Directors Report of India Nippon Electricals Ltd.

Mar 31, 2025

The Board of Directors are pleased to present the 40^th Annual Report of India Nippon Electricals Limited ("the Company") along
with the audited financial statements (Standalone and Consolidated) for the financial year ended 31^st March, 2025.

1. FINANCIAL HIGHLIGHTS

Particulars	Standalone		Consolidated
	Year ended 31st March, 2025	Year ended 31st March, 2024	Year ended 31st March, 2025	Year ended 31st March, 2024
Total Income	87,462	74,887	87,494	74,895
Profit before depreciation, exceptional items and taxes	12,324	9,087	12,349	9,087
Less: Depreciation	2,056	1,509	2,056	1,509
Profit before tax and exceptional items	10,268	7,578	10,293	7,578
Exceptional items	-	-	-	-
Profit before tax	10,268	7,578	10,293	7,578
Tax	2,065	1,648	2,065	1,648
Profit after tax	8,203	5,930	8,228	5,930
Add: Balance in statement of profit and loss including general	49,648	46,037	49,648	46,037
reserve
Total Comprehensive income available for Appropriation	57,851	51,966	57,876	51,966
Appropriations:
Dividend and Dividend Distribution tax	2,828	2,318	2,828	2,318
Surplus carried forward	55,023	49,648	55,048	49,648

2. FINANCIAL AND OPERATIONAL PERFORMANCE

Our total revenue grew by 16% year-on-year (YoY)
to ?84,483 Lakhs, reflecting the growing demand
for our products and the strength of our customer
relationships. Profit After Tax (PAT) stood at ?8,203
Lakhs, a commendable 38% increase from the previous
year. We continued to enhance profitability, with
EBITDA increasing from ?9,126 Lakhs to ^ 12,363
Lakhs. This improvement was driven by our focused
efforts on optimizing material costs and expanding our
footprint in exports and aftermarket segments, which
contributed to a healthy uptick in gross margin from
31.2% in 2023-24 to 32.1% in 2024-25.

2.1. Transfer to Reserves

The Company retained the entire surplus in the Profit
and Loss Account and hence no transfer to General
Reserve was made during the Year.

3. INTERNAL FINANCIAL CONTROLS SYSTEMS AND
ADEQUACY

The Company has established a robust internal
financial framework including Internal Controls over

Financial Reporting and anti-fraud framework. The
Company’s internal control systems are commensurate
with the nature of its business, the size and complexity
of its operations and such internal financial controls
concerning the financial statements are adequate. The
Company has engaged an auditor who is a strong and
independent external firm specializing in internal audit.

Internal Audit firm functionally reports to the Chairman of
the Audit Committee, thereby maintaining its objectivity
and independence. The framework is regularly
reviewed by the management and audit committee and
strengthened, from time to time to ensure adequacy
and effectiveness of internal financial controls. While
Internal controls over Financial Reporting is certified by
the Statutory Auditors, the Chief Financial Officer and
the Managing Director certifying the adequacy of over¬
all Financial Controls to the Audit Committee and Board
on quarterly/ annual basis.

The Current system of internal financial control is
aligned with statutory requirements. Effectiveness
of internal financial control is ensured through

management reviews, controlled self-assessment and
independent testing by external independent Internal
Auditor.

4. CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Act, the
Company has undertaken CSR activities, projects and
programs, excluding activities undertaken in pursuance
of its normal course of business. We are committed
to actively contribute towards the development of a
sustainable society.

For the year 2024-25, a number of CSR projects/
programs were undertaken and based on the
recommendation of the CSR Committee, the Board
had approved an amount of '' 1,06,23,000 i.e., 2% of
the average qualifying net profits of the last three
financial years on CSR activities. After setting off the
previous year’s excess spent of '' 1 1,563, the balance
'' 1,06,11,437 was required to be spent towards CSR
projects against which the Company had spent
'' 1,15,09,492 which is '' 8,98,055 in excess of the CSR
obligation for the year which shall be carried forward to
the FY 2025-26.

In addition to the projects specified as CSR activities
under Section 135 of the Act, the Company has also
carried out several other sustainability/ responsible
business initiatives to the community and most of the
activities were carried out near to the locations of the
factory.

The Annual Report on CSR containing the Composition
of the CSR Committee, salient features of the CSR Policy,
details of activities, and other information as required
under Companies (Corporate Social Responsibility
Policy) Rules, 2014 are provided in Annexure to this
report. The CSR Policy may be accessed on the
Company’s website at the link: https:// indianippon.
com/policies/

5. SUBSIDIARY COMPANY AND THE CONSOLIDATED
FINANCIAL STATEMENTS:

a) Subsidiary Company: PT Automotive Systems

Indonesia (PTASI)

PT Automotive Systems Indonesia (PTASI) had

applied for liquidation, and the final accountability

report of the liquidator, dated 10^th January 2025,
was duly approved by the shareholders of the
company.

Subsequently, the winding-up process of PTASI
has been completed, and the liquidation proceeds
were received on 24^th June 2025. The company
is currently awaiting confirmation from the
Indonesian authorities regarding the removal of its
name from the Register of Companies. Financial
position of the subsidiary is provided in Form
AOC-1 as required under Section 129 (3) of the
Companies Act 2013.

b) Consolidated Financial Statements

The Consolidated Financial Statements of the
Company is prepared in accordance with the
provisions of Section 129 (3) of the Companies
Act 2013 read with the Companies (Accounts)
Rules, 2014 and Regulation 33 of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015. Pursuant to the provisions
of Section 136 of the Companies Act, 2013, the
audited financial statements of the subsidiary
have been placed on the website of the Company
at https://indianippon.com/investor/ and will be
made available to the members on receipt of a
request from them.

c) Joint venture or Associates

The Company does not have any Joint venture or
Associate Company.

6. REMUNERATION RECEIVED BY MANAGING/ WHOLE
TIME DIRECTOR FROM THE COMPANY, HOLDING OR
SUBSIDIARY COMPANY

For the financial year 2024-25, a remuneration of
'' 384.46 Lakhs, including commission of '' 150 Lakhs,
subject to applicable taxes, was approved for Mr. Arvind
Balaji, Managing Director, by the Board of Directors
at their meeting held on 30^th May 2025. This approval
was based on the recommendation of the Nomination
and Remuneration Committee and is within the limits
approved by the shareholders at the Annual General
Meeting held on 21^st September 2022. During the
year, Managing Director received a commission of '' 8
Lakhs from the holding company, Lucas Indian Service
Limited.

7. DIVIDEND

a. Declaration and Payment of Dividend

The Board of Directors, at their meeting held on
13^th February 2025, declared an interim dividend
of '' 12.50 per equity share of face value '' 5 each,
representing a dividend rate of 250% on the face
value, for the financial year under review. Your
Directors recommend consideration of the same
as final dividend for the year which absorbs a
total sum of '' 2827.68 Lakhs for the year ended
31^st March, 2025.

As per the Income-Tax Act, 1961, dividends paid
or distributed by the Company shall be taxable in
the hands of the shareholders. Accordingly, the
Company makes the payment of the dividend
from time to time after deduction of tax at source.

b. Dividend Distribution Policy

The Dividend recommended is in accordance with
the Dividend Distribution Policy of the Company.
According to Regulation 43A of the Securities
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015
("Listing Regulations") the Board had adopted a
Dividend Distribution Policy, which has been placed
on the website of the Company and can be accessed
at the link: https://indianippon.com/policies/.

8. PUBLIC DEPOSITS

During the year, the Company has not accepted any
deposits from the public falling within the ambit of
Section 73 or Section 76 of the Companies Act, 2013
read with Companies (Acceptance of Deposits) Rules,
2014. No amount on account of principal or interest on
deposits from the public was outstanding as on 31^st
March, 2025.

9. FAMILIARIZATION PROGRAM

The Company has put in place a familiarization
program for all its Directors including the Independent
Directors. The familiarization program for Independent
Directors in terms of provisions of Regulation 46(2)(i)
of the Listing Regulations is uploaded on the website of
the Company at https://indianippon.com/investor/

10. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO:

The information on the Conservation of energy,
technology absorption and Foreign exchange earnings
and outgo as stipulated under Section 134(3) (m) of the
Act, read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 is set out in the Annexure to this Report.

11. BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing
Regulations, 2015 read with SEBI Master Circular No.
SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated 11^th July,
2023, the Business Responsibility and Sustainability
Report (''BRSR'') for 2024-25 has been prepared on
a voluntary basis, based on the framework of the
National Guidelines on Responsible Business Conduct
and in the format prescribed by SEBI.

12. PARTICULARS OF 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
annexed to this Report.

Disclosures with respect to the remuneration of
Directors and employees as required under Section
197 of the Companies Act, 2013 and Rule 5(1) of
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, has been appended
as Annexure to this Report.

The statement containing names of the top ten
employees in terms of remuneration drawn and the
particulars of employees as required under Section
197(12) of the Act read with Rule 5(2) and 5(3) of
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, forms
part of this Report. In terms of Section 136(1) of the
Act, the Annual Report is being sent to the Members,
excluding the aforesaid statement. The statement is
open for inspection upon request by the Members and
any Member desirous of obtaining the same may write
to the Company Secretary at [e-mail].

13. ANNUAL RETURN

The copy of draft Annual Return in Form MGT-7,
prepared as per Section 92(3) of the Act read with Rule
11 of the Companies (Management and Administration)
Rules, 2014 is placed on the website of the Company
at https://indianippon.com/. The Annual Return will
be submitted to the Registrar of Companies within the
timelines prescribed under the Act.

14. RISK MANAGEMENT COMMITTEE

The Board of Directors of the Company has formed a
Risk Management Committee to frame, implement, and
monitor the risk management plan for the Company.
The Committee is responsible for reviewing the risk
management plan and ensuring its effectiveness.
The Committee considers the risks that impact the
mid-term to the long-term objectives of the business,
including those reputational in nature.

The Company has an elaborate risk charter and risk
policy defining the risk management governance
model, risk assessment, and prioritization process. As
per Schedule II to SEBI (LODR) Regulations, the Risk
Management Policy was amended and approved by the
Board in its meeting held on 13^th November, 2024. The
policy can be accessed at https://indianippon.com/
policies/.

Further, the Risk Management Committee reviews and
monitors the key risks and their mitigation measures
periodically and provides an update to the Board on the
Company’s risks outlined in the risk registers. There are
no risks which in the opinion of the Board threaten the
existence of the Company. The Audit Committee has
additional oversight in the area of financial risks and
controls.

15. CORPORATE GOVERNANCE AND MANAGEMENT
DISCUSSION AND ANALYSIS

The Company has complied with the corporate
governance requirements under the Act, and the
Listing Regulations. A separate section on Corporate
Governance along with a certificate from the Practicing
Company Secretary confirming compliance forms an
integral part of this Annual Report. A detailed report
on Management Discussion and Analysis also forms
an integral part of this Annual Report and covers the

consolidated operations reflecting the nature of our
business.

16. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls
and compliance systems established and maintained
by the Company, work performed by the internal,
statutory, cost, and secretarial auditors including
the audit of internal financial controls over financial
reporting by the statutory auditors and the reviews
performed by the management and the relevant Board
Committees, including the Audit Committee, the Board
is of the opinion that the Company’s internal financial
controls were adequate and operating effectively
during the financial year 2024-25.

Pursuant to Section 134 (5) of the Act, the Board of
Directors, to the best of their knowledge and ability,
confirm that for the financial year ended 31^st March,
2025:

a. In the preparation of the annual accounts, the
applicable accounting standards have been
followed and there are no material departures;

b. They 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 profits of the Company for that period;

c. They have taken proper and sufficient care 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;

d. They have prepared the annual accounts on a
''going concern basis’;

e. They have laid down internal financial controls
for the Company which are adequate and are
operating effectively;

f. They have devised a proper system to ensure
compliance with the provisions of all applicable
laws and such systems are adequate and are
operating effectively.

17. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

17.1.Independent and Non-Executive Directors: Appointment, Re-appointment, Resignation, Retirement etc.:

There were no appointment or re-appointment of Independent Directors during the year 2024-25. Following table
represents the appointment and tenure of Independent Directors of your Company:

Name of the Director	Date of Appointment (first term)	Date of Appointment (second term)	Term
Mr. Anant J Talaulicar	6th April, 2019	6th April, 2023	5 Years
Mr. Heramb R Hajarnavis	10th August, 2022	-	4 Years
Mrs. Gangapriya Chakraverti	10th August, 2022	-	4 Years

Retirement by rotation and subsequent
re-appointment:

In accordance with the provisions of Section 152
and other applicable provisions, if any, of the Act
and the Articles of Association of the Company,
Mrs. Priyamvada Balaji (DIN: 00730712), Non-Executive
Director of the Company, is liable to retire by rotation at
the ensuing AGM and being eligible has offered herself
for re-appointment.

Based on performance evaluation and recommendation
of the Nomination and Remuneration Committee, the
Board of Directors recommends her re-appointment
as a Non-Executive Director of the Company, liable to
retire by rotation. The appropriate resolution for the
re-appointment of Mrs. Priyamvada Balaji is being
placed for the approval of the shareholders of the
Company at the ensuing AGM. Details with respect
to her experience, attributes, skills, disclosure of
relationship between directors inter-se, directorships
held in other companies and committee memberships,
etc., as stipulated under Regulation 36 of the Listing
Regulations and Secretarial Standard on General
Meetings issued by ICSI, have been disclosed in the
Annexure to the Notice of the AGM. The Managing
Director and Independent Directors of the Company are
not liable to retire by rotation.

17.2. Key Managerial Personnel (KMPs):

Mr. Arvind Balaji, Managing Director, Mr. Elango
Srinivasan, CFO & Ms. S Logitha Company Secretary, are
the Key Managerial Personnel ("KMP") of the Company
in accordance with the provisions of Sections 2(51) and
203 of the Act read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014.

During the year under review, there were no changes to
the KMP or Directors of the Company.

17.3. Declaration by Independent Directors as required u/s
149:

In terms of Section 149 of the Act and SEBI Listing
Regulations, Mr. Anant J Talaulicar, Mr. Heramb R
Hajarnavis and Ms. Gangapriya Chakraverti are the
Independent Directors of the Company, as on the date
of this report.

All Independent Directors of the Company have given
requisite declarations under Section 149(7) of the
Act, that they meet the criteria of independence as
laid down under Section 149(6) of the Act along with
Rules framed thereunder, Regulation 16(1)(b) of SEBI
Listing Regulations and have complied with the Code
of Conduct of the Company as applicable to the Board
of Directors and Senior Management Personnel.

In terms of Regulation 25(8) of the SEBI Listing
Regulations, the Independent Directors have confirmed
that they are not aware of any circumstance or situation,
which exists or may be reasonably anticipated, that
could impair or impact their ability to discharge
their duties with an objective independent judgment
and without any external influence. The Company
has received confirmation from all the Independent
Directors of their registration on the Independent
Directors Database maintained by the Indian Institute
of Corporate Affairs, in terms of Section 150 read with
Rule 6 of the Companies (Appointment and Qualification
of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors
possess the requisite expertise, integrity and experience
and are persons of high integrity and repute. They
fulfill the conditions specified in the Act as well as the

Rules made thereunder and are independent of the
management.

Declaration of Independence comprising all the
requirements of Companies Act, 2013 and SEBI Listing
Regulations were received by the Company and was
taken on record by the Board after verifying the veracity
of the declarations, from Mr. Anant J Talaulicar, Mr.
Heramb R Hajarnavis and Ms. Gangapriya Chakraverti.

Further, a report by Practicing Company Secretary
certifying that none of the Directors of the Company are
debarred or disqualified is given as an annexure to this
Report.

18. MEETINGS OF THE BOARD

During the year under review, 5 meetings of the Board
of Directors were held on 30^th May, 2024, 6^th August,
2024, 13^th November, 2024, 13^th February, 2025 and
25^th March, 2025. The maximum interval between any
two meetings did not exceed 120 days, as prescribed
by the Act and the Listing Regulations. The details on
attendance by the Directors during Financial year 2024¬
25 are given in the Report of Corporate Governance
forming part of this Annual Report.

18.1. Committees of the Board

The Committees of the Board focus on certain specific
areas and make informed decisions in line with
the delegated authority. The following Committees
constituted by the Board function according to their
respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders’ Relationship Committee

• Risk Management Committee

Details of composition, terms of reference and number
of meetings held for respective committees are given in
the Report on Corporate Governance, which forms part
of this report. During the year, all recommendations of
the Committees of the Board which were mandatorily
required have been accepted by the Board.

18.2.Separate meeting of Independent Directors & Board
evaluation:

The Company conducted a separate meeting of
Independent Directors as per the requirements of the
Companies Act, 2013 and SEBI Listing Regulations on
13^th February, 2025.

The annual evaluation process of the Board of Directors,
individual Directors and committees were conducted
in accordance with the provisions of the Act and the
SEBI Listing Regulations. The Board was evaluated
on following parameters: The Board evaluated its
performance after seeking inputs from all the Directors
on the basis of criteria such as Strategy, Performance
Management & Succession Plan, Execution,
Investments, M&A and Financial Controls, Talent
Management, Risk Management, Core Governance
& Compliance, Review of Information, Monitoring of
Committee.

Committees were evaluated on the parameters like
Functions and Duties, Management Relations, Support
to the Committee and overall.

The Board and the NRC reviewed the performance of
individual Directors on the basis of criteria such as the
contribution of the individual Director to the Board and
committee meetings like preparedness on the issues to
be discussed, meaningful and constructive contribution
and inputs in meetings, etc

In a separate meeting of Independent Directors,
performance of Non-Independent Directors and the
Board as a whole was evaluated. Additionally, they
also evaluated the Chairman of the Board, taking into
account the views of Executive and Non-executive
Directors in the aforesaid meeting. The Board also
assessed the quality, quantity and timeliness of flow of
information between the Company management and
the Board that is necessary for the Board to effectively
and reasonably perform their duties. The above
evaluations were then discussed in the Board meeting
and performance evaluation of Independent Directors
was carried out by the entire Board, excluding the
Independent Directors being evaluated. The separate
meeting of Independent Directors for 2024-25 was held
pursuant to Schedule IV to the Companies Act, 2013
& Regulations 17 & 25 of SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015.

19. POLICY ON DIRECTORS'' APPOINTMENT AND
REMUNERATION

The Company’s Policy on Directors’ appointment and
remuneration and other matters provided in Section
178(3) of the Act has been briefly disclosed hereunder
and in the Report on Corporate Governance, which
forms part of this report.

19.1. Selection and procedure for nomination and
appointment of Directors:

The Nomination and Remuneration Committee ("NRC")
of the Board is entrusted with the responsibility for
developing competency requirements for the Board,
based on the industry and strategy of the Company.
The Board composition analysis reflects an in-depth
understanding of the Company, including its strategies,
environment, operations, financial condition and
compliance requirements.

The NRC makes recommendations to the Board
regarding the appointment/re-appointment of
Directors, and Key Managerial Personnel ("KMP") and
other members of the Senior Management. The role
of the NRC encompasses conducting a gap analysis
to refresh the Board periodically, including each time a
Director’s appointment or re- appointment is required.

The NRC is also responsible for reviewing the
profiles of potential candidates vis-a-vis the required
competencies, undertaking reference, and due
diligence, and meeting potential candidates before
making recommendations of their nomination to
the Board. The appointee is also briefed about the
specific requirements for the position including expert
knowledge expected at the time of appointment.

The Company has a Nomination and Remuneration
Policy in place and the same can be accessed at
https://indianippon.com/policies/.

20. AUDITORS

20.1 Statutory Auditors

M/s Deloitte Haskins & Sells LLP Chartered
Accountants, were appointed for a period of five years

from the conclusion of the 32^nd Annual General Meeting
held on 24^th August, 2017 and were re-appointed for
a second term of 5 years from the conclusion of the
Annual General Meeting held on 21^st September, 2022
until the conclusion of the Annual General Meeting to
be held in the year 2027. Based on the approval of the
Shareholders at the AGM held in 2022, the Board of
Directors had fixed a fee of '' 26 Lakhs per annum plus
applicable taxes and reimbursement of out-of-pocket
expenses for the Statutory Auditors for 2 years from
2022-23.

Further, the Board of Directors at their meeting held on
6^th August, 2024 had increased the fee from '' 26 Lakhs
to '' 30 Lakhs per annum plus applicable taxes and
reimbursement of out-of-pocket expenses for 2 years
from 2024-25.

The Statutory Auditors have issued an unmodified
opinion on the financial statements for the FY 2024¬
25. The Statutory Auditor’s report does not contain
any qualifications, reservations, adverse remarks or
disclaimers, which would be required to be dealt with in
the Boards’ Report.

20.2. Cost Auditors

Pursuant to Section 148(1) of the Act read with Rule
3 and 5 of the Companies (Cost Records and Audit)
Rules, 2014, the Company has maintained cost records
for FY 2024-25. The Cost Audit Report for the FY 2024¬
25 does not contain any qualification, reservation, or
adverse remark and the Report has been filed with
MCA. The Board at its meeting held on 30^th May, 2025,
approved re-appointment of Mr. K Suryanarayanan as
cost auditor for the FY 2025-26 at a remuneration of
'' 3.80 Lakhs. The ratification of his remuneration shall
be included as an item in the Notice of the Annual
General Meeting as required under Section 148 (3)
of the Companies Act, 2013 read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014.

20.3. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act
and the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the Company
appointed M/s S.A.E. & Associates LLP, Company
Secretaries LLPIN: AAM-6181 (ICSI Registration no:
L2018TN004700), to carry out the Secretarial Audit of
the Company for FY 2024-25.

The Report of the Secretarial Auditor for the FY 2024-25
is attached herewith as Annexure to this Report. There
are no qualifications, observations, adverse remarks, or
disclaimer in the said Report.

The Board of Directors, based on the recommendation
of the Audit Committee, have appointed M/s. S.A.E. &
Associates LLR Practicing Company Secretaries as the
Secretarial Auditors of the Company for a term of five
years commencing from the conclusion of 40^th AGM
till the conclusion of 45^th AGM (Audit period covering
the financial years from 2025-26 to 2029-30) and
as per Regulation 24A of the Listing Regulations, the
appointment of the Secretarial Auditor is subject to
approval of the Shareholders of the Company in the
ensuing Annual General Meeting.

M/s. S.A.E. & Associates LLP have confirmed that they
are not disqualified to be appointed as the Secretarial
Auditors of the Company.

As required by Schedule V of the Listing Regulations,
the Auditor’s Certificate on Corporate Governance
received from M/s. S.A.E. & Associates LLP is annexed
to the Report on Corporate Governance forming part of
this Annual Report.

20.4. Internal Auditors

M/s. R.G.N. Price & Co., Internal Auditors of the
Company have carried out Internal Audit for FY 2024¬
25. The reports and findings of the Internal Auditors are
periodically reviewed by the Audit Committee.

Pursuant to Section 138 of the Act read with Rule 13
of the Companies (Accounts) Rules, 2014, the Board of
Directors, based on the recommendation of the Audit
Committee, have re- appointed M/s. R.G.N. Price & Co.
as Internal Auditors of the Company for FY 2025-26.

21. SECRETARIAL STANDARDS

The Company has complied with all the applicable
provisions of Secretarial Standards on Meetings
of Board of Directors (SS-1), Secretarial Standards
on General Meetings (SS-2) issued by Institute of
Company Secretaries of India.

22. UNCLAIMED DIVIDEND

In terms of applicable provisions of the Act read with
the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016
("IEPF Rules"), unclaimed dividend amounting to '' 8.66
Lakhs was transferred by the Company to the Investor
Education and Protection Fund ("IEPF"), established by
the Government of India, during the year under review.

The shares on which dividend has not been paid or
claimed by the Shareholder for seven consecutive years
or more shall also be transferred to demat account
of the IEPF Authority. Accordingly, 6576 shares were
transferred to the demat account of the IEPF Authority
during the year under review, in accordance with the
IEPF Rules, as the dividend(s) has not been claimed by
the Shareholders for 7 consecutive years or more.

The Company had sent individual notices to all the
members whose dividends are lying unpaid/ unclaimed
against their name(s) for 7 consecutive years and
followed other procedures seeking action from the
members. The list of such members is displayed on the
website of the Company.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES

All contracts/arrangements/transactions entered
into by the Company during the financial year under
review with related parties (as defined in the Act and
Listing Regulations) were in the ordinary course of
business and on an arm’s length basis. During the
year, the Company did not enter into any contract/
arrangement/transaction with related parties which
could be considered as material in accordance with
the Policy of the Company on Materiality of Related
Party Transaction (RPT Policy). Form AOC-2 pursuant
to Section 134(3)(h) of the Act read with Rule 8(2) of
the Companies (Accounts) Rules, 2014, is set out as
Annexure to this Report.

The details of the related party transactions as per Ind
AS-24 on Related Party Disclosures are set out in the
financial statements of the Company.

24. RELATED PARTY TRANSACTIONS

All transactions with related parties during the FY
2024-25 were reviewed and approved by the Audit
Committee and are in accordance with the Policy on
dealing with materiality of Related Party Transactions
and the Related Party Framework, formulated and
adopted by the Company. Prior omnibus approval of
the Audit Committee is obtained on a yearly basis for
the transactions which are of repetitive nature. The
transactions entered into pursuant to the omnibus
approval so granted are audited peridically and a
statement giving details of all related party transactions
is placed before the Audit Committee for their review/
approval on a quarterly basis.

All contracts/arrangements/transactions entered into
by the Company during the year under review with
related parties were in the ordinary course of business
and on arm’s length basis in terms of provisions of the
Act. There are no materially significant related party
transactions that may have potential conflict with
interest of the Company at large.

The Company’s Policy on dealing with and materiality
of related party transactions was amended during
FY 2024-25 and the updated Policy is available on its
website at https://indianippon.com/policies/.

25. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS U/S 186

The Company has not given any loans or guarantee
as specified under Section 186 of the Companies Act
2013. The details of investments are given in Note No.
8 of Notes to Accounts for the FY 2024-25. The same is
within the prescribed limits under provisions of Section
186 of the Companies Act 2013.

26. VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Company believes in the conduct of the affairs of
its constituents in a fair and transparent manner by
adopting the highest standards of professionalism,
honesty, integrity and ethical behavior. In line with the
policy, any actual or potential violation, howsoever
insignificant or perceived as such, would be a matter
of serious concern for the Company. The role of the
employees in pointing out such violations of the policy
of the Company, cannot be undermined.

Pursuant to Section 177(9) of the Act, a vigil mechanism
was established for directors and employees to report
to the management, instances of unethical behavior,
actual or suspected fraud or violation of the Company’s
code of conduct or ethics policy. The Vigil Mechanism
provides a mechanism for employees of the Company
to approach the Chairperson of the Audit Committee of
the Company for redressal. No person has been denied

access to the Chairperson of the Audit Committee.
Details of the Vigil Mechanism and Whistle Blower
Policy is available at the link: https://indianippon.com/
policies/.

27. PREVENTION OF SEXUAL HARASSMENT OF WOMEN
AT WORKPLACE

The Company has adopted zero tolerance for sexual
harassment at the workplace and has formulated a
policy on prevention, prohibition, and redressal of sexual
harassment at the workplace in line with the provisions
of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and
the rules made thereunder for prevention and redressal
of complaints of sexual harassment at workplace and
an Internal Complaints Committee has also been set up
to redress any such complaints received.

The Company is committed to providing a safe and
conducive work environment to all of its employees
and associates. Further, the Policy also gives shelter to
contract workers, trainees, apprentices of the Company
and any person visiting the Company.

During the year under review, following is the status of
complaints received by your Company:

a) Number of complaints of sexual harassment
received in the year: 2

b) Number of complaints disposed off during the
year: 2

c) Number of cases pending for more than ninety
days: 0

The Company periodically conducts sessions for
employees across the organization to build awareness
about the Policy and the provisions of the Prevention of
Sexual Harassment Act.

28. MATERNITY BENEFIT ACT, 1961

The Company has complied with the provisions of
Maternity Benefit Act, 1961.

29. GENERAL

Your Directors state that no disclosure or reporting is
required in respect of the following matters as there
were no transactions on these items during the year
under review:

a) There are no significant material orders passed by
the Regulators or Courts or Tribunal, which would
impact the going concern status of the Company
and its future operation. However, Members
attention is drawn to the Statement on contingent
liabilities and commitments in the notes forming
part of the Financial Statements.

b) No fraud has been reported by the Auditors to the
Audit Committee or the Board.

c) There has been no change in the nature of
business of the Company.

d) No revision of Financial Statements or the Board’s
Report occurred during the year.

e) There were no material changes and commitments
affecting the financial position of the Company
which has occurred between the end of the financial
year of the Company to which the Financial
Statements relate and the date of the Report.

30. CHANGES IN SHARE CAPITAL:

30.1. Changes in Share Capital:

During the financial year 2024-25, there was no change
in the authorized, issued, subscribed, and paid-up share
capital of the Company.

30.2. Issue of Equity shares with differential rights

During the financial year, the Company has not issued
any equity shares with differential rights.

30.3. Issue of Sweat Equity Shares

During the financial year, the Company has not issued
any sweat equity shares.

30.4. Issue of Employee Stock Options

During the financial year, the Company has not issued
any Shares under employee stock options.

30.5. Issue of shares to Trustees for benefit of employees

During the financial year, the Company has not issued
any shares to Trustees for the benefit of employees.

30.6. Issuance of any other securities which carries a right
or option to convert into equity shares

During the financial year, the Company has not issued
any securities which carry a right or option to convert
such securities into equity shares.

31. THE DETAILS OF APPLICATION MADE OR ANY
PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING
THE YEAR ALONG WITH THEIR STATUS AS AT THE
END OF THE FINANCIAL YEAR:

During the year under review, no application was made
nor any proceedings are pending against the Company
under the Insolvency and Bankruptcy Code, 2016.

32. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF
THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE
TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF:

There were no such instances during the year under
review.

33. ACKNOWLEDGMENTS

The Directors wish to convey their deep appreciation to
all the employees, customers, vendors, investors, and
consultants/advisors of the Company for their sincere
and dedicated services as well as their collective
contribution to the Company’s performance.

Your Directors acknowledge the continued support
received from Lucas TVS Limited, Lucas Indian Service
Limited and also wish to thank the Governments at
the Center and in the States of Tamil Nadu, Haryana
and Puducherry and our Bankers for the assistance
rendered by them from time to time.

For and on behalf of the Board of Directors

T K Balaji

Place: Chennai DIN: 00002010

Date: 13^th August, 2025 Chairman

---

Mar 31, 2024

The Board of Directors are pleased to present the 39^th Annual Report of India Nippon Electricals Limited ("the Company") along with the audited financial statements (Standalone and Consolidated) for the financial year ended 31^st March, 2024.

1. FINANCIAL HIGHLIGHTS (on standalone basis):

('' In Lakhs)

Particulars	Year ended 31st March, 2024	Year ended 31st March, 2023
Total Income	74,887	69,642
Profit before depreciation, exceptional items and taxes	9,087	9,271
Less:
Depreciation	1,509	1,462
Profit before tax & exceptional items	7,578	7,809
Exceptional items	-	803
Profit before tax	7,578	7,006
Taxation	1,648	1,219
Profit after tax	5,930	5,787
Add:
Balance in statement of profit and loss including general reserve	46,037	42,342
Total Comprehensive income available for Appropriation	51,966	48,128
Appropriations:
Dividend and Dividend Distribution tax	2,318	2,091
Surplus carried forward	49,648	46,037

2. FINANCIAL AND OPERATIONAL PERFORMANCE:

Our sound financial performance and strong balance sheet position us well to embark on a new wave of growth. Our profit before tax (PBT) for the year 2023-24 stood at 7,578 Lakhs and the operational profit for the year is 5,138 Lakhs. Our total revenue for the year stood at 72,408 Lakhs, recording a 10.3% year-on-year (y-o-y) growth while the profit after tax (PAT) for the year stood at 5,930 Lakhs, clocking a 2.5% growth y-o-y and 48.7% excluding one-time dividend of 1,800 Lakhs received from Indonesia subsidiary in the previous year. Our EBITDA for 2023-24 reached 9,126 Lakhs, compared

to 8,510 Lakhs in 2022-23. Our efforts to improve the gross margin through material cost reduction activities and focus on exports and after market, has resulted in increase of gross margin from 30.9% to 31.2%. We have successfully reduced our working capital days from 57 to 42, demonstrating our commitment to efficient management of working capital and financial discipline while supporting capex for future business growth. Fixed expenses are kept under control despite increase in inflation. We are pleased to declare a dividend of '' 10.25 per share for 2023-24, continuing our culture of rewarding shareholders.

2.1 TRANSFER TO RESERVES

The Company retained the entire surplus in the Profit and Loss Account and hence no transfer to General Reserve was made during the Year.

3. INTERNAL FINANCIAL CONTROLS SYSTEMS AND ADEQUACY:

The Company has established a robust internal financial framework including Internal Controls over Financial Reporting and anti-fraud framework. The Company’s internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls concerning the financial Statements are adequate. The Company has engaged an auditor who is a strong and independent external firm specializing in internal audit. Firm is subject to rotation in every two years. Internal Audit firm functionally reports to the Chairman of the Audit Committee, thereby maintaining its objectivity and independence. The framework is regularly reviewed by the management and audit committee and strengthened, from time to time to ensure adequacy and effectiveness of internal financial controls. While Internal controls over Financial Reporting is certified by the Statutory Auditors, the Chief Financial Officer and the Managing Director certifying the adequacy of overall Financial Controls to the Audit Committee and Board on quarterly/ annual basis.

The Current system of internal financial control is aligned with statutory requirements. Effectiveness of internal financial control is ensured through management reviews, controlled self-assessment and independent testing by external independent Internal Auditor.

4. CORPORATE SOCIAL RESPONSIBILITY:

In Compliance with Section 135 of the Act, the Company has undertaken CSR activities, projects and programs, excluding activities undertaken in pursuance of its normal course of business. We are committed to actively contribute towards the development of a sustainable society.

For the year 2023-24, a number of CSR projects/ programs were undertaken and based on the recommendation of the CSR Committee, the Board had approved an amount of '' 96.57 Lakhs i.e., 2% of the average qualifying net profits of the last three financial years on CSR activities. After setting off the previous year’s excess spent of '' 0.72 Lakhs against CSR projects, the balance '' 95.85 Lakhs was required to be spent towards CSR projects against which the Company had spent '' 95.96 Lakhs which is '' 0.11 Lakhs in excess of the CSR obligation for the year which shall be carried forward to the FY 2024-25.

In addition to the projects specified as CSR activities under Section 135 of the Act, the Company has also carried out several other sustainability/ responsible business initiatives to the Community and most of the activities were carried out near to the locations of the factory.

The Annual Report on CSR containing the Composition of the CSR & Sustainability, salient features of the CSR Policy, details of activities, and other information as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure to this report. The CSR Policy may be accessed on the Company’s website at the link: https:// indianippon.com/policies/.

5. SUBSIDIARY COMPANY AND THE CONSOLIDATED FINANCIAL STATEMENTS:

a. Subsidiary company: PT Automotive Systems Indonesia

The subsidiary company has applied for liquidation and winding up process has begun by appointing a Liquidator. Continuous follow up is being made with government authorities to speed up the approval process. Financial position of the subsidiary is provided in Form AOC-1 as required under Section 129 (3) of the Companies Act 2013.

b. Consolidated Financial Statements

The Consolidated Financial Statements of the Company is prepared in accordance with the provisions of Section 129 (3) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of the subsidiary have been placed on the website of the Company at www.indianippon. com and will be made available to the members on receipt of a request from them.

5.1 DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has one subsidiary (PT Automotive Systems Indonesia) and no Joint venture or Associate as on 31^st March, 2024.

5.2 REMUNERATION RECEIVED BY MANAGING/ WHOLE TIME DIRECTOR FROM THE COMPANY, HOLDING OR SUBSIDIARY COMPANY.

For the year 2023-24, a remuneration of '' 306.9 Lakhs including commission of '' 97.7 Lakhs, subject to tax, as applicable was approved by the Board of directors for Mr Arvind Balaji, Managing Director at their meeting held on 30^th May, 2024 as recommended by the Nomination and Remuneration Committee within the limits as approved by the Shareholders at the annual general meeting held on 21^st September, 2022. During the year, Managing Director received a commission of '' 7 Lakhs from the holding company, Lucas Indian Service Limited.

6. DIVIDEND:

a. Declaration and Payment of Dividend

The Board of Directors at their meeting held on 13^th February, 2024 had declared an interim dividend of '' 10.25 per equity share during the year under review on a face value of Rs 5 each. Your Directors recommend consideration of the same as final dividend for the year which absorbs a total sum of '' 2318.69 Lakhs for the year ended 31^st March, 2024.

As per the Income-Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. Accordingly, the Company makes the payment of the dividend from time to time after deduction of tax at source.

b. Dividend Distribution Policy

The Dividend recommended is in accordance with the Dividend Distribution Policy of the Company. According to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Board had adopted a Dividend Distribution Policy, which has been placed on the website of the Company and can be accessed at the link: https://indianippon.com/ policies/.

7. PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits from the public falling within the ambit of Section 73 or Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules 2014. No amount on account of principal or interest on deposits from the public was outstanding as on 31^st March, 2024.

8. FAMILIARISATION PROGRAMME

The Company has put in place a familiarisation programme for all its Directors including the Independent Directors. The familiarisation programme for Independent Directors in terms of provisions of Regulation 46(2)(i) of the Listing Regulations is uploaded on the website of the Company.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on the Conservation of energy, technology absorption and Foreign exchange earnings and outgo as stipulated under Section 134(3) (m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is set out in the Annexure to this Report.

10. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, 2015 read with SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated 11^th July 2023, the Business Responsibility and Sustainability Report (''BRSR'') for 2023-24 has been prepared based on the framework of the National Guidelines on Responsible Business Conduct and in the format prescribed by SEBI.

11. PARTICULARS OF 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 annexed to this Report.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has been appended as Annexure to this Report.

The information required pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company are available to Shareholders for inspection on request. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, on https://indianippon.com/policies/ whereupon a copy would be sent.

12. ANNUAL RETURN:

The copy of draft Annual Return in Form MGT-7, prepared as per Section 92(3) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 is placed on the website of the Company at https://indianippon.com/. The Annual Return will be submitted to the Registrar of Companies within the timelines prescribed under the Act.

13. RISK MANAGEMENT COMMITTEE:

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement, and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Committee considers the risks that impact the mid-term to the long-term objectives of the business, including those reputational in nature. The Company has an elaborate risk charter and risk policy defining the risk management governance model, risk assessment, and prioritization process. The Risk Management Committee reviews and monitors the key risks and their mitigation measures periodically and provides an update to the Board on the Company’s risks outlined in the risk registers. There are no risks which in the opinion of the Board threaten the existence of the Company. The Audit Committee has additional oversight in the area of financial risks and controls. The policy can be accessed at https:// indianippon.com/policies/.

14. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

The Company has complied with the corporate governance requirements under the Act, and the Listing Regulations. A separate section on Corporate Governance along with a certificate from the Practicing Company Secretary confirming compliance forms an integral part of this Annual Report.

A detailed report on Management Discussion and Analysis forms an integral part of this Annual Report and also covers the consolidated operations reflecting the nature of our business.

15. DIRECTORS'' RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, and secretarial auditors including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial

controls were adequate and operating effectively during the financial year 2023-24.

Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that for the financial year ended 31^st March, 2024:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) They 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 profits of the Company for that period;

c) They have taken proper and sufficient care 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;

d) They have prepared the annual accounts on a ''going concern basis’;

e) They have laid down internal financial controls for the Company which are adequate and are operating effectively;

f) They have devised a proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

16. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):

16.1 Independent and Non-Executive Directors: Appointment, Reappointment, Resignation, Retirement etc.:

Independent directors, Mr. R Vijayaraghavan and Mr. K G Raghavan have completed their second term on the Board as at the close of the Annual General Meeting held on 20^th September, 2023. The Board places on record its appreciation of the services rendered by Mr. R Vijayaraghavan and Mr. K G Raghavan during their tenure as Independent Directors of the Company.

Your Directors wish to place on record that, pursuant to entering into the Share Purchase Agreement dated 19^th June, 2023 amongst Mahle Electric Drives Japan Corporation, Mahle Holding India Private Limited and Lucas Indian Service Limited in connection with the acquisition of the entire holding of MEDJ and MHIPL i.e., 14,14,786 equity shares and 30,00,000 equity shares respectively, in India Nippon Electricals Limited, by LIS, and as per Article 6.01.2 of the Joint Venture Agreement dated 24^th August, 1985, consequent upon acquisition of shares by LIS on 26^th June, 2023 and termination of the Joint Venture agreement vide termination agreement dated 17^th July, 2023, Mr. Kiyoyasyu Kawakami (DIN: 09283649) and Mr. Jakob Ruemmler (DIN: 09237428) tendered their resignations from the post of Directorship of India Nippon Electricals Limited, effective from the closing hours of 19^th July, 2023.

Considering their resignations and the retirement of the independent directors viz., Mr. R Vijayaraghavan (DIN: 00026763) and Mr. K G Raghavan (DIN: 00359471), the size of the Board got reduced to 6 with effect from 20^th September, 2023 and is in compliance with the statutory requirements in terms of composition of the Board pursuant to the Companies Act 2013 and SEBI Listing Regulations.

The following table presents the appointment and tenure of the Independent Directors of your Company:

Name of the Director (Mr./ Mrs.)	Date of appointment (first term)	Date of re-appointment (second term)	Reappointed/ appointed up to
Anant J Talaulicar	6th April, 2019	6th April, 2023	AGM 2028
Heramb R Hajarnavis	10th August, 2022	-	AGM 2026
Gangapriya Chakraverti	10th August, 2022	-	AGM 2026

Retirement by rotation and subsequent reappointment:

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. T K Balaji (DIN: 00002010), Non-Executive Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for reappointment.

Based on performance evaluation and recommendation of the Nomination and Remuneration Committee, the Board of Directors recommends his re-appointment as a Non-Executive Director of the Company, liable to retire by rotation. The appropriate resolution for the reappointment of Mr. T K Balaji is being placed for the approval of the shareholders of the Company at the ensuing AGM. Details with respect to his experience, attributes, skills, disclosure of relationship between directors inter-se, directorships held in other companies and committee memberships, etc., as stipulated under Regulation 36 of the Listing Regulations and Secretarial Standard on General Meetings issued by ICSI, have been disclosed in the Annexure to the Notice of the AGM. The Managing Director and Independent Directors of the Company are not liable to retire by rotation.

16.2 Key Managerial Personnel (KMPs):

Mr. Arvind Balaji, Managing Director, Mr. Elango Srinivasan, CFO & Ms. S Logitha Company Secretary, are the Key Managerial Personnel ("KMP") of the Company in accordance with the provisions of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

During the year under review, there were no changes to the KMP of the Company.

16.3 Declaration by Independent Directors as required u/s 149:

In terms of Section 149 of the Act and SEBI Listing Regulations, Mr. Anant Jaivant Talaulicar, Mr. Heramb R Hajarnavis and Ms. Gangapriya Chakraverti are the Independent Directors of the Company, as on the date of this report.

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act along with Rules framed thereunder, Regulation 16(1)(b) of SEBI Listing Regulations and have complied with the Code of Conduct of the Company as applicable to the Board of

Directors and Senior Management personnel. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Company has received confirmation from all the Independent Directors of their registration on the Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

Declaration of Independence comprising all the requirements of Companies Act, 2013 and SEBI Listing Regulations were received by the Company and was taken on record by the Board after verifying the veracity of the declarations, from Mr. Anant Jaivant Talaulicar, Mr. Heramb R Hajarnavis and Ms. Gangapriya Chakraverti.

Further, a report by Practicing Company Secretary highlighting that none of the Directors of the Company are debarred or disqualified is given under the Corporate Governance Section of this report.

17. MEETINGS OF THE BOARD:

During the year under review, 5 meetings of the Board of Directors were held. The details of the meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2023-24 are given in the Report of Corporate Governance forming part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act and the Listing Regulations.

17.1 Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following Committees constituted by the Board function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders’ Relationship Committee

• Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms part of this report. During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board.

17.2 Separate meeting of Independent Directors & Board evaluation:

The annual evaluation process of the Board of Directors, individual Directors and committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regulations. The Company conducted a separate meeting of Independent Directors as per the requirements of the SEBI Listing regulations.

Board was evaluated on following parameters: The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as Strategy, Performance Management & Succession Plan, Execution, Investments, M&A and Financial Controls, Talent Management, Risk Management, Core Governance & Compliance, Review of Information, Monitoring of Committee.

Committees were evaluated on the parameters like Functions and Duties, Management Relations, Support to the Committee and overall.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and

committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-executive Directors in the aforesaid meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated. The separate meeting of independent directors for 2023-24 was held pursuant to Schedule IV to the Companies Act, 2013 & Regulations 17 & 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

18. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company’s Policy on Directors’ appointment and remuneration and other matters provided in Section 178(3) of the Act has been briefly disclosed hereunder and in the Report on Corporate Governance, which forms part of this report.

18.1 Selection and procedure for nomination and appointment of Directors:

The Nomination and Remuneration Committee ("NRC") of the Board is entrusted with the responsibility for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The NRC makes recommendations to the Board regarding the appointment/re-appointment of Directors, and Key Managerial Personnel ("KMP") and other members of the Senior Management. The role of the NRC encompasses conducting a gap analysis to refresh the Board periodically, including each time a Director’s appointment or re- appointment is required.

The NRC is also responsible for reviewing the profiles of potential candidates vis-a-vis the required competencies, undertaking reference, and due diligence, and meeting potential candidates before making recommendations of their nomination to the Board. The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.

During the year under review, the Nomination and Remuneration Policy was amended to, inter alia, include the revised definition of senior management to reflect the intent of the law in letter and spirit.

The policy can be accessed at https://indianippon. com/policies/.

19. AUDITORS:

19.1 Statutory Auditors

M/s Deloitte Haskins & Sells LLP Chartered Accountants, were appointed for a period of five years from the conclusion of the 32^nd Annual General Meeting held on 24^th August, 2017 and were re-appointed for a second term of 5 years from the conclusion of the Annual General Meeting held on 21^st September, 2022 until the conclusion of the Annual General Meeting to be held in the year 2027. Based on the approval of the Shareholders at the AGM held in 2022, the Board of Directors had fixed a fee of '' 26 Lakhs per annum plus applicable taxes and remibursement of out of pocket expenses for the Statutory Auditors for 2 years from 2022-23.

Further, the Board of Directors at their Meeting held on 06^th August 2024 had increased the fee from Rs.26 lakhs to Rs. 30 lakhs per annum plus applicable taxes and reimbursement of out of pocket expenses for 2 years from 2024-25.

The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year 2023-24.

The Statutory Auditor’s report does not contain any qualifications, reservations, adverse remarks or disclaimers, which would be required to be dealt with in the Boards’ Report.

19.2 Cost Auditors

Pursuant to Section 148(1) of the Act read with Rule 3 and 5 of the Companies (Cost Records and Audit)

Rules, 2014, the Company has maintained cost records for FY 2023-24.

The Cost Audit Report for the financial year 202324 does not contain any qualification, reservation, or adverse remark and will be submitted within the prescribed timelines.

The Board has re-appointed Mr. K Suryanarayanan as cost auditor for the financial year 2024-25 at a remuneration of '' 3.50 Lakhs. The ratification of his remuneration shall be included as an item in the Notice of the Annual General Meeting as required under Section 148 (3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

19.3 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s S.A.E. & Associates LLP Company Secretaries LLPIN: AAM-6181 (ICSI Registration no: L2018TN004700), to carry out the Secretarial Audit of the Company for 2023-24.

The Report of the Secretarial Auditor for the 2023-24 is attached herewith as Annexure to this Report. There are no qualifications, observations or adverse remarks, or disclaimer in the said report.

The Board of Directors, based on the recommendation of the Audit Committee, have appointed M/s. S.A.E. & Associates LLP Practicing Company Secretaries as the Secretarial Auditors of the Company for 2024-25.

M/s. S.A.E. & Associates LLP have confirmed that they are not disqualified to be appointed as the Secretarial Auditors of the Company.

As required by Schedule V of the Listing Regulations, the Auditor’s Certificate on Corporate Governance received from M/s. S.A.E. & Associates LLP is annexed to the Report on Corporate Governance forming part of this Annual Report.

19.4 Internal Auditors

M/s. R.G.N. Price & Co., Internal Auditors of the Company have carried out Internal Audit for FY 202324. The reports and findings of the Internal Auditors are periodically reviewed by the Audit Committee.

Pursuant to Section 138 of the Act read with Rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors, based on the recommendation of the Audit Committee, have appointed M/s. R.G.N. Price & Co. as Internal Auditors of the Company for FY 2023-24 & FY 2024-25.

20. SECRETARIAL STANDARDS:

The Company has complied with all the applicable provisions of Secretarial Standards on Meetings of Board of Directors (SS-1), Secretarial Standards on General Meetings (SS-2) issued by Institute of Company Secretaries of India.

21. UNCLAIMED DIVIDEND

In terms of applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), unclaimed dividend amounting to '' 6.69 Lakhs was transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Government of India, during the year under review.

Further, 2524 shares were transferred to the demat account of the IEPF Authority during the year under review, in accordance with the IEPF Rules, as the dividend(s) has not been claimed by the shareholders for 7 consecutive years or more. The shares on which dividend has not been paid or claimed by the Shareholder for seven consecutive years or more shall also be transferred to demat account of the IEPF Authority. Accordingly, the Company has sent individual notices to all the members whose dividends are lying unpaid/ unclaimed against their name(s) for 7 consecutive years and followed other procedures seeking action from the members. The list of such members is displayed on the website of the Company.

22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/arrangements/transactions entered into by the Company during the financial year under review with related parties (as defined in the Act and Listing Regulations) were in the ordinary course of business and on an arm’s length basis. During the year, the Company did not enter into any contract/ arrangement/transaction with related parties which could be considered as material in accordance with the Policy of the Company on Materiality of Related Party Transaction (RPT Policy). Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is set out as Annexure to this Report.

The details of the related party transactions as per Ind AS-24 on Related Party Disclosures are set out in the standalone financial statements of the Company.

23. RELATED PARTY TRANSACTIONS:

All transactions with related parties during the financial year 2023-24 were reviewed and approved by the Audit Committee and are in accordance with the Policy on dealing with materiality of Related Party Transactions and the Related Party Framework, formulated and adopted by the Company. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of unforeseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their review/ approval on a quarterly basis.

All contracts/arrangements/transactions entered into by the Company during the year under review with Related Parties were in the ordinary course of business and on arm’s length basis in terms of provisions of the Act. There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

The Company’s Policy on dealing with and materiality of related party transactions is available on its website at https://indianippon.com/policies/.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/s 186:

The Company has not given any loans or guarantee as specified under Section 186 of the Companies Act 2013. The details of investments are given in Note No 8 of Notes to Accounts for the financial year 2023-24. The same is within the prescribed limits under provisions of Section 186 of the Companies Act 2013.

25. VIGIL MECHANISM/ WHISTLE-BLOWER POLICY

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In line with the policy, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the policy of the Company, cannot be undermined.

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairperson of the Audit Committee of the Company for redressal. No person has been denied access to the Chairperson of the Audit Committee. Details of the Vigil Mechanism and Whistle Blower Policy is available at the link: https://indianippon.com/ policies/.

26. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has adopted zero tolerance for sexual harassment at the workplace and has formulated a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace and an Internal Complaints Committee has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates. Further, the Policy also gives shelter to contract workers, trainees, apprentices of the Company and any person visiting the Company.

During the year under review, your Company has received two complaint(s) of sexual harassment and the same has been investigated and disposed.

The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of the Prevention of Sexual Harassment Act.

27. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

a) There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company

and its future operation. However, Members attention is drawn to the Statement on contingent liabilities and commitments in the notes forming part of the Financial Statements.

b) No fraud has been reported by the Auditors to the Audit Committee or the Board.

c) There has been no change in the nature of business of the Company.

d) No revision of financial statements or the Board’s Report occurred during the year.

e) There were no material changes and commitments affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of the Report.

28. CHANGES IN SHARE CAPITAL:

28.1 Changes in the Share Capital:

During the financial year 2023-24, there was no change in the authorised, issued, subscribed, and paid-up share capital of the Company.

27.1 Issue of Equity Shares with Differential Rights

During the financial year, the Company has not issued any equity shares with differential rights.

27.2 Issue of Sweat Equity Shares

During the financial year, the Company has not issued any sweat equity shares.

27.3 Issue of Employee Stock Options

During the financial year, the Company has not issued any Shares under employee stock options.

27.4 Issue of Shares to Trustees for benefit of employees

During the financial year, the Company has not issued any Shares to Trustees for the benefit of employees.

27.5 Issuance of any other securities which carries a right or option to convert into Equity shares

During the financial year, the Company has not issued any securities which carry a right or option to convert such securities into equity shares.

29. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

During the year under review, no application was made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

30. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF: There were no such instances during the year under review.

31. ACKNOWLEDGEMENTS

The Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors, and consultants/advisors of the Company for their sincere and dedicated services as well as their collective contribution to the Company’s performance.

Your Directors acknowledge the continued support received from Lucas TVS Limited, Lucas Indian Service Limited and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry and our Bankers for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

T K BALAJI

Place: Chennai DIN: 00002010

Date: 06^th August, 2024 Chairman

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Mar 31, 2023

The Board of Directors is delighted to present the 38^th Annual Report on the business and operations of India Nippon Electricals Limited ("the Company”) along with the summary of standalone financial statements for the year ended 31^st March, 2023.

1. FINANCIAL HIGHLIGHTS (on standalone basis):

('' In Lakhs)

Particulars	Year ended	Year ended
	31st March,	31st March,
	2023	2022
Total Income	69,642	58,032
Profit before depreciation, exceptional items and taxes	9,271	6,440
Less:
Depreciation	1,462	1,285
Profit before tax & exceptional items	7,809	5,155
Exceptional items	803	-
Profit before tax	7,006	5,155
Taxation	1,219	1,129
Profit after tax	5,787	4,026
Add:
Balance in statement of profit and loss including general reserve	42,342	39,730
Total Comprehensive income available for appropriation	48,128	43,756
Appropriations:
Dividend and Dividend Distribution tax	2,091	1,414
Surplus carried forward	46,037	42,342

2. FINANCIAL AND OPERATIONAL PERFORMANCE:

The Company witnessed improved sales growth year on year when compared to the industry growth in two/ three-wheeler segment. The Company has positioned itself well in the aftermarket by introducing new products by meeting the emerging customer requirements, expanding the network across the boundary and aggressive brand promotion activities

in the field. Realization of export business from new customers mitigated the delayed offtake of volumes in the last quarter of the year due to setting of global recession and showed marginal growth. Employee costs and other expenses were kept under control despite surging inflation and new wages settlement in Hosur factory through optimization of costs. Volatility in commodity prices were seen throughout the year and mitigated well through balancing of settlement between customers and suppliers.

The Company has received non-recurring and one time dividend more than the investment value from its subsidiary company in Indonesia through repatriation of profits earned from the sale proceeds of the land situated in Indonesia. Consequently, the realizable value of investment in the Company is impaired and shown as an exceptional item in the financials.

Profit before tax showed decent growth over previous year mainly from dividend from subsidiary company and impressive growth in aftermarket and exports.

2.1 TRANSFER TO RESERVES

The Company retained the entire surplus in the

Profit and Loss Account and hence no transfer to

General Reserve was made during the Year.

3. INTERNAL FINANCIAL CONTROLS SYSTEMS AND ADEQUACY:

The Company has established a robust internal financial framework including Internal Controls over Financial Reporting and anti-fraud framework. The Company''s internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls concerning the financial Statements are adequate. The Company has engaged an auditor who is a strong and independent in-house Internal Audit ("IA”) department that functionally report to the Chairman of the Audit Committee, thereby maintaining its objectivity. The framework is regularly reviewed by the management and strengthened, from time to time to ensure adequacy and effectiveness of internal financial controls. While Internal controls over Financial Reporting is certified by the Statutory Auditors, the Chief Financial Officer and the Managing Director certifying the adequacy of overall Financial Controls to the Audit Committee and Board on quarterly/ annual basis.

The Current system of internal financial control is aligned with statutory requirements. Effectiveness of internal financial control is ensured through management reviews, controlled self-assessment and independent testing by external independent Internal Auditor.

4. CORPORATE SOCIAL RESPONSIBILITY:

In Compliance with Section 135 of the Act, the Company has undertaken CSR activities, projects and programs, excluding activities undertaken in pursuance of its normal course of business. We are committed to actively contribute towards the development of a sustainable society.

For the year 2022-23, a number of CSR projects/ programs were undertaken and based on the recommendation of the CSR Committee, the Board had approved an amount of ''93.57 Lakhs i.e., 2% of the average qualifying net profits of the last three financial years on CSR activities. After setting off the previous year''s excess spent of '' 5.92 Lakhs against CSR projects, the balance ''87.65 Lakhs was required to be spent towards CSR projects against which the Company had spent ''94.29 Lakhs which is '' 0.72 Lakhs in excess of the CSR obligation for the year which shall be carried forward to the FY 2023-24.

In addition to the projects specified as CSR activities under Section 135 of the Act, the Company has also carried out several other sustainability/ responsible business initiatives to the Community and most of the activities were carried out near to the locations of the factory.

The Annual Report on CSR containing the Composition of the CSR & Sustainability, salient features of the CSR Policy, details of activities, and other information as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 are provided in Annexure to this report. The CSR Policy may be accessed on the Company''s website at the link: https:// indianippon.com/policies/.

5. SUBSIDIARY COMPANY AND THE CONSOLIDATED

FINANCIAL STATEMENTS:

a. Subsidiary company: PT Automotive Systems

Indonesia

The subsidiary company has successfully sold

the unused land and profits were distributed to

the holding company as dividend of '' 18 Crores through repatriation. The subsidiary company has applied for liquidation and winding up process has begun by appointing a Liquidator. Necessary approvals are sought from Government Authorities. Hence, the investment has been impaired and shown as an extra-ordinary item in the financials. Financial position of the subsidiary is provided in Form AOC-1 as required under Section 129 (3) of the Companies Act 2013.

b. Consolidated Financial Statements

The Consolidated Financial Statements of the Company is prepared in accordance with the provisions of Section 129 (3) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of the subsidiary have been placed on the website of the Company at www.indianippon. com and will be made available to the members on receipt of a request from them.

5.1 DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has one subsidiary (PT Automotive Systems Indonesia) and no Joint venture or Associate as on 31^st March, 2023.

5.2 REMUNERATION RECEIVED BY MANAGING/ WHOLE TIME DIRECTOR FROM THE COMPANY, HOLDING OR SUBSIDIARY COMPANY.

For the year 2022-23, a remuneration of '' 305 lakhs including commission of '' 100 lakhs, subject to tax, as applicable was approved by the Board of directors for Mr Arvind Balaji, Managing Director at their meeting held on 26^th May 2023 as recommended by the Nomination and Remuneration Committee within the limits as approved by the Shareholders at the annual general meeting held on 21 ^st September 2022. During the year, Managing Director received a commission of '' 6 lakhs from the holding company, Lucas Indian Service Ltd.

6. DIVIDEND:

a. Declaration and Payment of Dividend

The Board of Directors at their meeting held on 14^th February, 2023 had declared an interim dividend of '' 9.25 per equity share during the year under review on a face value of '' 5 each. Your Directors recommend consideration of the same as final dividend for the year which absorbs a total sum of '' 2,092.48 Lakhs for the year ended 31^st March, 2023.

b. Dividend Distribution Policy

The Dividend recommended is in accordance with the Dividend Distribution Policy of the Company. According to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations”) the Board had adopted a Dividend Distribution Policy, which has been placed on the website of the Company and can be accessed at the link: https://indianippon.com/ policies/.

7. PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits from the public falling within the ambit of Section 73 or Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules 2014. No amount on account of principal or interest on deposits from the public was outstanding as on 31^st March, 2023.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS:

The information on Conservation of Energy, technology absorption and Foreign Exchange outgo and earnings pursuant to Section 134(3) (m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given as Annexure to this Report.

9. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Since your Company is not falling under top 1000 listed entities as per the list released based on market capitalization by NSE & BSE as of 31^st March, 2023, the Business Responsibility and Sustainability Report,

pursuant to Regulation 34 (2)(f) of the SEBI Listing Regulations, is not applicable for the year 2022-23.

10. PARTICULARS OF 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 annexed to this Report.

Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as a separate Annexure forming part of this Report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members, excluding the aforesaid Annexure. The said Statement is also open for inspection by the Members and will be made available to any member on request. None of the employees listed in the said Annexure are related to any Director of the Company.

11. ANNUAL RETURN:

A weblink of the Annual Return is furnished in accordance with sub section (3) of Section 92 of the Companies Act, 2013 and as prescribed in Form MGT 7 of the Companies (Management and Administration) Rules, 2014 and can be accessed at www.indianippon. com.

12. RISK MANAGEMENT COMMITTEE:

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement, and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Committee considers the risks that impact the mid-term to the long-term objectives of the business, including those reputational in nature.

The Company has an elaborate risk charter and risk policy defining the risk management governance model, risk assessment, and prioritization process. The Risk Management Committee reviews and monitors the key risks and their mitigation measures periodically and provides an update to the Board on the Company''s

risks outlined in the risk registers. The Audit Committee has additional oversight in the area of financial risks and controls. The board approved the revised Risk Management Policy at their meeting held on 26^th May, 2022. The policy can be accessed at https://indianippon. com/policies/.

13. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

The Company has complied with the corporate governance requirements under the Act, and the Listing Regulations. A separate section on Corporate Governance along with a certificate from the Practicing Company Secretary confirming compliance forms an integral part of this Annual Report.

A detailed report on Management Discussion and Analysis forms an integral part of this Annual Report and also covers the consolidated operations reflecting the global nature of our business.

14. DIRECTORS'' RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, and secretarial auditors including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and operating effectively during the financial year 2022-23.

Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that for the financial year ended 31^st March, 2023:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) They 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 profits of the Company for that period;

c) They have taken proper and sufficient care 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;

d) They have prepared the annual accounts on a ''going concern basis'';

e) They have laid down internal financial controls for the Company which are adequate and are operating effectively;

f) They have devised a proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

15. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):

15.1 Independent and Non-Executive Directors : Appointment, Reappointment, Resignation, Retirement etc.:

Independent directors, Mr. R Vijayaraghavan and Mr. K G Raghavan complete their second term on the Board as at the close of the ensuing Annual General Meeting to be held on 20^th September 2023. The Board places on record its appreciation of the services rendered by Mr. R Vijayaraghavan and Mr. K G Raghavan during their tenure as Independent Directors of the Company.

For continuing directorship of Mr. T K Balaji (DIN: 00002010) as a Non-Executive Director of the Company beyond the age of 75 years from 12^th July, 2023 and for re-appointment of Mr. Anant Jaivant Talaulicar (DIN: 00031051) as an Independent Director for a second term of 5 years from 6^th April, 2023, approval of the Members was taken through postal ballot on 18^th March, 2023.

Your Directors wish to place on record that, pursuant to entering into the Share Purchase Agreement dated 19^th June, 2023 amongst Mahle Electric Drives Japan Corporation, Mahle Holding India Private Limited and Lucas Indian Service Limited in connection with the acquisition of the entire holding of MEDJ and MHIPL i.e., 14,14,786 equity shares and 30,00,000 equity shares respectively, in India Nippon Electricals Limited, by LIS, and as per Article 6.01.2 of the Joint Venture

Agreement dated 24^th August, 1985, consequent upon acquisition of shares by LIS on 26^th June, 2023 and termination of the Joint Venture agreement vide termination agreement dated 17^th July, 2023, Mr. Kiyoyasyu Kawakami (DIN: 09283649) and Mr. Jakob Ruemmler (DIN: 09237428) tendered their resignations from the post of Directorship of India Nippon Electricals Limited, effective from the closing hours of 19^th July, 2023.

Considering their resignations and the retirement of the independent directors viz., Mr. R Vijayaraghavan (DIN: 00026763) and Mr. K G Raghavan (DIN: 00359471), the size of the Board would be reduced to 6 with effect from 20^th September, 2023 and would be in compliance with the statutory requirements in terms of composition of the Board pursuant to the Companies Act 2013 and SEBI Listing Regulations.

The following table presents the appointment and tenure of the Independent Directors of your Company:

Name of the Director (Mr./ Mrs.)	Date of appointment (first term)	Date of re-appointment (second term)	Reappointed/ appointed upto
Anant J Talaulicar	6th April, 2019	6th April, 2023	AGM 2028
Heramb R Hajarnavis	10th August, 2022	-	AGM 2026
Gangapriya Chakraverti	10th August, 2022	-	AGM 2026

In accordance with the provisions of the Act, at least two-thirds of the total number of Directors (excluding independent directors) shall be liable to retire by rotation, out of which, one-third shall be liable to retire by rotation at every AGM. Accordingly, Ms. Priyamvada Balaji, (DIN: 00730712) non-executive Director on the Board would be retiring by rotation at the ensuing Annual General Meeting and being eligible she offers herself for re-appointment. Brief particulars of Ms. Priyamvada Balaji, who is proposed to be re-appointed as per Regulation 36(3) of SEBI Listing Regulations, is incorporated in the annexure to the notice calling 38^th Annual General Meeting. The Directors recommend this proposal for the approval of the Members.

15.2 Key Managerial Personnel (KMPs):

Pursuant to Section 2(51) and Section 203 of the Companies Act 2013, the Key Managerial Personnel of the Company as on 31^st March, 2023 are:

a) Mr. Arvind Balaji, Managing Director

b) Mr. Elango Srinivasan, Chief Financial Officer

c) Ms. S Logitha, Company Secretary with effect from 24^th November, 2022.

Ms. S Logitha (Membership No. A29260) was appointed as Company Secretary and the Compliance Officer at the vacancy caused by the resignation of Mr. G Venkatram, who served as Company Secretary upto 26^th May, 2022.

15.3 Declaration by Independent Directors as required u/s 149:

In terms of Section 149 of the Act and SEBI Listing Regulations, Mr. R Vijayaraghavan, Mr. Anant Jaivant Talaulicar, Mr. K G Raghavan, Mr. Heramb R Hajarnavis and Ms. Gangapriya Chakraverti are

the Independent Directors of the Company, as on the date of this report.

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act along with Rules framed thereunder, Regulation 16(1)(b) of SEBI Listing Regulations and have complied with the Code of Conduct of the Company as applicable to the Board of Directors and Senior Management personnel. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Company has received confirmation from all the Independent Directors of their registration on the Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

Declaration of Independence comprising all the requirements of Companies Act, 2013 and SEBI Listing Regulations were received by the Company and was taken on record by the Board after verifying the veracity of the declarations, from Mr. K G Raghavan, Mr. R Vijayaraghavan, Mr. Anant Jaivant Talaulicar, Mr. Heramb R Hajarnavis and Ms. Gangapriya Chakraverti.

Further, a report by Practicing Company Secretary highlighting that none of the Directors of the Company are debarred or disqualified is given under the section Corporate Governance of this report.

16. MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on the Company/ business policy and strategy apart from other Board business. The Board exhibits strong operational oversight with regular presentations in quarterly meetings. The Board/ Committee meetings are pre-scheduled, and a tentative annual calendar of the Board and Committee meetings is circulated to the Directors well in advance to help them plan their schedule and ensure meaningful participation in the meetings. Only in case of special and urgent business, if the need arises, the Board''s or Committee''s approval is taken by passing resolutions through circulation or by calling the Board/ Committee meetings at short notice, as permitted by law.

The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed to enable the Directors to make an informed decision.

The Board of Directors had 6 meetings during the FY 2022-23. For further details, please refer to the Corporate Governance section of this report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

16.1 Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following Committees constituted by the Board function according to their respective roles and defined scope:

s Audit Committee

s Nomination and Remuneration Committee

s Corporate Social Responsibility Committee

s Stakeholders'' Relationship Committee

s Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms part of this report. Further, during the year under review, the Board has accepted all recommendations made by various committees.

16.2 Separate meeting of Independent Directors & Board evaluation:

The annual evaluation process of the Board of Directors, individual Directors and committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regulations. The Company conducted a separate meeting of Independent Directors as per the requirements of the SEBI Listing regulations.

Board was evaluated on following parameters: The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as Strategy, Performance Management & Succession Plan, Execution, Investments, M&A and Financial Controls, Talent Management, Risk Management, Core Governance & Compliance, Review of Information, Monitoring of Committee.

Committees were evaluated on the parameters like Functions and Duties, Management Relations, Support to the Committee and overall.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-executive Directors in the aforesaid meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated. During the year 2022-23, the separate meeting of independent directors was held on 13th February 2023 pursuant to Schedule IV to the Companies Act, 2013 & Regulations 17 & 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

17. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s Policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been briefly disclosed hereunder and in the Report on Corporate Governance, which forms part of this report.

17.1 Selection and procedure for nomination and appointment of Directors:

The Nomination and Remuneration Committee ("NRC”) of the Board is entrusted with the responsibility for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its

strategies, environment, operations, financial condition and compliance requirements.

The NRC makes recommendations to the Board regarding the appointment/re-appointment of Directors, and Key Managerial Personnel ("KMP”) and other members of the Senior Management. The role of the NRC encompasses conducting a gap analysis to refresh the Board periodically, including each time a Director''s appointment or reappointment is required.

The NRC is also responsible for reviewing the profiles of potential candidates vis-a-vis the required competencies, undertaking reference, and due diligence, and meeting potential candidates before making recommendations of their nomination to the Board. The appointee is also briefed about the specific requirements for the position including expert knowledge expected at the time of appointment.

The policy can be accessed at www. indianippon. com/ policies/. Additional details including various ratios required under the Companies Act 2013 is given as Annexure to this report.

18. AUDITORS:

18.1 Statutory Auditors:

M/s Deloitte, Haskins & Sells LLR Chartered Accountants, were appointed for a period of five years from the conclusion of the 32^nd Annual General Meeting held on 24^th August, 2017 and were re-appointed for a second term of 5 years from the conclusion of the Annual General Meeting held on 21^st September, 2022 until the conclusion of the Annual General Meeting to be held in the year 2027. Based on the approval of the Shareholders at the AGM held in 2022, the Board of Directors had fixed a fee of '' 26 Lakhs plus out of pocket expenses for the statutory auditors for 2 years from 2022-23.

The Statutory Auditor''s report does not contain any qualifications, reservations, adverse remarks or disclaimers, which would be required to be dealt with in the Boards'' Report.

18.2 Cost Auditor:

The Company maintains Cost records as required under the Companies Act, 2013 and relevant Rules/ Orders made thereunder. Pursuant to the Companies (Cost Records and Audit) Rules, 2014, the Company had submitted the Cost Audit Report for the financial year 2022-23 and the same was filed by the Company in Extensible Business Reporting Language (XBRL) format with the Ministry of Corporate Affairs. There is no adverse remarks or qualification in the report.

The Board has re-appointed Mr. K Suryanarayanan as cost auditor for the financial year 2023-24 at a remuneration of '' 3.50 Lakhs. The ratification of his remuneration shall be included as an item in the Notice of the Annual General Meeting as required under Section 148 (3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

18.3 Secretarial Auditor & Audit Report:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Ms. B Chandra, Company Secretary in Practice (Certificate of Practice No. 7859), to carry out the Secretarial Audit of the Company.

The Report of the Secretarial Auditor for the FY 2022-23 is attached herewith as Annexure to this Report. There are no qualifications, observations or adverse remarks, or disclaimer in the said report.

19. SECRETARIAL STANDARDS:

The Company has complied with all the applicable provisions of Secretarial Standards on Meetings of Board of Directors (SS-1), Revised Secretarial Standard on General Meetings (SS-2) issued by Institute of Company Secretaries of India.

20. INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to Section 124 and Section 125 of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, transfer and Refund) Rules, 2016 (''the Rule''), all the unpaid and unclaimed dividends are required to be transferred by the Company to the

IEPF established by the Government of India, after the completion of Seven Years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the Shareholder for seven consecutive years or more shall also be transferred to demat account of the IEPF Authority. Accordingly, the Company has sent individual notices to all the members whose dividends are lying unpaid/ unclaimed against their name(s) for 7 consecutive years and followed other procedures seeking action from the members. The list of such members is displayed on the website of the Company. In compliance with the above said provisions, during the year, the Company had transferred 6436 shares in May 2022 and 7768 shares in November 2022 to IEPF account. for further details, please refer to the Corporate Governance report.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the year, the Audit Committee had accorded omnibus approval to Related Party Transactions which were foreseen, repetitive in nature. The Audit Committee reviews, on a quarterly basis, the details of Related Party Transactions entered pursuant to the aforementioned omnibus approval as well as transactions carried on under agreements with related parties. All the existing and proposed transactions with related parties are in the ordinary course of business and on arm''s length basis. As per the SEBI Listing Regulations, if any Related Party Transactions (''RPT'') exceeds Rs.1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and would require Members approval. In this regard, during the year under review, the Company has taken necessary Members approval. The details of ''material'' contracts or arrangements with related parties are disclosed in form AOC-2 which is annexed to and forms part of the Board''s report. Further, transactions with the related parties have been reported elsewhere in the annual report, as per the applicable Accounting Standards.

22. RELATED PARTY TRANSACTIONS:

All transactions with related parties during the financial year 2022-23 were reviewed and approved by the Audit Committee and are in accordance with the Policy on dealing with materiality of Related Party Transactions and the Related Party Framework, formulated and

adopted by the Company. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of unforeseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee for their review/ approval on a quarterly basis.

All contracts/arrangements/transactions entered into by the Company during the year under review with Related Parties were in the ordinary course of business and on arm''s length basis in terms of provisions of the Act. There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed at https://indianippon.com/policies/.

During the year 2021-22, the Policy was reviewed and amended by the Audit Committee and the Board of Directors to encompass inter-alia the regulatory changes brought as per amendment in Regulation 23 of the Listing Regulations as well to bring more clarity on certain other operational aspects as per industry benchmark.

The said Policy was further amended by the Board of Directors on 26^th May, 2022 on the recommendation of the Audit Committee, pursuant to the regulatory changes brought in as per the amended Regulation 23 of Listing Regulations and criteria for material modification of related party transactions.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/s 186:

The Company has not given any loans or guarantee as specified under Section 186 of the Companies Act 2013. The details of investments are given in Note No 8 of Notes to Accounts for the financial year 2022-23. The same is within the prescribed limits under provisions of Section 186 of the Companies Act 2013.

24. VIGIL MECHANISM/ WHISTLE-BLOWER POLICY

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism,

honesty, integrity and ethical behaviour. In line with the policy, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the policy of the Company, cannot be undermined.

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairperson of the Audit Committee of the Company for redressal. No person has been denied access to the Chairperson of the Audit Committee. Details of the Vigil Mechanism and Whistle Blower Policy is available at the link: https://indianippon.com/ policies/.

25. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has adopted zero tolerance for sexual harassment at the workplace and has formulated a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. Awareness programs were conducted at various locations of the Company.

The Company has complied with provisions relating to the constitution of the Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, your Company has not received any complaint(s) of sexual harassment.

26. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

a) There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation. However, Members attention is drawn to the Statement on contingent

liabilities and commitments in the notes forming part of the Financial Statements.

b) No fraud has been reported by the Auditors to the Audit Committee or the Board.

c) There has been no change in the nature of business of the Company.

d) No revision of financial statements or the Board''s Report occurred during the year.

e) There was no material changes and commitments, if any, affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of the Report.

27. CHANGES IN SHARE CAPITAL:

27.1 Changes In The Share Capital :

During the financial year, there were no changes to the share capital of the Company.

27.1 Issue of Equity Shares With Differential Rights

During the financial year, the Company has not issued any equity shares with differential rights.

27.2 Issue of Sweat Equity Shares

During the financial year, the Company has not issued any sweat equity shares.

27.3 Issue of Employee Stock Options

During the financial year, the Company has not issued any Shares under employee stock options.

27.4 Issue of Shares to Trustees for Benefit of Employees

During the financial year, the Company has not issued any Shares to Trustees for the benefit of employees.

27.5 Issuance of Any Other Securities Which Carries A Right Or Option to Convert Into Equity Shares

During the financial year, the Company has not issued any securities which carry a right or option to convert such securities into equity shares.

28. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

During the year under review, no application was made or any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

29. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:

There were no such instances during the year under review.

30. ACKNOWLEDGEMENTS

The Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors, and consultants/advisors of the Company for their sincere and dedicated services as well as their collective contribution to the Company''s performance.

Your Directors acknowledge the continued support received from Lucas TVS Limited, Lucas Indian Service Limited, Mahle Electric Drives Japan Corporation, Mahle Holding (India) Private Limited and also wish to thank the Governments at the Centre and in the States of Tamilnadu, Haryana and Puducherry our Bankers for the assistance rendered by them from time to time.

for and on behalf of the Board of Directors

T K BALAJI

Place: Chennai DIN: 00002010

Date: 10^th August, 2023 Chairman

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Mar 31, 2018

The Directors have pleasure in presenting the 33rd Annual Report and Audited Accounts for the year ended 31st March 2018.

1. Financial Highlights (on standalone basis)

(Rs. in lacs)

Particulars	Year ended 31st March ‘18	Year ended 31st March ‘17
Total Income	47877	40897
Profit before depreciation, exceptional items and taxes	7681	5125
Less: Depreciation	597	417
Profit before tax & exceptional items	7084	4708
Less: Exceptional items	-	-
Profit before tax	7084	4708
Less: Taxation	2074	1468
Profit after tax	5010	3240
Add:
Balance in statement of profit and loss including general reserve	27062	25184
Total Comprehensive income available for appropriation	32072	28424
Appropriations:
Dividend and Dividend Distribution tax	817	1362
Surplus carried forward	31255	27062

2. Financial and Operational Performance

Your Company’s sales has gone up as compared to the previous year by 29% in value terms. However, the total income had gone up by 17% due to transition to Goods and Services Tax regime. Profit before tax and exceptional items, has increased by around 49% over the previous year because of increased level of sales and profitable sales product mix and cost reduction in material cost despite increase in employee cost. Your company also increased production capacity in Pondy and Hosur units to meet out the higher demand from the customers and increased investments in R&D equipment to take care of technological change requirements.

3. Internal Financial Controls

Your Company’s internal financial control system provides for well-documented policies and procedures that ensure orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information.

4. Corporate Social Responsibility

Your Company has constituted the Corporate Social Responsibility Committee (CSR Committee) and laid down the CSR policy which is available on the Company’s website.

During the year the Company had spent Rs.69.50 lacs which is the equivalent of 2% of average net profits for the immediate past three financial years, towards CSR activities through Swami Dayananda Educational Trust, an eligible institution undertaking project on activities listed in Schedule VII of the Companies Act, 2013.

The report on CSR activities is annexed to this report.

5. Subsidiary Company and Associate Company and the Consolidated Financial Statements

5.1 Subsidiary company

Your subsidiary company, PT Automotive Systems Indonesia, was started as a subsidiary of your company in Indonesia to manufacture and supply products to one of its major customers from India. However as the volumes did not reach the expected levels, your company meets the requirements of the customer from India itself. The approvals granted by the appropriate authorities of the Government of Indonesia are valid till 2020 by which time an appropriate decision will be taken.

5.2. Associate company

Synergy Shakthi Renewable Energy Private Limited (SSREPL) was not in operation during the financial year 2017-18 due to restrictions on sale of power to third parties, unviable tariff offered by TNEB and adverse changes in regulatory policies. As a result, the associate company incurred a loss of Rs 98.45 lacs as against a loss of Rs 541.90 lacs during the previous year. SSREPL along with the State Biomass Industry Association made representations to various arms of the government seeking changes in policies to support renewable power producers as these projects were set up to reflect commitment to the cause of sustainable and environment-friendly clean energy. The project also provided linkages with the agro-economy for promotion of social cause of rural development and employment avenues for local population.

Considering the avowed objective of the government to promote renewable energy in line with the global trends and the commitments made in the national energy mission, it was hoped that there would be favourable changes in the regulatory policies that would enable SSREPL to re-establish its operations on a viable scale. As the efforts taken in this direction have not borne fruits so far and considering the need to reflect the diminution in the value of investments due to non-operation of the plant, appropriate provision has been made in the accounts.

5.3. Consolidated financial statements

The Consolidated Financial Statements of the Company prepared in accordance with the provisions of Section 1 29 (3) of the Companies Act 2013 read with the Companies (Accounts) Rules, 201 4 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with a separate statement containing salient features of the financial performance of the subsidiary / associate, in the prescribed format, form part of the Annual Report.

Pursuant to the provisions of Section 1 36 of the Companies Act, 2013, the audited financial statements of the subsidiary has been placed on the website of the Company at www.indianippon. com and the same will be made available to the shareholders on receipt of a request from them. This will also be available for inspection by the shareholders at the registered office of the company during the business hours.

6. Sub-division of face value of shares

The Board of Directors in their meeting held on 29th January, 201 8 recommended sub-division of face value of shares from Rs.10 per share to Rs.5 per share and the same was approved by the shareholders through postal ballot on 8th March, 2018 with consequential amendments to the Memorandum and Articles of Association.

7. Dividend

Your Company had declared and paid a first interim dividend of Rs.6 per share on the pre subdivision face value of Rs.10 per share, in the meeting of the Board of Directors held on 29th January 2018 absorbing a sum of Rs.678.64 lacs, besides dividend distribution tax of Rs.13815 lacs and a second interim dividend of Rs.3.50 per share, in the meeting held on 8th May, 201 8 on the subdivided share of face value of Rs.5 per share, absorbing a sum of Rs.791.75 lacs, besides dividend distribution tax of Rs.162.74 lacs. The total outgo due to dividend, with respect to financial year 2017-18, was Rs.1 771.33 lacs (Rs.1470.44 lacs towards dividend and Rs.300.89 lacs dividend distribution tax). The first interim dividend declared for the year 2017-18 was paid during the year and was reflected in the financial statements. The second interim dividend was paid after the end of financial year and hence will be reflected in the financial statements of 2018-19.

8. Public Deposits

Your Company has not accepted any deposits falling within the ambit of Section 73 or Section 76 of the Companies Act, 201 3 read with Companies (Acceptance of Deposits) Rules 2014.

9. Conservation of Energy, Technology Absorption and Foreign Exchange Outgo and Earnings

Details of Conservation of Energy, technology absorption and Foreign Exchange outgo and earnings are given as Annexure to the Report.

10. Particulars of Employees

T he information required under Section 1 97 of the Companies Act, 201 3 and Rule 5(2) made thereunder, as amended, is given in Annexure 2. In terms of first proviso to Section 136(1) of the Companies Act 2013, the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the company. The annexure is available for inspection at the registered office of the company during business hours and any shareholder interested in obtaining a copy of said annexure may write to the Company Secretary at the registered office of the company.

The Comparative Analysis of the remuneration paid to Directors and Key Managerial Personnel with the Company’s performance is given in annexure to the Report.

11. Annual Return

Extract of Annual Return is given as annexure to the Report.

12. Corporate Governance

Pursuant to the Listing Regulations 2015, the ‘Report on Corporate Governance’ is enclosed as annexure to this report. The certificates required from Managing Director on Compliance with the Code of Conduct and Business Ethics and Managing Director / CFO Certification are annexed to this report.

13. Directors’ Responsibility Statement

As required under Section 134 (5) of the Companies Act, 2013, the Board of Directors hereby confirm: -

i. That in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. That the Directors had 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 the affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

iii. That the Directors had taken proper and sufficient care 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. That the Directors had prepared the Annual Accounts on a going-concern basis;

v. That the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

vi. That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Directors & Key Managerial Personnel (KMP)

Mr. K Seshadri, resigned from the Board of Directors with effect from 29th January 2018 and in his place Ms. Priyamvada Balaji was appointed under Section 161 of the Companies Act, 2013 which is proposed for approval of members under Section 152 in the ensuing Annual General Meeting.

Mr. Tadaya Momose, will be retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

A brief resume of Ms. Priyamvada Balaji and Mr. Tadaya Momose and other relevant information have been furnished in the Notice of the Annual General Meeting including the resolutions for the same. The Directors recommend these businesses for approval.

The Board wishes to place on record its appreciation of the contributions made by Mr. K Seshadri for the development of the Company during his long tenure as Director of the Company.

The term of appointment of Mr. Arvind Balaji Managing Director, was due for re-appointment and the shareholders approved his reappointment for a further period of five years with effect from 1st April, 2018 through postal ballot as recommended by the Nomination and Remuneration Committee and the Board of Directors.

Mr. Elango Srinivasan, Chief Financial Officer and Mr. S. Sampath, Company Secretary are KMPs in terms of Section 2(51) and Section 203 of the Companies Act 2013.

Mr. S Sampath, Company Secretary retired with effect from 8th May, 2018 and in his place Mr. G Venkatram (ACS No. A23989) was appointed with effect from the same date, as recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.

14.1 Declaration by independent directors as required u/s 149:

At the Annual General Meeting held on 27th August 2014, M/s G Chidambar, V Balaraman, K G Raghavan, R Vijayaraghavan and Ms. Jayshree Suresh were appointed as independent directors not liable to retire by rotation, for a consecutive period of five years.

All Independent Directors have given declarations under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and SEBI (LODR) Regulations 2015.

14.2 Terms of appointment of independent directors of India Nippon Electricals Limited

T he terms of appointment of the Independent Directors are available on the website of the company viz., www.indianippon.com.

14.3 Number of meetings of the board

Five meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report.

14.4 Board evaluation

The Nomination & Remuneration Committee (N&RC) of the company approved an evaluation policy which provides for evaluation of the Board, the Committees of the Board and individual Directors.

Pursuant to Schedule IV of the Companies Act 2013, the Independent Directors of the company met without the attendance of Non-independent Directors and members of management and reviewed

(i) the performance of non-independent Directors of the Board as a whole;

(ii) the performance of the Chairman of the Company; and

(iii) Assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

On the same day, the performance evaluation of the Independent Directors was also done by the entire Board excluding the Directors being evaluated and also of its own performance and that of its Committees and individual Directors.

14.5 Policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors, key managerial personnel and other employees Summary of the Nomination and Remuneration Policy, which details the principles underlying Directors/ Key Managerial Personnel appointment, remuneration etc is presented as part of the Corporate Governance Report. The policy can be accessed at www.indianippon. com. Additional details including various ratios required under the Companies Act 2013 is given as separate annexure to this report.

15. Auditors

(i) Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013 and Rules made thereunder, M/S Deloitte, Haskins & Sells LLP, Chartered Accountants, were appointed for a period of five years from the conclusion of the 32nd Annual General Meeting held on 24th August 2017 until the conclusion of the forthcoming 37th Annual General Meeting subject to ratification by the members at every annual general meeting if so required under the Act.

(ii) Cost Auditor

Pursuant to the Companies (Cost Records and Audit) Rules, 201 4, the Company filed the Cost Audit Report, with the Ministry of Corporate Affairs, for the financial year 2016-17 in XBRL format.

Mr. K Suryanarayanan who was appointed as Cost Auditor for the financial year 2017-18 will be submitting his report within the time limit applicable under the Companies (Cost Record and Audit) Rules 2014.

The Board has re-appointed Mr. K Suryanarayanan as cost auditor for the financial year 2018-19 also and a remuneration of Rs.2.75 lacs has been fixed for the audit. The ratification of his remuneration is included as an item in the Notice of the Annual General Meeting as required under Section 148 (3) of the Companies Act 201 3 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014.

(iii) Secretarial Auditor & the Secretarial Audit Report

Ms. B Chandra, Practicing Company Secretary was appointed as Secretarial Auditor by the Board of Directors for the financial year 201 718 whose report is annexed to this report. Ms. B Chandra, Practicing Company Secretary was re-appointed as Secretarial Auditor for carrying out the secretarial audit for the financial year 2018-19.

(iv) Qualification/reservation/adverse remark in Audit Report

There were no qualification / reservation / adverse remark in the Auditor’s Report or in the Secretarial Audit Report.

16. Particulars of contracts or arrangements with related parties

The Audit Committee accords omnibus approval to Related Party Transactions which are foreseen and repetitive in nature. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transaction entered pursuant to the aforementioned omnibus approval.

Consequent to the application of Indian Accounting Standards (IND AS), your Company’s transactions with TVS Motor Company Limited had become a material related party transaction. Further, your Company envisages that transactions with certain other related parties may become material in the future taking into consideration the overall trajectory in two/ three wheeler business. Approval of the shareholders is being sought under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5 for the material Related Party Transactions and the proposal along with detailed explanatory statement is given as part of the Notice to Shareholders for the ensuing Annual General Meeting.

All the existing and proposed transactions with related parties are in the ordinary course of business and on arm’s length basis and the details of ‘material’ related party transactions are disclosed in form AOC-2 which is annexed to forms part of this report.

The Company has a policy on Related Party Transactions and the same is displayed on the Company’s website viz., www.indianippon.com.

17. Particulars of loans, guarantees or investments u/s 186:

The company has not given any loans or guarantee as specified under Section 186 of the Companies Act 2013.

The details of investments are given in Note no 5 on Accounts for the financial year 2017-18. The same is within the prescribed limits under provisions of Section 186 of the Companies Act 2013.

18. Prevention of sexual harassment of women at workplace:

As per the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act 2013 and Rules made thereunder, your Company has constituted Internal Complaints Committee. During the year under review, your Company has not received any complaints of sexual harassment from any of the women employees of the Company.

19. Material changes and commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year to which the financial statements relate and the date of the report.

20 . Acknowledgements

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas TVS Limited, Lucas Indian Service Ltd, Mahle Electric Drives Japan Corporation and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana, Maharashtra and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Place : Chennai T K BALAJI

Date : 8th May 2018 DIN No.:00002010

Chairman

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Mar 31, 2017

The Directors have pleasure in presenting the 32nd Annual Report and Audited Accounts for the year ended 31st March 2017

1. Financial Highlights

Rs. in Lakhs

	Year ended 31st March ''17	Year ended 31st March ''16
Total Income	40,792	38,847
Profit before depreciation, exceptional items and taxes Less:	5,125	4,551
Depreciation	417	418
Profit before tax & exceptional items	4,708	4,133
Exceptional items	-	-
Profit before tax	4,708	4,133
Taxation	1,468	1,075
Profit after tax	3,240	3,058
Profit brought forward from previous year	25,468	24,003
Other Comprehensive Income	321	245
Dividends	1131	1,527
Dividend distribution tax	230	311
Transfer to general reserve & share capital	-	-
Retained in profit and loss account	27,668	25,468

2. Financial and Operational Performance

Your Company''s sales has gone up as compared to the previous year by 4% in value terms. Profit before tax and exceptional items, has increased by around 14.7% over the previous year because of increased level of sales and cost reduction in material cost despite increase in employee cost. Your company also increased production capacity in Pondy to take care of the higher demand from the customers.

3. Management Discussion and Analysis

a. Overall economic view:

Indian economy has witnessed good GDP growth up to 7.9% initially during the first half of FY17 by showing resilience amidst global economy challenges, decline in investments and increased protectionist measures. The current fiscal has also seen significant game changing activities like passing of GST Bill and Bankruptcy Code bills and demonetization. Repo rates have also fallen from 7.5% to 6.25% in Apr1 7 increasing the liquidity with banks and exchange rates were stable during the year. Demonetization impact set the clock back in terms of growth especially in two wheeler market where demand has contracted significantly in the last quarter as liquidity remained tight affecting the disposable cash. Customers followed wait and watch policy since elections in big states were around the corner. Exports had lethargic growth

b. Industry structure and developments:

While the industry enjoyed robust growth early in the year, a significant slowdown was noticed since the last quarter of last fiscal due to demonetization. The two wheeler industry recorded an overall growth of around 6% led by a 25% and 11 % growth in moped and scooter segment while motor cycle market remained flat and three wheeler registered negative growth of 16% compared to last year. Industry has witnessed negative growth of 6% in exports. Two wheeler industry growth shrank in the later part of the year and was significantly affected by weak rural demand after demonetization and changes in emission standards from BS III to BS IV during the last quarter.

c. Performance review:

Your company had a growth of around 42% in moped segment against industry growth of 25% mainly due to higher share of business from the various customers. Sales growth in motor cycle has also increased slightly better than the industry growth. However, growth in scooter segment is less than market growth. Your company was able to increase its market share by 1 % through planned readiness for launch of BSIV products and introduction of few electronic products. The direct sales to aftermarket also scaled a steady growth of around 20% by expanding the distributors network in North and East India markets. Exports also witnessed about 20% growth compared to last year.

d. Business outlook:

The measures taken by Govt. during last fiscal are expected to result in positive trend in the long term. Demonetization is expected to increase the liquidity among the public and in banking system helping to lower lending rates and lift economic activity. This will help your company to increase the sales from two wheeler market. Implementation of GST is expected to catapult GDP growth. Moderate inflation and with solid agricultural input from bumper harvests after drought last year will provide fillip. Economy is forecast to regain its momentum with GDP growth rising to 7.4% FY18 from 7.1% in last fiscal. Automotive two wheeler industry is expected to growth between 7~9% in current financial year.

Industry has never been more uncertain and globalization of the market and competition from global players continue to drive the industry. Disruptive technological changes, electronic manufacturing services and continuous up gradation of emission standards offer both the opportunities and challenges. Introduction of BS VI, Electric Vehicles are on the cards. Sharing and connected vehicles will dramatically change both the types of vehicles and how they are used. More digitalization in automotive industry gives us scope for further growth. Few existing products may be phased out in the medium term. Your company is technologically well geared and ready to take up the challenges and convert into business opportunity.

Your company is planning to focus more on new technology products such as ISG, Immobilizers, Instrument Clusters, Electronic Control Units, Electronic Fuel Injection system and Brushless Alternators in coming years. The company stands to gain from the improving economic environment and investing in technologies and delivering higher value to customers by enabling them to stay ahead of global competition.

Your company has commercialized new business of EGR controller and Throttle Position Sensor for a Diesel Engine manufacturer for Three wheeler and small commercial vehicle application. The company plans to expand its reach in aftermarket through introducing new products like smart sensor adding cost benefit to the customer. On the cost front, your company is taking aggressive cost reduction measures like e-auction for material procurement, cost benchmarking, low cost automation, productivity improvement initiatives to make its products more competitive.

Your company has received new business enquiries from reputed customers in USA. The company is also exploring business opportunities in Asia Pacific region which are at initial stages.

Kolhapur unit commenced its operations during the year

e. Human resources and industrial relations:

The long term wage settlement for Hosur and Rewari have been completed. Negotiations for Pondy are in advanced stages. The industrial relations in all the units of the company continue to be harmonious.

f. Risks and concerns:

Uncertain weather conditions continue to influence the rural demand. Similarly, rising trend in raw material prices in steel, copper and petroleum products result in increasing product costs. Minimum wages policy pushes the cost of operation up. It poses challenge to maintain the profitability as customers may not fully offset the cost escalations. Frequent changes in emission norms make the customer postpone their purchases and makes few existing products obsolete.

Your Company is focusing on development of newer range of products which offer customers good value propositions, improving productivity and cost reduction in every possible area of operation to protect the bottom line.

g. Risk management policy:

Your Company takes cognizance of each business risk and has a risk management plan and policy in line with the overall objectives of the Company. The Company tracks the ever changing business risks and evaluates their impact on business results. Mitigation plan and counter measures are prepared and monitored to keep the impact minimal. Your Company had also formulated Risk Management Policy to identify and address the various risks.

h. Internal control system and their adequacy:

Your Company views internal audit as a continuous process to keep the management regularly appraised on the existence, adequacy and effectiveness of the internal control systems/processes in the company.

Based on the annual review and feedback received from the units and statutory auditors, audit plan is prepared and updated every year and approved by the Audit Committee. Internal auditors independently verify and test the adequacy and operating effectiveness of internal control systems and this provides assurance to the Audit Committee of continued compliance. The internal audit reports are also shared with statutory auditors.

Your Company improves internal control systems and accuracy of information on costs in real time through the effective use of ERP system which will help to analyze and exercise better control.

i. Internal financial control:

The company has established internal financial framework including internal controls over financial reporting and anti-fraud framework. The framework is reviewed regularly by the management and strengthened, from time to time to ensure adequacy and effectiveness of internal financial controls.

4. Corporate Social Responsibility

Your Company has constituted the Corporate Social Responsibility Committee (CSR Committee) and laid down the CSR policy which is available on the Company''s website.

During the year the Company had spent Rs. 60 lakhs which is the equivalent of 2% of average net profits for the immediate past three financial years, towards CSR activities through Swami Dayananda Educational Trust, an eligible institution undertaking project on activities listed in Schedule VII of the Companies Act, 2013.

The annual report on CSR activities is annexed to this report as ''Annexure -5 ''

5. Subsidiary Company and Associate Company and the Consolidated Financial Statements

5.1 Subsidiary company

Your subsidiary company, PT Automotive Systems Indonesia, has been granted approval from the Capital Investment Coordinating Board (BKPM) on January 19, 2017 for a further period of three years to explore business opportunities. However as mentioned in the previous report, the manufacturers of two wheelers in that country have their own sources for the products in the subsidiary''s range of manufacture and it has been decided to take necessary steps to liquidate the subsidiary

5.2. Associate company

Synergy Shakthi Renewable Energy Private Limited (SSREPL) was not in operation during the financial year 2016-17 due to restrictions on sale of power to third parties, unviable tariff offered by TNEB and adverse changes in regulatory policies. As a result, the associate company incurred a loss of Rs. 661.33 lakhs as against a loss of Rs. 389.46 lakhs during the previous year. SSREPL along with the State Bio mass Industry association has made representations to various arms of the government seeking changes in policies to support renewable power producers as these projects were set up to reflect commitment to the cause of sustainable and environment-friendly clean energy. Considering the avowed objective of the government to promote renewable energy in line with the global trends and the commitments made in the national energy mission. It is hoped there will be favourable changes in regulatory policies in the future would enable SSREPL to reestablish operations on a viable scale. The project was aligned to government policy of clean environment and also through linkages SSREPL established over a period for promotion of social cause of rural development and employment.

In order to fund this as well as to enable SSREPL restart its operations on a viable mode, SSREPL has come up ''rights issue'' in the ratio of 2 shares for every one share held by its existing shareholders at the face value of Rs. 10/- each to revive the company repay the borrowings from banks and also to meet the working capital requirements. Your Company subscribed Rs.12 Crores for the ''rights issue'' proportionate to its existing holding of Rs. 6 Crores.

Financial position of the subsidiary and the associate company are provided in AOC-1 as required under Section 129 (3 ) of the Companies Act 2013 as part of the financial statements.

5.3. Consolidated financial statements

The Consolidated Financial Statements of the Company prepared in accordance with the provisions of Section 129 (3) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 along with a separate statement containing salient features of the financial performance of the subsidiary / associate, in the prescribed format form part of the Annual Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of the subsidiary has been placed on the website of the Company at www.indianippon.com and the same will be made available to the shareholders on receipt of a request from them. This will also be available for inspection by the shareholders at the registered office of the company during the business hours.

6. Dividend

Your Company had paid two interim dividends of Rs.4 and Rs. 6 per share totaling to Rs.10 per share during the year. Your directors recommend consideration of the same as total dividend for the year. The total dividend for the year will absorb a sum of Rs. 1131.07 laksh besides an additional outgo on dividend distribution tax of Rs. 230.30 lakhs.

7. Public Deposits

Your Company has not accepted any deposits falling within the ambit of Section 73 or Section 76 of the Companies Act, 2013 read with Companies [Acceptance of Deposits] Rules 2014.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Outgo and Earnings

Please refer to Annexure-1 to the Directors'' Report to the Shareholders.

9. Particulars of Employees

The information required under Section 197 of the Companies Act, 2013 and the rule 5(2) made there under, as amended, has been given in Annexure 2. In terms of first proviso to Section 136(1) of the Companies Act 2013, the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the company. The annexure is available for inspection at the registered office of the company during business hours and any shareholder interested in obtaining a copy of said annexure may write to the Company Secretary at the registered office of the company.

The Comparative Analysis of the remuneration paid to Directors and Key Managerial Personnel with the Company''s performance is given in Annexure 3.

10. Annual Return

Extract of Annual Return is given as Annexure 4 to this report

11. Corporate Governance

Pursuant to the Listing Regulations 2015, the ''Report on Corporate Governance'' is enclosed as part of this report.

A certificate from the Auditors of your Company regarding compliance of the conditions of the Corporate Governance as stipulated by the SEBI (LODR) Regulations 2015, is attached to this report as Annexure 6.

The certificates required from Managing Director / CFO, are also attached to this report.

12. Directors’ Responsibility Statement

As required under Section 134 (5) of the Companies Act, 2013, the Board of

Directors hereby confirm:-

i. That in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. That the Directors had 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 the affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

iii. That the Directors had taken proper and sufficient care 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. That the Directors had prepared the Annual Accounts on a going-concern basis;

v. That the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

vi. That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. Directors & Key Managerial Personnel (KMP)

Mr. . T. K. Balaji, will be retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. A brief resume of Mr. . T K Balaji and other relevant information have been furnished in the Notice of the Annual General Meeting including the resolution for his reappointment. The directors recommend his re-appointment.

Mr. . Arvind Balaj, Managing Director, Mr. . Elango Srinivasan, Chief Financial Officer and Mr. . S. Sampath, Company Secretary are KMPs in terms of Section 2(51) and Section 203 of the Companies Act 2013. There is no change in KMP during the year.

13.1 Declaration by independent directors as required u/s 149:

At the Annual General Meeting held on 27th August 2014, M/S G Chidambar, V Balaraman, K G Raghavan, R Vijayaraghavan and Ms. Jayshree Suresh were appointed as independent directors not liable to retire by rotation, for a consecutive period of five years.

All Independent Directors have given declarations under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and SEBI (LODR) Regulations 2015.

13.2 Terms of appointment of independent directors of India Nippon Electricals Limited

The terms of appointment is available on the website of the company viz., www. indianippon.com.

13.3 Number of meetings of the board

Five meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report.

13.4 Board evaluation

The Nomination & Remuneration Committee (N&RC) of the company approved an evaluation policy which provides for evaluation of the Board, the Committees of the Board and individual directors.

Pursuant to Sch. IV of the Companies Act 2013, the independent directors of the company met without the attendance of non-independent Directors and members of management and reviewed

(i) the performance of non-independent Directors of the Board as a whole;

(ii) the performance of the Chairman of the Company; and

(iii) Assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

On the same day, the performance evaluation of the independent directors was also done by the entire Board excluding the directors being evaluated and also of its own performance and that of its committees and individual Directors.

14. Auditors

(i) Statutory auditors

Pursuant to Section 139 of the Companies Act, 201 3 and Rules made there under, M/s Brahmayya & Co., Chartered Accountants, were appointed for a period of three years from the conclusion of the 29th Annual General Meeting held on 27th August 2014 until the conclusion of the forthcoming 32nd Annual General Meeting thus concluding their term of appointment. The Board of Directors place on record its appreciation of the services rendered by M/S Brahmayya & Co. as statutory auditors of the Company since its inception.

The Audit Committee and the Board of Directors have recommended the appointment of M/S Deloitte, Haskins & Sells LLP (DHS LLP), Chartered Accountants (Firm Registration No. 117366W/W-100018) as the Statutory Auditors of the Company, subject to the approval of the shareholders. M/S Deloitte, Haskins & Sells LLP have consented to the said appointment and confirmed that in the event of their appointment it would be within the limits mentioned under the provisions of Section 1 41 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

M/S Deloitte, Haskins & Sells LLP, Chartered Accountants, will hold office as statutory auditors for the first term of five years from the conclusion of 32nd Annual General Meeting of the Company, subject to ratification of the appointment by members at every Annual General Meeting held during their tenure.

(ii) Cost auditor

Pursuant to the Companies (Cost Records and Audit) Rules, 2014, the Company filed the Cost Audit Report, with the Ministry of Corporate Affairs, for the financial year 2015-16 in XBRL format.

Mr. . K Suryanarayanan who was appointed as Cost Auditor for the financial year 2016-17 will be submitting his report within the time limit applicable under the Companies (Cost Record and Audit) Rules 2014.

The Board has re-appointed Mr. . K Suryanarayanan as cost auditor for the financial year 2017-18 also and a remuneration of Rs. 2.50 lakhs has been fixed for the audit. The ratification of his remuneration is included as an item in the Notice of the Annual General Meeting as required under Section 148 (3) of the Companies Act 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014.

(iii) Secretarial auditor & the secretarial audit report

Ms. B Chandra, Practicing Company Secretary was appointed as Secretarial Auditor by the Board of Directors for the financial year 2016-17 whose report is attached separately to this report (Annexure 7). Ms. B Chardra, Practicing Company Secretary was re-appointed as Secretarial Auditor for carrying out the secretarial audit for the financial year 2017-18.

(iv) Qualification/reservation/adverse remark in Audit Report

There were no qualification / reservation / adverse remark in the auditor''s report or in the secretarial audit report.

15. Particulars of contracts or arrangements with related parties

All the transactions with related parties are in the ordinary course of business and on arm''s length basis and there are no ''material'' related party transactions and thus disclosure in form AOC - 2 is not required.

15.1 Policy on related party transactions of the company

The Company has a policy on Related Party Transactions and the same is displayed on the Company''s website viz., www.indianippon.com.

16. Particulars of loans, guarantees or investments u/s 186:

The company has not given any loans or guarantee as specified under Section 186 of the Companies Act 2013.

The details of investments are given in Note no. 6 on Accounts for the financial year 2016-17. The same is within the prescribed limits under provisions of Section 186 of the Companies Act 2013.

17. Employee stock option:

There is no scheme of employees'' stock option in your Company.

18. Policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors, key managerial personnel and other employees

The Board shall have minimum 3 and maximum 12 Directors.

The Nomination and Remuneration Committee of your Company has laid down criteria and qualification for appointment of Directors and Key Managerial Personnel. The person for such appointment should possess adequate qualification, expertise, experience and integrity.

The Managing Director of the Company is entitled to monthly remuneration and commission based on the profit computed in the manner prescribed under the Companies Act, 2013 and subject to the overall ceiling specified in Section 1 98 of the Act. All other Directors are entitled to sitting fees for attending the meetings of the Board of Directors and its Committees and also to commission based on the profit subject to the ceiling as specified in Section 198 of the Companies Act, 2013.

Some of the additional reports as required under the Companies Act 2013 and forming part of the Boards Report are attached to this report.

19. Prevention of sexual harassment of women at workplace:

As per the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act 2013 and Rules made there under, your Company has constituted Internal Complaints Committee. During the year under review, your Company has not received any complaints of sexual harassment from any of the women employees of the Company.

20. Material changes and commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year to which the financial statements relate and the date of the report.

21. Acknowledgements

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Mahle Electric Drives Japan Corporation, Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana, Maharashtra and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Chennai T K BALAJI

18th May 2017 DIN No.:00002010

Chairman

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Thirtieth Annual Report and Audited Accounts for the year ended 31st March 2015.

1. FINANCIAL HIGHLIGHTS

Rs. Lacs

Year ended Year ended 31st March 15 31st March 14

Sales (Net of excise duty) 32653 26153

Profit before depreciation, 3962 3172

exceptional items and taxes

Less:

Depreciation 775 562

Profit before tax & 3187 2610 exceptional items

Exceptional items - -

Profit before tax 3187 2610

Taxation 921 644

Profit after tax 2266 1966

Profit brought forward 1199 1181 from previous year (*)

Dividends 1018 1018

Dividend distribution tax 204 173

Transfer to general 900 750 reserve & share capital

Retained in profit and 1343 1206 loss account

(*) Consequent to the adoption of the revised estimates of useful life of fixed assets as stipulated in Sch. II of the Companies Act, 2013, with effect from 1st April 2014, an amount of Rs. 6.86 lacs arising out of realignment with useful life as prescribed has been debited to the opening balance of retaining earnings.

2. FINANCIAL AND OPERATIONAL PERFORMANCE

Your Company's sales has gone up as compared to the previous year by 24.9% in value terms. Profit before tax and exceptional items has increased by around 22.1% over the previous year because of increased level of sales and cost reduction initiatives undertaken. Your company also increased production capacity in Rewari to meet the higher demand from the customers.

4. SUBSIDIARY COMPANY AND ASSOCIATE COMPANY AND THE CONSOLIDATED FINANCIAL STATEMENTS

4.1 Subsidiary Company

The subsidiary of your company, PT Automotive Systems Indonesia is exploring various business opportunities in that country as it also has a large two wheeler population and an appropriate decision will be taken within the time granted by the Governmental authorities of Indonesia. The Government authorities of Indonesia have given time till March 2017 for the decision to be reached. The details relating to the subsidiary have been provided in the prescribed form as part of the accounts.

The annual accounts of the subsidiary company will be available at the Registered office of the Company and of the subsidiary company concerned, if any member or investor wishes to inspect them during the business hours on any working day.

4.2 Associate Company

M/s Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company has made a strategic investment, reported a profit of Rs. 70.52 lacs for its financial year ended 31st March 2015 which has been recognised appropriately in the consolidated accounts. During the year under review, their plant generated 41.31 million units of power that represented 53% PLF as against previous year's 72%. The drop is due to temporary suspension of third party sales by the state utility during the second quarter of the year account of partial withdrawal of power cuts. SSREL also augmented its revenue by trading in Renewable Energy Certificates (RECs) where the market under-performed due to ineffective enforcement of Renewable Purchase Obligations (RPOs) by the regulatory authorities. Based on the renewable energy sector's representations to the Government and other regulatory agencies, it is hoped that appropriate measures will be in place to provide a fillip to the REC market with an effective enforcement of RPOs in the near future.

Financial position of the subsidiary and the associate company are provided in AOC- 1 as required under Section 129 (3) of the Companies Act 2013 as part of the financial statements.

4.3 Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with the provisions of Section 129 (3) of the Companies Act 2013 and relevant Accounting Standards issued by the Institute of Chartered Accountants of India form part of the Annual Report.

5 DIVIDEND

Your Company had paid an interim dividend of Rs. 4.50 per share in the month of Feb'15. A final dividend of Rs. 4.50 per share has been recommended by the Board of Directors for approval of the shareholders. If approved, the total dividend for the year will be Rs. 9 per share absorbing a sum of Rs. 1017.97 lacs besides an additional outgo on dividend distribution tax of Rs. 203.56 lacs.

6 PUBLIC DEPOSITS

Your Company has not accepted any deposits falling within the ambit of Section 73 of the Companies Act, 2013 read with Companies [Acceptance of Deposits] Rules 2014.

7 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

Please refer to Annexure-1 to the Directors' Report to the Shareholders.

8 PARTICULARS OF EMPLOYEES

The information required under Section 197 (12) of the Companies Act, 2013 and the rules made thereunder, as amended, has been given in Annexure 2 appended hereto and forms part of this report.

The Comparative Analysis of the remuneration paid to Directors and Key Managerial Personnel with the Company's performance is given in Annexure 3.

9 ANNUAL RETURN

Extract of Annual Return is given as Annexure 4 to this report.

10 CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the 'Report on Corporate Governance' is enclosed as part of this report.

A certificate from the Auditors of Your Company regarding compliance of the conditions of the Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report as Annexure 6.

The certificates required from Managing Director / CFO, are also attached to this report.

11. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134 (5) of the Companies Act, 2013, the Board of Directors hereby confirm:-

i. That in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. That the Directors had 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 the affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

iii. That the Directors had taken proper and sufficient care 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. That the Directors had prepared the Annual Accounts on a going-concern basis;

v. That the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

vi. That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. DIRECTORS

Mr. T K Balaji, who opted to retire by rotation in the Board meeting held on 23rd May 2014 and Mr. K Seshadri, will be retiring by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

At the Annual General Meeting held on 27th August 2014 the members had appointed the existing Independent Directors M/S K G Raghavan, V Balaraman, G Chidambar, R Vijayaraghavan and Ms. Jayshree Suresh as Independent Directors under the Act, each for a term of five years with effect from that date.

All Independent Directors, on appointment, were issued letter of appointment setting out the terms of appointment, duties, remuneration etc which was acknowledged by them.

12.1 Declaration by Independent Directors as required u/s 149:

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Clause 49 of the listing agreement.

12.2 Terms of appointment of Independent Directors of India Nippon Electricals Limited

The terms of appointment is available on the website of the company viz., www. indianippon.com.

12.3 Number of meeting of the Board

Six meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report.

12.4 Board Evaluation

The Nomination & Remuneration Committee (N&RC) of the company approved an evaluation policy which provides for evaluation of the Board, the Committees of the Board and individual directors.

Pursuant to Sch IV of the Companies Act 2013, the independent directors of the company convened on 23rd March 2015 an exclusive meeting without the attendance of non-independent Directors and members of management to review.

(i) the performance of non-independent Directors and the Board as a whole;

(ii) the performance of the Chairman of the Company; and

(iii) Assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

On the same day, the performance evaluation of the independent directors was also done by the entire Board excluding the directors being evaluated.

13. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars 31st March 2015 31st March 2014 % change

Market capitalisation 476.18 226.21 110.50 (in Rs. crores)

Price Earnings Ratio 21.10 11.51 83.32

14. AUDITORS

(i) Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013 and Rules made thereunder, M/s Brahmayya & Co., Chartered Accountants, were appointed for a period of three years from the conclusion of the 29th Annual General Meeting held on 27th August 2014 until the conclusion of the 32nd Annual General Meeting. Their continuation in the appointment is placed for ratification in the ensuing Annual General Meeting as required under the Act.

(ii) Cost Auditor

The Board of Directors on the recommendation of the Audit Committee has appointed Mr. K Suryanarayanan as Cost Auditor for the financial year 2015- 16 and fixed his remuneration, as cost audit is applicable for the products manufactured by the company vide notification dated 31st December 2014 issued by the Ministry of Corporate Affairs, Govt. of India. The ratification of his remuneration is included as an item in the Notice of the Annual General Meeting as required under Section 148 (3) of the Companies Act 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014.

(iii) Secretarial Auditor & the Secretarial Audit Report

Ms. B Chandra, Practicing Company Secretary was appointed as Secretarial Auditor by the Board of Directors for the financial year 2014-15 whose report is attached separately to this report (Annexure 7)

(iv) Qualification/reservation/adverse remark in Audit Report

There were no qualification / reservation / adverse remark in the auditor's report or in the secretarial audit report.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and on arm's length basis and there are no 'material' contracts or arrangements or transactions at arm's length basis and thus disclosure in form AOC - 2 is not required.

15.1 Policy on Related Party Transactions of the Company

The Company has a policy on Related Party Transactions and the same is displayed on the Company's website viz., www.indianippon.com.

16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186:

The Company has not given any loans or guarantee as specified under Section 186 of the Companies Act 2013.

The investments made by the Company during the period 2014-15 are depicted below. The same is well within the prescribed limits under provisions of Section 186 of the Act.

S.no Loans, Guarantees & Investments Amount 60% of Paid made in (In Rs.Lacs) up capital and Free Reserves

1 Investment in equity instruments 4632.06

2 Investments in bonds 2162.55

3 Investments in venture capital funds 627.58

4 Investments in mutual funds 6755.31

Total 14177.50 12652.31



S.no Loans, Guarantees & Investments 100% of Free Remarks made in Reserves

1 Investment in equity instruments

2 Investments in bonds

3 Investments in venture capital funds

4 Investments in mutual funds

Total 19956.12

17. EMPLOYEE STOCK OPTION:

There is no scheme of employees' stock option in your Company.

18. Policy on Directors' Appointment and Remuneration including criteria for determining qualifications, Positive Attributes, Independence of Directors, Key Managerial Personnel and Other Employees

The Board shall have minimum 3 and maximum 12 Directors.

The Nomination and Remuneration Committee of your Company has laid down criteria and qualification for appointment of Directors and Key Managerial Personnel. The person for such appointment should possess adequate qualification, expertise, experience and integrity.

The Managing Director of the Company is entitled to monthly remuneration and commission based on the profit computed in the manner prescribed under the Companies Act, 2013 and subject to the overall ceiling specified in Section 198 of the Act. All other Directors are entitled to sitting fees for attending the meetings of the Board of Directors and its Committees and also to commission based on the profit subject to the ceiling as specified in Section 198 of the Companies Act 2013.

Some of the additional reports as required under the Companies Act 2013 and forming part of the Directors Report are attached to this report.

19. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Bengaluru T K BALAJI 25th May 2015 Chairman

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Mar 31, 2014

The Directors have pleasure in presenting the Twenty Ninth Annual Report and Audited Accounts for the year ended 31st March 2014.

1. FINANCIAL HIGHLIGHTS

Lacs

Year ended Year ended 31st March 14 31st March 13

Sales (Net of excise duty) 26153 26802

Profit before depreciation 3172 4128

and taxes

Less:

Depreciation 562 613

Profit before tax 2610 3515

Taxation 644 78

Profit after tax 1966 2837

Profit brought forward 1181 1532 from previous year

Dividends 1018 1018

Dividend distribution tax 173 170

Transfer to general reserve 750 2000

& share capital

Retained in profit and loss 1206 1181

account

2. OPERATIONAL PERFORMANCE

Your Company''s sales during the year under review fell by 2.40% compared to the previous year owing to adverse business conditions. Your Company went for an aggressive price strategy to get enhanced market share particularly for fly wheel magneto which coupled with the loss of business of profitable electronic component due to changes in the model of one of the major customers impacted the bottom line significantly. Efforts at cost reduction which, by and large, went according to the plan drawn up and restricting price increases to suppliers helped to mitigate the impact on the company''s bottom line. The tax incidence on the profit earned was more than the previous year due to completion of the tax holiday period by one of the units of the Company.

4. SUBSIDIARY COMPANY

The subsidiary of your company, PT Automotive Systems Indonesia has been granted three more years time up to March 2017 to establish manufacturing operations in Indonesia. Your Company is exploring various business opportunities in that country as it has a large two wheeler population and an appropriate decision will be taken within the time granted by the Governmental authorities of Indonesia. The annual accounts of the subsidiary company will be available at the registered office of the Company and of the subsidiary company concerned, if any member or investor wishes to inspect them during the business hours on any working day.

5. ASSOCIATE COMPANY

M/s Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company has made a strategic investment, reported a profit of Rs.195.02 lacs for its financial year ended 31st March 2014 which has been recognised appropriately in the consolidated accounts. SSREL continued its focus on improving the capacity utilization of its power plant by securing alternate sources of biomass and stepping up its operations by addressing the plant issues. On the market front, the base was enlarged by SSREL by targeting better realizations from short term open access customers. SSREL also augmented its revenue by trading in Renewable Energy Certificates (RECs) where the market under- performed due to ineffective enforcement of Renewable Purchase Obligations (RPOs) by the regulatory authorities. As the viability of the project is also dependent upon the performance of the REC market, the industry association is in continuous dialogue with the Government and the regulators to address this need.

6. DIVIDEND

Your Company had paid an interim dividend of Rs. 4 per share in the month of Feb''14. A further dividend of Rs. 5 will be paid in June ''14. The total dividend of Rs. 9 per share is being treated as final dividend for the year. The dividends will absorb a sum of Rs. 1017.97 lacs besides an additional outgo on dividend distribution tax of Rs. 173 lacs.

7. PUBLIC DEPOSITS

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules 1975.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

Please refer to Annexure–I to the Directors'' Report to the Shareholders.

9. PARTICULARS OF EMPLOYEES

None of the employees is drawing remuneration in excess of the amounts specified as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended.

10. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the ''Report on Corporate Governance'' is enclosed as part of this report. A certificate from the Auditors of your Company regarding compliance of the conditions of the Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report. The certificates required from Head of Operations/ CFO, are also attached to this report.

11. DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 on the Directors'' Responsibility Statement, it is hereby confirmed:

a) that in the preparation of accounts for the financial year ended 31st March 2014 the applicable accounting standards have been followed.

b) that the Directors have selected the accounting policies and applied them consistently and made judgements 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 under review and of the Profit of the Company, for the year under review.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the annual accounts for the year ended 31st March 2014 on a ''going concern'' basis.

12. DIRECTORS

In terms of Section 149 read with Section 152 of the Companies Act 2013, Independent Directors can be appointed for a term upto five years and they need not retire by rotation during their tenure. Accordingly, resolutions are placed for consideration of the Members to appoint independent directors for a term upto 5 years in the ensuing Annual General Meeting (A.G.M.).

Mr T K Balaji, Chairman of the Company who was appointed as Director not liable to retire by rotation in the A.G.M. held in 1987 has opted to retire by rotation to fulfil the requirement of Section 149 read with Section 152 of the Companies Act 2013. Mr. N S Murthy resigned from the Board of Directors with effect from 29th October 2013 and Ms. Jayshree Suresh was appointed as an independent Director with effect from 26th March 2014 in the casual vacancy caused by his resignation. Mr Y Tomita retires by rotation and does not seek re- election. Mr. Tadaya Momose is being proposed for appointment as a Non- independent Director liable for retirement by rotation. The Company has received proposals for the above appointments from shareholders as required under Section 160 of the Companies Act 2013.

The Board would like to place on record its appreciation of the valuable contributions made by M/s N S Murthy and Y Tomita during their tenure as Directors of the Company.

13. AUDITORS

M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and are eligible for re-appointment.

14. COST AUDITORS

Mr. K Suryanarayanan who was appointed as cost auditor for the financial year 2012-13 filed the cost audit report with the MCA within the stipulated time. He was also re-appointed as Cost Auditor by the Board of Directors, for the financial year 2013 -14 who will be completing the cost audit for the year ended 31st March 2014 and file the cost audit report before the due date.

15. GENERAL

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company. Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Chennai T K BALAJI

23rd May 2014 Chairman

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Mar 31, 2013

To the Shareholders

The Directors have pleasure in presenting the Twenty Eighth Annual Report and Audited Accounts for the year ended 31st March 2013.

1. FINANCIAL HIGHLIGHTS

Rs.lacs

Year ended Year ended 31st March 2013 31st March 2012

Sales (Net of excise duty) 26802 26005

Profit before depreciation, exceptional items and taxes 4128 4371

Less: Depreciation 613 528 Profit before tax & exceptional items 3515 3843

Exceptional items 133

Profit before tax 3515 3976

Taxation 678 846

Profit after tax 2837 3130

Profit brought forward from previous year 1532 785

Dividends 1018 1018

Dividend distribution tax 170 165

Transfer to general reserve & share capital 2000 1200

Retained in profit and loss account 1181 1532

2. FINANCIAL AND OPERATIONAL PERFORMANCE

Your Company''s sales grew by 3% over the previous year in value terms. Profit before tax and exceptional items, as a percentage of sales, dropped by around 1.70% over the previous year mainly, due to increase in material and conversion costs given to suppliers not recouped, in full by the customers. Metal prices were on the higher side in the first half of the year resulting in higher material cost. Other expenses were higher primarily due to higher fuel consumption arising out of higher power cuts and higher expenses on new product tooling, purchase of critical spares for plant and machinery, travel for business development etc. Depreciation was more due to capacity expansion in Hosur and Rewari units.

3. SUBSIDIARY COMPANY

Your company acquired land in Indonesia through its subsidiary company, PT Automotive Systems Indonesia, with a view to establish manufacturing operations to support TVS

Motors. However, as the volumes have not reached our expectations, we cannot proceed with the same. Our current approvals are valid till March 2014, by which time an appropriate decision will be taken.

The Ministr y of Corporate Affairs vide the General Circular No.2/2011/circular no.5/12/2007-CL-III dated 8th February 2011 had granted general exemption from the requirement of attaching the annual report of subsidiary company, subject to fulfilment of conditions stipulated in the circular. Your company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.

The annual accounts of the subsidiary company will be available at the registered office of the Company and of the subsidiary company concerned, if any member or investor wishes to inspect them during the business hours on any working day.

4. ASSOCIATE COMPANY

M/s Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company has made a strategic investment, improved its capacity utilization during FY 2012-13 by procuring biomass through alternate sources and stepping up its plant operations. The company enlarged its customer base by targeting better realizations from short term open access consumers. SSREL has also augmented its revenue by trading in Renewable Energy Certificates (RECs) which showed buoyancy during the first half of the year. With these measures, we are happy to report that your investee Company has been able to achieve profits during the year under review. Going forward, sourcing of biomass fuels of right quality in required volumes at affordable cost would pose challenges. During the current year, many State utilities have also not been forthcoming in buying RECs from renewable energy generators. The viability of the project is dependent upon support from realisation of revenue through sale of RECs. This, in turn, is subject to effective enforcement of renewable purchase obligations by the regulators. The industry association is in continuous dialogue with the Government and regulatory authorities on the matter, to address these issues.

6. DIVIDEND

Your Company had paid an interim dividend of Rs. 4.00 per share in the month of Mar''13. A further dividend of Rs. 5.00 per share will be paid in June ''13. The total dividend of Rs. 9.00 per share is being treated as final dividend for the year. The dividends will absorb a sum of Rs. 1017.97 lacs besides an additional outgo on dividend distribution tax of Rs.169.51 lacs.

7. PUBLIC DEPOSITS

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules 1975.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

Please refer to Annexure–I to the Directors'' Report to the Shareholders.

9. PARTICULARS OF EMPLOYEES

None of the employees is drawing remuneration in excess of the amounts specified as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended.

10.CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the ''Report on Corporate Governance'' is enclosed as part of this report.

A certificate from the Auditors of Your Company regarding compliance of the conditions of the Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

The certificates required from Head of Operations/ CFO, are also attached to this report.

11.DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 on the Directors'' Responsibility Statement, it is hereby confirmed:

a) that in the preparation of accounts for the financial year ended 31st March 2013 the applicable accounting standards have been followed.

b) that the Directors have selected the accounting policies and applied them consistently and made judgements 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 under review and of the Profit of the Company, for the year under review.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the annual accounts for the year ended 31st March 2013 on a ''going concern'' basis.

12.DIRECTORS

Mr. K Seshadri and Mr. KG Raghavan are retiring by rotation at the ensuing Annual General meeting and being eligible offer themselves for re-appointment. Mr. Arvind Balaji was appointed during the year as an additional Director and he will be proposed for appointment as a director not liable to retire by rotation at the ensuing Annual General Meeting. Mr. Arvind Balaji, has also been appointed as a Whole-time Director of the Company u/s 269 of the Companies Act, 1956 effective 1st April 2013. A separate resolution will be proposed for approval of the aforesaid appointment at the ensuing Annual General Meeting.

Mr. RD Flint who also retires by rotation at the ensuing Annual General meeting does not seek re-election.

The Board would like to place on record its appreciation of the valuable contributions made by Mr. RD Flint during his tenure as Director of the Company.

Mr. R Vijayaraghavan was appointed as an Additional Director who will be proposed for appointment as a director liable to retire by rotation at the ensuing Annual General Meeting.

13. AUDITORS

M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and are eligible for re-appointment.

14. COST AUDITORS

Ministry of Corporate Affairs (MCA) issued an industry specific Cost Audit Order vide No.52/26/CAB-2010 dated 24th January 2012, thereby requiring all such companies, which are in the manufacturing activities of automotive components to appoint a Cost Auditor for auditing the cost accounting information effective 1st April 2012 for the financial year 2012-13 and file a report with the Central Government on or before 30th September every year.

The Board of Directors have appointed Mr K Suryanarayanan, Practising Cost Accountant, Chennai for carrying out the cost audit of the company for the year 2012-13 and the cost audit report will be filed with the MCA within the stipulated time.

15. GENERAL

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Chennai T K BALAJI

28th May 2013 Chairman

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Mar 31, 2012

The Directors have pleasure in presenting the Twenty Seventh Annual Report and Audited Accounts for the year ended 31st March 2012.

1. FINANCIAL HIGHLIGHTS

Rs lacs

Year ended Year ended 31st March 2012 31st March 2011

Sales (Net of excise duty) 26005 22885

Profit before depreciation, exceptional items and taxes 4371 3750

Less:

Depreciation 528 415

Profit before tax & exceptional items 3843 3335

Exceptional items 133 -

Profit before tax 3976 3335

Taxation 846 792

Profit after tax 3130 2543

Profit brought forward from previous year 785 836

Dividends 1018 767

Dividend distribution tax 165 127

Transfer to general reserve & share capital 1200 1700

Retained in profit and loss account 1532 785

2. OPERATIONS

Your Company's sales grew by 14% over the previous year, from Rs 228.85 crores to Rs 260.05 crores. Profit before tax and exceptional items at Rs 38.43 crores showed an improvement of 15% over the previous year.

4. INTERNATIONAL APPRECIATION

The 'smart regulator' developed through in- house R&D by your company has won an award from a well known motorcycle maker from Japan, for fuel efficiency. A certificate in appreciation of the development has been given to the joint venture partner of your company, M/s Kokusan Denki, acknowledging this development by your company in India. The customer is also keen to promote the use of this regulator in its products manufactured in other parts of the world.

5. PT AUTOMOTIVE SYSTEMS INDONESIA (PT ASI)

Your Company has obtained approval from the designated authorities at Indonesia for extension of time by two more years for commencing commercial production which is expiring in March 2014. Your Company is continuing to explore various options and an appropriate decision will be made.

The Ministry of Corporate Affairs viae its General Circular No.2/2011/circular no.5/12/2007-CL-lll dated 8th February 2011 has granted general exemption from the requirement of attaching the annual report of subsidiary company subject to fulfilment of conditions stipulated in the circular. Your company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.

The annual accounts of the subsidiary company will be available at the registered office of the Company and of the subsidiary company concerned, if any member or investor wishes to inspect them during the business hours on any working day.

6. ASSOCIATE COMPANY

As indicated in the last year's report, in the context of the growing need to reduce dependence on conventional sources of energy and on environmental grounds, the Central Government is accelerating initiatives to promote use of renewable sources of energy from the Twelfth Plan (2012- 17). Introduction of Renewable Purchase Obligation (RPO) for industrial consumers and state distribution utilities alongside Renewable Energy Certificates (REC) scheme for the renewable power generators is a step in this direction. Mandatory compliance of RPO commencing from FY 2011 -12 is expected to gather momentum in the coming years. The Ministry of New and Renewable Energy is also in the process of formulating a National Biomass Mission policy framework to support biomass-based power generators on issues ranging from long term fuel security to viable energy tariffs for this sector.

Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company has made a strategic investment, has gradually improved its capacity utilization during the second half of the year under review by securing alternate sources of biomass and fine tuning its operations. SSREL has also received accreditation from the regulatory authorities for trading in RECs to which it would be entitled based on energy sold to its customers. Realization from en-cashing the certificates by sale to the obligated entities is expected to support the long term viability of your investee company.

7. DIVIDEND

Your Company had paid an interim dividend of Rs 4.00 per share in the month of February '12, A further dividend of Rs 5 per share will be paid in June '12. The total dividend of Rs 9 per share is being treated as final dividend for the year. The dividends will absorb a sum of Rs 101 7,97 lacs besides an additional outgo on dividend distribution tax of Rs 165.15 lacs.

8. BONUS SHARES

During the year, your Company issued and allotted 32,31,632 equity shares of Rs 10/- each as bonus shares on 22nd September 2011 in the ratio of 2 equity shares for every 5 equity shares held to the eligible shareholders as on the record date i.e. 21 st September 2011 by capitalizing an equivalent amount standing to the credit of the general reserve account of the Company. As a result, the Company's share capital now stands at Rs 11.31 crores. The said issue and allotment of bonus shares was completed within the stipulated period of two months of its declaration by the Board of Directors in terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

9. PUBLIC DEPOSITS

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules 1975.

10.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

Please refer to Annexure-I to the Directors' Report to the Shareholders.

11. PARTICULARS OF EMPLOYEES

None of the employees is drawing remuneration in excess of the amounts specified as per Section 21 7 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended.

12.CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the 'Report on Corporate Governance' is enclosed as part of this report.

A certificate from the Auditors of your Company regarding compliance of the conditions of the Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

The certificate required from CEO/ CFO, is also attached to this report.

13. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 on the Directors'

Responsibility Statement, it is hereby confirmed:

a) that in the preparation of accounts for the financial year ended 31st March 2012 the applicable accounting standards have been followed.

b) that the Directors have selected the accounting policies and applied them consistently and made judgements 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 under review and of the Profit of the Company, for the year under review.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the annual accounts for the year ended 31st March 2012 on a 'going concern' basis.

14. DIRECTORS

Mr. K Nakamura has resigned from the Board of Directors and Mr Y Tomita has been inducted in the casual vacancy caused by his resignation effective 1st June 2012. Mr Y Tomita, will be proposed for appointment as a Director liable to retire by rotation in the ensuing Annual General Meeting.

Mr. N S Murthy and Mr. G Chidambar are retiring by rotation at the ensuing Annual General meeting and being eligible offer themselves for re-appointment.

15. AUDITORS

M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and are eligible for re-appointment.

16. GENERAL

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors

Chennai T K BALAJI

30th May 2012 Chairman

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Mar 31, 2011

To the Shareholders

The Directors have pleasure in presenting the Twenty Sixth Annual Report and Audited Accounts for the year ended 31st March 2011.

1. FINANCIAL HIGHLIGHTS

Rs. lacs Year ended Year ended 31st March 31st March 2011 2010

Sales 22885 16908 (Net of excise duty)

Profit before depreciation and taxes 3750 2934

Less:

Depreciation 415 357

Profit before tax 3335 2577

Taxation 792 585

Profit after tax 2543 1992

Profit brought forward from previous year 836 4101

Dividends 767 606

Dividend distribution tax 127 101

Transfer to general reserve 1700 4550

Retained in Profit and Loss 785 836 Account

2. OPERATIONS

Your Company's sales grew by 35% over the previous year, from Rs. 169.08 crores to Rs.228.85 crores. Your Company achieved a double digit growth, in value terms, in all vehicle segments and the business in electronics more than doubled. Profit before tax at Rs.33.35 crores showed an improvement of 29% over the previous year.

4. PT AUTOMOTIVE SYSTEMS INDONESIA (PT ASI)

As reported earlier, your Company has obtained approval from the designated authorities at Indonesia for extension of time by two years for commencing commercial production which is expiring in March 2012. Your Company is continuing to explore various options and an appropriate decision will be made.

Your Company has obtained approval from the Ministry of Corporate Affairs, New Delhi vide letter no.47/102/2011-CL-lll dated 9th February 2011, in terms of Section 212 (8) of the Companies Act, 1956 exempting it from attaching the annual report of its subsidiary company.

The annual accounts of the subsidiary company will be available at the registered office of the Company and of the subsidiary company concerned, if any member or investor wishes to inspect them during the business hours on any working day.

5. SYNERGY SHAKTHI RENEWABLE ENERGY LTD

To promote sustainable economic development, the Government of India has placed considerable emphasis on power generation out of renewable resources. Reflecting our commitment to this cause, we have made an investment in Synergy Shakthi Renewable Energy Limited (SSREL) which is a project for producing power out of biomass. The company has now completed one full year of operation. SSREL is, however, facing acute shortage of biomass availability. As a result of overall economic growth, a number of industries are competing to procure biomass not only for power generation but also for other industrial purposes. Consequently, SSREL along with other investors in the renewable energy in Tamilnadu have been facing shortage of raw material coupled with the rising cost of inputs, affecting their operations. Consequently, despite growing demand for power, SSREL is unable to generate to its full capacity and incurring some losses. In the near term, the company is making determined efforts to find alternate sources of biomass. The company is also planning to raise additional finance from other strategic investors, The company has clearly a long-term potential given the support that the renewable energy segment is poised to receive from the government

6. DIVIDEND

Your Company had paid interim dividends of Rs.5.00, Rs.3.50 and Re. 1.00 per share in the months of Dec' 10, Mar' 11 and May' 11. The total dividend of Rs.9.50 per share is being treated as final dividend for the year. The dividends will absorb a sum of Rs.767.51 lacs besides an additional outgo on dividend distribution tax of Rs. 127.15 lacs.

7. PUBLIC DEPOSITS

Your Company has not accepted any deposits under Section 58A of the Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules 1975.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

Please refer to Annexure-I to the Directors' Report to the Shareholders.

9. PARTICULARS OF EMPLOYEES

None of the employees is drawing remuneration in excess of the amounts specified as per Section 217 (2A) of the Companies Act, 1956 read with Companies [Particulars of Employees] Rules 1975 as amended,

10. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the 'Report on Corporate Governance' is enclosed as part of this report.

A certificate from the Auditors of your Company regarding compliance of the conditions of the Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this report.

The certificates required from CEO/ CFO, are also attached to this report.

11 .DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956 on the Directors' Responsibility Statement, it is hereby confirmed:

a) that in the preparation of accounts for the financial year ended 31 st March 2011 the applicable accounting standards have been followed.

b) that the Directors have selected the accounting policies and applied them consistently and made judgements 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 under review and of the profit of the Company, for the year under review.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that the Directors have prepared the annual accounts for the year ended 31st March 2011 on a 'going concern' basis.

12.DIRECTORS

Mr H Nanjo has resigned from the Board of Directors and Mr M Namatame has been inducted in his place effective 1st April 2011. Mr. M Namatame will be proposed for appointment as a Director not liable to retire by rotation in the ensuing Annual General Meeting. Mr K Nakamura, who was appointed by the shareholders as a Director not liable to retire by rotation in the Annual General Meeting held on 21 st August 2008 is resigning with effect from 20th August 2011 as such non-retiring Director and will be proposed for appointment as a Director liable to retire by rotation in the ensuing Annual General Meeting.

Mr K G Raghavan and Mr V Balaraman are retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

13.AUDITORS

M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of the Annual General Meeting and are eligible for re-appointment.

14.GENERAL

Your Directors wish to place on record their appreciation for the good work of all the employees of the Company.

Your Directors also acknowledge the continued support received from Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and also wish to thank the Governments at the Centre and in the States of Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd, Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time to time.

For and on behalf of the Board of Directors T K BALAJI Chairman

Chennai 27.05.2011