Panasonic Appliances India Company Ltd Directors Report

REVIEW OF PERFORMANCE

During the year under review, your Companys gross revenue stood at Rs 326.39 Crores in FY 2023-24 contrast to Rs. 336.11 crore in FY 2022-23. The PBT of the Company (Profit Before Tax) was Rs. (4.66) Crores in FY 2023-24 compared to Rs. 0.92 Crores in FY 2022-23. The Company stated a PAT (Profit After Tax) of Rs (3.57) Crores in FY 2023-24 compared to Rs 0.56 Crores in FY 2022-23. A summary of operating results is covered in the Boards Report for ready reckoning.

Your Company tried a better performance considering the adverse external factors that prevailed during the financial year 2023-24. Now PAPIN Successfully launched new products for the Countries as below: SR-2363FH/UH36FH Rice Cooker introduced for USA and Canada SR-UH36F Rice Cooker introduced for UK & Ireland 1.8L SUS Rice Cooker with Sandwich bottom for Value Addition and Enhancement of Competition in Domestic Market and Successfully Launched in Feb24 MX-GC3550/GE3750 New Value Series Mixer Grinder in 550W & 750W category for Domestic Market and Successfully Launched in June24 SR-ETC18 New Timer Cooker with Multiple dish cooking options for Domestic Market and Successfully Launched in July24.

The companys financial performance has been adversely affected by a confluence of factors, including market volatility, a decline in Original Equipment Manufacturer sales, and a substantial decrease in secondary market mixie sales within the key southern Indian states of Karnataka, Kerala, Tamil Nadu, and Andhra Pradesh.”. Despite aggressive efforts to reduce losses, the company has adopted a number of strategic initiatives which include focusing on New Economy Mixie sales, expanding the commercial cooker business through e-commerce in the Western region, exploring export opportunities for new products such as commercial cookers in SAARC countries via bilateral trade agreements, and strengthening in-house research and development capabilities Considering that, the overall consumer sentiment and business confidence which prevailed during the financial year 2023-24 was not conducive due to a host of factors, the fact that your Company was able to increase its sales compared to previous financial year with an improvement in the bottom line shows a sign of revival. The management of the Company strongly believes that the strategic initiatives which were implemented during the previous financial years are far-reaching and will definitely materialize in the long term and deliver sustainable and profitable growth.

DIVIDEND.

As the Company has incurred losses during the year under review the Directors do not recommend a dividend to its shareholders.

SHARE CAPITAL

The Companys authorized share capital was revised during the fiscal year ended March 31, 2024. The Authorized share capital of the Company is Rs25,00,00,000 (Rupees Twenty-Five crore) divided into 2,50,00,000 (Two crore and Fifty lakh) equity shares of Rs10 (Rupees Ten) each.

As on March 31, 2024, the Paid-up share capital of the Company is Rs 1,97,46,7050 (Rupees Nineteen crore seventy-four lakhs sixty-seven thousand and fifty) divided into 1,97,46,705 (One crore ninety-seven lakhs forty-six thousand seven hundred and five) equity shares of Rs10 (Rupees Ten) each.

TRANSFERS TO RESERVES

During the financial year, the Company did not transfer any amount to the General reserve. The total amount of General reserve as on March 31, 2024, was Rs. 354,194 being the same as reported in the previous year.

SUBSIDIARIES, ASSOCIATES AND JOIN VENTURE COMPANIES.

The Company does not have any subsidiary or joint venture or associate company.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL DURING THE FINANCIAL YEAR 2023-24.

BOARD MEETINGS

The Board functions as a full Board and meets at regular intervals to decide on the Company/business policy and strategy apart from other Board businesses. The meetings of the Board of Directors are normally held at Chennai. Meetings are scheduled well in advance and after serving adequate notice. The Board meets at least once in a quarter to review the quarterly performance and the financial results. The Agenda for the Board/Committee Meetings along with explanatory notes is set by the Company Secretary in consultation with the Managing Director of the Company and circulated to the Directors well in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. The Members of the Board are also free to recommend inclusion of any matter in the agenda for discussion. Four Board Meetings were held during the financial year 2023-24, as against the minimum requirement of four meetings and the gap between two meetings was within the period prescribed under the Companies Act, 2013. The dates on which the said meetings were held on May 9, 2023; August 7, 2023; November 3,2023 and December 13,2023.

The Last Annual General Meeting of the Company was held on September 27, 2023.

Table 1: Composition, Attendance at Board meetings and last Annual General Meeting (AGM) and details of memberships of Directors in other Boards and Board Committees

** Mr. Nobuyuki Shimobayashi (DIN: 10173853), appointed as Non-Executive Non-Independent Director with effect from June 01,2023 approved at Board Meeting dated May 9, 2023.

COMMITTEE OF THE BOARD

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas/activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by the members of the Board, as a part of good governance practice. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes of the meetings of all the Committees are placed before the Board for review. The Board has currently established the following statutory and non-statutory Committees.

AUDIT COMMITTEE

The Audit Committee of the Board is constituted in accordance with the applicable provisions of the Companies Act, 2013.

TERMS OF REFERENCE

10) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

11) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors.

12) Reviewing the functioning of the whistle blower mechanism.

13) Review of management discussion and analysis of financial condition and results of operations, statements of significant related party transactions submitted by management, management letters/letters of internal control weaknesses issued by the statutory auditors, internal audit reports relating to internal control weaknesses, and the appointment, removal and terms of remuneration of the Internal auditors.

14) Carrying out any other function as mentioned in the terms of reference of the Audit Committee.

COMPOSITION

The Companys Audit Committee for the financial year 2023-24 is comprised of two Independent Directors and one Executive Director. The Chairperson of the Committee is an Independent Director. All the members of the Audit Committee are financially literate, with knowledge of accounts and having financial management expertise.

The Audit Committee invites such number of the executives as it considers appropriate, particularly senior officers from the finance and accounts department, representatives of the statutory auditors and representatives of the internal auditors to be present at its meetings. The Company Secretary acts as the Secretary to the Audit Committee.

MEETINGS AND ATTENDANCE

During the financial year 2023-24, three Audit Committee Meetings were held on May 9, 2023; August 7,2023 and December 13, 2023.The necessary quorum was present for all the meetings.

Table 2: The details of the Composition of the Committee, Names of Members and Chairperson and attendance at its Meetings are as follows:

NOMINATION AND REMUNERATION COMMITTEE

The Company has constituted a Nomination and Remuneration Committee in accordance with the requirements specified under Section 178 of the Companies Act, 2013.

TERMS OF REFERENCE

The broad terms of reference of the Remuneration Committee are as under

COMPOSITION

The Companys Remuneration Committee for the financial year 2023-24 is comprised of two Independent Directors and one Non-Executive Director. The Chairperson of the Committee is an Independent Director.

MEETINGS AND ATTENDANCE

During the financial year 2023-24, Two Nomination and Remuneration Committee Meetings were held on May 9, 2023, and August 7, 2023. The necessary quorum was present for all the meetings.

Table 3: The details of the Composition of the Committee, Names of Members and Chairperson and attendance at its Meetings are as follows:

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Company has constituted a Corporate Social Responsibility Committee in accordance with the requirements specified under Section 135 of the Companies Act, 2013.

TERMS OF REFERENCE

The broad terms of reference of the Corporate Social Responsibility Committee are as under

COMPOSITION

The Companys Corporate Social Responsibility Committee for the financial year 2023-24 is comprised of two Independent Director and one Executive Directors. The Chairperson of the Committee is an Independent Director.

MEETINGS AND ATTENDANCE

During the financial year 2023-24, Two Corporate Social Responsibility Committee Meeting was held on May 9, 2023, and December 13,2023. The necessary quorum was present for all the meetings.

Table 4: The details of the Composition of the Committee, Names of Members and Chairperson and attendance at its Meetings are as follows:

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company has constituted a Stakeholders Relationship Committee in accordance with the requirements specified under Section 178 of the Companies Act, 2013.

TERMS OF REFERENCE

The broad terms of reference of the Stakeholders Relationship Committee are as under

COMPOSITION

The Companys Stakeholders Relationship Committee for the financial year 2023-24 is comprised of Two Independent Directors and One Executive Director. The Chairperson of the Committee is an Independent Director.

MEETINGS AND ATTENDANCE

During the financial year 2023-24, the two Stakeholders Relationship Committee Meeting was held on May 9, 2023, and August 7, 2023, the necessary quorum was present for all the meetings.

Table 5: The details of the Composition of the Committee, Names of Members and Chairperson and attendance at its Meetings are as follows:

BOARD EVALUATION

The Nomination and Remuneration Committee in their meetings held on May 9,2023 and March 27, 2024, evaluated the performance of the Board, that of its committees and individual directors including Independent Directors. No Director participated in his own evaluation.

The Independent Directors reviewed the performance of the Non-Independent Directors, and the Board at a separate meeting of Independent Directors held on March 27, 2024. The Board of Directors were evaluated on various criteria including attendance, participation in board meetings, their involvement by way of providing advice, guidance, suggestions on the business front and the willingness and commitment to devote their extensive time necessary to fulfill their duties. The Independent Directors were also evaluated based on their performance, professional conduct, roles and duties as specified in Schedule IV to the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to clause (c) of sub-section (3) of Section 134 of The Companies Act, 2013 as amended from time to time, the board of directors hereby confirm that: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(b) 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 affairs of the company at the end of the financial year and of the profit and loss of the company for that period.

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) 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.

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to Section 149(7) of the Companies Act, 2013, all the Independent Directors have given declaration that they meet the criteria of independence as set out in Section 149(6).

POLICY ON DIRECTORS/KMPs APPOINTMENT AND REMUNERATION

Policy on appointment and removal of Directors, KMPs and Senior Management and their Remuneration attached herewith as “ANNEXURE 1”, shall act as a guideline for determining qualifications, positive attributes, independence of a Director and matter relating to the appointment and removal of Directors.

The remuneration policy of the Company was formulated considering the following factors:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (c) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

AUDITORS

M/s. B S R & Co. LLP. (Firm Registration No.: 101248W/W-100022), Chartered Accountants, Chennai, Statutory auditors of the Company were re-appointed at the 32^nd Annual General Meeting held on September 25, 2020, to hold their office as Statutory Auditors for a second term of Five (5) years, i.e., from conclusion of the 32^ndAGM till conclusion of the 37^th AGM. A necessary certificate under Section 139(1) of the Companies Act, 2013 has been received from them.

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions of the Act, the Company had appointed M/s. Venkatesh & Co. (Firm Registration No.: 004636S) Chartered Accountants, Chennai as Internal auditors of the Company for the financial year 2023-24.

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 had appointed M/s. M. Alagar & Associates (Firm Registration No.: P2011TN078800), a firm of Company Secretaries in Practice, Chennai to undertake the secretarial audit of the Company for the financial year 2023-24. The Secretarial Audit Report does not contain any reservation or adverse remark for the year under review.

The Report on the Secretarial Audit is annexed herewith as “ANNEXURE 2”.

AUDIT REPORT

The Statutory Auditors Report on Financial Statements for the fiscal year ending March 31, 2024, has no qualifications. However, it is important to emphasize that the Company uses accounting software with an audit trail capability that was not turned on at the database level. However, auditors assessment of all relevant transactions throughout the year found no evidence of tampering with audit trail records.

INTERNAL FINANCIAL CONTROLS

The Company is in compliance with the requirements of The Companies Act, 2013 with regard to the Internal Financial Controls which embraces adherence to Companys policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of financial information.

During the year, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2024, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”).

RISK MANAGEMENT

The Board of Directors of the Company has implemented the risk management policy and delegated the power to the Audit Committee to monitor the risk management plan for the Company and to report to the Board of Directors. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Board of Directors is of the opinion that there were no major risks that may threaten the existence of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETING

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board meeting and General Meetings.

DEPOSITS/LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

Your Company has not accepted any deposits during the year under review. There were no loans/advances, guarantees and investments given under Section 186 of The Companies Act, 2013 during the year under review.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE.

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS UNDER SECTION 143(12)

Pursuant to Section 143(12) of the Companies Act, 2013, the Company has not received any report from the auditors in respect of fraud committed by its officers or employees.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments in the business operations of the Company for the financial year ended March 31, 2024, to the date of signing of the Boards Report.

STATEMENT UNDER THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

There is Two employee drawing remuneration of more than Rs10,200,000 (Rupees One crore and two lakh) per annum or drawing remuneration of Rs850,000 (Rupees Eight lakh fifty thousand) per month, if employed part of the year as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY

Due to losses in this financial year, the company was exempt from the Corporate Social Responsibility (CSR) provisions outlined in Section 135 of the Companies Act, 2013. However, for your reference, details of our CSR Policy, adopted by the Board of Directors, are available in Annexure 3 of this report. The policy adheres to the format mandated by the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Additionally, you can access the CSR Policy online at the following link: http://www.panasonicappliances.in/Home/investor

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return of the Company is placed Company website at: http://www.panasonicappliances.in/Home/investor.

COMPLIANCE WITH SECRETARIAL STANDARDS (“SS-1 and SS-2”)

The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India (ICSI) i.e., SS-1 and SS-2 relating to ‘Meetings of the Board of Directors and ‘General Meetings respectively.

RELATED PARTY TRANSACTIONS (RPT)

All transactions entered with related parties as defined under Section 2(76) of the Companies Act, 2013 during the financial year were in the ordinary course of business and on an arms length and do not attract the provisions of Section 188 of the Companies Act, 2013. There are no materially significant related party transactions made by the Company with promoter, directors, key managerial personnel or other designated person which may have a potential conflict with the interest of the Company at large.

Pursuant to Section 134(3)(h) read with Rule 8(2) of The Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of The Companies Act, 2013, in Form AOC-2.

Suitable disclosures as required by Accounting Standard 18 have been made in the notes forming part of the Financial Statements.

ANTI- SEXUAL HARASSMENT POLICY

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 became effective from December 9, 2013, and is applicable to the Company. In line with the requirement of this Act, the Company has duly constituted an Internal Complaints Committee and also framed an Anti-Sexual Harassment policy for prevention of sexual harassment at workplace. During the year under review, there was one complaint received.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism through “PAPIN Whistle Blower Policy” to enable employees and directors to report genuine concerns dealing with instances of fraud and mismanagement, if any. The mechanism provides for adequate safeguard against victimization of the whistle blower and also provides for direct access to the Chairperson of the audit committee in appropriate or exceptional cases or Chief Financial Officer or Company Secretary of the Company as the case may be to report any concern or unethical activities.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND FOUTGO

The particulars as prescribed under Section 134(3)(m) of The Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 are provided in “ANNEXURE 4” which forms part of this report.

INDUSTRIAL RELATIONS

The relations with the workmen and employees of the Company have continued to remain cordial.

CODE OF CONDUCT

The Company has already put in place a Code of Conduct which is applicable to all the Members of the Board and all employees in the course of day-to-day business operations of the company. The Company believes in “Zero Tolerance” against bribery, corruption and unethical dealings/ behaviours in any form and the Board has laid down the directives to counter such acts.

MAINTENANCE OF COST RECORDS

The Company is not mandated to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and accordingly no such accounts and records are made and maintained.

ACKNOWLEDGEMENTS

Your directors wish to express their deep sense of appreciation for the committed services of all the employees of the Company. They also place on record their appreciation for the support and co-operation your Company has been receiving from its Bankers, Customers, Distributors, Dealers, Suppliers and other Business Partners and also the valuable assistance received from the collaborator Panasonic Corporation, Japan. Your directors take this opportunity to thank all the stakeholders, banks, regulatory and government authorities for their continued support.

As we continue to grow and expand, we look forward to sharing our success in the years ahead with all our stakeholders.