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Panasonic Energy India Company Ltd.

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OPEN 240.10
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52-Week high 365.00
52-Week low 221.05
P/E 53.47
Mkt Cap.(Rs cr) 178
Buy Price 0.00
Buy Qty 0.00
Sell Price 237.00
Sell Qty 1000.00

Panasonic Energy India Company Ltd. (LAKHNNATNL) - Director Report

Company director report

Dear Shareholders

Your Directors have great pleasure to report to you at the end of another exciting yearand presenting the forty fourth annual report together with the audited financialstatement for the year ended March 31 2016.

1. Socio Economic Environment

The socio economic environment in India seems to indicate positivity. Economic growthfor the year ending March 2016 is showing signs of improvement.

Lower oil prices lower inflation expectation of normal monsoon buildinginfrastructure enabling reduce cost of business in the country and investments made inthe direction of boosting rural economy promises a better year ahead for battery industrywhich is predominantly dependent on rural consumption.

2. Financial Results Summary

(Rs. in lacs)
Particulars As at March 31 2016 As at March 31 2015
Sales Turnover 27794.06 26903.13
Profit/(Loss) before tax 2491.13 2702.28
Less: Provision for taxation (Net of deferred tax) 868.28 927.36
Less: Provision for taxation of earlier years (Net of refund/demand) (30.23) (8.83)
Profit/(Loss) after tax 1653.08 1783.75
Add: Profit brought forward from previous year (Opening balance ` 198.70 less Rs. 1.91 difference of dividend distribution tax of FY 2014-15 adjusted) 196.79 144.92
Net available surplus for appropriation 1849.87 1928.67
Proposed Dividend 525.00 525.00
Dividend Distribution Tax 106.88 104.97
General Reserve 1000.00 1100.00
Surplus carried to Balance Sheet 217.99 198.70
1849.87 1928.67

3. Operational Review

Your Company has delivered another year of steady performance inspite of sluggishperformance of organized battery industry. Organized sector recorded sales of slightlyover 2.1 billion pieces which is around 99% as compared to last year.

Despite of such adverse industry scenario your Company has improved its sales amountby 3% and achieved sales of Rs. 27794 lacs as against Rs. 26903 lacs in previous year.

The profit before tax (PBT) from ordinary activities during the year stood at Rs. 2491lacs which is slightly less as against Rs. 2591 lacs registered in last financial year.In the current year the Company could not maintain or improve the same owing to severecompetition adverse exchange rates increase in the cost of key raw materials andsluggish market condition prevailing in battery industry.

Batteries and Flashlights

The overall battery industry in the organized sector is witnessing de-growth which ismainly due to heavy inflow of inferior quality imported products dumped mainly from Chinaat very low rates.

Flashlight market has also under performed during the year 2015-16 and is at around 90%to previous year. This is mainly due to its dependence on monsoon which was sluggishduring the year. In stiff conditions also your Company has established growth of around102% over previous year.


The organized battery industry is facing challenges owing to cheap imported batteries.Company is pleased to inform that steps are being taken to overcome this situation withina reasonable time frame which will present the battery industry in much brighter prospectsfor the years to come.

4. Dividend

Keeping in view the current profitability of the Company your Directors are pleased torecommend payment of a dividend of Rs. 7/- per equity share (@ 70% at par value of Rs.10/- each) (previous year Rs. 7/- per equity share) subject to the approval ofshareholders at the forthcoming Annual General Meeting. The dividend when approved willentail payment to shareholders of Rs. 525 lacs. It will be tax free income in the hands ofrecipients. However the Company’s outflow towards dividend distribution tax would beto the tune of Rs. 106.88 lacs.

5. Management Discussion and Analysis

A. Business Overview

Zinc carbon batteries

Zinc carbon sales of organized manufacturers have reported sales at around 99% ascompared to previous year. However the dry battery consumption in India is much more dueto continuous import of Chinese batteries at dumped price. In this context there is ascope for organized sector to grow.

Another significant factor which is affecting the sales turnover is due to the shift inconsumer preference from high value D size batteries towards low priced AA / AAA sizebatteries.

The statistics given below explains the current battery consumption scenario in India.

Battery size wise contribution in % (Estimated)

2013-14 2014-15 2015-16
D Size 14.5 13.0 10.7
C Size 0.3 0.3 0.2
AA Size 74.3 73.5 73.4
AAA Size 10.9 13.2 15.7

The above trend is in line with the global trend and envisaging the change in trendtowards miniaturization your Company has invested in enhancing the production capacity ofAAA category. The growth in AAA category is expected to continue in the years to come andyour Company is well placed to take advantage of this growing segment.

Alkaline batteries

At present battery industry in India is dominated by zinc carbon batteries and alkalinecontributes only 4% of the total battery demand in the country. Contrary to this indeveloped countries the alkaline segment dominates the total battery demand.

Alkaline is a category for future growth. Realizing this your Company is aggressivelyconcentrating its activities towards improvement of sales in this category. The Company ispleased to report having doubled its share in this category during the year 2015-16 v/sprevious year.


Flashlight market is shared equally by organized and unorganized sectors. Unorganizedsector continuously launch look alike low price models. This coupled with weak monsoon hasresulted into flashlight segment showing de-growth for the year 2015-16 at around 90% inthe organized sector.

Your Company is pleased to report achieving growth rate of 102% during the year. TheCompany foresees large opportunity in flashlight market owing to ever increasing demand ofalternative solutions required by consumers to cope with power cuts.

Rechargeable batteries

Rechargeable battery market is stagnant and contributes around 1% to total batterydemand. This segment is dominated by imported cheap rechargeable batteries.

Your Company has successfully marked its presence in marketing and sales of "eneloop"brand of rechargeable batteries and chargers. Company intends to aggressively face thechallenges from cheap imported products.

Dealers and consumers appreciate the quality & superiority of our rechargeablebatteries but are attracted by huge margins and low offer rates of imported rechargeablebatteries.

B. Industry Structure and Development

Organized battery industry has marginally gone down in the financial year 2015-16. Italso indicates changes in the buying preferences of the consumer. "D Size"continues to de-grow. De-growth in "AA" Economy segment and double digit growthin "AAA" segment has opened up challenges to be faced in the year 2016-17.

As a result of consumer shift towards miniaturization "AAA" segment hasplayed a very positive role in maintaining sales of the industry and is expected to growfurther.

Company is pleased to announce that having enhanced its production capabilities withsuccessful commissioning of new "AAA" production line it is well placed to takeadvantage in this growing segment.

Marketing and Distribution

Your Company has been continuously making efforts not only to strengthen itsdistribution network but simultaneously also concentrating on improving the productivityof each and every members of its sales team through training and educative programs.

To support productivity enhancement the Company has also undertaken various brandbuilding activities in rural as well as urban markets such as wall paintings sun shedsdealer boards and advertisement in bus panels etc. The Company also continued its basicactivity i.e. "DISHA" which helped in improving the visibility of Panasonicbatteries at shop fronts.

C. Opportunities and threats


Presently per capita consumption of batteries in India is quite low as compared toother developed countries. It indicates potential for higher future growth. Battery is thecheapest source of portable power and its consumption is always expected to grow as italso is an item of recurring use. Changing usage patterns arrival of new appliancesshift towards miniaturization of appliances growing income levels and changing life stylepromises growth especially in AA/AAA batteries.


Import of huge quantity of low performance cheap Chinese batteries poses a big threatto the organized sector of the Industry. It not only poses more pressure on the pricing ofeconomy range of batteries but also augments price competition giving lower operatingmargins which leaves less scope for research and development.

D. Risks & Concerns

Continuous upward trend in raw material cost and devaluation of rupee are a matter ofconcern for the Indian economy including battery industry.

E. Outlook

The current trend of battery usage pattern in India is gradually moving in line withglobal trend. It is a positive sign and first step towards moving up with the global percapita consumption which at present is much higher than the per capita consumption inIndia.

F. Internal Financial Controls

The Company has an adequate system of internal control to ensure compliance withpolicies and procedures. The internal audit is done by an independent firm of CharteredAccountants. Internal audits are regularly carried out to review the internal controlsystems. The internal audit reports along with recommendations contained therein arereviewed by the Audit Committee of the Board.

G. Development in Human Resource and Industrial Relation

Your Directors wish to place on record their appreciation to all its employees fortheir sustained efforts and valuable contribution. Your Company works on the principle of"People before Product" which enables cordial relationship amongst theemployees.

The total employee strength of the Company as on March 31 2016 stood at 836.

H. Research & Development

The goal of our Company is to supply high quality products to our valued customers.Need of customers is changing frequently as per the usage pattern of gadgets. Ifadditional features of environment friendly products with high quality & safetyfeatures are available it would lead to higher level of customer satisfaction andconsumer delight. Keeping the above objective in view the research and developmentactivities were focused towards manufacturing of best quality products with lowmanufacturing cost incorporating additional features of safety of appliances and offeringenvironment friendly products.

As a part of continual improvement your Company during the year has taken lead ineliminating heavy metal i.e. "Lead" (Pb) from dry battery for which effortsduring past several years have been made under the guidance of the Panasonic CorporationJapan. The above is the joint effort made by your Company under the guidance of PanasonicCorporation to manufacture lead free batteries despite the lead levels being permissibleas per the Indian regulation.

As a result of the above initiative effective from August 2016 onwards your Companywill be the only Company in India manufacturing the lead free dry battery. You would behappy to know that at present yours is the only Company in India to manufacture completerange of eco-friendly products.

Your Company is planning to create awareness amongst employees and business partnersetc. by way of special training programs and conferences with the sales channels to takeadvantage of this exclusive initiative in the market place.

Your Company is also committed to be "No. 1 Green Innovative Company inIndia" by supplying eco-friendly products adopting global vision philosophy ofPanasonic Corporation.

During the year your Company has enhanced the manufacturing capacity of R03/ AAAbattery by introduction of new manufacturing line to meet the growing segment.

During the year several activities were undertaken to improve product quality withoutincreasing cost and process losses by use of statistical methods like QC seven tools Q.C.Circle and Kaizen activities. This will lead to enhancement in the confidence level of theemployees suppliers business associates and customers.

You will be glad to know that during the year your Company introduced the highestperformance grade of product in R20 paste type "Panasonic Gold" in attractivepackaging with the objective to provide "Value for Money" to our valuedcustomers.

Further during the year under review your Company improved the recycle rate as perthe guidelines of collaborator for the waste generated out of manufacturing process. YourCompany also carried out various environmental activities like tree plantation trainingand awareness to employees to conserve natural resources.

6. Corporate Governance

As per requirement of SEBI (LODR) Regulations 2015 a separate section on corporategovernance practices followed by the Company together with a certificate from theCompany’s Auditors confirming compliance forms an integral part of this Report.

7. Extract of Annual Return

The details forming part of the extract of the Annual Return in MGT 9 Form annexedherewith. (Ref. "Annexure-A")

8. Board Meetings

Schedules of Board and Committee meetings are prepared and circulated in advance to theDirectors. During the year four Board Meetings and four Audit Committee meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.

9. Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013.

(a) that in the preparation of the annual accounts for the year ended March 312016 the applicable accounting standards have been followed along with proper explanationrelating to material departures; if any;

(b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2016 andof the profit and loss of the Company for the year ended on that date;

(c) that the directors had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) that the directors had prepared the annual accounts on a going concernbasis;

(e) that the directors in the case of a listed Company had laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and were operating effectively; and

(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

10. Declaration by Independent Directors

The Company had received declarations from all Independent Directors that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andrequirements of SEBI (LODR) Regulations 2015.

11. Nomination & Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The details of the remuneration policy are stated in the CorporateGovernance Report.

12. Auditor’s Report

No qualifications or adverse remarks have been made either by Statutory Auditors intheir report or by Company Secretary in practice in his Secretarial Audit Report.

13. Related Party Transactions

All related party transactions that were entered into during the financial year were onan arm’s length basis and majority of those transactions were in the ordinary courseof business. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.

All related party transactions were placed before the Audit Committee and also theBoard for approval. Prior omnibus approval of the Audit Committee was obtained for thetransactions which were of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted were reviewed and a statement giving detailsof all related party transactions was placed before the Audit Committee and the Board ofDirectors for their approval on a quarterly basis.

The policy on related party transactions as approved by the Board is uploaded on theCompany’s website. None of the Directors has any pecuniary relationships ortransactions vis--vis the Company.

The particulars of contracts or arrangements with related parties given in "AOC2" Form annexed herewith. (Ref. "Annexure-B")

14. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are annexed herewith. (Ref. "Annexure-C")

15. Corporate Social Responsibility

During the year under review as part of its initiatives under Corporate SocialResponsibility (CSR) the Company has expanded its activities and participated in theprojects in the areas of eradication of hunger pure drinking water health hygienesanitation medical to specially abled people and education undertaken by various NGOs andTrusts. These projects are in accordance with Schedule VII of the Companies Act 2013. Theannual report on CSR activities is annexed herewith. (Ref. "Annexure-D")

16. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013

The Company has been employing about 20 women employees in various cadres within thefactory premises. The Company has in place an anti-harassment policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaint Committee has been setup to redress complaintswhich are monitored by the presiding officer working at senior level who directly reportsto the Chairman & Managing Director. All female employees are covered under thepolicy. There was no complaint received from any employee during the financial year2015-16 and hence no complaint is outstanding as on March 31 2016 for redressal.

17. Board Evaluation

Pursuant to the provisions of schedule IV of the Companies Act 2013 and SEBI (LODR)Regulations 2015 a structured questionnaire was prepared after taking into considerationthe various aspects of the Board’s functioning composition of the Board and itscommittees. The Board has carried out an annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itscommittees. The Board of Directors expressed their satisfaction with the evaluationprocess.

18. Directors

As per succession planning the present term of Mr. S. K. Khurana as Chairman &Managing Director is getting expired on September 30 2016 and members had alreadyre-designated him as an Executive Chairman w.e.f. October 01 2016.

In accordance with the succession planning of Mr. S. K. Khurana the Board and Membershad already appointed Mr. Mikio Morikawa as Joint Managing Director w.e.f. July 01 2015subject to approval of Central Government. It was also decided to elevate Mr. Morikawa asManaging Director w.e.f. October 01 2016. But due to non-availability of employment visahis approval as Joint Managing Director has been rejected by the Central Government andthe Board had to re-designate him as Non-executive Director of the Company w.e.f. January28 2016.

The Board had on the recommendation of the Nomination & Remuneration Committeeagain appointed Mr. Morikawa as Managing Director w.e.f. October 01 2016.

As per the provisions of the Companies Act 2013 Mr. Morikawa currently being theNon-executive Director retires by rotation and being eligible offers himself forre-appointment.

Mr. M. Shigeta had resigned from the Board w.e.f. January 29 2016. The Board hadplaced on record its appreciation for the valuable contribution provided by Mr. Shigetaduring his tenure as Director of the Company. The Board had to fill up the vacancy causedby the resignation of Mr. Shigeta appointed Mr. Chiaki Kidani as additional Directorw.e.f. February 11 2016.

As required by SEBI (LODR) Regulations 2015 the relevant details in respect of theDirectors proposed to be appointed / re-appointed are set out in the Corporate GovernanceReport forming part of the Board’s Report. The Directors recommend all theresolutions placed before the Members relating to appointment of Directors for theirapproval.

19. Statutory Auditors

The Company’s Auditors M/s. K. C. Mehta & Co. Chartered AccountantsVadodara have already been appointed for a term of three years subject to ratification byshareholders at every Annual General Meeting. They have confirmed their eligibility underSection 141 of the Companies Act 2013 and the Rules framed thereunder for reappointmentas Auditors of the Company. As required under SEBI (LODR) Regulations 2015 the auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

20. Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its activity is required to be audited. Your Directors had on therecommendation of the Audit Committee appointed M/s. Diwanji & Co. to audit the costaccounts of the Company for the FY 2016-17 on a remuneration of Rs.125000/-. As requiredunder the Companies Act 2013 the remuneration payable to the cost auditor is required tobe placed before the Members in a general meeting for their ratification. Accordingly aResolution seeking Member’s ratification for the remuneration payable to M/s. Diwanji& Co. Cost Auditors is included at Item No. 5 of the Notice convening the AnnualGeneral Meeting.

21. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. J. J. Gandhi & Co. a firm of Company Secretaries in practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith. (Ref. "Annexure-E")

22. Subsidiaries

Your Company does not have any subsidiary / subsidiaries within the meaning of theCompanies Act 2013.

23. Deposits

The Company has not accepted any fixed deposits and accordingly no amount wasoutstanding as on the date of the Balance Sheet.

24. Disclosure under Rule 5 of Companies (Appointment & Remuneration) Rules 2014

Disclosures required under Section 197 of the Companies Act 2013 read with rule 5 ofCompanies (Appointment & Remuneration) Rules 2014 have been annexed herewith. (Ref."Annexure-F")

25. Significant and Material Orders passed by the Regulators or Courts

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

26. Acknowledgment

Your Directors have pleasure to acknowledge the continued and wholehearted supportreceived from all its trade partners valued customers and vendors.

Directors also place on record sincere appreciation of the commitment and enthusiasm ofall its employees.

Directors also place on record sincere gratitude and deep appreciation to our promoters"Panasonic Corporation Japan" and to all our valued stakeholders.

For and on behalf of the Board
S. K. Khurana
Vadodara May 24 2016 Chairman & Managing Director

"Annexure-B" to the Board’s Report

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm’s length transactions under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm’s lengthbasis : Not Applicable

2. Details of contracts or arrangements or transactions at arm’s lengthbasis

(Rs. in lacs)
Sr. No. Name of Related Party Nature of contracts/ arrangements/ transactions Duration of the contracts / arrangements / transactions Terms of contracts Value of Contract Date(s) of approval by the Board
1 Panasonic Carbon India Co. Ltd. Purchase - Carbon Rods Yearly Prevailing Market Price 915.98 09-02-2015
2 Panasonic Corporation Purchase - Eneloop Batteries Yearly Prevailing Market Price 305.94 09-02-2015
Service - Royalty & Trademark License Fee 10 & 5 Years Respectively Mutually agreed terms 712.98 09-02-2015
Service - IT services- group mail warp & Gpclm Yearly Mutually agreed terms 5.71 09-02-2015
Expenses incurred on behalf of Company Yearly Mutually agreed terms 2.29 09-02-2015
Service - Reimbursement of brand awareness expenses Yearly Mutually agreed terms 212.59 11-02-2016
3 Panasonic Energy (Shanghai) Co. Ltd. Sales - Raw Material Yearly Prevailing Market Price 0.26 09-02-2015
Purchase - Dry Cell Yearly Prevailing Market Price 69.31 09-02-2015
Purchase - Raw Material Yearly Prevailing Market Price 24.96 09-02-2015
4 Panasonic Energy (Thailand) Co. Ltd Purchase - Appliances/Parts Yearly Prevailing Market Price 127.20 09-02-2015
5 Panasonic India Pvt. Ltd. Service - IT Network Yearly Mutually agreed terms 3.40 09-02-2015
Expenses incurred on behalf of Company Yearly Mutually agreed terms 7.10 09-02-2015
6 Panasonic Asia Pacific Pte. Ltd. Service - Reimbursement of brand buidling expenses Purchase - Raw Material Yearly Mutually agreed terms 202.65 09-02-2015
Yearly Prevailing Market Price 87.04 09-02-2015
7 Panasonic Peruana S.A. Sales - Spares Yearly Prevailing Market Price 23.86 09-02-2015
8 Panasonic Energy Tanzania Co. Ltd. Sales - Raw Materials Yearly Prevailing Market Price 281.52 09-02-2015
Sales - Spares Yearly Prevailing Market Price 4.39 09-02-2015
Expenses incurred on behalf of company Yearly Mutually agreed terms 3.48 09-02-2015
9 P.T. Panasonic Gobel Energy Indonasia Purchase - Appliances/Parts Yearly Prevailing Market Price 3.60 09-02-2015
10 Panasonic Hong Kong Ltd. Purchase - Eneloop Batteries & Charger Yearly Prevailing Market Price 2.11 09-02-2015
11 Panasonic AVC Networks India Co. Ltd. Sales - Dry Cell Yearly Prevailing Market Price 7.76 09-02-2015
12 Panasonic Industrial Devices Sales (HKG) Co. Ltd. Purchase - Eneloop Batteries & Charger Yearly Prevailing Market Price 50.66 09-02-2015
TOTAL 3054.79

No advance has been paid to any of the above related parties during the year.

For and on behalf of the Board
S. K. Khurana
Vadodara May 24 2016 Chairman & Managing Director

"Annexure-C" to the Board’s Report


[Section 134(3)(m) of The Companies Act 2013 read with rule 8(3) of The Companies(Accounts) Rules 2014]

(A) Conservation of energy

(i) the steps taken or impact on conservation of energy;

Electricity consumption on compressor reduced by 5% v/s previous year due to variousmeasures taken by air saving techniques.

Electrical load reduction by 4 Kw by modification in various machinery processes.

Energy checking by internal departments to improve energy efficiency of the factory& office. Implemented various production engineering techniques to improve machineryperformance.

(ii) the steps taken by the company for utilising alternate sources of energy;

Presently solar water heating systems are being used.

(iii) the capital investment on energy conservation equipments;

Capital investment on energy conservation equipment's is to the tune of Rs. 120 K.

(B) Technology Absorption

1 The efforts made towards technology absorption 1. Various trials to eliminate the heavy metals to make all dry batteries 100 % eco- friendly.
2. Introduction of highest performance R20DDG paste type battery.
3. Efforts to conserve energy through adoption of innovative ideas and technology are made.
2 The benefit derived like product improvement cost reduction product development import substitution 1. Manufacturing of environment friendly products & thereby contribute to the betterment of the society.
2. Providing of high performance batteries to the customers.
3. Implementation of innovative ideas and technology to reduce emission. Explore and use of global source manufacturing CO2 of materials and thereby reduce product cost without affecting quality.
3 The expenditure incurred in research & development Rs. 166.37 lacs
(C) Foreign Exchange Earnings and Outgo
1 Foreign Exchange Earned Rs. 309.85 lacs
2 Foreign Exchange Outgo Rs. 5381.05 lacs

"Annexure-F" to the Board’s Report

Disclosure under rule 5 of the Companies (Appointment & Remuneration) Rules 2014.

1. Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2015-16 :

Sr. No. Name of Director Ratio
1 Mr. S.K.Khurana - Chairman & Managing Director 29.21:1
2 Mr. G.N.Punj 1.78:1
3 Ms. Geeta Goradia 2.49:1
4 Mr. Mayur Swadia 2.43:1
5 Mr. Atul Dalmia 2.37:1
6 Mr. M.Shigeta* 1.37:1
7 Mr. M. Morikawa* 0.29:1
8 Mr. C. Kidani* 0.23:1

* Part of the year

2. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretarty or Manager if any for the financial year2015-16 compared to 2014-15:

Sr. No. Name of Director % of increase
1 Mr.S.K.Khurana - Chairman & Managing Director 7
2 Mr.G.N.Punj - Director -12
3 Ms.Geeta Goradia - Director$ 28
4 Mr. Mayur Swadia - Director$ 120
5 Mr. Atul Dalmia - Director$ 127
6 Mr. M.Shigeta - Direcor * -26
7 Mr. M. Morikawa - Direcor * NA
8 Mr. C. Kidani - Direcor * NA
9 Mr. A. R. Shah - Chief Financial Officer@ 14
10 Ms.S.M.Maheshwari - Company Secretary@ 5

$ Part of the year for F.Y. 2014-15 * Part of the year for F.Y. 2015-16 @ As perSection 17 of Income Tax Act 1961.

3. The percentage increase in the median remuneration of employees in the financialyear 2015-16 as compared to 2014-15 : 8.13%

4. The number of permanent employees on the roll of the Company : 31.03.2016 31.03.2015
836 816

5. The explanation on the relationship between avarage increase in remuneration andcompany performance :

The increase in median remuneration of around 8.13% is in line with other industrieswith matching business and work areas. The Company’s performance during the period(Profit Before Tax) decreased by 7.81%.

6. Comparision of the remuneration of the Key Managerial Personnel against theperformance of the Company for financial year 2015-16 as compared to 2014-15 :

Remunaration of KMP 7.61%
Performance of Company -7.81%
7. Variation in 31.03.2016 31.03.2015
Market Capitalization Rs. 221.33 Crores Rs. 214.05 Crores
Price Earning Ratio 13.39 12.00
Percentage Increase/decrease of market quotations 3.40% 361.81%
Net worth of the Company Rs. 94.55 Crores Rs. 84.36 Crores

8. Average percentile increase in salaries of employees other than managerial personnel: 8.13%

9. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company :

Sr. No. Name of Key Managerial Personnel Remuneration 15-16 Performance 15-16
V/s. 14-15 (%) V/s. 14-15 (PBT) (%)
1 Mr. S. K.Khurana - Chairman & Managing Director 107 92
2 Mr. A. R. Shah - Chier Financial Officer 114 92
3 Ms. S. M. Maheshwari - Company Secretary 105 92

10. Key parameter for any variable component of remuneration availed by the Directors :

Commission as per the Companies Act 2013 (1% of Net profit to Chairman & Managingdirector and another 1% to all other non-executive directors).

11. Ratio of the remuneration of the highest paid director to that of the employees whoare not directors but receive remuneration in excess the highest paid director during theyear : NA

12. The Board of Directors of the Company affirms that the remuneration is as per theremuneration policy of the Company.

13. The statement showing the names of every employee of the Company as per rule 5(2)is given below :

(i) Name S. K. Khurana
(ii) Age 68 Years
(iii) Designation Chairman & Managing Director
(iv) Qualification B.E. (Mechanical). F.I.E. Chartered Engineer
(v) Experience 43 years
(vi) Remuneration ` 89.96 Lacs
(vii) Date of commencement of employment December 01 1972
(viii) Last employment/ designation Teksons Ltd. (Development Engineer)