We take pleasure in presenting the 14th Annual Report and the AuditedAccounts of the Company for the year ended 31st March, 2012.
PERFORMANCE HIGHLIGHTS (Standalone)
| || ||( RS In Million) |
|Particulars ||FY 2011 - 12 ||FY 2010 - 11 |
|Operating income ||8,547.96 ||7,622.94 |
|Operating Other income ||198.72 ||113.94 |
|Total Operating Income ||8,746.68 ||7,736.88 |
|EBIDTA excluding FOREX impact ||2,439.46 ||2,080.14 |
|Foreign Exchange Gain / (Loss) ||(10.49) ||28.75 |
|EBIDTA ||2,428.97 ||2,108.89 |
|% Margin ||27.77% ||27.25% |
|Less: || || |
|Interest Expenses ||575.07 ||448.17 |
|Depreciation ||773.43 ||740.07 |
|Profit before tax ||1,080.47 ||920.65 |
|Less: || || |
|Income Tax provision || || |
| Current ||231.52 ||205.43 |
| Deferred ||66.22 ||234.80 |
| MAT Credit Entitlement || ||(205.43) |
|Profit After Tax ||782.73 ||685.85 |
|% Margin ||8.94% ||8.86% |
|Add: || || |
|Profit brought forward from previous year ||643.91 ||353.83 |
|Profit available for appropriation ||1,426.64 ||1,039.68 |
|Appropriation: || || |
|Proposed dividend on Equity Shares ||283.21 ||281.52 |
|Dividend Distribution Tax thereon ||45.94 ||45.66 |
|Transfer to General Reserve ||78.27 ||68.59 |
|Balance carried to Balance Sheet ||1,019.22 ||643.91 |
|Earnings Per Share (Basic / Diluted) (RS ) ||9.67 ||8.53 |
In view of the Companys good performance, the Board has recommended equitydividend at RS 3.50 per equity share i.e. @ 35% (previous year RS 3.50 per equity sharei.e. @ 35%) on 8,09,15,986 equity shares of RS 10 each for the financial year ended 31stMarch, 2012. The dividend shall be paid after approval by the members at the forthcomingAnnual General Meeting between 10th August, 2012 and 16th August,2012.
The total cash outflow on account of dividend payment including dividend distributiontax thereon will be RS 329.15 Million (Previous Year RS 327.18 Million).
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 17% from RS 6,026Million to RS 7,052 Million. The growth is being driven by new customers, new productsdeveloped and sold globally.
We renewed our focus on Specialty Food & Beverages (SF&B) Segment. During theyear, this segment grew by 28% from RS 2,740 Million to RS 3,503 Million.
In the Pharmaceutical segment, we maintained our leadership position in the domesticmarket.
A detailed discussion of operations for the year ended 31st March, 2012 isgiven in the Management Discussion and Analysis section.
INCREASE IN SHARE CAPITAL
During the year, 4,81,250 equity shares of RS 10 each pertaining to Rights entitlementof Overseas Corporate Body (OCB), which were held in abeyance during the Rights Issue ofthe Company in 2009 pending receipt of requisite approval of the Reserve Bank of India,were allotted to the OCB, consequent upon receipt of such approval.
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, Piramal Glass Ceylon PLC focused on improving its manufacturingoperations and also increased its productivity apart from developing the export market forthe niche Specialty Food & Beverage (SF&B) segment.
The turnover of Piramal Glass Ceylon PLC has grown by 23% from SLR 4,163 Million to SLR5,119 Million. The export turnover has increased by 22.10%
Piramal Glass International, Inc. (USA)
This is a wholly owned subsidiary of the Company. The turnover of this subsidiary wasUSD 7.06 Million (Previous year USD 5.77 Million) and has enabled the Company to maintainand improve its market share in Premium C&P segment in USA due to a focused approach.
Piramal Glass - USA, Inc.
Piramal Glass - USA, Inc. the Companys wholly owned subsidiary, has reported anet profit of USD 1.21 Million as compared to a net profit of USD 2.60 Million in theprevious year.
The sales of the company grew from USD 81.17 Million in the previous year to USD 82.08Million in FY2012, depicting a growth of 1.12%.
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..It has reported an income of USD 0.26 Million in the year under review, which is the sameas the 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 0.74 Million as compared to GBP 0.66 Million in the previous year,reflecting a growth of 12.12%.
Piramal Glass Europe SARL
Piramal Glass Europe SARL, is a wholly owned subsidiary of the Company situatedin France. Its turnover during the year was Euro 6.46 Million as compared to Euro 2.48Million in the previous year reflecting a growth of 160.48%.
Exemption from publishing Subsidiary Accounts
The Ministry of Corporate Affairs had vide its circular dated 8th February,2011 issued directions under section 212(8) of the Companies Act, 1956, granting generalexemption to companies from attaching to their Balance Sheets, the Accounts and otherdocuments of their subsidiaries, subject to fulfillment of specified conditions. In viewof this general exemption and being in compliance with the conditions thereof, theAccounts and other documents of the Companys subsidiaries are not attached to theBalance Sheet of the Company. The Consolidated Financial Statements of the Company, whichinclude the results of its subsidiaries, are included in this Annual Report. Further, astatement containing the relevant particulars prescribed under the terms of the generalexemption, for each of the Companys subsidiaries, is enclosed in this Annual Report.The Annual Accounts of the Companys subsidiaries and the related detailedinformation can also be sought by any shareholder of the Company or its subsidiaries bymaking a written request to the Company Secretary at the Registered Office of the Company.The Annual Accounts of the Companys subsidiaries are also available for inspectionby any shareholder at the Companys and / or the concerned subsidiarysRegistered Office. These documents are also available on the Companys website i.e.www.piramalglass.com.
IN TERNAL 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 itsOccupational Health Safety and Environment Management System, in conformity with theinternational standards under the Integrated Management System. Additionally to meet thedemanding customer requirements, manufacturing facilities have been certified for SocialAccountability standard SA 8000 (Kosamba) and Food Management System FMS 22000 (Jambusar)by Bureau Veritas. Major capital investment (approx RS 16 Cr) in effluent treatmentfacility has been completed to equip Jambusar location as a zero discharge facility.
DIRECTORS RESPONSIBILITY STATEMENT
As required under section 217(2AA) of the Companies Act, 1956, ("the Act") wehereby state:
a. that in the preparation of annual accounts, the applicable accounting standards havebeen followed. There are no material departures from these applicable accountingstandards;
b. that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch, 2012 and its profit for the year ended on that date;
c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the Directors have prepared the annual accounts on a going concern basis.
Dr. (Mrs.) Swati A. Piramal, Mr. Bharat Kewalramani and Mr. Vijay Shah retire byrotation at the ensuing Annual General Meeting and are eligible for re-appointment, whichthe Board recommends.
Mr. Vijay Shah ceased to be the Managing Director of the Company from the close ofbusiness hours on 31st December, 2011, but continues as a non-ExecutiveDirector on the Board of the Company.
Consequent to Mr. Vijay Shah ceasing to be the Managing Director of the Company witheffect from 31st December, 2011, Mr. Sandeep Arora has been appointed as theManager of the Company with effect from 1st January, 2012, subject to theapproval of the members of the Company, in compliance with the provisions of section 269of the Companies Act, 1956.
M/s. Kailash Sankhlecha & Associates, Cost Accountants have been duly appointed asCost Auditors for conducting Cost Audit for the current financial year ending 31stMarch, 2013. They were also the cost auditors for the previous year ended 31stMarch, 2012. The Cost Audit Report for the financial year ended 31st March,2012 will be filed within the prescribed period.
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.
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 from N.L. Bhatia & Associates, Practicing Company Secretaries confirmingcompliance with the conditions of Corporate Governance as stipulated under the aforesaidclause 49 is annexed as Annexure II and forms part of this report.
Employees are vital to Piramal Glass. We have created a favourable work environmentthat encourages innovation and meritocracy. We had a staff strength of 3,957 employees asat 31st March, 2012 (Previous Year 3,257 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 III to thisReport.
M/s. Haribhakti & Co., Chartered Accountants, Vadodara retire as Auditors of theCompany at the ensuing Annual General Meeting and are eligible for re-appointment.
|We take this opportunity to thank the employees for their dedicated service and co-operation in the functioning of the Company. |
|We also thank the Shareholders and Companys Bankers for their continued support to the Company. |
| ||By Order of the Board |
|Mumbai ||Ajay G. Piramal |
|7th May, 2012 ||Chairman |
ANNEXURE I TO THE DIRECTORS REPORT
Particulars under Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 for the year ended 31stM arch, 2012 Conservation ofEnergy
The manufacturing units in India have been certified for Energy Management System EMS50001 by Bureau Veritas for systematically accelerating the energy management andconservation. During the year, the units implemented the following measures to conserveenergy
Lighting transformer introduced for reducing the voltage on lightingcircuit;
Cooling tower conversion from natural to forced draft;
Timer based switching system introduced for street lighting;
Introduced low melting batch recipe and experimented with usage of sand inplace of quartz.
FORM - A
|A POWER & FUEL CONSUMPTION ||2011-2012 ||2010-11 |
|1. Gas / Electricity || || |
|a) (I) Gas || || |
|Unit (000 M3) ||67,917 ||65,577 |
|Total Amount (RS In Mio) ||1,133 ||804 |
|Rate / Unit (M3) ||16.68 ||12.26 |
|(II) Electricity || || |
|Unit (in 000) ||54,789 ||35,927 |
|Total Amount (RS In Mio) ||381 ||239 |
|Rate / Unit (KWH) ||6.95 ||6.65 |
|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 || || |
|2. Coal || || |
|Quantity (Tonnes) || || |
|Total Amount (RS In Mio) || || |
|Average Rate || || |
|3. Furnace Oil || || |
|Quantity (K Ltrs) ||2,503 ||6,371 |
|Total Amount (RS In Mio) ||80 ||153 |
|Average Rate / K. Ltrs ||31.81 ||24.08 |
|4. LPG/ Propane || || |
|Quantity (Tonnes) || || |
|Total Amount (RS In Mio) || || |
|Average Rate / Tonne || || |
|5. Other / Internal Generation || || |
|(I) CPP plant || || |
|Unit (in 000) ||55,945 ||77,506 |
|Total Amount (RS In Mio) ||303 ||284 |
|Average Rate ||5.43 ||3.67 |
|(II) Wind Mill Generation || || |
|Unit (in 000) ||1,032 ||1,134 |
|Total Amount (RS In Mio) ||6.27 ||7.35 |
|Average Rate ||6.07 ||6.48 |
B. Consumption per unit of Production
Since the operations of the Company involve multiple products of different sizes andvolumes, disclosure of consumption figures 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 Earnings and Outgo: During the year, Foreign ExchangeEarnings were RS 5,110.86 Mio as against Outgo of RS 140.46 Mio.
ANNEXURE II TO THE DIRECTORS REPORT
Compliance 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, 2012 as stipulated in Clause 49of the Listing Agreement of the said Company with the Stock Exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to procedures and implementation thereof, adoptedby the Company for ensuring the compliance of the conditions of Corporate Governance. Itis neither an audit nor an expression of opinion on the financial statement of theCompany.
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 |
|Mumbai ||Partner |
|7th May, 2012 ||C. P. No. 422 |
ANNEXURE III TO THE DIRECTORS REPORT
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, for Options granted to the Companys employees forthe financial year ended 31st March, 2012.
|Sr. No. ||Details ||Disclosures |
|(i) ||Options Granted during FY2012 ||3,57,916 Options |
|(ii) ||Exercise price of options ||The option price is determined by the Trustees of the Piramal Glass Senior Employees Stock Option Trust (ESOP Trust) and is subject to a limit not exceeding the higher of: |
| || ||(a) market price on the date of grant; or |
| || ||(b) average of the price prevailing for the type of share or other security in respect of which the option is granted during the 3 (three) months immediately preceding the date on which the option is offered to the employee; or |
| || ||(c) the issue price of any such shares or securities if the same have been issued within three months prior to the option. |
| || ||Options granted during the financial year ended 31st March, 2012, were at an exercise price of RS 40 per option which was approved by the Trustees of the ESOP Trust, taking into consideration several factors. |
|(iii) ||Options Vested during FY2012 ||5,01,914 (Relating to options granted for FY 2011) |
|(iv) ||Options Exercised during FY2012 ||Options ||Relating to Fin Yr |
| || ||73,101 ||FY 10 |
| || ||2,41,407 ||FY 11 |
|(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 1 equity share. |
| || || |
|(vi) ||Options Lapsed ||Nil |
|(vii) ||Variation of terms of Options ||None |
|(viii) ||Total number of Options in force ||Options ||Relating to Fin Yr |
| || ||1,69,532 ||FY 10 |
| || ||2,60,507 ||FY 11 |
|(ix) ||Employee-wise details of options granted ||All Stock Options that have been granted by the Company as aforesaid have been granted to senior managerial personnel. |
| || senior managerial personnel || |
| || employees who receive a grant in any one year of options amounting to 5% or more of options granted during that year ||The following have received a grant amounting to 5% or more of Options granted during FY 12 |
| || ||a) Mr. Vijay Shah - Director |
| || ||b) Mr. Sanjay Tiwari - CEO and Executive Director of Piramal |
| || ||Glass Ceylon PLC |
| || identified employees who were granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. ||None |
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.