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Directors Report of Honda Siel Power Products Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 30th Annual Report together with Audited Accounts of the Company for the year ended 31s1 March 2015.

1. Financial Results:

(Rs. in lacs) Particulars Year Ended Year Ended March 31,2015 March 31,2014

Revenue from Operations 63,073 54,135

Other Income 709 457

Profit before depreciation and exceptional items 7,678 5,569

Depreciation 2,131 1,754

Exceptional items (347) 922

Profit before tax 5,894 2,893

Tax Expenses 2,032 1015

Profit after Tax 3,862 1,878

Balance of profit brought forward 15,855 14,673

Amount available for appropriation 19,717 16551

APPROPRIATIONS

Dividend 609 406

Tax on Dividend 124 69

General Reserves - 188

Balance carried to Balance Sheet 18,984 15,888

a) Dividend

Your Directors recommend a dividend of Rs. 6/- per equity share of Rs. 10/- each (60%) for the year ended 31st March 2015 (previous year 40%). The total outgo on this account (including dividend tax) will be Rs. 733/- lacs.

b) Transfer of Amounts to Investor Education and Protection Fund

In compliance with Section 125 of the Companies Act, 2013 and Section 205 (C) of the Companies Act, 1956, the Company has transferred a sum of Rs. 3,12,176.00 during the financial year 2014-15 to the Investor Education and Protection Fund established by the Central Government. The said amount represents unclaimed dividend which was lying with the Company for a period of seven years from the due date of payment.

2. Results of Operations and the state of Company''s affairs

Your company achieved sales of Rs. 65,725 lakh in 2014-15 (as against Rs. 57,570 lakh in 2013-14) in domestic and export markets, thereby registering a growth of 14% over the previous year.

The year saw the introduction of the New 7 kVA generator for European and Japanese markets. This new model is expected to contribute significantly to your Company''s future business growth.

A detailed report on operations titled ''Management Discussion and Analysis Report'' is annexed to the Board''s Report as Annexure-A and forms part thereof.

3. Environment Protection and Safety

Your Company is committed towards the protection and safety of environment. This is depicted in overall HONDA Philosophy "BLUE SKIES FOR OUR CHILDREN" and is adopted by your Company also. All associates make efforts in their daily operations towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services as per the predefined norms.

A statement on Environmental Protection and Safety, Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is annexed as Annexure - B and forms part of this report.

4. Details of Board meetings

During the year under review, five Board Meetings were held details of which are given below:

Date of the meeting Total No. of No. of Directors Directors on the attended the Board meeting

May 30, 2014 Eight (8)

August 05, 2014 Eight (8)

November 03, 2014 10 Nine (9)

February 12, 2015 Ten (10)

March 30, 2015 Nine (9)

Resolutions by Circulation were passed on the following dates:

1. April 01,2014

2. June 02, 2014

3. August 30, 2014

4. September 12, 2014

5. September 18, 2014

6. September 26, 2014

All statutory and other important items/ information were placed before the Board for approval/review.

5. Committees of Board

The details of composition of the Audit Committee and other Committees of the Board of Directors alongwith the attendance thereof is provided in the Corporate Governance Report forming part hereof.

6. Extract of Annual Return

Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as Annexure- C.

7. Managing the Risks of Fraud, Corruption and Unethical Business Practices

i) Vigil Mechanism / Whistle Blower Policy

In order to provide Vigil Mechanism avenue to our Directors, Associates, Customers, Vendors and Dealers to raise concerns in line with the commitment of the Company to highest standards of ethical, moral and legal business conduct and its commitment to transparent approach, Vigil Mechanism in the name of Business Ethics Proposal Line (BEPL) has been established.

For the effective implementation of the policy, the Company has constituted a Business Ethics Committee (BEC), comprising of senior executives/directors, to provide an opportunity to all Directors/Associates/ Vendors/ Customers to access BEC in good faith, in case they observe an unethical or improper practice in the Company.

The detailed policy is posted on the Company''s website at the weblink: https:// www.hondasielpower.com.

8. Directors'' Responsibility Statement

Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm:

(a) in the preparation of the annual accounts for the year ended March 31, 2015, 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) the Directors 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, 2015 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with

the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the Directors 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) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively..

9. Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

The Company has not made any loans, guarantees or investments under Section 186 of the Companies Act, 2013 during the year under review.

10. Auditors

i) Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants, (Firm Registration No. 101248W), Statutory Auditors of the Company will hold office until the conclusion of the forthcoming Annual General Meeting of the Company and are eligible for re-appointment as per Section 139 of the Companies Act, 2013. M/s. B S R & Co. LLP have expressed their willingness to get re-appointed as the Statutory Auditors of the Company and have furnished a certificate of their eligibility and consent under Section 139 (1) and 141 of the Companies Act, 2013 and the rules framed thereunder.

The Auditors have represented that they have been subjected to the ''Peer Review Process'' of The Institute of Chartered Accountants of India and hold a valid Certificate.

The observations of Statutory Auditors in their report, read with the relevant Notes to Accounts are self explanatory and therefore, do not require any further explanation.

ii) Cost Auditors

In pursuance of Section 148 of the Companies Act 2013, Circular issued by the Ministry of Corporate Affairs and applicable provisions, if any, the Board of Directors, on recommendation of the Audit Committee, has appointed M/s Rakesh Singh & Co., Cost Accountants as Cost Auditors of the Company for the Financial Year 2015-16, for conducting the audit of the cost records maintained by the Company, subject to the approval of the Members on the remuneration to be paid to the Cost Auditors.

iii) Secretarial Auditor and Secretarial Audit Report

The Board had appointed M/s Tanuj Vohra & Associates, Company Secretaries to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2014- 15. Their report is annexed to this report as Annexure - D. The report does not contain any qualification.

11. Related Party Transactions

All Contracts/transactions/arrangements entered into by the Company during the financial year with the Related Parties were in ordinary course of business and on an arm''s length basis.

However, in view of the applicability of Clause 49 of the Listing Agreement, all Related Party Transactions are approved by the Audit Committee. Omnibus approval is obtained for un-foreseen transactions. Subsequently on a quarterly basis the transactions are presented to the Audit Committee, specifying the nature, value and terms and conditions of the same.

The Related Party Transactions Policy, as approved by the Board, has been uploaded on the Company''s website at the weblink: https://www.hondasielpower.com.

12. Risk Management Policy

In compliance with the requirement of the Companies Act, 2013 the Company has put in place Risk Minimization and Assessment Procedures. In order to effectively and efficiently manage risk and address challenges, the Company has formulated Risk Management Policy.

The objective of any risk identification and assessment process is to evaluate the combination of likelihood and level of negative impacts from an event. The three main components of risk assessment are business risk, service/operational risk and external risk.

The Company manages the risk in line with current risk management best practices. This facilitates the achievement of our objectives, operational effectiveness and efficiency, protection of people and assets, informed decision-making and compliance with applicable laws and regulations.

13. Corporate Social Responsibility initiatives

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure - E.

The CSR Policy may be accessed on the Company''s website at the link https://www.hondasielpower.com.

14. Policy on Remuneration to be paid to Directors, Key Managerial Personnel (KMP) and other employees and criteria for appointment of Directors

The Board vide resolution by circulation dated September 18, 2014 adopted a policy, on Remuneration to be paid to Directors, Key Managerial Personnel and other employees and Criteria for Appointment of Directors.

The objective of the policy is to define the criteria for qualification, qualities and characteristics for the Board as a whole and to ensure that Executive/Non-Executive Directors and Key Managerial Personnel are sufficiently compensated for their performance.

Policy on appointment of Directors

The Composition and strength of the Board of Directors ("the Board") of the Company is subject to the provisions of the Companies Act, 2013, Listing Agreements and Articles of the Association of the Company. The Nomination and Remuneration Committee is responsible for evaluating the qualifications of each candidate to be appointed as Director on the Board

In general, it is expected from a Director to possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the Company''s business and to have ample experience and a proven record of professional success, leadership and the highest level of personal and professional ethics, integrity and values.

Remuneration Policy

Non-Executive Independent Directors receive sitting fees for attending the Meeting of the Board and Committees thereof. The Executive Directors and other employees are paid remuneration by way of salary, perquisites, allowances and variable pay. Perquisites and retirement benefits are paid as per the Company policy. The remuneration of Executive Directors, as recommended by the Nomination and Remuneration Committee, is approved and further recommended by Board of Directors to the Members for approval. Remuneration and annual variable pay of Executive Directors and employees is determined keeping in view the industry benchmark and the relative performance of the Company.

Criteria of Independence

The Nomination and Remuneration Committee shall assess the independence of Directors at the time of appointment / re-appointment pursuant to the criteria laid down in Companies Act, 2013 and Clause 49 of the Listing Agreement and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interests or relationships are disclosed by a Director.

15. Declaration by independent directors

The Board of the Company consists of Dr. Dharam Vir Kapur, Mr. Om Prakash Khaitan, Mr. Ravi Vira Gupta, Mr. Manoj Arora and Ms. Alka Marezban Bharucha as independent Directors. These Directors have confirmed that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the Rules thereunder.

16. Directors and Key Managerial Personnel (KMP)

i) Cessation

a) Mr. Ravi Prakash Mehrotra (DIN 06823899), an independent Director on the Board of the Company, due to some personal reasons resigned from the Board with effect from September 01,2014.

b) Mr. Takashi Hamasaki (DIN 03024621), President & CEO of the Company on completion of his tenure has resigned from the Board with effect from March 31,2015.

c) Mr. Yoshiyuki Matsumoto (DIN 06542714), Director of the Company, due to relocation to some other place, has resigned from the Board with effect from April 01,2015.

d) Mr. Rahul Kumar, Company Secretary (Membership No. A20928), resigned from the services of the Company with effect from September 26, 2014.

The Board placed on record its appreciation for the valuable services rendered by the above directors and KMPs.

ii) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013, Articles of Association of the Company and applicable Regulations issued by the Securities & Exchange Board of India, Mr. Vinay Mittal (DIN 05242535), Director of the Company will retire by rotation at the forthcoming Annual General Meeting (''AGM'') and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

iii) Appointment

i) Ms. Alka Marezban Bharucha (DIN 00114067)

Ms. Alka Marezban Bharucha has been appointed as an additional Director (Independent Director) under Section 161 of the Companies Act, 2013 with effect from September 15, 2014 till the date of the ensuing Annual General Meeting.

The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013 from a member proposing her appointment as Director. The Board of Directors recommend her appointment.

ii) Mr. Yoshifumi Iida (DIN 07136925 )

Mr. Yoshifumi Iida has been appointed as an additional Director (Non-Independent/Executive Director) with effect from April 01, 2015 to hold office upto the date of the ensuing Annual General Meeting. The Board of Directors has further proposed his appointment as Whole Time Director to be designated as President & CEO of the Company.

The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013 from a member proposing his appointment as Director. The Board of Directors recommend his appointment.

iii) Mr. Shinya Inamura (DIN 06851565)

Mr. Shinya Inamura has been appointed as a Director of the Company with effect from April 01, 2015, to fill up the casual vacancy caused by the resignation of Mr. Yoshiyuki Matsumoto.

iv) In compliance with the provisions of Section 203 of the Companies Act, 2013, Ms. Sunita Ganjoo (Membership No. A33198) was appointed as the Company Secretary of the Company with effect from November 03, 2014.

Brief resume of Directors appointed on the Board, nature of their expertise in specific functional areas and the name of the Companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are given in the Notice convening the Annual General Meeting.

Necessary resolutions for the appointment / re-appointment and remuneration of the aforesaid Directors have been included in the Notice convening the Annual General Meeting.

As per the confirmations received, none of the Directors of the Company are disqualified for being appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013. There is no relationship between the Directors inter-se.

v) Payment of remuneration

- The remuneration to be paid to Mr. Yoshifumi Iida as President & CEO of the Company has been approved by the Board of Directors on March 30, 2015 subsequent to the recommendation of the Nomination and Remuneration Committee on March 30, 2015. Your Board recommends the remuneration of Mr. Yoshifumi Iida for your approval.

- The revised remuneration of Mr. Vinay Mittal from 01.04.2015 to 31.03.2016 (both days inclusive) has been approved by the Board of Directors on March 30, 2015, subsequent to the recommendation of the Nomination and Remuneration Committee at its Meeting held on March 30, 2015. Your Board recommends the approval of revised remuneration of Mr. Vinay Mittal. Proposal for the same is being put up for your approval.

17. Evaluation of the Board''s Performance

In compliance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, during the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation to evaluate the performance of individual directors including the Board Chairman.

The evaluation of Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

18. Explanations or comments on qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their reports.

There were no qualifications, reservations or adverse remarks made by the Auditors in their respective reports.

19. Deposits

The Company does not have any deposits and has neither accepted any deposits during the year under review.

20. Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

21. Sweat Equity

'' The Company has not issued any Sweat Equity shares during the year under review.

22. Bonus Shares

No bonus shares were issued during the year under review.

23. Employees Stock Option Scheme

The Company has not provided any Stock Option Scheme during the year under review.

24. Significant and material orders passed by the regulators

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations.

25. Corporate Governance

A separate section on Corporate Governance is annexed to this report as Annexure- F.

A certificate from a Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is annexed as Annexure- I.

26. Sexual harassment of women at workplace

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company''s premises through various interventions and practices.

A policy on Prevention of Sexual Harassment at Workplace was released during the last financial year. The policy aims at prevention of harassment of female employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour. A seven member Committee was set up with women employees constituting majority.

During the year ended March 31, 2015, the Company did not receive any complaint pertaining to sexual harassment.

27. Code of Conduct and Ethics

The Board of the Company has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company. The object of the Code is to conduct the Company''s business ethically and with responsibility, integrity, fairness, transparency and honesty. The Code sets out a broad policy for one''s conduct in dealing with the Company, fellow Directors and Employees and with the environment in which the Company operates. The Code is available on the Company''s Corporate website twww.hondasielpower.com). A declaration signed by President & CEO of the Company with regard to the compliance with the Code by

the Members of the Board and Senior Executives is annexed as Annexure - G and forms part hereof.

28. Familiarization programmes for Board Members

The Board members are provided with necessary documents, reports and internal policies to enable them to familiarise with the Company''s procedures and practices. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company.The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at the link https://www.hondasielpower.com.

29. Particulars of Employees

Particulars of employees and the ratio of the remuneration of each director to the median employee''s remuneration and other details in terms of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report. However, in terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the members and others entitled thereto, excluding these statements. The Annexures are available for inspection by the Members at the Registered Office of the Company during working hours on working days for a period of 21 days before the ensuing Annual General Meeting. However, a copy of the Statement shall be made available to any member on demand.

30. Material changes and commitments affecting the financial position of the Company after 31" March 2015

There were no material changes and commitments affecting the financial position of the Company after 31st March 2015.

Acknowledgements

Your Directors wish to thank and acknowledge with gratitude the co-operation, assistance and support received from the Central Government, State Government of Uttar Pradesh, Company''s Bankers, Shareholders, Dealers, Vendors, Indian and Japanese Promoters of the Company and other Business Associates in the Management of affairs of the Company.

The Directors also wish to place on record their sincere appreciation and gratitude towards the contribution made by every employee of the Company.

On behalf of the Board,

New Delhi Siddharth Shriram May 18, 2015 Chairman


Mar 31, 2013

Dear Members,

The Directors are pleased to present the Twenty Eighth Annual Report together with Audited Accounts of the Company for the year ended 31" March 2013.

FINANCIAL RESULTS AND APPROPRIATIONS

(Rs. in lacs)

Particulars Year Ended Year Ended March 31,2013 March 31,2012

Revenue from Operations 51,554.72 50,337.04

Other Income 697.49 1,108.06

Profit before depreciation and exceptional items 4,500.70 6,270.46

Depreciation 1,374.59 1,030.45

Exceptional items - 2,033.82

Profit before tax 3,126.11 7,273.83

Provision for taxation

- Current 735.81 1,969.55

-Deferred Tax 329.86 136.13

Profit after Tax 2,060.44 5,168.15

Balance of profit brought forward 13,293.08 9,705.90

Amount available for appropriation 15,353.52 14,874.05

APPROPRIATIONS

Dividend 405.72 912.88

Tax on Dividend 68.95 148.09

General Reserves 206.00 520.00

Balance carried to Balance Sheet 14,672.85 13,293.08

DIVIDEND

Your Directors recommend a dividend of Rs. 4/- per equity share of Rs. 10 each (40%) for the year ended 31* March 2013 (previous year 90%). The total outgo on this account (including dividend tax) will be Rs. 474.67 lacs.

APPROPRIATIONS

It is proposed to transfer Rs. 206.00 lacs to General Reserve and retain the balance in Profit and Loss Account.

DOMESTIC MARKETS AND EXPORTS

Your company achieved gross sales of Rs. 55,559 lacs in 2012-13 (as against Rs. 53,678 lacs in 2011-12) in domestic and export markets, thereby registering a growth of 3.5% over the previous year.

The year saw the introduction of the New 1 kva generator which has received an encouraging response from the market. The technologically advanced EU series generators have shown robust growth.

During the year, your Company introduced a New Tiller cum Power Weeder model in the small 5.5 HP category for the domestic market.

A detailed report on operations titled ''Management Discussion and Analysis Report'' is annexed to the Directors'' Report as Annexure - A and forms part thereof.

INDIGENISATION PROGRAMME

Your Company is continuously working on cost reduction by localization of critical parts with the help of Honda Motor Co. Ltd., Japan.

To achieve cost competitiveness, the Company is focusing on reducing the import content in GX series of Engines through localization. All critical parts in these models have been identified and accordingly planning for localization of these parts has been done.

The Company will continue to further evaluate the feasibility of localization of other Model parts for saving and cost competitiveness with support from Honda Motor Co. Ltd., Japan.

ENVIRONMENT PROTECTION & SAFETY

Your Company is committed towards the protection and safety of environment. All employees make efforts in daily operations towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services as per the predefined norms. Environmental improvements were achieved by completing the following actions:

- Installation of hot water based VAM (Vapour Absorption Machine) and commencement of recovery of waste heat from Engine jacket water through VAM for utilization in air conditioning of Office building. Commissioning of the same is for reducing the consumption of electric energy. However, since the system was commissioned in winter, the energy reduction could not be achieved during the current year. The benefits of reduction in energy are expected to be obtained from April 2013onwards.

- Commencement of operation of variable speed type energy efficient Air Compressor from September 2012 onwards thereby reducing the electric energy consumption of compressors by 10%.

- Installation of LED (light emitting diode)Tubelights in new Assembly line. Your Company is further planning to:

- Replace existing T5 tube lights with energy efficient LED tube lights.

- Replace the existing Metal Halide lamps with tube lightfixtures

- Synchronize DG Sets for reduction in fuel consumption.

- Reduce Air consumption by replacing existing Air Guns used for component cleaning with energy efficient Air Guns operating at low air pressure and by installing solenoid valves in Air line of machines to shut off the air supply during machine idle time.

The products manufactured by your Company comply with the air emission and noise regulation norms notified by the Ministry of Environment and Forests (MOEF), Government of India. The ''Confirmation of Production'' (COP) to the air emission and noise regulation is done as laid down by the MOEF.

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

The requisite information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 is set out in a separate statement annexed to this report as Annexure -Band forms part thereof.

DIRECTORS

Mr. H. Kanayama ceased to be Director of the Company with effect from the close of the working hours of March 31,2013. Your Board places on record its deep appreciation for the services rendered by Mr. H. Kanayama during his tenure with the Company.

Mr. Y. Matsumoto was appointed as Director effective April 1, 2013. Your Board recommends the appointment of Mr. Y Matsumoto as Director of the Company. Proposal for the appointment of Mr. Y. Matsumoto is being put up for your approval.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Siddharth Shriram and Mr. Ravi V. Gupta, Directors of the Company retire by rotation at the forthcoming Annual

General Meeting (''AGM'') and being eligible, offer themselves for re- appointment.

Brief resume of the above Directors, nature of their expertise in specific functional areas and the name of the Companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement of the Stock Exchanges, is given in the Notice convening the Annual General Meeting.

The remuneration of Mr. Vinay Mittal from 01.04.2013 to 31.03.2014 (both days inclusive) has been approved by the Board on May 20, 2013 subsequent to the recommendation of the Remuneration Committee at its Meeting held on May 20, 2013. Your Board recommends the approval of remuneration of Mr. Vinay Mittal. Proposal for the same is being put up for your approval.

Necessary resolutions for the appointment / re-appointment and remuneration of the aforesaid Directors have been included in the Notice convening the Annual General Meeting.

As per the confirmations received, none of the Directors of the Company are disqualified for being appointed as Director as specified in Section 274(1 )(g) of the Companies Act, 1956.

AUDITORS

Statutory Auditors

The observations of Statutory Auditors in the report, read with the relevant Notes to Accounts are self explanatory and therefore, do not require further explanation.

M/s B S R & Co., Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming AGM and are recommended for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the prescribed limits specified under Section 224 (1B) of the Companies Act, 1956.

The Auditors have represented that they have been subjected to the ''Peer Review Process'' of The Institute of Chartered Accountants of India and hold a valid Certificate.

Cost Auditors

As per the provisions of section 233B(1) of the Companies Act, 1956 and in accordance with the circular issued by the Ministry of Corporate Affairs, audit of the Company''s Cost Accounts from the year ended March 31, 2013 has been made compulsory.

In pursuance to this, M/s Rakesh Singh & Co., Cost Accountants will be appointed as Cost Auditors of the Company for the financial year 2013-14 subject to approval of the Central Government and the cost audit report will be filed within the stipulated time period of one hundred and eighty days from the close of the financial yearto which the report relates.

The Cost Auditors have certified that they are not disqualified under any of the provisions of section 224 (1B) read with Section 226 of the Companies Act, 1956 and that the appointment made is within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. A declaration to this effect has been submitted by the Auditors to the Audit Committee. A certification from the CostAuditors of their being an independent firm of Cost Accountants and at arm''s length relationship with the Company has also been submitted to the Audit Committee.

DIRECTORS''RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm as under:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

2. That the accounting policies selected and applied are consistent and the

judgements and estimates made 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 of the Company for that period;

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the annual accounts have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the particulars of employees are required to be furnished in statement to be annexed to this Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the report and accounts are being sent to all the Shareholders excluding the aforesaid Annexure. The complete Annual Report including this statement shall be made available for inspection by any shareholder during working hours for a period of 21 days before the date of the Annual General Meeting. Any member interested in obtaining the copy of the statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is annexed to this report as Annexure-C.

A certificate from a Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is annexed as Annexure - F.

CODE OF CONDUCT AND ETHICS

The Board of the Company has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company. The object of the Code is to conduct the Company''s business ethically and with responsibility, integrity, fairness, transparency and honesty. The Code sets out a broad policy for one''s conduct in dealing with the Company, fellow Directors and Employees and with the environment in which the Company operates. The Code is available on the Company''s Corporate website (www.hondasielpower.com). A declaration signed by President & CEO of the Company with regard to the compliance with the Code by the Members of the Board and Senior Executives is annexed as Annexure - D and forms part hereof.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis Report is annexed as Annexure -A.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER 31st MARCH 2013

There were no material changes and commitments affecting the financial position of the company after 31sl March 2013.

ACKNOWLEDGEMENTS

Your Directors wish to thank and acknowledge with gratitude the co- operation, assistance and support received from the Central Government, State Governments of Uttar Pradesh and Puducherry, Company''s Bankers, Shareholders, Dealers, Vendors, Indian and Japanese Promoters of the Company and other Business Associates in the Management of affairs of the Company.

The Directors also wish to place on record their sincere appreciation of the contribution made by every employee of the Company.

On behalf of the Board,

New Delhi

May 20, 2013 Siddharth Shriram

Chairman


Mar 31, 2012

The Directors are pleased to present the Twenty Seventh Annual Report together with Audited Accounts of the Company for the year ended 31st March , 2012.

FINANCIAL RESULTS AND APPROPRIATIONS

(Rs. in lacs)

Particulars Year Ended Year Ended March 31,2012 March 31,2011

Revenue from Operations 50,483 40,565

Other Income 962 779

Profit before depreciation and exceptional items 6,270 5,266

Depreciation 1,030 821

Exceptional items 2,034 -

Profit before tax 7,274 4,445

Provision for taxation

- Current 1,970 1,273

- Deferred Tax charge/(benefit) 136 206

Profit after Tax 5,168 2,966

Balance of profit brought forward 9,706 7,924

Amount available for appropriation 14,874 10,890

APPROPRIATIONS

Dividend 913 761

Tax on Dividend 148 126

General Reserves 520 297

Balance carried to Balance Sheet 13,293 9,706

DIVIDEND

Your Directors recommend a dividend of Rs. 9 per equity share of Rs. 10 each (90%) for the year ended 31" March 2012 (previous year 75%). The total outgo on this account (including dividend tax) will be Rs. 1,061 lacs.

APPROPRIATIONS

It is proposed to transfer Rs. 520 lacs to General Reserve and retain the balance in Profit and Loss Account.

DOMESTIC MARKETS AND EXPORTS

Your company achieved a record sales of Rs. 53,678 lacs in 2011-12 (as against Rs. 42,788 lacs in 2010-11) in domestic and exports markets thereby realizing a growth of 25% over previous year.

The overall growth was led by record sales in the generator segment and good volumes in the engines and water pump segment setting new records in all segments during the year. This year also saw introduction of new revolutionary products such as 3.0 KVA -EU series of Generators - made in India, as well as small 5.5 hp Tiller cum power weeder for the domestic market.

A detailed report on operations titled 'Management Discussion and Analysis Report' is annexed to the Directors' Report as Annexure-A and forms part thereof.

INDIGENISATION PROGRAMME

Your Company is continuously working on cost reduction by localization of critical parts with the help of Honda Motor Co. Ltd., Japan.

The Company has successfully localized 80 parts of Generator Model EU65is Model and achieved planned cost saving during the year.

The Company is in the process of further localising 10 more parts during the year 2012-13 and is hopeful of realization of savings thereon.

The Company shall continue localization of balance parts with support from Honda Motor Co. Ltd., Japan.

ENVIRONMENT PROTECTION & SAFETY

Your Company is committed towards the protection and safety of the environment. All employees make efforts in daily operations towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services as per the predefined norms. Environmental improvements were achieved by completing the following actions:

- Commencement of power Cogeneration i.e. Gas based power generation Along with Exhaust Flue Gas based waste heat recovery Boiler due to which instead of running a Gas fired boiler for supplying steam to Paint Shop, the entire steam is now being generated by the exhaust flue gases heat recovery system.

- Conversion of LPG fired burners into Natural Gas fired burners in Paint shop ovens and Aluminium melting furnaces thus leading to reduction of C02 and resulting in cleaner environment.

- Placed order for new energy efficient latest state of art technology compressors which are expected to be installed within the year 2012, thereby reducing energy consumption of Compressors.

Your Company is further planning to install hot water fired VAM (Vapour Absorption Machine) to utilize the heat of Engine jacket water and steam fired VAM to utilise the excess steam from 'Waste Heat Recovery Boiler' for Air conditioning of office space.

The products manufactured by your Company comply with the air emission and noise regulation norms notified by the Ministry of Environment and Forests (MOEF), Government of India. The 'Confirmation of Production' (COP) to the air emission and noise regulation is done as laid down by the MOEF.

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

The requisite information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 is set out in a separate statement annexed to this report as Annexure- B and forms part thereof.

DIRECTORS

During the year under review, Mr. T. Nagai and Mr. M. Saito ceased to be Directors of the Company with effect from the close of the working hours of March 31, 2012. Your Board places on record its deep appreciation for the services rendered by Mr. T. Nagai and Mr. M. Saito during their tenure with the Company.

Mr. H. Kanayama was appointed as Director and Mr. Vinay Mittal as Whole Time Director of the Company effective April 1,2012.

Your Board recommends the appointments of Mr. H. Kanayama as Director and of Mr. Vinay Mittal as Director and as Whole Time Director of the Company. Proposal for appointment of Mr. H. Kanayama and Mr. Vinay Mittal is being put up for your approval.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. D. V. Kapur and Mr. O.P. Khaitan, Directors of the Company retire by rotation at the forthcoming Annual General Meeting ('AGM') and being eligible, offer themselves for re- appointment.

Brief resume of the above Directors, nature of their expertise in specific functional areas and the name of the Companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement of the Stock Exchanges, is given in the Notice convening the Annual General Meeting.

Necessary resolutions for the appointment / re-appointment of the aforesaid Directors have been included in the Notice convening the Annual General Meeting.

As per the confirmations received, none of the Directors of the Company are disqualified for being appointed as Director as specified in Section 274(1 )(g) of the Companies Act, 1956.

AUDITORS Statutory Auditors

The observations of Statutory Auditors in the report, read with the relevant Notes to Accounts are self explanatory and therefore, do not require further explanation.

M/s. B S R & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the forthcoming AGM and are recommended for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the prescribed limits specified under Section 224(1 B) of the Companies Act, 1956.

The Auditors have represented that they have been subjected to the 'Peer Review Process' of The Institute of Chartered Accountants of India and hold a valid Certificate.

Cost Auditors

As per the provisions of Section 233B(1) of the Companies Act, 1956 and in accordance with the circular issued by the Ministry of Corporate Affairs, audit of the Company's Cost Accounts for the year ended March 31, 2013 has been made compulsory.

In pursuance to this, M/s Rakesh Singh & Co., Cost Accountants will be appointed as Cost Auditors of the Company for the financial year 2012 -13 subject to approval of the Central Government.

The Cost Auditors have certified that they are not disqualified under any of the provisions of Section 224 (1B) read with Section 226 of the Companies Act, 1956 and that the appointment made is within the limits prescribed under Section 224 (1B) of the Companies Act, 1956. A declaration to this effect has been submitted by the Auditors to the Audit Committee. A certification from the Cost Auditors of their being an independent firm of Cost Accountants and at arm's length relationship with the Company has also been submitted to the Audit Committee.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm as under:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the accounting policies selected and applied are consistent and the judgements and estimates made 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 of the Company for that period;

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the annual accounts have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the particulars of employees are required to be furnished in statement to be annexed to this Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the report and accounts are being sent to all the Shareholders excluding the aforesaid Annexure. The complete Annual Report including this statement shall be made available for inspection by any shareholder during working hours for a period of 21 days before the date of the Annual General Meeting. Any member interested in obtaining the copy of the statement may write to the Company Secretary at the Registered Office of the Company.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is annexed to this report as Annexure-C.

A certificate from a Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is annexed as Annexure- F.

CODE OF CONDUCT AND ETHICS

The Board of the Company has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company. The object of the Code is to conduct the Company's business ethically and with responsibility, integrity, fairness, transparency and honesty. The Code sets out a broad policy for one's conduct in dealing with the Company, fellow Directors and Employees and with the environment in which the Company operates. The Code is available on the Company's Corporate website (www.hondasielpower.com). A declaration signed by President & CEO of the Company with regard to the compliance with the Code by the Members of the Board and Senior Executives is annexed as Annexure - D and forms part hereof.

SALE OF LAND AND BUILDING THEREON SITUATED AT RUDRAPUR

Subsequent to shifting of manufacturing facility from Rudrapur to Greater Noida, your Company disposed off the land and building constructed thereon, situated at Rudrapur, Uttarakhand, during the year under review.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis Report is annexed as Annexure-A.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER 31st MARCH 2012

There were no material changes and commitments affecting the financial position of the company after 31" March 2012.

ACKNOWLEDGEMENTS

Your Directors wish to thank and acknowledge with gratitude the co- operation, assistance and support received from the Central Government, State Governments of Uttar Pradesh, Uttarakhand and Puducherry, Company's Bankers, Shareholders, Dealers, Vendors, Indian and Japanese Promoters of the Company and other Business Associates in the Management of affairs of the Company.

The Directors also wish to place on record their sincere appreciation Of the contribution made by every employee of the Company.

On behalf of the Board, New Delhi

May 23, 2012 Siddharth Shriram

Chairman


Mar 31, 2010

The Directors are pleased to present the Twenty Fifth Annual Report together with Audited Accounts of the Company for the year ended 31st March 2010.

FINANCIAL RESULTS AND APPROPRIATIONS

(Rs. in Lacs)

Particulars Year Ended Year Ended March 31, 2010 March 31, 2009

Sales 32,013 24,843

Job Charges 261 211

Other Income 886 1,374

Profit before finance charges, 4,723 3,147 depreciation and exceptional items

Finance Charges 19 21

Depreciation 743 579

Exceptional items 2,004 119

Profit before tax 1,957 2,428 Provision for taxation

- Current 1,113 764

- Deferred Tax charge/(benefit) (425) 58

- Fringe Benefit Tax - 42 Profit after Tax 1,269 1,564 Balance of profit brought forward 7,256 6,324 Amount available for appropriation 8,525 7,888 APPROPRIATIONS

Dividend 406 406

Tax on Dividend 69 69

General Reserves 127 157

Balance carried to Balance Sheet 7,923 7,256

DIVIDEND

Your Directors recommend a dividend of Rs. 4 per equity share of Rs.10 each (40%) for the year ended 31st March 2010 (previous year 40%). The total outgo on this account will be Rs. 475 lacs including dividend tax.

APPROPRIATIONS

It is proposed to transfer Rs. 127 lacs to General Reserve and retain the balance in Profit and Loss Account.

DOMESTIC MARKETS AND EXPORTS

Your Company has achieved a Sales volume of 1,90,538 Units (as against 1,30,937 units in 2008-09) in domestic and export markets during the financial year 2009-10. This represents a growth of 46% over previous year.

This increase in sales was primarily due to growth in Engine and Water Pump business which had registered record sales during the year.

A detailed report on operations titled Management Discussion and Analysis Report is annexed to the Directors Report as Annexure- Band forms part thereof.

INDIGENISATION PROGRAMME

Your Company is continuously working on cost reduction by localization of critical parts with the support of Honda Motor Co., Ltd., Japan. Due to indigenisation the import content was reduced to 21% during the year. However, due to temporary outsourcing of critical components by way of imports at the time of non-availability of manufacturing facility at Rudrapur, the total imports has increased to 28% of total consumption of Raw Material and Components.

During the year under review, your Company has successfully developed critical electrical parts such as Switch Assembly Engine Stop, Terminal Assembly High Tension and Cap Assembly Noise Suppressor. Since these parts shall be used in production in next financial year, savings on account of these parts will be realized in the next Financial Year 2010-11.

INFORMATION TECHNOLOGY {IT)

After successful completion of upgradation of Oracle Application, from the earlier desupported version (11.5.4) to the latest supported version (11.5.10.2), Enterprise Resource Planning (ERP) has been made fully operational during the year 2009-10. Your company has also implemented other modules during the year thereby making optimum utilization of upgraded ERP in the Company.

To further take advantage of information technology in more operational functions of the Company, the following projects were initiated duringthe year:

(a) Online, restricted and secured access of ERP was given to suppliers to enhance the efficiency in transaction handling, as well as for avoiding duplication of processes. This project was initially started with few suppliers. However, after successful trials, it is now ready for full fledged roll out.

(b) Human Resources Information System (HRIS), was planned for better handling of Human Resources data, online communication with Company Personnel and for fully integrated seamless data transfer to Oracle application. The process for the same has been initiated and the same is expected to roll out within first half of the year 2010-11.

ENVIRONMENT PROTECTION &SAFETY

Your Company is committed towards the protection and safety of the environment. All employees make efforts in daily operation towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services as per the predefined norms. Environmental improvements were achieved by completing thefollowingactions:

Ensuring cleaner environment by retrofitting of gas fired burners in existing High Speed Diesel (HSD) fired melting cum holding furnace.

New ETP (Effluent Treatment Plant) lab made for ensuring effective monitoring of treated water quality. New centralized oil yard made for storage of oil.

The products manufactured by your Company strictly comply with air emission and noise regulation norms notified by the Ministry of Environment and Forests (MOEF). The confirmation of production to the air emission and noise regulation is done as laid down by MOEF.

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

The requisite information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required to be disclosed pursuant to Section 217(l)(e) of the Companies Act, 1956, read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 is set out in a separate statement annexed to this report as Annexure-A and forms part thereof.

DIRECTORS

Duringtheyear under review, Mr. J. Kobayashi, Presidents CEO of the Company has been re-assigned by Honda Motor Co., Ltd., Japan (HM) to other assignment in Japan after a successful tenure in the Company. Your Board places on record its deep appreciation for the services rendered by Mr. J. Kobayashi during his tenure with the company.

Mr. R. S. Bidesi, Vice President & Whole Time Director retired from the services of the Company after successful tenure of over 26 years with the Company. Your Board places on record its deep appreciation for the services rendered by Mr. R. S. Bidesi during his tenure with the Company.

Honda Motor Co., Ltd., Japan withdrew the nominations of Mr. M.Takedagawa and Mr. S. Mizusawa, who ceased to be Directors of the Company effective April 1, 2010. The Directors wish to place on record their deep appreciation for the services rendered by Mr. M. Takedagawa and Mr. S. Mizusawa during their tenure as Directors of the Company.

Mr.Takashi Hamasaki was appointed as a Director and Presidents CEO of the Company effective April 1, 2010. Further, Mr.Takashi Nagai and Mr. Masato Saito were appointed as Directors with effect from April 1, 2010 to fill up the casual vacancies caused by the resignations of Mr. M. Takedagawa and Mr.S. Mizusawa respectively.

Your Board recommends the appointments of Mr. T. Hamasaki as a Director and as President & CEO of the Company and of Mr.T. Nagai and Mr. M. Saito as Directors of the Company. Proposals for the appointment and remuneration of Mr. T. Hamasaki and for the appointments of Mr.T. Nagai and Mr. M. Saito are being put up for your approval.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. D. V. Kapur and Mr. 0. P. Khaitan retire by rotation at the forthcoming Annual General Meeting (AGM) and being eligible, offer themselves for re- appointment.

Brief resume of the above Directors, nature of their expertise in specific functional areas and the name of the Companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement of the Stock Exchanges, is given in the Notice convening the Annual General Meeting.

Necessary resolutions for the appointment / re-appointment of the aforesaid Directors have been included in the Notice convening the Annual General Meeting. None of the Directors of the Company are disqualified for being appointed as Director as specified in section 274(l)(g)ofthe Companies Act, 1956.

AUDITORS

The Notes on Accounts referred to in the Auditors Report are self- explainatoryanddonotcallforanyfurthercomments. M/s. B S R & Company, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the forthcoming AGM and are recommended for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the prescribed limits specified under Section 224(lB)ofthe Companies Act, 1956.

Your Company has further ensured that the Auditors have been subjected to the Peer Review Process of The Institute of Chartered Accountants of India.

DIRECTORSRESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm as under:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relatingto material departures;

2. That the accounting policies selected and applied are consistent and the judgements and estimates made 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 or loss of the Company for that period;

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

4. That the annual accounts have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, the particulars of employees are required to be furnished in statement to be annexed to this Report. However, as per the provisions of Section 219(l)(b)(iv) of the said Act, the report and accounts are being sent to all the Shareholders excluding the aforesaid Annexure.

The complete annual report including this statement shall be made available for inspection by any shareholder during working hours for a period of 21 days before the date of the Annual General Meeting. Any member interested in obtaining the copy of the statement may write to the Company Secretary at Registered Office of the Company.

CORPORATE GOVERNANCE

A separate section on Corporate Governance is annexed to this report

asAnnexure-C.

A certificate from a Practicing Company Secretary on compliance with

the conditions of Corporate Governance as stipulated under clause 49

of the Listing Agreement with Stock Exchanges is annexed as

Annexure- F

CODEOFCONDUCTAND ETHICS

The Board of the Company has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company. The object of the Code is to conduct the Companys business ethically and with responsibility, integrity, fairness, transparency and honesty. The Code sets out a broad policy for ones conduct in dealing with the Company, fellow Directors and Employees and with the environment in which the Company operates. The Code is available on the Companys Corporate website (www.hondasielpower.com). A declaration signed by President & CEO of the Company with regard to the compliance with the Code by the Members of the Board and Senior Executives is annexed as Annexure -D and forms part hereof

SHIFTING OF REGISTERED OFFICE OFTHE COMPANY FROM THESTATE OF UTTAR PRADESH TO THE NATIONAL CAPITALTERRITORYOF DELHI

Your Company has shifted its Registered office from the State of Uttar Pradesh to the National Capital Territory of Delhi, after taking necessary approvals from concerned Authorities.

CONSOLIDATION OF MANUFACTURING FACILITIES FROM RUDRAPUR TOGREATERNOIDA

Successful shifting of the manufacturing facility from Rudrapur to Greater Noida has been achieved by way of signing of Memorandum of Settlement between the Company and Workers Representatives on August 25, 2009. The Industrial Tribunal had accordingly passed an award based on the said settlement which was notified in the official gazette.

As per the agreement, a voluntary retirement scheme (VRS) had been offered to all the workers of the Rudrapur factory. Significant majority of the workers of Rudrapur factory had opted for the said VRS scheme and had not resumed services at the Greater Noida factory. All claims and dues of such workers have been settled.

All required machines have been shifted from Rudrapur to Greater Noida unit and have been commissioned. Consequently, full production has commenced at the Greater Noida factory from November 2009 onwards.

With this, the consolidation of operation has been successfully completed.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis Report is annexed as Annexure- B.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER 31ST MARCH 2010

There were no material changes and commitments affecting the financial position of the company after 31st March 2010.

ACKNOWLEDGEMENTS

Your Directors wish to thank and acknowledge with gratitude the co- operation, assistance and support received from the Central Government, State Governments of Uttar Pradesh, Uttarakhand and Puducherry, Companys Bankers, Shareholders, Dealers, Vendors, Indian and Japanese Promoters of the Company and other Business Associates in the Management of affairs of the Company.

The Directors also wish to place on record their sincere appreciation of the contribution made by every employee of the Company.

On behalf of the Board

New Delhi Siddharth Shriram

May 21, 2010 Chairman

 
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