million in the previous year.
Piramal Glass Europe SARL
Piramal Glass Europe SARL, is a wholly owned subsidiary of the Company situated inFrance. Its revenue during the year was Euro 8.70 million as compared to Euro 9.00 millionin the previous year reflecting a de-growth of 3.4%.
Exemption from publishing Subsidiary Accounts
The Ministry of Corporate Affairs had vide its circular dated 8th February, 2011 issueddirections under section 212(8) of the Companies Act, 1956, granting general exemption tocompanies from attaching to their Balance Sheets, the Accounts and other documents oftheir subsidiaries, subject to fulfilment of specified conditions. In view of this generalexemption and being in compliance with the conditions thereof, the Accounts and otherdocuments of the Companys subsidiaries are not being attached to the Annual Reportof the Company. The Consolidated Financial Statements of the Company, which include theresults of its subsidiaries, are included in this Annual Report. Further, a statementcontaining the relevant particulars prescribed under the terms of the general exemption,for each of the Companys subsidiaries, is enclosed in this Annual Report. The AnnualAccounts of the Companys subsidiaries and the related detailed information can alsobe sought by any shareholder of the Company or its subsidiaries by making a writtenrequest to the Company Secretary at the Registered Office of the Company. The AnnualAccounts of the Companys subsidiaries are also available for inspection for anyshareholder at the Companys and the respective Registered Office of thesubsidiaries.
INTERNAL CONTROL SYSTEM
Our Company has a sound internal control system, which ensures that all assets areprotected against loss from unauthorized use and all transactions are recorded andreported correctly. The internal control systems are further supplemented by internalaudit carried out by an independent firm of Chartered Accountants and periodical review bymanagement. The Audit Committee of the Board addresses issues raised by both, the InternalAuditors and Statutory Auditors.
ENVIRONMENT AND SAFETY
Our Companys commitment to environmental protection and safety is based on thecontinued ongoing processes implemented at its manufacturing facilities. TheCompanys plants at Kosamba and Jambusar are certified by Bureau Veritas for itsQuality Management System, Occupational Health, Safety and Environment Management System,in conformity with the international standards under the Integrated Management System.Additionally to meet the demanding customer requirements, the Kosamba manufacturingfacility has been certified for Social Accountability Standard SA 8000 by Bureau Veritas.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Our Company has directed its efforts to reduce energy costs by focusing on energysavings through the best optimization of operations on a day-to-day basis. The Company hasused fuels in appropriate mix to attain maximum savings. As required by the Companies(Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, therelevant data pertaining to conservation of energy, technology absorption and foreignexchange earnings and outgo is given in Annexure I and forms part of this Report.
During the year Mr. Bharat Kewalramani, resigned as a Director of the Company witheffect from 31st May 2013 due to his personal commitment. The Board places onrecord its appreciation for the valuable contributions made by Mr. Kewalramani during histenure as a Director of the Company.
Mr. Vijay Shah retires by rotation at the ensuing Annual General Meeting("AGM") and is eligible for re-appointment, which the Board recommends.
The Board of the Company, presently comprises six Independent Directors viz. Mr. SuhailNathani, Mr. Vimal Bhandari, Mr. Shitin Desai, Mr. Jiten Doshi, Mr. Dharendra Chadha andMs. Vinita Bali. Pursuant to section 149 (10) of the Companies Act, 2013, an independentdirector shall hold office for a term of upto five consecutive years (and shall not liableto retire by rotation under section 152(6) of the said Act.
In order to give effect to the applicable provisions of sections 149 and 152 of theAct, it is proposed that these Directors be appointed as Independent Directors, to holdoffice for five consecutive years, for a term up to March 31, 2019.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under Section149(6) of the Companies act, 2013 and Clause 49 of the Listing Agreement with the StockExchange.
The Board recommends the appointment / re-appointment of all the aforesaid Directors.
Employees are vital to Piramal Glass. We have created a favourable work environmentthat encourages innovation and meritocracy. We had a staff strength of 3987 employees asat 31st March, 2014 (Previous Year 3,997 employees).
Any shareholder interested in obtaining a copy of the statement of particulars ofemployees referred to in section 217(2A) of the Companies Act, 1956, may write to theCompany Secretary at the Registered Office of the Company. The statement is also availablefor inspection at the Registered Office of the Company during working hours upto the dateof the Annual General Meeting. Stock Options disclosures pursuant to the applicablerequirements of the Securities and Exchange Board of India (Employee Stock Option Schemeand Employee Stock Purchase Scheme) Guidelines, 1999 are given as Annexure II to thisReport.
M/s. Kailash Sankhlecha & Associates, Cost Accountants have been appointed as theCost Auditors of the Company, for conducting Cost Audit for current financial year ending31st March, 2015. Their remuneration is subject to the ratification by the members at theensuing Annual General Meting.
M/s. Kailash Sankhlecha & Associates were also the cost auditors for the previousyear ended 31st March, 2014. The Cost Audit Report for the financial year ended 31stMarch, 2014 will be filed within the prescribed period.
As a measure of good Corporate Governance Practice and as recommended by the MCACorporate Governance Voluntary Guidelines, 2009, the Company has voluntarily subjecteditself to a Secretarial Audit for FY2014, which was carried out by N.L. Bhatia &Associates, Practicing Company Secretaries. The Secretarial Audit Report forms part ofthis Annual Report.
The said Secretarial Audit Report confirms that the Company has complied with all theapplicable provisions of the Companies Act, 1956, the notified sections of Companies Act,2013, Listing Agreements with the Stock Exchanges and all the regulations of Securitiesand Exchange Board of India (SEBI) as applicable to the Company, including the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the SEBI(Prohibition of Insider Trading) Regulations, 1992.
Our Company has complied with the applicable provisions of Corporate Governance underclause 49 of the Listing Agreement with the Stock Exchanges. A separate report onCorporate Governance compliance is included as a part of the Annual Report. The requisiteCertificate confirming compliance with the conditions of Corporate Governance asstipulated under the aforesaid clause 49 of the Listing Agreement, issued by N.L.Bhatia & Associates, Practicing Company Secretaries, is annexed as Annexure III andforms part of this report.
M/s. Haribhakti & Co., Chartered Accountants, Vadodara hold office till theconclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Inaccordance with the provisions of section 139, 142 and other applicable provisions of theCompanies Act, 2013 and of the Companies (Audit and Auditors) Rules, 2014, it is proposedto re-appoint them as the Auditors of the Company for a period of three consecutive yearscommencing from the conclusion of this Annual General Meeting, until the conclusion of the19th Annual General Meeting of the Company in the calendar year 2017.
DIRECTORS RESPONSIBILITY STATEMENT
As required under section 217 (2AA) of the Companies Act, 1956, ("the Act")we hereby state: a. that in the preparation of annual accounts, the applicable accountingstandards have been followed. There are no material departures from these applicableaccounting standards; b. that the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at 31stMarch, 2014 and its profit for the year ended on that date; c. that the Directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d. that the Directors haveprepared the annual accounts on a going concern basis.
We take this opportunity to thank the employees for their dedicated service andco-operation in the functioning of the Company. We also thank the Shareholders andCompanys Bankers for their continued support to the Company.
| ||By Order of the Board |
|Place: Mumbai ||Ajay G. Piramal |
|Dated: 15th May, 2014 ||Chairman |
Particulars under Companies (Disclosures of Particulars in the Report of Board ofDirectors) Rules, 1988 for the year ended 31st March 2014
Conservation of Energy
The manufacturing Units in India have been certified for Energy Management System EMS50001 by BV for systematically accelerating the energy management and conservation. Duringthe year the Units implemented the following measures to conserve energy
Optimised glass melting temperatures (specifically bottom temperature) to reduceenergy consumption
Quarterly air leakage audits and corrective action
Instrument air pressure optimised using VFD
Replacement of FRP sheets with PC sheets for more daylight and reducedartificial lighting.
Replacement of existing lighting being done with energy efficient lights inphases
FORM - A
Form for Disclosure of Particulars with respect to Conservation of Energy.
|A POWER & FUEL CONSUMPTION ||2013-2014 ||2012-2013 |
|1. Gas / Electricity || || |
|a) (I) Gas || || |
|Unit ('000 M3) ||77,429 ||77,591 |
|Total Amount (Rs. in Mio) ||2084 ||1755 |
|Rate / Unit (M3) ||26.92 ||22.62 |
|(II) Electricity || || |
|Unit (in '000) ||113,210 ||101,335 |
|Total Amount (Rs. in Mio) ||581 ||562 |
|Rate / Unit (KWH) ||5.13 ||5.54 |
|b) Own Generation || || |
|(I) Through Diesel Generator || || |
|Unit || || |
|Total Amount (Rs. in Mio) || || |
|Rate / Unit || || |
|(II) Through Steam Turbine Generator || || |
|Unit || || |
|Total Amount (Rs. in Mio) || || |
|Rate / Unit || || |
|A POWER & FUEL CONSUMPTION || || |
|2. Coal || || |
|Quantity (Tonnes) || || |
|Total Amount (Rs. in Mio) || || |
|Average Rate || || |
|3. Furnace Oil || || |
|Quantity (K Ltrs) ||503.42 ||2,817 |
|Total Amount (Rs. in Mio) ||16.79 ||110 |
|Average Rate / K. Ltrs ||33.36 ||39.11 |
|4. LPG/ Propane || || |
|Quantity (Tons.) || ||155 |
|Total Amount (Rs. in Mio) || ||9 |
|Average Rate / Ton || ||60.85 |
|5. Other / Internal Generation || || |
|(I) CPP plant || || |
|Unit (in 000) ||18,550.27 ||29,898 |
|Total Amount (Rs. in Mio) ||194.13 ||242 |
|Average Rate ||10.47 ||8.08 |
|(II) Wind Mill Generation || || |
|Unit (in 000) ||809.39 ||1,394 |
|Total Amount (Rs. in Mio) ||5.35 ||9.12 |
|Average Rate ||6.61 ||6.54 |
B. Consumption per unit of Production
Since the operation of the Company involves multiple products of different sizes andvolumes, disclosure of consumption figure per unit of production is not meaningful.
FORM - B
Form for the disclosure of particulars with respect to Technology Absorption
1. Research & Development: The Company does not have a Research &Development set up and therefore there is no expenditure under this head.
2. Technology Absorption, Adoption & Innovation: Continuous efforts arebeing made to reduce costs and improve product qualities.
3. Foreign Exchange Earning and Outgo: During the year Foreign ExchangeEarning was Rs. 6,166. 16 Mio as against Outgo of Rs. 212.16 Mio.
DISCLOSURES REGARDING STOCK OPTIONS
Pursuant to the applicable requirements, if any, of the Securities and Exchange Boardof India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 ("the SEBI Guidelines"), following disclosures are made in connection withthe ESOP Scheme of the Company.
|Sr. No. ||Details ||Disclosures |
|(i) ||Options Granted (FY 2013-14) ||Nil |
|(ii) ||The pricing formula ||Not Applicable for FY2013-14 as no option were granted |
|(iii) ||Options Vested during FY 2013-14 ||69,985 (relating to Option Granted for FY 2012-13) |
|(iv) ||OptionsExercised (during FY 2013-14) ||Relating to Fin Yr ||Options |
| || ||FY 2009-10 ||82,805 |
| || ||FY 2010-11 ||1,64,450 |
| || ||FY 2011-12 ||1,61,073 |
| || ||FY 2012-13 ||49,985 |
| || ||Total ||4,58,313 |
|(v) ||Total number of shares arising as a result of exercise of options ||Same as Options exercised, as each Option entitles the holder thereof to one equity share of Rs. 10 each. |
|(vi) ||Options Lapsed ||Financial Year ||Options Lapsed |
| || ||FY 2009-10 ||2,250 |
| || ||FY 2010-11 ||9,000 |
| || ||Total ||11,250 |
|(vii) ||Variation of terms of Options ||None || |
|(viii) ||Total number of options in force ||Relating to Fin Yr ||Options |
| || ||FY 2009-10 ||8,100 |
| || ||FY 2010-11 ||13,050 |
| || ||FY 2011-12 ||2,26,506 |
| || ||FY 2012-13 ||20,000 |
| || ||Total ||2,67,656 |
Since the PGL ESOP Scheme is implemented by the ESOP Trust and the shares issued by theESOP Trust against exercise of stock options are those that have been acquired by the ESOPTrust from the existing shareholders and not fresh shares issued by the Company, therewill not be any increase in the share capital of the Company, nor will there be any impacton the Earnings Per Share or other ratios relating to share capital as a result of suchexercise of Stock Options.
Certificate on Corporate Governance
The Members of Piramal Glass Limited
We have examined the compliance of conditions of Corporate Governance by Piramal GlassLimited for the year ended 31st March, 2014 as stipulated in Clause 49 of the ListingAgreement of the Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to procedures and implementation adopted by theCompany for ensuring the compliance of the conditions of Corporate Governance. It isneither an audit nor an expression of opinion on the Financial Statement of the Company.
In our opinion and to the best of our information and according to the explanationsgiven to us, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in Clause 49 of the Listing Agreement.
We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the Management hasconducted the affairs of the Company.
| ||For N. L. Bhatia & Associates |
| ||Practicing Company Secretaries |
| ||N. L. Bhatia |
| ||Partner |
|Place: Mumbai ||C. P. No. 422 |
|Date: 15th May, 2014 ||F.C.S No. 1176 |