As on: May 06, 2024 10:58 PM
Dear Members,
The Board of Directors is delighted to present the 38th 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)
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 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 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 31st 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 26th 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 21st 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 14th 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 31st 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 31st 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 31st 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 26th 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 ended31 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 20th 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 12th 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 6th April, 2023, approval of the Members was taken through postal ballot on 18th March, 2023.
Your Directors wish to place on record that, pursuant to entering into the Share Purchase Agreement dated 19th 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 24th August, 1985, consequent upon acquisition of shares by LIS on 26th June, 2023 and termination of the Joint Venture agreement vide termination agreement dated 17th 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 19th 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 20th 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:
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 38th 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 31st 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 24th 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 26th 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:
• 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. 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 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 and were re-appointed for a second term of 5 years from the conclusion of the Annual General Meeting held on 21st 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 26th 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