GOA CARBON LIMITED
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
Dear Shareholders,
Your Directors have pleasure in presenting the 44th Annual Report together
with the audited accounts of your Company for the year ended March 31,
2012.
Financial Results Rs. in lacs
2011-12 2010-11
Profit before tax for 1566.10 1402.50
the year
Less: Provision for Tax - -
Current Tax 525.00 533.00
Prior Year Tax (1.84) 0.98
Deferred Tax (5.81) (50.60)
517.35 483.38
Profit for the year
after tax 1048.75 919.12
Add: Surplus B/F from statement
of Profit & Loss of previous
year 1171.25 769.55
Amount Available
for Appropriations 2220.00 1688.67
Appropriations:
General Reserve 105.00 92.00
Proposed Dividend 366.04 366.04
Tax on Dividend 59.38 59.38
530.42 517.42
Balance carried to the
Balance Sheet 1689.58 1171.25
2220.00 1688.67
Year in Retrospect:
The sales and other income for the financial year under review were
Rs.35,008.66 lacs as compared to Rs. 27,093.83 lacs for the previous
financial year, up by 29%. The production of Calcined Petroleum Coke
("CPC") was 1,31,735 tonnes as compared to 1,27,379 tonnes for the previous
financial year.
The sales of CPC were 1,34,492 tonnes (including exports 52,364 tonnes) for
the financial year under review as compared to 1,23,691 tonnes (including
exports 30,941 tonnes) for the previous financial year. The profit after
tax during the financial year was Rs. 1048.75 lacs as compared to the
profit of Rs. 919.12 lacs in the previous financial year.
Dividend:
Your Directors have recommended a dividend of Rs. 4/- per equity share
(40%) of face value of Rs. 10/- for the financial year ended March 31,
2012, as against a similar 40% paid in the previous financial year.
Subsidiary Company/China Project:
As reported earlier, the Company, together with its wholly owned subsidiary
`GCL Global Resources SGP Pte Ltd.`, Singapore entered into a Joint Venture
Agreement with Sinoway International Holdings Ltd., Hong Kong with the
intention of setting up a wholly owned subsidiary in the Peoples Republic
of China (PRC) for the manufacture of 2,80,000 MT of Calcined Petroleum
Coke per annum. However, the joint venture partner`s have mutually agreed
to terminate the joint venture agreement due to practical difficulties. The
company is exploring other avenues to set-up project in China.
Listing Information:
The equity shares of your Company are listed on the Bombay Stock Exchange
Limited (BSE) and on the National Stock Exchange of India Limited (NSE).
The listing fees for the year 2012-2013 have been paid to BSE and NSE.
Accreditation:
The Company continues to enjoy ISO 9001 & ISO 14001 accreditation made by
BUREAU VERITAS.
Public Deposits:
The Company has not accepted any public deposits during the year under
review.
Directors:
In terms of Article 140 of the Articles of Association of the Company, Mr.
Shrinivas V. Dempo and Dr. A.B. Prasad, Directors, retire by rotation at
the ensuing Annual General Meeting and being eligible offer themselves for
re-appointment.
A Brief resume of these Directors, the nature of their expertise in
specific functional areas, and the names of the companies in which they
hold directorships and membership of board committees, shareholding in the
Company as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, are provided in the Report on Corporate Governance.
Directors` Responsibility Statement:
As required by Section 217(2AA) of the Companies Act, 1956, based on the
information and representations received from the operating management your
Directors confirm that:
(i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with the proper explanation relating to
material departures;
(ii) The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company
for that period to the best of their knowledge and ability;
(iii) The Directors have taken proper and sufficient care to maintain
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 to the best of their knowledge and ability;
(iv) The Directors have prepared the annual accounts on a going concern
basis.
Auditors:
The Auditors, Deloitte Haskins & Sells, retire at the ensuing Annual
General Meeting and are eligible for re-appointment. The Board recommends
their re-appointment as Auditors to audit the accounts of the Company for
the financial year 2012-2013.
Particulars of Employees;
In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of the employees are set out in the
Annexure - I to the Directors Report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings
and outgo:
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, required to be disclosed by Section
217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are provided
in the Annexure-II to this Report.
Corporate Governance:
It has been the endeavor of your Company to follow and implement best
practices in corporate governance, in letter and spirit. A detailed
Corporate Governance Report is attached and forms part of this report.
A certificate from the Statutory Auditors of the Company regarding
compliance of the conditions of corporate governance as required under
Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of
this report.
Acknowledgment:
Your Directors would like to express their appreciation for the assistance
and co-operation received from the Government authorities, banks,
customers, business associates and members during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services by the executives, staff and
workers of the Company.
For and on behalf of the Board of Directors
Shrinivas V. Dempo
Chairman
Place: Panaji
Dated: 17th April, 2012.
ANNEXURE-II TO THE DIRECTORS` REPORT:
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, ETC. AS PER COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES,
1988.:
(A) Conservation of Energy:
(a) Energy Conservation measures:
Goa Plant:
Total electrical units consumed for the whole year was 6,26,292 kwh units
as against 6,43,651 kwh units of previous year. Consumption of electrical
energy per metric ton of Calcined Petroleum Coke (CPC) produced during the
year was 20.42 kwh/ MT of CPC as against 16.73 kwh/MT of previous year.
This is due to lower production run days for the full year as compared to
previous year. A strict control on routinely maintaining power factor
enabled the company to get maximum rebate of Rs. 72,645/-.
Furnace Oil consumption during the year was 2,34,349 litres as against
1,68,340 litres of previous year. Furnace Oil consumption per ton of CPC
during the year was 7.64 litres/MT as against 4.38 litres/MT in the
previous year due to production of higher RD CPC (i.e. 2.06 grams/cc
minimum) to meet customer specifications and also due to frequent start/
stop of production to meet market requirement. (extra furnace oil &
electricity units consumed for heating & cooling of kiln).
b) Additional investment and proposals, if any, being implemented for
reduction of consumption of energy.
Goa Plant:
1) Installed new glass luminaries to reduce lighting unit consumption.
2) Installed power capacitor at local load point to reduce losses in cables
and to maintain unity power factor.
3) Replaced high energy efficient water pump in place of old pump at
continuous operation point.
4) Conditioned monitoring of equipments & strict monitoring for efficient
usage of equipment is being continued
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
Goa Plant:
The above steps will help to save 2% to 3% of electrical energy consumption
on current connected load.
d) Total energy consumption & energy consumption per unit of production as
per Form-A of the Annexure in respect of industries specified in the
schedule there to.:
NIL
(A) Conservation of Energy:
(a) Energy conservation measures:
Bilaspur Plant:
Electrical Energy consumption during the year has increased to 16.79 kwh/MT
as compared to 16.24 Kwh/MT of previous year. This increase is due to lower
production running days. A vigilant control on periodically maintained
power factor enabled the company to maximum power factor incentives of
Rs.11,910/-. This was lower than the previous year due to lower production
run during the year.
Furnace Oil consumption per MT of CPC has decreased from 7.22 liters/MT to
1.96 liters/MT for heating and cooling of the Kiln. Furnace Oil used for
processing has also decreased from 5.48 liters/MT to 0.20 liters/MT due to
concerted efforts and continuous monitoring of process parameters.
(A) Conservation of Energy:
(a) energy conservation measures:
b) Additional investment and proposals, if any, being implemented for
reduction of consumption of energy.
Bilaspur Plant:
1) Additional transparent FRP sheets provided in CPC storage godown thereby
using natural light.
2) Installed energy efficient luminaries.
3) Initiation to install energy efficient motor.
(A) Conservation of Energy:
(a) Energy conservation measures:
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.:
Bilaspur Plant:
NIL
(A) Conservation of Energy:
(a) Energy conservation measures:
d) Total energy consumption & energy consumption per unit of production as
per Form-A of the Annexure in respect of industries specified in the
schedule there to.
Bilaspur Plant:
Not applicable to our industry.
(A) Conservation of Energy:
(a) energy conservation measures:
Paradeep Plant:
The specific Electrical Energy consumption for the financial year 2011-12
was 15.62 Kwh/MT. In comparison with the previous financial year 2010-11,
the specific energy consumption is less by 0.12 Kwh/MT of CPC produced. The
average production rate has been maintained as in the previous year.
The Power cost has increased from Rs. 4.73 per unit to Rs. 5.96 per unit.
This increase of Rs. 1.23/Unit is due to power tariff revision by CESU.
The consumption of Furnace oil for production was nil as in the previous
year.
b) Additional investment and proposals, if any, being implemented for
reduction of consumption of energy.
Paradeep Plant:
No additional investment.
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
Paradeep Plant:
We had already replaced the electrical motors with high efficiency motors
and it has resulted in reduction in specific energy consumption as in the
previous year.
d) Total energy consumption & energy consumption per unit of production as
per Form-A of the Annexure in respect of industries specified in the
schedule there to.
Paradeep Plant:
NIL
(B) Technology Absorption:
e) Efforts made in technology absorptions per Form-B of the Annexure.:
Please refer to the enclosure.
(C) Foreign Exchange Earnings and Outgo.:
f) Activities relating to exports; initiatives taken to increase exports;
development of new export markets for products and services and export
plans.:
The Company`s exports to internationally renowned aluminium majors as per
long term contracts still continues.
g) Total foreign exchange used and earned.:
Foreign Exchange used for importing raw material, interest on foreign
currency loans and travel expenses of employees for official work etc. were
equivalent to Rs. 26,400.38 lakhs. Foreign Exchange earned during the year
2011-2012 by exporting finished product was equivalent to Rs. 13,368.16
lakhs.
FORM-B:
(See Rule 2):
Form for disclosure of particulars with respect to Technology Absorption.
Research and Development (R&D):
1. Specific area in which R & D }
carried out by the Company. }
}
2. Benefits derived as a result }
of the above R & D. } As reported, the Company has been
} able to achieve
3. Future plan of action. } reduction in energy consumption and
} higher product recovery with efforts
4. Expenditure on R & D } towards continuous and consistent
} reviews of all processes &
a) Capital } operations and consequent
} improvement actions.
b) Recurring }
}
c) Total }
}
d) Total R & D expenditure }
as a percentage of total }
turnover. }
Technology absorption,adaptation and innovation.
1. Efforts, in brief, made }
towards technology absorption, }
adaptation and innovation. } The Company has been able to achieve
} an improvement
2. Benefit derived as a result } in the efficiency of the production
of the above efforts } during the year
e.g. product improvement, cost } under review.
reduction, product development, }
import substitution, etc. }
3. In case of imported }
technology (Imported during }
the last 5 years reckoned }
from the beginning of the }
financial year) following }
information may be furnished }
}
a) Technology imported. }
}
b) Year of Import } Not applicable
}
c) Has Technology been fully }
absorbed }
}
d) If not fully absorbed, }
areas where this has not }
taken place, reasons therefore }
and future plans of action. }
MANAGEMENT DISCUSSION AND ANALYSIS:
The year 2011-12 was an extremely challenging as well as difficult year for
the Calcined Petroleum Coke (CPC) industry overall due to the demanding
economic scenario in the international as well as domestic markets. The
prices of the finished product CPC has not been effectively reflected the
way raw material prices and ocean freights have been rising. However,
despite these negative factors, the Company has demonstrated positive
confidence in the bottom line.
Under the circumstances, the Company reviewed the short, medium and long
term business prospects of the petcock industry and is of the firm view
that even though petroleum coke business is witnessing an increase in
demand, there will be pressures on margin and profitability in short and
medium term. The growth of petroleum coke business is linked with the
growth of basic aluminium metal production, steel industry and manufacture
of titanium dioxide and it is reported that the growth of aluminium metal
production is expected to be on the rise in the years to come. A number of
brown field expansions in aluminium industry are at a plan stage in the
domestic market. Considering all these factors, the management feels that
petroleum coke business looks promising in the long term.
Risks & Concern:
The worldwide recession is having severe consequences throughout all
segments of industries resulting in significant capacity curtailments by
all basic product manufacturers. Since the demand for CPC entirely depends
on the production schedule of aluminium and steel industry, the CPC
industry is also affected by the changes in global environment.
The international recession particularly in European countries impacted the
demand for US$ which resulted in volatility in the value of Indian Such
volatility in US$ resulted in forex losses for most of the companies in
India, including the companies which mainly import its raw material from
foreign countries. The Company also imports most of its raw material from
foreign countries.
Another major concern of the industry is availability of right type of raw
material i.e., Raw Petroleum Coke (RPC) also known as Green Petroleum Coke
in required quantities to meet the growing demand of aluminium smelters.
There is a major shift in refining operations internationally which has
impacted the availability of right type of RPC for calciners. Under the
circumstances, the calciners, to be more competitive and successful are
required to work closely with the aluminium smelters on continuous basis to
optimize and blend different types of RPC. The Company continues to
overcome this problem by working towards regular research and development
and interacting with aluminium smelters to meet their requirements, by
adapting to the changed scenarios.
Research and Development:
Research and development is a continuous process at Goa Carbon. The Company
is continuously innovating and discovering new methods and concepts to
improve the quality of CPC and to achieve efficiency in manufacturing
operations. The company is awarded with quality certification of ISO 9001
and ISO 14001 which demonstrates the ability of the Company to achieve
higher level of customer satisfaction.
Financial Review:
The financial statements have been prepared in compliance with the
requirements of the Companies Act, 1956. The key financial ratios are given
below in percentage, except for earnings per share:
Year Year
ended ended
31.03.2012 31.03.2011
PAT/Sales 3.05% 3.43%
Return on Net Worth 20.61% 19.92%
Earnings per share (Rs. ) 11.46 10.04
The net cash flow of the Company during the year ended 31.03.2012 is as
follows:
Rs. in Lacs
Year Year
ended ended
31.03.2012 31.03.2011
Cash (used in)/from operations (2,299.53) (939.34)
Cash (used in)/from investing 1,466.36 4,427.78
activities
Cash (used in)/ from financial (1,737.72) 7,075.63
activities
Net increase/(decrease) in cash (2,570.89) 1,708.51
Internal Control System:
The company has adequate internal control system commensurate with its size
and business. The Internal Auditor reviews all the transactions of the
company and ensures that they are in line with the compliance of laws,
policies and procedures and have been correctly recorded and reported. The
Internal Audit is conducted on regular basis and the reports are submitted
to the Audit Committee of Directors at their meetings held at every
quarter.
Human Resources:
As on 31st March 2012, the Company had 249 employees consisting of 80
managerial personnel and 169 other employees including workmen.
The Company has excellent combination of experienced and talented Technical
Managers. The Company on a regular basis undertakes various training
programs to keep its employees updated on information and new technical
developments which allows them to achieve cost effectiveness and
operational efficiency.
The Company`s relation with its employees is cordial. The Company always
reciprocates commitment to its employees in order to motivate them to
perform at their best.
Statutory Compliance:
All declarations and compliances with respect to the applicable statutes,
enactments and guidelines are submitted at every meeting of the Board of
Directors of the Company. The Company Secretary who is also the Compliance
Officer gives a declaration of compliance to the Board with respect to the
applicable provisions of Companies Act, 1956, SEBI Regulations and Listing
Agreements with the Stock Exchanges.
Cautionary Statement:
Some of the statements given in the above management discussion and
analysis about the Company`s projections, objectives, estimates,
expectations and predictions may be `forward looking statements` within the
meaning of applicable securities laws and regulations. The actual results
may differ substantially from these expressed or implied statements.
Significant factors that could make a difference to the company`s
operations including domestic and global economic conditions affecting
demand and supply and price conditions in the industry, changes in
Government laws, tax regime and other statutory changes, environment laws
and labor relations. The Company undertakes no obligation to periodically
revise any such forward looking statement to reflect future events or
circumstances. |