As on: Sep 23, 2023 10:43 AM
for the year ended March 31, 2021
Your Directors have pleasure in presenting the Forty Eight Annual Report of your Company together with the Audited Balance Sheet as at March 31, 2021, the Statement of Profit & Loss for the year ended that date and the Auditors' Report thereon.
FINANCIAL RESULTS:
The profit after tax for the year under review is at Rs.3395.13 Lakhs as against Rs.48.63 Lakhs in the previous year. The financial results for the year 2020-21 as compared with the previous year are summarized as under.
REVIEW OF PERFORMANCE DRY CELL BATTERIES:
Along with the mandatory BIS Certification rules imposed by government of India for selling dry cell batteries in India, the usage of gadgets like Pulse Oximeter and Thermometer guns as part of COVID protocols has helped in decent spurt in AAA volumes. However, in our assessment, the D Size is continuing to de-grow and there is a small dip of AA batteries as well. Due to digitisation, most of the remotes are supported with AAA batteries instead of AA batteries, which is resulting in dip in AA battery volumes.
Deepening of the distribution reach and continuation of behavioural changes influenced by COVID protocols and the planned marketing initiatives should help your company to have further growth in the coming years.
NON-BATTERY CATEGORY:
Your company is able to achieve 2% growth in LED in spite of lockdown in the first quarter of FY 21. The Mosquito Bat category has seen a growth of 12%. The Flash light category has seen a dent of 1% because inability to penetrate into the rural areas due to lack of public transport in the first 4-5 months of FY 21. Leaving aside the loss of volumes of Q1, the flash light category has seen a growth for the balance 3 quarters.
By adding new channels, deepening the distribution and adding few new SKUs, your company is confident of continuing the growth curve in non-battery categories.
DISTRIBUTED PRODUCTS:
In spite of launching the DORCO branded Razors and Blades during June 2021 and the challenges imposed by COVID, your company is successful in placing the products in more than 1 Lac outlets. With the planned marketing initiatives from DORCO during the year 2021-22 and additional launch of new SKUs, your company is confident of decent progress in distributing this category.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.
DIVIDEND:
Your Directors have recommended a dividend of Rs.25/- per share (250%) for the year 2020-21. This Dividend, if approved, will be paid to the Shareholders whose names appear on the Register of Members as on 29th September, 2021. The Company intends to pay the dividend on 8th October, 2021. The above dividend declared by the Company is in accordance with dividend distribution policy of the Company.
TRANSFER TO RESERVES:
During the year under review, your Company has transferred Rs.25 Crs. to General Reserves.
SHARE CAPITAL:
During the year under review, the Company has neither issued any shares with differential voting rights nor issued sweat equity shares. Further, the Company did not grant any stock options during the year under review.
FIXED DEPOSITS:
The Company has not accepted any deposits from the public.
CREDIT RATING:
The rating provided by CRISIL Ltd. for the credit facilities of Rs.70 Crores availed by the Company from banks are as follows :
SUBSIDIARIES, CONSOLIDATED FINANCIAL STATEMENTS:
Your Directors have pleasure in attaching the consolidated financial statements pursuant to section 129(3) of the Companies Act 2013 and SEBI (LODR) Regulations 2015. The consolidated financial statements have been prepared by the Company in accordance with the Accounting Standards prescribed by the ICAI in this regard. The Audited Consolidated Financial Statements together with Auditor's Report form part of the Annual Report. The Auditor's Report does not contain any qualification, reservation or adverse remarks.
Your Company's subsidiary, M/s. Kineco Ltd., registered a consolidated turnover for the year 2020-21 amounts to Rs.145.05 crores as against Rs.178.44 crores in the Previous year 2019-20. Total comprehensive income for the year amounts to Rs.1.92 crores as against Rs.12.61 crores in the previous year. The total comprehensive income attributable to owners of the company for the year amounts to Rs. (0.74) crores as against Rs.7.36 crores in the previous year.
Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company's subsidiaries, Associates and Joint Ventures in Form AOC-1 is attached to the financial statements of the company. Pursuant to the provisions of Section 136 of the Act, the financial statements of the company consolidated financial statements along with relevant documents and separate audited financial statements in respect of the subsidiaries are available on the website of the company.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review, as stipulated under SEBI (LODR) Regulations 2015 is presented in a separate section forming part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the 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 to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance along with Auditors' Certificate on its compliance is attached as Annexure - "B" to this report.
RELATED PARTY TRANSACTIONS:
As per the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations 2015, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.nippo.in The Policy intends to ensure that proper reporting approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions.
All Related Party Transactions are placed before the Audit Committee as well as Board for review and approval. Prior omnibus approval is obtained for Related Party Transactions on a quarterly basis for transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arm's Length.
There were no contract / arrangement / transactions entered in to during the year ended March 31, 2021 which were not at arm's length basis. All the material related party transitions exceeding ten percent of the Annual Standalone / Consolidated turnover as per the last audited financial statement/ other related party transactions were entered during the year by the company are disclosed in accordance with section 134 (3) (h) of the Companies Act, 2013, in form AOC 2 as per Annexure -"C" of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:
The CSR committee comprises Mr.N.Ramesh Rajan, Chairman, Mr. M. Sankara Reddy and Mr. P. Aditya Reddy as other members.
The Board has laid out the Company's policy on corporate social responsibility (CSR), and the CSR activities of the Company are carried out as per the instructions of the committee. The Committee also monitors the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. During the year, the Company had spent 2% of its average net profits for the three immediately preceding financial years on CSR activities.
The financial data / Annual Report pertaining to the Company's CSR activities for the financial year 2020-2021 is presented in the prescribed format in Annexure-"D"to the Board Report.
The CSR Policy is available on our website www.nippo.in
RISK MANAGEMENT:
The Board has constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in overseeing that all the risks that the organization faces such as strategic, financial, credit, market, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company regularly updates to committee on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.
The Company has developed and implemented a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company.
DIRECTORS / KMP:
In accordance with the Articles of Association of the Company Mr. P.Dwaraknath Reddy will retire by rotation at this ensuing Annual General Meeting. He being eligible, offer himself for re-appointment.
In accordance with the Articles of Association of the Company Mr. R.P. Khaitan will retire by rotation at this ensuing Annual General Meeting. He being eligible, offer himself for re-appointment.
In accordance with the Articles of Association of the Company Mr. P. Aditya Reddy will retire by rotation at this ensuing Annual General Meeting. He being eligible, offer himself for re-appointment. In accordance with the Articles of Association of the Company Mr. M.Sankara Reddy will retire by rotation at this ensuing Annual General Meeting. He being eligible, offer himself for re-appointment. In the opinion of the Board, Mr. N. Ramesh Rajan and Mrs. Lakshmmi Subramanian Independent Directors of the company possess integrity, expertise and experience (including the proficiency).
RELATIONSHIP BETWEEN DIRECTORS INTER-SE:
The details of inter-se relationship between Directors are given in the Corporate Governance Report. Information about all the Directors proposed to be re-appointed is furnished in the Explanatory Statement under Section 102 of the Companies Act, 2013 under the heading "Information about the Directors proposed to be re-appointed" attached to the Notice of the ensuing Annual General Meeting for your consideration
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI (LODR) Regulations 2015.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS:
As per Companies Act, 2013 and SEBI (LODR) Regulations 2015 mandates that the Board shall monitor and review the Board evaluation framework and a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Board subsequently evaluated its own performance, the working of its Committees and Independent Directors without participation of the relevant Director(s).
TRAINING OF INDEPENDENT DIRECTORS:
To familiarize the strategy, operations and functions of our Company, the executive directors make presentations/ orientation programme to non –executive independent directors about the company's strategy, operations, product and service offerings, markets, organization structure, finance, human resources, production facilities and quality and risk management. The appointment letters of Independent Directors has been placed on the Company's website at www.nippo.in
MEETING OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company had met during the year on 12th February, 2021 to review the performance of non- Independent Directors and the Board as a whole, review the performance of the Chairperson of the Company and had accessed the quality, quantity and timeliness of flow of information between the company management and the Board.
MEETINGS OF THE BOARD:
Five meetings of the Board of directors were held during the year. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
COMMITTEES OF THE BOARD:
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee.
5. Risk Management committee
The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report as per Regulation 34 of the SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives taken by the Company on the environment, social and governance aspects of business, forms part of this Annual Report is appended on Annexure-G to this report.
PERSONNEL:
Your Directors wish to place on record their appreciation for the dedication and hard work put in by the employees at all levels for the overall growth of your Company. Relations with the employees at Factory, Head office / Depots and other Branches were cordial during the year. In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the information required in respect of employees of the Company is appended in Annexure-G to this report. As per section 136(1) of the Companies Act, 2013 the report and accounts are being sent to the members and others entitled thereto. Any member interested in inspecting or obtaining copy of the statement of particulars of employees being forms part of the Report may contact the Company Secretary at Registered Office during working hours and any member interested in obtaining such information may write to the company secretary and the same will be furnished on request.
REMUNERATION POLICY OF THE COMPANY:
The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance report, which forms part of the Board's Report. The objective of the Remuneration Policy is to attract, motivate and retain qualified and expert individuals that the Company needs in order to achieve its strategic and operational objectives.
PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013:
The particulars of loans, guarantees and investments under section 186 of the Act read with the Companies (Meetings of Board and its powers) Rules,2014 for the financial year 2020-21 are given in the notes to the financial statements.
STATUTORY AUDITORS:
M/s G. Balu Associates (Firm Registration No. 000376S) have been appointed as the Statutory Auditors of the Company for a period of 5 years, to hold office from the conclusion of Forty Fourth Annual General Meeting till the conclusion of the Forty Ninth Annual General Meeting of the Company. Further the auditors have confirmed their eligibility under Section 144 of the Companies Act, 2013 and the rules made there under. The Auditor's Report along with Notes to Accounts is self-explanatory and therefore does not call for any further explanations / comments. The Auditor's Report does not contain any qualifications, reservation and or adverse remarks. Pursuant to provisions of section 143 (12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
COST AUDITOR:
In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and audits) Rules, 2014 the Company has appointed Mr. P. Raju Iyer, Practicing Cost Accountant, as the Cost Auditor of the Company for conducting the audit of cost records of the Company for the financial year ending 31st March 2022 subject to ratification of remuneration payable to him by the members of the Company at the ensuing Annual General Meeting of the Company. The Company hereby confirms that maintenance of Cost Accounts and Records as specified by the Central Government under section 148(1) of the Companies Act, 2013.
SECRETARIAL AUDITOR:
As required under Section 204 of the Companies Act, 2013 and Rules thereunder the Board has appointed M.Damodaran & Associates, Practising Company Secretaries as Secretarial Auditor of the company to conduct Secretarial Audit for the financial year 2020-21. The Secretarial Audit Report for the financial year ended March 31, 2021 is annexed herewith marked as Annexure – "F" to this Report. The Secretarial Audit Report of M/s. Kineco Ltd (Material unlisted subsidiary) for the financial year ended 31st March 2021,is annexed herewith marked as – Annexure – F1 to this Report. The Secretarial Audit Report's does not contain any qualification, reservation or adverse remark.
WHISTLE BLOWER POLICY/VIGIL MECHANISIM:
The Company has adopted a whistle blower policy / Vigil mechanism that cover directors and employees of the Company to bring to the attention of the management any issues which is to be in violation or in conflict with the fundamental business principles of the Company. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express those concerns without fear of punishment or unfair treatment.
No one may take any adverse action against any employee for complaining about, reporting, or participating or assisting in the investigation of, a reasonably suspected violation of any law, this Policy, or the Company's Code of Conduct and Ethics.
All the employees have been given access to the Audit Committee. The Company Secretary is the designated officer for effective implementation of the policy and dealing with the complaints registered under the policy.
The Whistle Blower Policy is available on the website of the Company www.nippo.in
INTERNAL CONTROL SYSTEM AND INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:
The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorised and recorded.
The Company has an established Internal Financial Control to cover internal controls over financial reporting and operating controls etc., The framework is reviewed regularly by the management and tested by internal audit team and presented to the Audit Committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls of the Company.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC:
Your Company has always been in the forefront of energy conservation. Several measures to conserve energy and to reduce the costs associated with it have been taken. The details regarding conservation of energy, foreign exchange, technology absorption including R & D efforts as required under Section 134 (3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure "A" to this Report. The Company has an in-house Research Development Department, where the main areas of focus are, Energy Conservation, Process upgradation and Environment Preservation. The Ministry of Science and Technology, Department of Scientific and Industrial Research, Government of India has recognized in-house R&D facilities of the Company.
EXTRACT OF ANNUAL RETURN:
The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website: www.nippo.in weblink : http:/ /www.nippo.in/html/pdf/ANN.RETURN_2021.pdf
STATEMENT PURSUANT TO SEBI (LODR) REGULATIONS 2015:
The Company's Securities are listed with Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE). The Company has paid the Annual Listing fees to all the Stock Exchanges.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:
There are no other significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company during the year except cartelisation of Zinc carbon dry cell battery case pending before Hon. National Company Law Appellate Tribunal, New Delhi. (NCLAT).
DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The company has in place an anti-sexual Harassment Policy as required under prevention of Sexual Harassment of Woman at workplace (Prohibition, Prevention and Redressal) Act 2013 and constituted an Internal Complaints Committee (ICC).Your Directors further states that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
As per Section 124(6) of the Act read with the IEPF Rules as amended, all the shares in respect of which dividend has remained unpaid / unclaimed for seven consecutive years or more have been transferred to IEPF Account.
GENERAL:
During the year under review
1. The Company had not issued equity shares with differential voting rights as to dividend, voting right or otherwise.
2. There was a change in the key managerial personnel of the Company. Mr. M.Subramanyam, President of the Company has been appointed as one of the KMP of the Company.
3. The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
4. Neither the Managing Director nor the Joint Managing Director of the company receive any remuneration or commission from any of its subsidiaries.
ACKNOWLEDGEMENT:
Your Directors thank the Central and State Governments and the Banks for their continued help and support.
Your Directors also thank the Authorised Wholesale Dealers, Distributors and Retailers for their excellent support under difficult conditions and the Consumers for their continued patronage of your Company's products. Your Directors are especially thankful to the esteemed Shareholders for their continued encouragement and support.