Directors Report of Honda India Power Products Ltd.

Mar 31, 2025

The Board of Directors of your Company ("Boardâ) is pleased to present the 40^th Annual Report of Honda India Power Products Limited ("Companyâ) for the financial year ended March 31, 2025.

1. Financial Highlights

	(Rs	. in Lakhs)
	Year Ended
Particulars	March 31, 2025	March 31,2024
Revenue from Operations Other Income Profit before tax Tax Expenses Profit after Tax Other Comprehensive Income Total Comprehensive Income for the year	79,423 4,228 10,770 2,776 7,994 (63) 7,931	98,907 4,142 12,373 3,152 9,221 (10) 9,211
Results of Operations and the state of Company''s affairs

Your Company achieved aggregate revenue from operations of Rs. 79,423 Lakhs in 2024-25 (as against Rs. 98,907 Lakhs in 2023-24). This marks a reduction of 20% over the previous year. The Profit Before Tax has reduced by 13%.

To expand it''s product line, the Company has recently launched battery-operated handheld power equipment (DCHH) and new category of power products under the brand ''Hr. The Company believes that this shall give it an edge in the market among other competitors by having a very broad range of Power Products suiting to every segment of the customers.

Discussion on the performance and state of the Company''s affairs has been covered as part of the Management Discussion and Analysis which forms part of this Report and is annexed as Annexure-A.

2. Dividend Interim Dividend

The Board of Directors, at its meeting held on February 10, 2025, declared an interim (special) dividend of Rs. 10/- (Rupees ten only) i.e. (100%) on Equity Shares of face value of Rs. 10/- each fully paid up for the FY 2024-25.

Final Dividend

Your Directors are pleased to propose a final dividend at the rate of Rs. 21.50 (Rupees Twenty-One and Fifty paisa only) per equity share of the face value of Rs. 10/- each (215%), for financial year ended March 31, 2025. Dividend pay-out has been determined in accordance with the Company''s dividend distribution policy. Dividend will be payable subject to approval of members at the ensuing Annual General Meeting and the deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Record Date.

3. Dividend Distribution Policy

Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), the Dividend Distribution Policy of the Company is available on the Company''s website at

https://www.hondaindiapower.com/admin/public/uploads/document/h4N92dvHS0.pdf

4. Share capital

During the year under review, there was no change in the share capital of the Company.

5. Depository System

As per SEBI Listing Regulations, all Company shares are compulsorily tradable in electronic form. Accordingly, the Company will no longer process requests for transfer of securities in physical form. Requests for transmission, transposition, duplicate share certificates, split, and consolidation must be made in dematerialized form only. In such cases, the Company will issue a Letter of Confirmation, which should be submitted to your Depository Participant (DP) to credit the securities electronically. To benefit from the advantages of the Depository system and to mitigate the risk of fraud, shareholders holding physical shares are encouraged to convert them to demat form through either of the Depositories.

The Company has secured a special contingency insurance policy that provides for risk associated with the issuance of duplicate share certificates and claims related to IEPF.

In line with SEBI''s directive to strengthen due diligence for dematerialization, the Company has provided a static database of shareholders holding physical shares to the Depositories, enhancing system integrity and facilitating the validation of dematerialization requests.

6. Transfer of unclaimed dividend to Investor Education and Protection Fund

In accordance with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, and Amendments Rules, 2017, the Company is required to transfer shares on which dividends have remained unpaid or unclaimed for seven consecutive years or more to the Investor Education and Protection Fund (IEPF) Suspense Account. The Company has duly transferred such shares to the Demat Account of the IEPF Authority and uploaded the relevant details on our website: https://www.hondaindiapower.com/investors/dividend-and-iepf. Members can claim these shares and any accrued benefits from the IEPF Authority by following the prescribed procedure. Additionally, dividends unpaid for seven years from the date of transfer to the unpaid dividend account are also required to be transferred to the IEPF, as per Sections 124 and 125 of the Companies Act. Details of such unclaimed dividends are available on our website:

https://www.hondaindiapower.com/investors/dividend-and-iepf. Shareholders who have not claimed their dividends for the past seven years are requested to contact the Company''s Registrar and Share Transfer Agent to claim them.

During the year, 100 jointly held shares belonging to two shareholders were transferred to the unclaimed suspense account. There were no shares lying unclaimed at the beginning of the year.

7. Environment Protection and Safety

Your Company is committed to further reducing CO² emissions by 3% during financial year 2025-26. This goal is supported by a dedicated Safety & Environmental team that oversees the implementation of robust environmental sustainability practices across all operations. We continuously update our operational standards and environmental management systems to meet the targets, extending these practices to our major suppliers and service providers as well.

We actively promote sustainable development by managing resources efficiently and ensuring our products comply with all relevant regulatory standards. Our comprehensive health and safety management system covers and takes care of all employees across the Company.

Through regular safety meetings, suggestion schemes, and proactive participation from our Associates, we foster a culture of safety and environmental responsibility, ensuring a secure and healthy working environment for all stakeholders.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information on Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo pursuant to Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - B to this Report.

9. Occupational health and safety

The Company has established a comprehensive Health, Safety, and Environment (HSE) policy supported by regular awareness programmes, HSE management system and a strong monitoring framework to ensure its effectiveness. Our approach follows the ''Plan-Do-Check-Act'' cycle, driving continuous improvement across all operations. The policy is available on website of the Company at:

https://www.hondaindiapower.com/admin/public/uploads/document/s25R4zrdv5.pdf

The HSE management system encompasses risk assessments in key areas, including workplace safety, fire hazards, process safety, machinery risks, and occupational health. Regular audits are conducted to evaluate the Company''s HSE performance and ensure compliance with all regulatory requirements, reinforcing our commitment to a safe and sustainable work environment.

10. Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 (''the Act'') Annual Return for previous Financial Years and draft Annual Return for the Financial Year 2024-25, to be filed with the Registrar of Companies (''ROC''), Ministry of Corporate Affairs, pursuant to Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is available on website of the Company at https://www.hondaindiapower.com/investors/Annual%20Return

11. Details of Board and Committee Meetings

The Directors actively participate in Board and Committee Meetings, offering valuable guidance and advice to the Management on key business areas, including policy direction, governance, and compliance. This proactive involvement ensures the Board plays a crucial role in strategic decision-making.

During the year, the Board met six times, with the intervals between meetings complying with the timelines prescribed under the Companies Act, SEBI Listing Regulations, and relevant Circulars from the Ministry of Corporate Affairs and SEBI. The Board has consistently accepted all recommendations of the Audit Committee during the year under review.

For detailed information on the Board''s Committees, please refer to the Corporate Governance Report included in this Annual Report.

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

Your Company is committed to upholding the highest standards of integrity, transparency, and accountability in all its operations. To support this commitment, the Company has established a comprehensive Whistle Blower Policy, which serves as a formal vigil mechanism for all stakeholders, including employees, suppliers, customers, and other relevant parties.

This Policy enables stakeholders to report genuine concerns regarding unethical behaviour, actual or suspected fraud, violations of the Company''s Code of Conduct, or any other misconduct. It reflects the Company''s strong stance against any form of wrongdoing and reinforces our dedication to good corporate governance.

The Whistle Blower Mechanism is designed to ensure that concerns are addressed effectively and confidentially. In exceptional cases where the issue requires higher-level intervention, the Policy provides for escalation directly to the Chairman of the Audit Committee, ensuring that serious concerns receive the attention they deserve.

To safeguard the integrity of the reporting process, the Policy incorporates sufficient protection against victimization of whistleblowers.

For detailed information, the Whistle Blower Policy is available on the Company''s website at:

https://www.hondaindiapower.com/admin/public/uploads/document/fE65sfbg4p.pdf .

13. Risk Management

Operating in a dynamic, uncertain, and complex environment, your Company recognizes the critical importance of effective risk management to safeguard its assets, ensure business continuity, and create long-term value for stakeholders. To address these challenges, the Company has established a robust Risk Management Framework tailored to its size and operational complexity.

This framework is designed in compliance with regulatory requirements and aligns with industry best practices, reflecting our proactive approach to risk management. The primary objective is to foster a culture of accountability and competence across the organization, ensuring that risks are identified, assessed, and managed effectively at all levels.

The Risk Management Framework encompasses key activities, including:

â¢ Risk Identification: Systematic identification of potential risks across all business functions.

â¢ Risk Assessment and Prioritization: Evaluation of risks based on their impact and likelihood to prioritize management efforts.

â¢ Risk Monitoring and Review: Continuous monitoring of identified risks and periodic reviews to adapt to changing circumstances.

â¢ Risk Control: Implementation of measures to mitigate or eliminate risks, ensuring they remain within acceptable limits.

â¢ Risk Response Planning: Development of strategic response plans to address high-priority risks effectively.

This comprehensive approach enables the Company to manage risks proactively, minimizing their potential impact and enhancing decision-making processes.

For more details, the Company''s Risk Management Policy is available on our website at:

https://www.hondaindiapower.com/admin/public/uploads/document/rghiGWR896.pdf .

14. Directors'' Responsibility Statement

Pursuant to the requirement of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013, your Directors to the best of their knowledge & belief, confirm that:

(a) in the preparation of the annual accounts for the year ended March 31, 2025 the applicable Accounting Standards have been followed and there are no material departures;

(b) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and Profit and Loss of the Company as at March 31, 2025;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) 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;

(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; and

(g) the Company has complied with the Secretarial Standard-1 (Meetings of Board of Directors) and Secretarial Standard-2 (General Meeting) issued and amended, from time to time, by the Institute of Company Secretaries of India.

15. Particulars of Loans, Guarantees or Investments

The Company has not made any investments or given loan or provided guarantee/security during the year under review in terms of Section 186 of the Companies Act, 2013.

Further, the Company has not availed any loan from any Bank or Financial Institutions which requires explanation in term of Rule 8 of Companies (Accounts) Rules, 2014

16. Statutory Compliance

The Company has adequate systems and processes in place to comply with all applicable laws and regulations, pay applicable taxes on time and ensures statutory CSR spend.

17. MSME

The Company has registered itself on Trade Receivables Discounting System platform (TReDS) and complies with the requirement of submitting the required returns within the prescribed timelines.

18. Auditors

i) Statutory Auditors

In accordance with the provisions of Section 139 of the Companies Act, 2013, and the Rules made thereunder, M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed as the Statutory Auditors of the Company for a term of five (5) years. Their appointment is effective until the conclusion of the 42^ndAnnual General Meeting of the Company.

The statutory auditors have confirmed that they are not disqualified to continue as Statutory Auditors of the Company.

As required under the SEBI Listing Regulations, the Statutory Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Statutory Auditor''s Report

The Statutory Auditors'' Report on the accounts of the Company for the financial year ended March 31, 2025, is self-explanatory and does not call for further explanations or comments that may be treated as adequate compliance of Section 134 of the Companies Act, 2013.

There is no qualification, reservation or adverse remark made by the Statutory Auditors in their report for FY 2024-25. Report on Frauds, if any

During the year under review, no incidence of any fraud has occurred against the Company by its officers or employees. Neither the Audit Committee nor the Board of the Company has received any report involving any fraud, from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013.

ii) Internal Auditors

To have a proper and efficient internal audit system, the Company has a rotation policy for Internal Auditors. The current Internal Auditors have been rotated after a period of 5 years & M/s Deloitte Touche Tohmatsu India LLP has been appointed as Internal Auditors of the Company for the financial year 2025-26. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports their findings on the Internal Audit of the Company, to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

iii) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, M/s Rakesh Singh & Co., Cost Accountants have been reappointed as the Cost Auditors of the Company for the financial year 2025-26. They will conduct the cost audit of the Company''s accounts in compliance with the applicable Cost Audit Rules.

The remuneration of the Cost Auditors has been approved by the Board of Directors based on the recommendation of the Audit Committee. The necessary resolution seeking ratification of the remuneration of the Cost Auditors by the Members of the Company has been included in the Notice of the ensuing Annual General Meeting (AGM).

The Cost Auditors have provided a certificate confirming that their appointment is within the limits specified under Section 141(3)(g) of the Companies Act, 2013, and that they are not disqualified from appointment under the said Act.

iv) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s Saryu Munjal & Associates to undertake the Secretarial Audit of the Company for the financial year 202425. The Secretarial Audit Report for the financial year 202425 is annexed to this Report as Annexure-C M/s TVA & Co. LLP, Company Secretaries, (LLPIN: AAE -9329), is proposed to be appointed, on the basis of recommendation of Board of Directors, as the Secretarial Auditors of the Company from the Financial year 2025-26 to Financial year 2029-30 pursuant to the provisions of Regulation 24A of SEBI Listing Regulations and Section 204 of the Companies Act, 2013 and rules made thereunder, subject to the approval of shareholder of the Company at the ensuing AGM. Written consent of the Secretarial Auditors and confirmation to the effect that they are eligible and not disqualified to be appointed as the Secretarial Auditors of the Company in terms of the provisions of the Listing Regulations, Companies Act, 2013 and the rules made thereunder, has been obtained.

19. Related Party Transactions

The Company has established a proper process to periodically review and monitor Related Party Transactions (RPTs), ensuring transparency, compliance, and alignment with regulatory requirements.

All Related Party Transactions entered into during the financial year 2024-25 were conducted in the ordinary course of business and on an arm''s length basis. These transactions were duly approved by the Audit Committee, which also reviewed and approved the estimated related party transactions for the financial years 2025-26 and 2026-27.

The Company is seeking shareholders approval for material related party transactions at the ensuing AGM. Shareholders are requested to refer to the AGM Notice for detailed information on the proposed transactions.

For comprehensive details, the Company''s Policy on Related Party Transactions, as adopted by the Board, is available on our website:

https://www.hondaindiapower.com/admin/public/uploads/document/Fzb5v82w4l.pdf

20. Adequacy of Internal Control over Financial Reporting

The Company has established a comprehensive Internal Financial Control (IFC) system designed to ensure the adequacy, effectiveness, and reliability of management policies, processes, and procedures. This system serves as a key component of our governance framework, aimed at safeguarding the Company''s assets, ensuring the accuracy of financial reporting, and promoting operational efficiency.

For the financial year ended March 31, 2025, the Board is of the opinion that the Company''s IFC system is proper and commensurate with the nature and scale of its business operations. The controls are operating effectively, and no material weakness is reported or identified.

To maintain the robustness of the IFC system, the Company has implemented a continuous monitoring process to identify any potential gaps. Where such gaps are identified, corrective actions are promptly taken to enhance controls, ensuring they remain effective in mitigating risks that could materially impact the Company''s operations.

The IFC framework is governed by well-documented policies, guidelines, and procedures. It is further strengthened through an extensive internal audit program conducted by independent third parties, regular management reviews, and oversight by the Audit Committee, ensuring a dynamic and responsive control environment.

21. Corporate Social Responsibility initiatives

Aligned with our core theme and vision of building sustainable and inclusive communities, the Company remains committed to implementing flagship CSR programs that create meaningful and lasting social impact.

During the year, the Company launched an initiative focused on Infrastructure and Soft Skills Development in local schools.

This program aims to enhance the quality of education in the communities by improving school infrastructure and providing students with essential soft skills. These efforts are designed to empower young learners and better prepare them for future academic and professional success.

22. Criteria for appointment of Directors and remuneration to be paid to Directors, Key Managerial Personnel and other employees.

The Company has in place policies on ''Criteria for Appointment of Directors'' and ''Remuneration for Directors, KMPs and all other employees of the Company''.

The policies suggest the Directors to be of high integrity with relevant expertise and experience so as to have a diverse and informed Board. In addition, these Policies further lay down the positive attributes/ criteria which the Nomination and Remuneration Committee take into consideration while recommending the candidature for the appointment as Director on the Board.

These policies may be accessed on the Company''s website at the link

https://www.hondaindiapower.com/admin/public/uploads/document/0sH46gypAl.pdf .

23. Declaration of Independence

The Independent Directors of your Company have certified their independence to the Board, stating that they meet the criteria for independence as mentioned under Section 149(6) of the Act.

The Board is of the opinion that the Independent Directors of the Company have fulfilled the conditions as specified in SEBI Listing Regulations, are independent of the management, possess requisite qualifications, experience, proficiency and expertise and they hold highest standards of integrity.

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, (''IICA'') as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

24. Directors and Key Managerial Personnel (KMP)

i) Cessation of Directors

1. Ms. Alka Marezban Bharucha, on account of completion of her tenure, retired as an Independent Director on the Board of the Company with effect from September 15, 2024.

2. Ms. Kaori Osakada on account of her re-location by Honda Motor Co., Ltd., Japan, has resigned from the Board of Directors of the Company with effect from February 11, 2025.

The Board placed on record its appreciation for the assistance and guidance provided by Ms. Alka Marezban Bharucha and Ms. Kaori Osakada during their tenure as the Members of the Board of Director of the Company.

ii) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the SEBI, Mr. Shigeki Iwama (DIN: 10075458), CMD and President & CEO of the Company will retire by rotation at the forthcoming AGM and being eligible, offers his candidature for reappointment. The Board recommends his re-appointment. Necessary resolution for the re-appointment of Mr. Shigeki Iwama and disclosure in terms of the Secretarial Standard 2 and the SEBI Listing Regulations are given in the Notice convening the AGM.

As per the confirmations received from Mr. Shigeki Iwama, he is not disqualified to be appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

iii) Appointment of Directors

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors has approved the appointment/re-appointment of the following individuals to the Company''s Board:

1. Mr. Akihiro Sakurai (DIN: 10570035) - appointed as a Whole Time Director for a period of three (3) years w.e.f. April 01, 2024 through postal ballot dated May 22, 2024.

2. Mr. Balachandran Dharman (DIN: 01831731) - appointed as a Non-Executive, Independent Director at the 39^thAnnual General Meeting held on September 05, 2024.

3. Mr. Ravi Prakash Mehrotra (DIN: 06843899) -reappointed as a Non-Executive, Independent Director for a second term of 2 years through postal ballot dated March 26, 2025.

4. Mr. Yasuhiro Takabatake (DIN: 10909958) - appointed as a Non-Executive, Non-Independent Director through postal ballot dated March 26, 2025.

The voting results for the aforementioned resolutions are available on the Company''s website.

The Board affirms that Mr. Balachandran Dharman and Mr. Ravi Prakash Mehrotra, in their capacity as Independent Directors, possess the necessary qualifications, extensive experience, and professional expertise (including demonstrated proficiency, as applicable), and uphold the highest standards of integrity.

iv) Revision in remuneration of Whole Time Director

The Board of Directors, following an annual performance evaluation and considering Mr. Vinay Mittal''s professional background, experience, and overall engagement with the Company, reviewed and approved a revision in his remuneration. This decision was made in accordance with the Company''s Remuneration Policy and based on recommendations from the Nomination and Remuneration Committee of the Board. The revised remuneration applies from April 01, 2025 to March 31, 2026 (both days inclusive). The proposed remuneration revision was approved by the Members through postal ballot on March 26, 2025. The voting results have been updated on the Company''s website and the Stock Exchanges.

25. Board/Directors'' Evaluation

The annual performance evaluation of the Board, its Committees, and Directors, including Independent Directors, was conducted in alignment with the evaluation criteria established by the Nomination and Remuneration Committee (NRC). Directors provided feedback through a structured questionnaire assessing the performance of the Board, its Committees, individual Directors, the CMD and the President & CEO.

Key Focus Areas of Evaluation:

â¢ Board and Committee Functioning: Composition, experience, competencies, governance practices, transparency, and fulfilment of obligations.

â¢ Individual Director Assessment: Attendance, contributions to discussions, and exercise of independent judgment.

A separate evaluation was conducted for individual Directors to ensure comprehensive feedback. The Independent Directors convened a meeting on February 10, 2025, to review the performance of Non-Independent Directors, the Board as a whole, and the Chairman. This process reflects adherence to best practices for board evaluations aimed at enhancing governance effectiveness.

26. Directors and Officers Insurance (''D&O'')

As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken insurance for all its Directors and Members of the Senior Management.

27. Familiarization program imparted to Independent Directors

Independent Directors are regularly updated during Board and Committee meetings on key aspects such as business strategy, activities, manufacturing operations, and regulatory changes. Their opinions and suggestions are actively sought to enhance decision-making and governance.Upon appointment, Independent Directors and Executive Directors receive detailed letters outlining their terms of appointment, duties, responsibilities, and expected time commitments. The induction process for Non-Executive and Independent Directors includes interactive sessions with management, business and functional heads, as well as visits to company facilities.

Details of the familiarization program imparted to Independent Directors are available on the company''s website at:

https://www.hondaindiapower.com/admin/public/uploads/document/3c9R0V08uR.pdf

This program ensures that Independent Directors are well-informed to effectively contribute to the Company''s governance and strategic objectives.

28. Board diversity

Your Company acknowledges the vital role that a diverse Board plays in driving success. We firmly believe that a truly diverse Board, encompassing differences in thought, perspective, knowledge, skills, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race, and gender, will leverage these differences to enhance our competitive advantage. This diversity fosters improved decision-making, innovation, and stakeholder representation, ultimately contributing to our longterm growth and sustainability. The policy can be accessed at

https://www.hondaindiapower.com/admin/public/uploads/document/N6bp7C6ke.pdf

Our commitment to diversity reflects our dedication to being a responsible corporate citizen, enhancing our reputation and fostering stronger relationships with investors and the broader community.

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

The Report of the Auditors on the Financial Statements of the Company is part of the Annual Report. The report is not qualified.

30. Other Disclosures:

During the year under review, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) details relating to deposits covered under Chapter V of the Act; (b) issue of equity shares with differential rights as to dividend, voting or otherwise; (c) issue of shares (including sweat equity shares) to employees of the Company under any scheme; (d) raising of funds through preferential allotment or qualified institutions placement; (e) significant or material order passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future; (f) buy-back of its own securities and (g) issue of bonus shares .

31. Corporate Governance

Our Company has a long-standing legacy of ethical governance practices and remains committed to implementing robust corporate governance principles. These practices are designed to enhance transparency in our operations and maximize shareholders'' value. A comprehensive Report on Corporate Governance is included as Annexure-E and forms an integral part of the Board Report.

To ensure compliance with regulatory requirements, the Auditor''s Certificate, as stipulated under Schedule V of the SEBI Listing Regulations is annexed as Annexure-F & I to the Board Report. This certification underscores our commitment to maintaining the highest standards of governance and transparency, aligning with the principles of accountability and ethical decision-making that are essential for building trust among stakeholders.

32. Business Responsibility and Sustainability Report

The ''Business Responsibility and Sustainability Report'' (BRSR) of your Company for the Financial Year ended March 31, 2025, as required under Regulation 34(2)(f) of the Listing Regulations, is annexed at Annexure - J and forms part of this Annual Report. Your Company continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations.

33. Sexual Harassment of Women at Workplace

The Company is committed to fostering a workplace environment free from discrimination and harassment based on gender. To uphold this commitment, the Company has implemented a comprehensive Sexual Harassment Policy, which provides clear guidelines on addressing and preventing such issues.

An Internal Committee, established in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, oversees the enforcement of this policy. Regular training sessions are conducted to educate associates about the policy and promote awareness, ensuring proactive measures to prevent any occurrences of harassment.

The policy can be accessed at

https://www.hondaindiapower.com/admin/public/uploads/document/Zv1 WRyrybj.pdf

During the year, no complaints of sexual harassment were reported, reflecting the effectiveness of the Company''s preventive measures and its dedication to maintaining a respectful and inclusive workplace.

34. a. Code of Conduct and Ethics

The Board of Directors has adopted a Code of Conduct and Ethics for the Directors and Senior Executives of the Company, aimed at conducting business ethically while upholding responsibility, integrity, fairness, and transparency. This framework provides guiding principles for the conduct of individuals in their interactions with the Company, fellow Directors and employees.

The Code is accessible on the Company''s website via the following link:

https://www.hondaindiapower.com/admin/public/uploads/document/852tcJ8g4n.pdf.

Additionally, a declaration signed by the CMD and President & CEO regarding compliance with this Code by Board Members and Senior Executives is annexed as Annexure-G and forms part of the Board Report. This initiative underscores the Company''s commitment to ethical governance and professional conduct.

b. Code of Conduct on Insider Trading

Your Company has established a comprehensive Code of Conduct that aligns with the SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code provides detailed guidelines on procedures to follow and disclosures to make when dealing in the Company''s shares. It also highlights the consequences of non-compliance, ensuring that all stakeholders are aware of their responsibilities and obligations.

To reinforce compliance with insider trading laws, the Company conducts periodical training sessions for employees. These sessions offer practical insights and training, enabling employees to understand and adhere to the regulations effectively. This proactive approach underscores the Company''s commitment to maintaining the highest standards of integrity and transparency in its operations.

35. Respecting Human Rights

Your Company has adopted a comprehensive Human Rights Policy, supported by the Code of Conduct, Diversity Policy, and other relevant policies. These policies collectively promote respect for human rights and are integrated into our day-to-day operations to ensure their effective implementation.

To address any concerns or violations, the Company has established a structured investigation process. This process is overseen by the Business Ethics Proposal Line (BEPL) and the Business Ethics Committee, ensuring that all matters are handled with diligence and transparency.

36. Secretarial Standards

During the Financial Year, your Company has complied with the mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

37. Proceedings under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)

During the financial year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

38. Compliance Management

Our Company is committed to maintaining full compliance with applicable laws and regulations. To ensure ongoing adherence, we utilize a robust Compliance Management System that includes early warning mechanisms and an escalation matrix. This system enables us to proactively track and manage compliance with relevant legal requirements.

To maintain transparency and oversight, a comprehensive Report on Compliance with applicable laws, rules, and regulations is submitted to the Board on a quarterly basis. This regular reporting ensures that the Board remains informed about our compliance status, allowing for timely interventions, if needed, and reinforcing our commitment to ethical business practices

39. Particulars of Employees

Disclosure with respect to the remuneration of Directors and employees as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) have been appended as Annexure-K to this Annual Report.

The statement containing particulars of employee remuneration as required under provisions of Section 197(12) of the Act and Rule 5(2) and 5(3) of the Rules, forms part of this Report. In terms of Section 136(1) of the Act, the Annual Report is being sent to the Shareholders, excluding the aforesaid statement. The statement is open for inspection upon request by the Shareholders, and any Shareholder desirous of obtaining the same may write to the Company at [email protected].

40. Material changes and commitments affecting the financial position of the Company after March 31, 2025

There were no material changes and commitments affecting the financial position of the Company after March 31, 2025. Acknowledgements

The Board of Directors would like to extend its heartfelt appreciation to all employees of the Company for their unwavering commitment and dedicated service. Your hard work and contributions have been instrumental in driving the Company''s success.

The Board also expresses its sincere gratitude to the banks, government and regulatory authorities, stock exchanges, customers, vendors and Members for their invaluable assistance and cooperation during the year under review. Your support has been vital in enabling the Company to achieve its goals and uphold its values of excellence and integrity.

Mar 31, 2024

The Board of Directors of your Company (âBoardâ) is pleased to present the 39^th Annual Report of Honda India Power Products Limited (âThe Companyâ) for the financial year ended March 31, 2024.

1. Financial Highlights

(Rs. in Lakhs!

Particulars	Year Ended
Particulars	March 31,	March 31,
	2024	2023
Revenue from Operations	98,907	1,24,629
Other Income	4,142	1,917
Profit before depreciation and exceptional items	13,997	15,368
Depreciation	2,022	2,078
Profit before exceptional items and tax	11,975	13,290
Profit before taxs	12,373	11,540
Tax Expenses	3,152	3,031
Profit after Tax	9,221	8,509
Other Comprehensive Income	(10)	(302)
Total Comprehensive Income for the year	9,211	8,207
Balance of profit brought forward	60,177	53,491
Dividend	1,674	1,521
Balance carried to Reserves	67,714	60,177

The Company has prepared the Financial Statements in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013 (the âActâ).

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

Your Company achieved aggregate revenue from operations of K 98,907 Lakhs in 2023-24 (as against K 1,24,629 Lakhs in 2022-23). This marks a reduction of 21% over the previous year. The Profit Before Tax & Exceptional item has reduced up by 10%.

To expand the foothold in emerging markets with latest technological products, the Company has recently launched a new product line of battery-operated handheld power equipment (DCHH). This is in addition to the measures taken to introduce new category of power products under ''HI '' range. The Companys hold the strong opinion that this expansion in the product range shall give it an entry to future markets and shall help the Company in a bigger way in the years to come.

Discussion on the performance and state of the Companyâs affairs has been covered as part of the Management Discussion and Analysis which forms part of this Report and is annexed as Annexure-A.

2. Dividend

Your Directors at their meeting held on May 20, 2024 have recommended payment of dividend at the rate of K17.50 per equity share of the face value of K 10/- each ( 175%) for the year ended March 31, 2024. The dividend is subject to the approval of Members at the ensuing 39^th Annual General Meeting (AGM) of the Company.

Dividend pay-out shall be in accordance with the Companyâs Dividend Distribution Policy and deduction of tax at source. Dividend shall be payable to those Shareholders whose names appear in the Register of Members as on the Record Date.

3. Dividend Distribution Policy

Pursuant to the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulationsâ), the Dividend Distribution Policy of the Company is available on the Companyâs website at https://www.hondaindiapower.com/admin/ public/ uploads/ document/ zlB5zhwbQA.pdf

4. Share capital

During the year under review, there was no change in the share capital of the Company.

5. Depository System

As the members are aware, the Companyâs shares are compulsorily tradable in electronic form. Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities in physical form, shall not be processed by the Company and all requests for transmission, transposition, issue of duplicate share certificate, replacement of securities certificate, endorsement, split of securities certificate and consolidation of securities certificates/folios need to be processed only in dematerialized form.

In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical form are advised to avail the facility of dematerialization from either of the Depositories.

The Company has availed a special contingency insurance policy towards the risks arising out of the requirements relating to issuance of duplicate securities.

In adherence to SEBIâs circular to enhance the due diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request.

6. Transfer of unclaimed dividend to Investor Education and Protection Fund

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and Amendment Rules, 2017 notified by the Ministry of Corporate Affairs, the Company is required to transfer all shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more in the name of Investor Education and Protection Fund (IEPF) demat Account. Adhering to various requirements set out in the Rules, the Company has taken appropriate action for transferring the shares to the Demat Account opened by the IEPF Authority. The Company has also uploaded details of such Members whose shares are transferred to IEPF demat Account on its website at https://www.hondaindiapower. com/investors/dividend-and-iepf. The shares transferred to IEPF Suspense Account including all benefits accruing on such shares, if any, can be claimed by the Members from IEPF Authority, after following the procedure prescribed under the Rules.

Dividends which remain unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account are required to be transferred to IEPF established by the Central Government, pursuant to the provisions of Sections 124 and 125 of the Act. The details of unpaid dividend are uploaded on the website of the Company at https://www. hondaindiapower.com/investors/dividend-and-iepf. Members who have not claimed their dividend for last seven years are requested to write to the Companyâs Registrar and Share Transfer Agents and claim their dividends. Year wise details of the unclaimed dividend has been disclosed in the Note No. 10 of the 39^th Annual General meeting notice. Members are requested to claim their dividends lying unclaimed with the Company.

7. Environment Protection and Safety

Your Company has a commitment to reduce CO₂ levels by 0.8% by the financial year 2024-25.

The Company has a dedicated full-term Safety & Environmental team to ensure the safety and environmental sustainability in all its operations. This is being done by regularly updating and upgrading the operation standards and environmental management systems to comply with the applicable legal/ regulatory obligations. This extends to the Companyâs major suppliers also.

Your Company further strives to protect and preserve the environment by managing its operations and utilizing the resources using principles of sustainable development. Our products strictly meet the related regulatory and social norms. The health and safety management system of the Company covers all employees at all the locations. The Company has robust, well planned and dependable action plan for mitigation and elimination of any hazard, may it be natural or accidental. The Associates at our plant, Head Office and Branch Offices participate in safety meetings, suggestion schemes etc. to ensure safe and healthy working environment.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

9. Occupational health and safety

The Company has a well-defined Health, Safety and Environment (HSE) policy and HSE management system with a robust monitoring plan to ensure the efficiency and effectiveness of the policy. This system is designed according to the ''Plan-Do-Check-Act'' cycle of continual improvement. This approach includes the undertaking of assessments of various risks, such as: workplace risks, fire risks, process safety, ergonomics machinery risk, occupational health risks and so on. Periodical audits are being carried out to monitor the Companyâs HSE performance and compliance as per regulatory requirements.

10. Annual Return

Pursuant to Section 92(3) of the Act, Annual Return for previous Financial Years and draft Annual Return for the Financial Year 202324, to be filed with the Registrar of Companies (''ROCâ), Ministry

of Corporate Affairs, pursuant to Rule 12 (1) of the Companies

(Management and Administration) Rules, 2014 is available on website of the Company at https://www.hondaindiapower.com/investors/ Annual%20Return.

11. Details of Board and Committee Meetings

The Directors take active part in the deliberations at the Board and Committee Meetings by providing valuable guidance & advice to the Management on various aspects of business, policy direction, governance, compliance, etc. This way the Board of Directors play a critical role in decision making on strategic issues.

The Board met four times during the year, details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI (LODR) Regulations, 2015 and as per the Circulars issued by the Ministry of Corporate Affairs and SEBI. During the year under review, the Board accepted all the recommendations of the Audit Committee. Details of all the Committees of the Board have been given in the Corporate Governance Report that forms part of this Annual Report.

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

Your Company has a Whistle Blower Policy that provides a formal vigil mechanism for all Stakeholders to report genuine concerns about the unethical behavior, actual or suspected frauds or violation of the Companyâs Code of Conduct or Ethics Policy. The Policy is in line with the Companyâs Code of Conduct, Vision and Values and forms part of good Corporate Governance. The said mechanism also provides for escalation of the issues to the Chairman of the Audit Committee in exceptional cases. The policy has in built safeguards against victimization of the whistle blower.

The Whistle Blower Policy has been uploaded on the Companyâs website at https://www.hondaindiapower.com/admin/public/uploads/document/ fE65sfbg4p.pdf .

13. Risk Management

Your Company is operating in a dynamic , uncertain and complex environment. To manage the risks during all stages of its operations and with a view to create long-term stakeholdersâ value, and protect Companyâs assets, a robust risk management framework, keeping in view the size of the Company has been established. This framework is in compliance with regulations and industry best-practices. The purpose of our risk management framework is to ensure accountability and competence for managing risks across the organization. It also lays down activities for risk identification, monitoring, review, control and risk prioritization, along with development of a risk response plan.

Risk Management Policy of the Company may be accessed at Companyâs website at https://www.hondaindiapower.com/admin/public/uploads/ document7rghiGWR896.pdf .

14. 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 that:

(a) in the preparation of the annual accounts for the year ended March 31,2024 the applicable Accounting Standards have been followed and there are no material departures;

(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;

(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; and

15. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

The Company has not made any investments or given loan or provided guarantee/security during the year under review in terms of Section 186 of the Companies Act, 2013.

16. Statutory Compliance

The Company has adequate systems and processes in place to comply with all applicable laws and regulations, pay applicable taxes on time and ensures statutory CSR spend.

17. MSME

The Company has registered itself on Trade Receivables Discounting System platform (TReDS) and complies with the requirement of submitting the required returns within the prescribed timelines.

18. Auditors

i) Statutory Auditors

Pursuant to provisions of Section 139 of the Act and Rules thereunder, M/s.

B S R & Co. LLP, Chartered Accountants, (Firm Registration No. 101248W/ W-100022) were appointed as Statutory Auditors of the Company for a term of 5 (five) years to hold office till the conclusion of the 42^nd Annual General Meeting of the Company. A certificate from Statutory Auditors has been received to the effect that their appointment as Statutory Auditors of the Company, continues to be according to the terms and conditions prescribed under Section 139 of the Act and Rules framed there under. The Auditorsâ Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year 2023-24.

II) Cost Auditors

As per Section 148 of the Companies Act , 2013 read with Companies (Cost Records and Audit) Rules 2014, M/s Rakesh Singh & Co., Cost Accountants, have been re-appointed as Cost Auditors for the financial year 2024-25 to conduct cost audit of the accounts maintained by the Company. under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by Members of the Company has been set out in the Notice of ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.

III) Secretarial Auditor and Secretarial Audit Report

Pursuant to Section 204 of the Act, M/s Saryu Munjal & Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2023-24. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure -C to this report. There are no qualifications or adverse remarks of the Secretarial Auditors in the Report issued by them for the Financial Year 2023-24 which calls for any explanation from the Board of Directors.

In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended, and the Board of Directors appointed M/s. Saryu Munjal & Associates, Company Secretaries (Registration No.: S2020HR754900) as the Secretarial Auditor of the Company for the financial year ending March 31, 2025. The Company has received its written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder.

During the year under review, neither the statutory auditors nor the secretarial auditor has reported any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boardâs report in terms of Section 143 (12) of the Companies Act, 2013.

19. Related Party Transactions

The Company has a process in place to periodically review and monitor Related Party Transactions.

All related party transactions entered during FY 2023-24 were in the ordinary course of business and at armâs length. The Audit Committee has approved the related party transactions for the FY 2023-24 and the estimated related party/material related party transactions for FY 2024-25 & 2025-26.

The Company is seeking approval for certain material related party transactions at the ensuing AGM. Shareholders are requested to refer to the AGM notice for details of the proposed material related party transactions.

Your Companyâs Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Companyâs website at https:// www. hondaindiapower.com/ admin/public/ uploads/ document/ t398j8kCjn.pdf.

20. Adequacy of Internal Control over Financial Reporting

The Company has laid down a well-defined internal financial control (IFC) system developed with a view to review and control the adequacy

and effectiveness of management policies, processes and procedures. For the year ended March 31, 2024, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of business operation and is operating effectively and no material weakness exist. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have material effect on the Companyâs operations.

IFC are governed by documented policies, guidelines and procedures and further strengthened by an extensive programme of internal audits by third parties, review by management and the Audit Committee.

21. Corporate Social Responsibility initiatives

In line with our core theme and vision to build ''sustainable and inclusive communitiesâ the Company, during the period under review focussed on following two key flagship CSR programs:

â¢ Infrastructure and soft skills development in schools in local area of the Company.

â¢ Overall sustainability and progression in local villages by reviving ponds and developing green zones.

A brief outline of the Corporate Social Responsibility Policy of the Company and the initiatives undertaken on CSR activities during the Financial Year ended March 31, 2024, is given in Annexure D, forming part of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Composition of CSR Committee details are given in the Corporate Governance Report that forms part of this Annual Report.

The CSR Policy may be accessed on the Companyâs website at the link https://www.hondaindiapower.com/admin/public/uploads/document/ FA8tCPYKwf.pdf .

The Chief Financial Officer of the Company has certified that CSR funds so disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board.

22. Criteria for appointment of Directors and remuneration to be paid to Directors, Key Managerial Personnel and other employees.

The Company has in place policies on ''Criteria for Appointment of Directorsâ and ''Remuneration for Directors, KMPs and all other employees of the Companyâ.

These policies may be accessed on the Companyâs website at the link https://www.hondaindiapower.com/admin/public/uploads/ document70sH46gypAl.pdf .

23. Declaration of Independence

The Independent Directors of your Company have certified their independence to the Board, stating that they meet the criteria for independence as mentioned under Section 149(6) of the Act.

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, (''IICAâ) as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

24. Directors and Key Managerial Personnel (KMP)

i) Cessation of Directors

1. Mr. Manoj Arora, on account of completion of his tenure, retired as an Independent Director on the Board of the Company with effect from close of business hours on February 29,2024.

2. Mr. Noboru Sube on successful completion of his assignment in the Company and further to his subsequent re-location to some other country, has resigned from the Board of Directors of the Company with effect from close of business hours on February 29, 2024.

The Board placed on record its appreciation for the assistance and guidance provided by Mr. Manoj Arora and Mr. Noboru Sube during their tenure as the Members of the Board of Director of the Company. Their association was immensely valuable to build and drive resilient growth and performance of the Company.

ii) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the SEBI, Mr. Vinay Mittal (DIN 05242535), Whole Time Director of the Company will retire by rotation at the forthcoming AGM and being eligible, offers himself for re- appointment. The Board recommends his re-appointment.

Necessary resolution for the re-appointment of Mr. Mittal and disclosure in terms of the Secretarial Standard 2, the SEBI (LODR) Regulations, 2015, are given in the Notice convening the AGM.

As per the confirmations received from Mr. Mittal, he is not disqualified to be appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

iii) Appointment of Directors

The Board of Directors on recommendation of the Nomination and Remuneration Committee approved and recommended appointment of following Directors on the Board of the Company :

1. Mr. Nitin Savara (DIN 09398370 ) as an Independent Director

2. Mr. Akihiro Sakurai (DIN 10570035 ) as the Whole Time Director

The shareholders of the Company approved the above resolutions on March 31, 2024 and May 22, 2024 respectively.

Voting results of the resolution approved March 31, 2024 are available on the website of the Company.

Where as Results of voting on the resolutions approved on shall be updated on the website of the Company and on the Stock Exchange by May 22, 2024.

iv) Revision in remuneration of Whole Time Directors

The Board of Directors, based on the annual performance evaluation, professional background, experience and over all engagement of Mr. Vinay Mittal with the Company and in line with the Remuneration Policy of the Company and the recommendation made by the Nomination and Remuneration Committee of the Board, reviewed and approved the revision in remuneration of Mr. Mittal (DIN:05242535), Whole Time Director of the Company from April 01, 2024, to March 31, 2025 (both days inclusive).

The said remuneration has been proposed, through postal ballot, to Members on April 23, 2024 for their approval.

Voting results shall be updated on the website of the Company and on the Stock Exchange by May 24, 2024.

25. Board/Directors'' Evaluation

In line with the evaluation criteria defined by the Nomination and Remuneration Committee (NRC), the annual performance evaluation of the Board, its Committee and Directors, including Independent

Directors was carried out. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual Directors, CMD and President & CEO.

The evaluation process focused on various aspects of the Board and Committeesâ functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties, obligations, governance and transparency. A separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and exercise of independent judgment.

The Independent Directors met on November 10, 2023, to review performance evaluation of Non-Independent Directors and the Board of Directors as a whole and also of the Chairman.

26. Directors and Officers Insurance (''D&O'')

As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has taken insurance for all its Directors and Members of the Senior Management.

27. Familiarization program imparted to Independent Directors

The Independent Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations, regulatory changes etc. and opinions and suggestions from the Directors are sought accordingly.

Upon appointment, Independent Directors and Executive Directors are issued letters of appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. The induction process for Non-Executive Directors and Independent Directors includes interactive sessions with the management, business and functional heads, visits to plant etc. Details of familiarization program imparted to the Independent Directors are updated at https://www. hondaindiapower.com/investors/Familiarization%20Programme.

28. Board diversity

The Company recognizes the importance of a diverse board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender, that will help us retain our competitive advantage.

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

The Report of the Auditors on the Financial Statements of the Company is part of the Annual Report. The report is not qualified.

30. Other Disclosures:

During the year under review, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) details relating to deposits covered under Chapter V of the Act; (b) issue of equity shares with differential rights as to dividend, voting or otherwise; (c) issue of shares (including sweat equity shares) to employees of the Company under any scheme; (d) raising of funds through preferential allotment or qualified institutions placement; (e) significant or material order passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future; (f) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016; (g) instance of one-time settlement with any bank or financial institution; (h) buy-back of its own securities and (i) issue of bonus shares .

31. Corporate Governance

The Company has a legacy of ethical governance practices and is committed to implementing sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value. A Report on Corporate Governance is annexed as Annexure-E and forms part of the Board & Report.

The Auditorâs Certificate certifying the Companyâs compliance as

stipulated under Schedule V of the SEBI (LODR) Regulations, 2015 is annexed as Annexure-I to the Board Report.

32. Business Responsibility and Sustainability Report

The ''Business Responsibility and Sustainability Report'' (BRSR) of your Company for the Financial Year ended March 31, 2024, as required under Regulation 34(2)(f) of the SEBI (LODR), Regulations 2015 is annexed at Annexure - J and forms part of this Annual Report. Your Company continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations.

33. Sexual Harassment of Women at Workplace

Your Company believes in providing and ensuring a workplace free from discrimination and harassment based on gender.

Your Company has an appropriate policy to prevent sexual harassment at work places and provide clarity around the process. An Internal Committee in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is in place. Regular Training sessions are organized to make associates aware of the policy and to avoid occurrence of such incidences in the Company. During the year there was no complaint of sexual harassment that was reported.

34. a. 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 Companyâs business ethically with responsibility, integrity, fairness & transparency. The framework sets out a guiding policy for concerned personâs conduct in dealing with/ for the Company, fellow Directors and Employees. This Code is available on the Companyâs website and can be accessed by link: https://www.hondaindiapower.com/admin/ public/uploads/document/852tcJ8g4n.pdf. A declaration signed by CMD and 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.

b. Code of Conduct on Insider Trading

The Company has a comprehensive Code of Conduct in compliance with the SEBI Regulations on the prevention of Insider Trading. The Code lays down guidelines, which advise on procedures to be followed and disclosures to be made, while dealing in shares of the Company and cautions on the consequences of non-compliance.

The Company periodically organizes training sessions for its employees on dealing with Compliance insider trading laws.

35. Respecting Human Rights

The Company has adopted a Human Rights Policy backed by the Code of Conduct, diversity policy and various other policies. The Company promotes respect for Human Rights through these policies and their adaptability in day-to-day operations. The Company has also in place a structured investigation process overseen by the Business Ethics Proposal Line (BEPL) and Business Ethics Committee.

36. Secretarial Standards

During the Financial Year, your Company has complied with the mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

37. Proceedings under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)

During the financial year, 2023-24 neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

38. Compliance Management

Your Company is a fully compliant organization. To continually ensure this, a Compliance Management System comprising of early warnings and escalation matrix is being used to track compliances with the applicable laws and regulations. A Report on compliances with the applicable laws/ rules/regulations is submitted to the Board on a quarterly basis.

39. Particulars of Employees

Particulars on Remuneration Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-K forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said Statement is also open for inspection at the Registered Office of the Company, up to the date of the ensuing AGM. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

40. Material changes and commitments affecting the financial position of the Company after March 31, 2024

There were no material changes and commitments affecting the financial position of the Company after March 31, 2024.

Acknowledgements

The Board of Directors wishes to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the banks, government and regulatory authorities, stock exchanges, customers, vendors and Members during the year under review.

On behalf of the Board, for Honda India Power Products Limited,

Sd/-

Shigeki Iwama CMD and President & CEO (DIN 10075458)

Mar 31, 2023

The Board of Directors of your Company (âBoard") is pleased to present the 38^th Annual Report of Honda India Power Products Limited (âCompany") for the Financial Year ended March 31,2023.

This report covers the financial results and other developments during the Financial Year ended March 31, 2023 and upto the date of the Board Meeting, held on May 12, 2023 to approve this report in respect of the Company.

1.A. Financial Highlights

(Rs. in Lakhs)
Particulars	Year Ended
Particulars	March 31, 2023	March 31, 2022
Revenue from Operations	1,24,629	1,15,629
Other Income	1,917	1,684
Profit before depreciation and	15,368	11,858
exceptional items
Depreciation	2,078	1,852
Profit before exceptional items and	13,290	10,006
tax
Profit before tax	11,540	10,006
Tax Expenses	3,031	2,553
Profit after Tax	8,509	7,453
Other Comprehensive Income	(302)	(2)
Total Comprehensive Income for	8,207	7,451
the year
Balance of profit brought forward	53,491	47,054
Dividend	1,521	1,014
Balance carried to Reserves	60,177	53,491

The Company has prepared the Financial Statements in accordance with the Companies (Indian Accounting Standards) Rules, 2015 prescribed under Section 133 of the Companies Act, 2013 (the âAct").

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

Your Company achieved aggregate revenue from operations of ''1,24,629 Lakhs in 2022-23 (as against ''1,15,629 Lakhs in 2021-22). This marks a growth of 8% over the previous year. The Profit Before Tax and Exceptional item has grown up by 33%.

The catalysts for improved profitability include efficient utilization of available resources, efforts towards cost cutting and cost competitiveness and enhancing the sales of more profitable product segment.

The Board has pleasure to inform that the year 2022-23 was a significant year as your Company achieved accumulated production of 5 million units.

Discussion on the performance and state of the Companyâs affairs has been covered as part of the Management Discussion and Analysis which forms part of this Report and is annexed as Annexure-A.

2. Dividend

Your Directors recommend payment of dividend at the rate of ''16.5 per equity share of the face value of '' 10/- each (165%) for the year ended March 31,2023. Dividend pay-out is in accordance with the Companyâs dividend distribution policy and will be payable, subject to approval of Members at the ensuing Annual General Meeting and deduction of tax at source, to those Shareholders whose names appear in the Register of Members as on the Record Date.

3. Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI Listing Regulations can be accessed at https://www.hondaindiapower.com/admin/ public/ uploads/document/zlB5zhwbQA.pdf

4. Share capital

During the year under review, there was no change in the share capital of the Company.

5. Transfer of unclaimed dividend to Investor Education and Protection Fund

Pursuant to applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (âIEPF" or âFund") established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/ unclaimed account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years shall also be transferred to the demat account of the IEPF Authority. The Company had sent individual notices and also advertised in the newspapers seeking action from the Members who have not claimed their dividends for seven consecutive years from the Financial Year 2014-15. Thereafter, the Company transferred such unpaid/unclaimed dividend and corresponding shares to IEPF.

Members/claimants whose shares or unclaimed dividend, have been transferred to the IEPF demat Account/Fund, as the case may be, may claim the shares or apply for a refund by approaching the Company for issue of Entitlement Letter along with all the required documents before making an application to the IEPF Authority in Form IEPF - 5 (available on https://www.iepf.gov.in/ IEPF/corporates.html).

The Company will be transferring the dividend and corresponding shares for the Financial Year 2015-16 within statutory timelines. Members are requested to ensure that they claim the dividends and shares referred to above before they are transferred to the said Fund. The due dates for transfer of unclaimed dividend to IEPF are provided in the notes of 38^th AGM Notice. Details of shares/ shareholders in respect of which dividend has not been claimed, are provided on website of the Company at https://www.hondaindiapower.com/investors/dividend-and-iepf. The shareholders are encouraged to verify their records and claim their dividends of all the earlier seven years, if not claimed.

No shares are lying with NSDL/CDSL in demat suspense account or unclaimed suspense account as on the date of this Report.

6. Environment Protection and Safety

Your Company strives to protect and preserve the environment by managing its operations and utilizing the resources using principles of sustainable development. Our products strictly meet the related regulatory and social norms. The health and safety management system of the Company covers all employees at all the locations. The Company has robust, well planned and dependable action plan for mitigation and elimination of any hazard, may it be natural or due to accident. The Associates at our plant, Head Office and Branch Offices participate in safety meetings, suggestion schemes etc. to ensure safe and healthy working environment.

Our long-established Safety and Environmental team works to ensure safety and environmental sustainability by regularly upgrading the

operational standards and environmental management systems to comply with the applicable legal/ regulatory obligations. This extends to the Company''s suppliers also.

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.

7. Occupational health and safety

The Company considers occupational health and safety as a high-priority matter and a fundamental value to be upheld at all times by all people who work or visit its premises, to ensure that they remain safe and healthy. Strong technical and administrative systems have been developed to minimize risks and ensure the safety and well-being of the workforce.

8. Annual Return

Pursuant to Section 92(3) of the Act, Annual Return for previous Financial Years and draft Annual Return for the Financial Year 2022-23, to be filed with the Registrar of Companies (âROCâ), Ministry of Corporate Affairs, pursuant to Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is available on website of the Company at https://www.hondaindiapower.com/investors/Annual%20Return.

9. Details of Board and Committee Meetings

The Board met five times during the year, details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations and as per the Circulars issued by the Ministry of Corporate Affairs (âMCA'') and Securities and Exchange Board of India (âSEBI''). During the year under review, the Board accepted all the recommendations of the Audit Committee. Details of all the Committees of the Board have been given in the Corporate Governance Report.

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

Your Company has an efficient Whistle Blower Policy that provides a formal vigil mechanism for all Stakeholders to report genuine concerns about the unethical behaviour, actual or suspected frauds or violation of the Company''s Code of Conduct or Ethics Policy. The Policy is in line with the Company''s Code of Conduct, Vision and Values and forms part of good Corporate Governance. The said mechanism also provides for escalation of the issues to the Chairman of the Audit Committee in exceptional cases. The policy has in built safeguards against victimization.

The Whistle Blower Policy has been uploaded on the Company''s website at https://www.hondaindiapower.com/admin/public/ uploads/document/fE65sfbg4p.pdf .

11. Risk Management

Although risk is an integral and unavoidable part of the any business but your Company is committed to proactively manage the available risk in operations, products and work place. Though risks cannot be eliminated fully, an effective risk management program ensures that risks are reduced, avoided or mitigated. Your company has developed and implemented a Board approved Risk Management Policy that ensures appropriate management of risks which aligns with its internal systems and culture. Moreover, it has a well-defined Risk Management framework that is designed to enable risks identification, assessment, mitigation, monitoring and reporting. The risk management process encompasses a spectrum of strategic, operational, financial and compliance risks that your company is exposed to. Further, it is also embedded across all the major functions of the organization.

With a view to review the adequacy and effectiveness of policies and management procedures and to monitor and assess Business

Risks of the Company, to ensure that the key risk areas were well identified and managed, the Company regularly updates the list of all potential and possible risks, considering the environment in which it operates. Further, as an annual practice, the Company during the Financial Year 2022-23 also, carried out a risk assessment covering all the functions across the organization. An extensive program of Internal Audits, process review and Management reviews further supports this process.

Risk Management Policy of the Company may be accessed at Company''s website at the link https://www.hondaindiapower. com/admin/public/uploads/document/rghiGWR896.pdf.

12. Directors'' Responsibility Statement

Pursuant to the requirement of Clause (c) of Sub-section (3) of Section 134 of the Act, your Directors confirm that:

(a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable Accounting Standards have been followed and there are no material departures;

(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;

(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; and

13. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013

The Company has not made any investments or given loan or provided guarantee/security during the year under review in terms of Section 186 of the Act.

14. Auditors

i) Statutory Auditors

The Members at the 37^th Annual General Meeting held on September 26, 2022, approved the appointment of M/s. B S R and Co. LLP, Chartered Accountants, (Firm Registration No. 101248W/W-100022) for a term of 5 (five) years to hold office till the conclusion of the 42^nd Annual General Meeting of the Company. The Statutory Auditors have confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the Statutory Auditors. The report given by the Statutory Auditors on the Financial Statements of the Company forms part of the Annual Report. There is no qualification or any reservation given by the Statutory Auditors in their report expect one matter of emphasis. The Matter of emphasis read with note No. 31 (vi) of the Notes to accounts is self explanatory and does not need further explanations.

ii) Cost Auditors

As per Section 148 of the Act, read with Companies (Cost Records and Audit) Rules 2014, M/s Rakesh Singh and Co., Cost Accountants, have been re-appointed as Cost Auditors for the Financial Year 2023-24 to conduct cost audit of the accounts maintained by the Company under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by Members of the Company has been set out in the Notice of ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.

iii) Secretarial Auditor and Secretarial Audit Report

Pursuant to section 204 of the Act, M/s Saryu Munjal and Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial Year 2022-23. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure -C to this report. There are no qualifications or observations or adverse remarks or disclaimer of the Secretarial Auditors in the Report issued by them for the Financial Year 2022-23 which call for any explanation from the Board of Directors.

In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed M/s. Saryu Munjal and Associates, Company Secretaries (Registration No.: S2020HR754900) as the Secretarial Auditor of the Company for the Financial Year ending March 31, 2024. The Company has received its written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditor has confirmed that it is not disqualified to be appointed as the Secretarial Auditor of the Company for the Financial Year ending March 31,2024.

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported any instances of fraud committed against the Company by its officers or employees , the details of which would need to be mentioned in the Boardâs report in terms of Section 143 (12) of the Act.

15. Related Party Transactions

The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between your Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the Financial period under review were on an armâs length basis and in the ordinary course of the Companyâs business. All contracts or arrangements with related parties were entered into only with prior approval of the Audit Committee, except transactions which qualified as Omnibus transactions as permitted under law. Transactions with related parties, as per requirements of Indian Accounting Standard have been disclosed in the accompanying Financial Statements. The Companyâs Policy on Related Party Transactions, as adopted by the Board, can be accessed on the Companyâs website at the https://www.hondaindiapower.com/admin/public/uploads/ document/t398j8kCjn.pdf.

There were no Related Party Transactions made by the Company which may have potential conflict with the interest of the Company. The Company has a process in place to periodically review and monitor Related Party Transactions by the Audit Committee.

16. Adequacy of Internal Control over Financial Reporting

The Company has a well-defined and robust internal financial control system developed with a view to review and control the adequacy and effectiveness of management policies, processes and procedures. The Company has in place the globally acclaimed Enterprise Resource System (ERP) to ensure minimum manual intervention in handling data and transactions. Well laid out system has been designed for segregation of duties and to avoid the conflict in handling the financial transactions.

This is to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly. Internal controls are supplemented by an extensive programme of internal audits, review by Management and the Audit Committee and documented policies, guidelines and procedures. The Internal Control System is designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets.

The Companyâs management has evaluated the operative effectiveness of these controls and noted no significant deficiencies or material weaknesses that might impact the Financial Statements as of March 31,2023.

17. Corporate Social Responsibility initiatives

At Honda India Power Products Limited, we believe that we have a responsibility to bring enduring positive value to communities we work with. In line with our core theme and vision to build âsustainable and inclusive communitiesâ, the Company focusses on following two key flagship CSR programs to provide basic, safe and hygienic infrastructure to students studying in Government schools:

- Upgrading the Government schoolsâ basic infrastructure along with education standard by developing / building classrooms, washrooms, Clean/purified Drinking Water facilities, Power Backup connection, Library, Solar Panel, Pathway, Computer Labs, Office Furniture, Hostel Building renovation and renovation/upliftment at identified locations.

- 360-degree support in training teachers, students, construction of classrooms, building, labs and providing furniture etc.

A brief outline of the Corporate Social Responsibility Policy of the Company and the initiatives undertaken on CSR activities during the Financial Year ended March 31,2023, is given in Annexure-J, forming part of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Composition of CSR Committee details are given in the Corporate Governance Report that forms part of this Annual Report.

The CSR Policy may be accessed on the Companyâs website at the link https://www.hondaindiapower.com/admin/public/uploads/ document/FA8tCPYKwf.pdf .

18. Criteria for appointment of Directors and remuneration to be paid to Directors, Key Managerial Personnel and other employees.

The Company has in place policies on âCriteria for Appointment of Directorsâ and âRemuneration for Directors, KMPs and all other employees of the Companyâ.

These policies may be accessed on the Companyâs website at the link https://www.hondaindiapower.com/admin/public/uploads/ document/0sH46gypAl.pdf .

19. Declaration of Independence

The Independent Directors of your Company have certified their independence to the Board, stating that they meet the criteria for independence as mentioned under Section 149(6) of the Act.

The Board is of the opinion that the Independent Directors of the Company have fulfilled the conditions as specified in SEBI Listing Regulations, are independent of the Management, possess requisite qualifications, experience, proficiency and expertise and they hold highest standards of integrity.

The Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, (''MCA'') as required under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

20. Directors and Key Managerial Personnel

i) Retirement by Rotation

In accordance with the provisions of the Act, Mr. Noboru Sube (DIN 09269643 ), Whole Time 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.

Necessary resolution for the re-appointment of Mr. Sube and disclosure in terms of the Secretarial Standard 2, the SEBI Listing Regulations, are given in the Notice convening the Annual General Meeting.

As per the confirmations received from Mr. Sube, he is not disqualified to be appointed as Director as specified in Section 164(2) (a) and (b) of the Act.

ii) Cessation of Directors

Mr. Takahiro Ueda, on successful completion of his assignment in the Company and further to his subsequent re-location to some other country, has resigned from the Board of Directors of the Company with effect from close of business hours on March 31,2023. Pursuant to his resignation, Mr. Ueda consequently ceased to be the CMD and President & CEO of the Company from the said date.

The Board places on record its appreciation for the assistance and guidance provided by Mr. Takahiro Ueda during his tenure as Director designated as CMD and President & CEO of the Company. The association of Mr. Takahiro Ueda with the Company was significant in terms of the growth of the Company.

iii) Appointment of Directors

It is our belief that a strong Board is imperative to create a culture of leadership to provide a long-term vision and policy approach to improve the quality of governance. Keeping this in mind, the Board of Directors on recommendation of the Nomination and Remuneration Committee recommended the appointment of Directors as per the following details for approval by the Members:

1. Appointment of Mr. Shigeki Iwama (DIN 10075458) as a Director, to be designated as CMD and President & CEO of the Company.

2. Appointment of Ms. Kaori Osakada (DIN 10077646) as Non-Executive (Non-Independent) Director of the Company.

3. Appointment of Ms. Anuradha Dutt (DIN 00145124) as an Independent Director of the Company.

The Company, on April 13, 2023, has proposed the above appointments to the shareholders of the Company by way of Postal Ballot through e-voting. Voting results shall be updated on the website of the Company and on the Stock Exchange websites on or before May 16, 2023.

iv) Revision in remuneration of Whole Time Directors

In line with the Remuneration Policy of the Company and pursuant to the performance evaluation, professional background, experience and over all engagement of Mr. Vinay Mittal, Whole

Time Director of the Company, the Board of Directors in its Meeting held on March 28, 2023, on the recommendation of Nomination and Remuneration Committee, approved revision in remuneration of Mr. Vinay Mittal, Whole Time Director of the Company, from 01.04.2023 to 31.03.2024 (both days inclusive).

The said remuneration was proposed, through postal ballot, to Members on April 13, 2023 for their approval. Voting results shall be updated on the website of the Company and on the Stock Exchange websites on or before May 16, 2023.

21. Board/Directors'' Evaluation

In line with the evaluation criteria defined by the Nomination and Remuneration Committee (NRC) for the performance evaluation process of the Board, its Committee and Directors, including Independent Directors, the Board has carried out the annual evaluation of its own performance, performance of individual Directors and the working of its Committees.

The evaluation process focused on various aspects of the Board and Committees'' functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties, obligations, governance and transparency. A separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and exercise of independent judgment.

The Independent Directors met on February 06, 2023, to review performance evaluation of Non-Independent Directors and the Board of Directors as a whole and also of the Chairman.

The review concluded by affirming that the Board as a whole, its Committees as well as all its Members, individually, continued to make efforts and provide advice towards good governance, ensuring a constant improvement of processes and procedures.

22. Familiarization program imparted to Independent Directors

The Board Members are provided with necessary documents and reports to enable them to familiarize with the Company''s procedures and practices. Periodic presentations are made at the Board and Committee meetings, on business and performance updates of the Company, business strategy risks involved, new initiatives, regulatory changes etc. and opinions and suggestions from the Board are sought accordingly.

Upon appointment, Independent Directors and Executive Directors are issued letters of appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. The induction process for Non-Executive Directors and Independent Directors includes interactive sessions with the management, business and functional heads, visits to plant etc. Details of familiarization program imparted to the Independent Directors are updated at https://www.hondaindiapower.com/ investors/Familiarization %20Programme.

23. Board diversity

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

The Report of the Auditors on the Financial Statements of the Company is part of the Annual Report. The report is not qualified. There is one matter of emphasis in the audit report. The matter of emphasis read with note No. 31 (vi) of the notes to accounts is self explanatory and dose not need further explanation.

25. Other Disclosures:

During the year under review, there were no transaction requiring disclosure or reporting in respect of matters relating to: (a) details relating to deposits covered under Chapter V of the Act; (b) issue of equity shares with differential rights as to dividend, voting or otherwise; (c) issue of shares (including sweat equity shares) to employees of the Company under any scheme; (d) raising of funds through preferential allotment or qualified institutions placement; (e) significant or material order passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future; (f) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016;(g) instance of one-time settlement with any bank or financial institution; (h) buy-back of its own securities and (i) issue of bonus shares .

26. Corporate Governance

The Auditorâs Certificate certifying the Companyâs compliance as stipulated under Schedule V of the SEBI Listing Regulations, is annexed as Annexure-I to the Boardâs Report.

27. Business Responsibility and Sustainability Report

The âBusiness Responsibility and Sustainability Reportâ (BRSR) of your Company for the Financial Year ended March 31, 2023, as required under Regulation 34(2)(f) of the Listing Regulations, is annexed at Annexure - J and forms part of this Annual Report. Your Company continues to execute strong ESG proposition by working with all relevant stakeholders as well as in its own operations.

28. Sexual Harassment of Women at Workplace

Your Company firmly believes in providing a safe, supportive and friendly workplace environment - a workplace where our values come to life through supporting behaviors. A positive workplace environment and great employee experience is an integral part of our culture. Your Company believes in providing and ensuring a workplace free from discrimination and harassment based on gender.

Your Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment, your Company has created the framework for individuals to seek recourse and redressal to instances of sexual harassment.

Your Company has a Sexual Harassment Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Regular Training sessions are organized to make people aware of the existence of the system. During the year there was no complaint of sexual harassment that was reported.

29. a. Code of Conduct and Ethics

public/uploads/document/852tcJ8g4n.pdf. A declaration signed by CMD and 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.

b. Code of Conduct on Insider Trading

30. Respecting Human Rights

Aspects of Human Rights such as child labour, forced labour and non-discrimination are covered by the Code of Conduct, diversity policy and various other applicable policies. The Company promotes respect for Human Rights through these policies and their adaptability in day-to-day operations.

31. Secretarial Standards

During the Financial Year, your Company has complied with the mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

32. Proceedings under the Insolvency and Bankruptcy Code, 2016

During the Financial Year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

33. Compliance Management

The Company strives for a fully compliant organization. For this purpose a legal Compliance Management System comprising of early warnings and escalation matrix is being used to track compliances with the applicable Regulations. A Report on compliances with the applicable laws/rules/regulations is submitted to the Board on a quarterly basis.

34. Particulars of Employees

Particulars on Remuneration Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure-K forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said Statement is open for inspection at the Registered Office of the Company, up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary at [email protected] .

35. Material changes and commitments affecting the financial position of the Company after March 31, 2023

There were no material changes and commitments affecting the financial position of the Company after March 31,2023. Acknowledgements

The Board of Directors wishes to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express its sincere appreciation for the assistance and co-operation received from the Banks, Government and Regulatory Authorities, Stock Exchanges, Customers, Vendors, and Members during the year under review.

Mar 31, 2018

Dear Members,

The Directors are pleased to present the 33^rd Annual Report together with Audited Financial Statements of the Company for the year ended March 31, 2018.

1. a) Financial Highlights

(Rs, in lakhs)

Particulars	Year Ended
Particulars	March 31, 2018	March 31, 2017
Revenue from Operations	77,741	73,622
Other Income	1,547	1,617
Profit before depreciation and exceptional items	11,685	11,156
Depreciation	2,251	2,345
Profit before tax	9,434	8,811
Tax Expenses	3,293	3,033
Profit after Tax	6,141	5,778
Other Comprehensive Income	(31)	(63)
Total Comprehensive Income for the year	6,110	5,715
Balance of profit brought forward	28,754	23,772
Dividend	761	609
Tax on Dividend	155	124
Balance carried to Balance Sheet	33,948	28,754

b) Indian Accounting Standards (Ind AS)

The Company in line with the statutory requirement has adopted Ind AS w.e.f. April 01, 2017. Accordingly, Financial Statements for the Financial Year ended March 31, 2018 have been prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act, 2013 and Companies (Indian Accounting Standards) Rules, 201 5 and other relevant provisions thereof. Previous periods figures have been restated as per Ind AS to make them comparable. Accordingly, the financial highlights as stated above is an extract of the Financial Statements prepared in accordance with the said Standards.

c) Results of Operations and the state of Companyâs affairs

Your company achieved aggregate revenue from operations of Rs, 77,741 lakh in 2017-18 (as against Rs, 73,622 lakh in 2016-17). This marks a growth of 5.6% over the previous year.

The year saw the introduction of 1HP Brush Cutter targeted for light duty users. Besides, the thrust on construction sector, led by promoting usage of advanced technology Gasoline Engines, is yielding results.

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

2. Dividend

Your Directors recommend a dividend of Rs, 9/- per equity share of Rs, 10/- each (90%) for the year ended 31^st March 2018 (previous year 75%). The total outgo on this account (including dividend tax) will be Rs, 1,101 lakh.

3. Transfer of Amount to Investor Education and Protection Fund

In compliance with Section 125 of the Companies Act, 2013, the Company had transferred a sum of Rs, 3,55,184/- during the Financial Year 2017-18 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.

At the beginning of the Financial Year, reminders for claiming/ encashing dividend lying with the Company as aforesaid were sent to all such shareholders prior to transferring the same to Investor Education and Protection Fund.

4. Transfer of Shares to the Investor Education and Protection Fund

In terms of provisions of Section 124(6) of Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, shares of the Company, in respect of which dividend entitlements have remained unclaimed for seven consecutive years or more, were transferred by the Company to Investor Education and Protection Fund during the year 2017-18.

In terms of aforementioned provisions/rules, individual notices were sent to concerned shareholders providing them an opportunity to claim dividend for the Financial Year 2009-10 onwards. The said notice alongwith the details of concerned shareholders was published in the leading newspapers having wide circulation. Details were also updated on the website of the Company (www.hondasielpower.com) simultaneously.

Details of the shares lying with NSDL/CDSL in demat suspense account or unclaimed suspense account are as under:

1.	Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year;	575 Number Shareholders holdings 35924 shares
2.	Number of shareholders who approached listed entity for transfer of shares from suspense account during the year;	2
3.	Number of shareholders to whom shares were transferred from suspense account during the year;	NIL
4.	Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year;	575 Number Shareholders holdings 35924 shares
5.	Voting rights	Frozen till the rightful owner claims the shares

5. Environment Protection and Safety

Your Company is committed towards protection and safety of environment. The Company is dedicated to serve all the people with âfree, safe and comfortable life'' to expand their joys, lead social developments and fulfill qualitative improvement of life. All associates and other business partners strive towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services. Your Company has been achieving continuous improvement in safety performance through a combination of systems and processes as well as co-operation and support of all stakeholders.

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.

6. Occupational Health & Safety

Your Company believes in âZero Harm''. The Company''s vision is to improve health and safety standards for the people associated with the Company and working in any capacity. Efforts are taken to minimize activities which may affect the health and safety in work place or adversely impact the life of communities living near our plant. To promote this, we are encouraging the use of renewable resources as well as recycled waste. Further, steps are taken for optimum utilization of plant, with least emission in terms of noise and pollution in environment.

7. Extract of Annual Return

Pursuant to section 92(3) of the Companies Act, 2013 (âthe Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is Annexed as Annexure-C and forms part of this report.

8. Details of Board Meetings

During the year five Board meetings were held. Compliance reports of all laws applicable to the Company were reviewed by the Board at each meeting.

The Board has been given presentations / briefed on areas covering operations of the Company, business strategy and risk management practices, before approving the quarterly / annual Financial Statements of the Company.

The agenda and notes thereon were circulated to Directors as per the requirement of relevant laws in the defined agenda format. All material information was incorporated in the agenda for facilitating meaningful and focused discussions at the meeting. Where it was not practicable to attach any document to the agenda i.e. the document which contains price sensitive information and in respect of which consent of the Board of Directors was obtained for providing the same at a shorter notice of less than 7 days, it was placed before the meeting with specific reference to this effect in the agenda.

The Company Secretary recorded minutes of proceedings of each Board and Committee meeting. Draft minutes were circulated to Board/Board Committee members for their comments. The minutes were duly entered in the Minutes Book within 30 days from the conclusion of the meeting.

During the year under review, Board Meetings were held as per the following details:

Date of the meeting	Total No. of Directors on the Board of Directors	No. of Directors attended the meeting
May 15, 2017	8	6
August 04, 2017	8	7
September 08, 2017	8	8
November 16, 2017	8	8
February 12, 2018	8	7

No resolution by circulation was passed by the Board of Directors during the Financial Year 2017-18.

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

9. Committees of the Board

The details of composition of the Committees of the Board

i.e. Audit Committee; Stakeholders Relationship Committee; Nomination and Remuneration Committee; Corporate Social Responsibility Committee; Board Committee on Financial

Matters and Risk Management Committee, brief terms of reference thereof and details of meetings held and attended by the Members during the year are provided in the Report on Corporate Governance forming part hereof as Annexure-F.

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

The Company has formulated following policies with a view to adhere to ethical standards in order to ensure integrity, transparency, independence and accountability in dealing with all stakeholders:

a.) Vigil Mechanism / Whistle Blower Policy

As per the provisions of Section 177(9) of the Companies Act, 2013 read with Rules thereof and Regulation 4(2)(d)

(iv) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in line with the commitment of the Company to highest standards of ethical, moral and legal business conduct and transparent approach, the Vigil Mechanism/ Whistle Blower Policy 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 directors/ senior executives, to customer provide an opportunity to all Directors, Associates, Vendors, Customers to access BEC in good faith, in case an unethical or improper practice in the Company is observed.

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

b.) Risk Management Policy

The Company has in place the Risk Management Process/ Policy. The key risk areas are monitored and assessed prudentially and effectively.

To have the best practice/procedure within the Company, during the year under review the said policy has been revised to align with the Honda Global Risk Management Policy. The risk reporting channels, crisis level reporting criterion and response structure thereof was, inter-alia, established through the medium of such revision. Risk awareness sessions were conducted to improve employees'' awareness of possible risks and management thereof.

With a view to review the adequacy and effectiveness of policies and management procedures for providing a sound internal control framework over the Company''s major business processes, an extensive programme of Internal Audits and Management Reviews support the same.

Further, in pursuance to Section 177(4)(vii) of the Companies Act, 2013, Regulation 18(3) and Schedule II Part- C of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Audit Committee reviews and evaluates the internal financial controls and risk management system of the Company.

Risk Management Policy of the Company may be accessed at Company''s website at the link https://www.hondasielpower.com.

11. Directorsâ Responsibility Statement

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

(a) in the preparation of the Annual Accounts for the year ended March 31, 2018 the applicable accounting standards have been followed and there are no material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and profit and loss of the Company as at March 31, 2018.

(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;

(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; and

(g) the Company has complied with the Secretarial Standard-1 (Meetings of Board of Directors), Secretarial Standard-2 (General Meetings) issued and amended from time to time, by the Institute of Company Secretaries of India.

12. 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.

13. Auditors

i) Statutory Auditors

The Company in its 32^nd Annual General Meeting held on August 04, 2017 approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP (FRN 012754N/ N500016), as the Statutory Auditors of the Company for a term of 5 years i.e. from the conclusion of 32^nd Annual General Meeting till the conclusion of 37^th Annual General Meeting of the Company.

The Report of the Auditors on the Financial Statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

ii) Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s Rakesh Singh & Co., Cost Accountants as Cost Auditors of the Company for the Financial Year 2018-19. M/sRakeshSingh&Co., have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years. A certificate from M/s Rakesh Singh & Co., Cost Accountants has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and Rules framed there under.

Their remuneration as mentioned in the Notice convening 33^rd Annual General Meeting shall be subject to the approval of the Members.

iii) Secretarial Auditor and Secretarial Audit Report

The Secretarial Audit was carried out by M/s TVA & Co. LLP, Company Secretaries, for the Financial Year 2017-18.

The Report given by the Secretarial Auditors is annexed as Annexure - D and forms an integral part of this Board''s Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed M/s. TVA & Co., LLP, as the Secretarial Auditors of the Company for the Financial Year ending March 31, 2019. M/s TVA & Co., LLP has confirmed that their appointment as Secretarial Auditor of the Company is in accordance with the applicable provisions of the Act and rules framed there under.

14. Related Party Transactions

In line with the requirements of the Companies Act, 2013 and Listing Regulations, all related party transactions are entered into, on arm''s length basis, in the ordinary course of business.

Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prior approval of the Audit Committee has been obtained for all related party transactions. Omnibus approval was obtained for un-foreseen transactions. A report on the transactions, specifying the nature, value and terms and conditions of the same, done during the quarter vis- a-vis the approval granted were presented to the Audit Committee on a quarterly basis for its review. The transactions which were likely to cross materiality threshold, as prescribed, were placed before the Members for their approval.

The Related Party Transactions Policy, as approved by the Board, may be assessed at the Company''s website at https://www.hondasielpower.com.

15. Details in respect of adequacy of Internal Control over Financial Reporting

The Company has Internal Control over Financial Reporting (ICOFR) framework, commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use and embezzlement, executing transactions with proper authorization and ensuring compliance with corporate policies.

The systems, standard operating procedures and controls are implemented by the Company, reviewed by the Internal Auditors whose findings and recommendations are placed before the Audit Committee. The Internal Auditors in association with the Management of the Company develop an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at specified locations of the Company. Based on the report of internal auditor, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee. The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting.

The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The framework on ICOFR over Financial Reporting has been reviewed by the Internal and Statutory Auditors.

16. 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.

Your company collaborated with CII and contributed in social development projects of Uttar Pradesh Government for the enhancement of Government school''s infrastructure. The Company also contributed to Prime Ministers National Relief Fund to support Government''s noble cause.

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

17. Criteria for appointment of Directors and remuneration to be paid to Directors, Key Managerial Personnel and other employees

Your Company has put in place policies on âCriteria for Appointment of Directors'' and âRemuneration for Directors, KMPs and all other employees of the Company''.

The policies, inter-alia, stipulates the Directors to be of high integrity with relevant expertise and experience so as to have a diverse Board. The Policies further lay down the positive attributes/ criteria which the Nomination and Remuneration Committee takes into consideration while recommending the candidature for the appointment as Director.

The Policy on âCriteria for appointment of Directors'' and âRemuneration to be paid to Directors, Key Managerial Personnel (KMP) and other employees etc.'' may be accessed on the Company''s website at the link https://www.hondasielpower.com.

18. Criteria of Independence

The Nomination and Remuneration Committee assesses the independence of Directors at the time of appointment/ re- appointment pursuant to the criteria laid down by the Company in line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Determination of independence is being re-assessed when any new interests or relationships are disclosed by a Director.

19. Declaration by Independent Directors

The Board of your Company consists of Dr. Dharam Vir Kapur, Mr. Ravi Vira Gupta, Mr. Manoj Arora and Ms. Alka Marezban Bharucha as Independent Directors. These Directors have confirmed that they fulfill 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 there under.

20. Directors and Key Managerial Personnel (KMP)

i) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the Securities & Exchange Board of India, Mr. Siddharth Shriram (DIN 00027750), Chairperson of the Company will retire by rotation at the forthcoming Annual General Meeting (âAGM'') and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Necessary resolution for the re-appointment of Mr. Shriram and disclosure in terms of the Secretarial Standard 2 (General Meetings), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are given in the Notice convening the Annual General Meeting.

As per the confirmation received from Mr. Shriram, he is not disqualified for being appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

ii) Revision in remuneration

The Board of Directors in its Meeting held on May 24, 2018, on the recommendation of Nomination and Remuneration Committee at its Meeting held on the same day, approved revision in remuneration of Mr. Vinay Mittal from 01.04.2018 to 31.03.2019 (both days inclusive).

As per the confirmation received from Mr. Mittal, he is not disqualified for being appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

Revision in remuneration of Mr. Vinay Mittal from 01.04.2018 to 31.03.2019 (both days inclusive), as per the details provided in the Notice convening the Annual General Meeting, is recommended for your approval.

21. Board/Directorsâ Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ). The performance of the Board and Committees thereof was evaluated on the basis of the criteria such as the composition and structure, effectiveness of processes, information, involvement of the Members and functioning etc. The Board and the Nomination and Remuneration Committee reviewed performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive discussion and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The review concluded by affirming that the Board as a whole, the Committees of the Board as well as all of its Members, individually, continued to display commitment to good governance, ensuring a constant improvement of processes and procedures. It was further acknowledged that every individual Member of the Board and the Committee thereof contribute its best in the overall growth of the organization.

22. 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 by the Auditors in their respective reports.

23. Deposits

The Company has not accepted any deposits from the public/ members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

24. Buy Back of Securities

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

25. Sweat Equity

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

26. Bonus Shares

No Bonus Shares were issued during the year under review.

27. Employees Stock Option Scheme

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

28. 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.

29. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the same. The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, in time. A separate section on Corporate Governance is annexed to this report as Annexure - F.

The Auditors'' Certificate certifying the Company''s compliance with the requirements of Corporate Governance in terms of the Listing Regulations, is annexed as Annexure - I. and forms part of the Boards'' Report.

30. Sexual Harassment of Women at Workplace.

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (âSHWW Act''), your Company has a robust mechanism in place to redress complaints reported under it. An Internal Complaint Committee (ICC) has also been set up to redress complaints received on sexual harassment. In the Financial Year 2017-18 no case of sexual harassment was reported in the Company. During the course of the year, several initiatives were undertaken to demonstrate the Company''s zero tolerance philosophy against sexual harassment, which included creation of comprehensive and easy to understand training.

31. 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 in the environment in which the Company operates. The Code is available on the Company''s 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 - G and forms part hereof.

32. 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 are annexed as Annexure - J hereof. Particulars of employees under Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms 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 this statement. The details 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.

33. Material changes and commitments affecting the financial position of the Company after March 31, 2018

There were no material changes and commitments affecting the financial position of the Company after March 31, 2018.

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 each and every associate of the Company.

On behalf of the Board, for Honda Siel Power Products Limited,

Siddharth Shriram

Chairman

Mar 31, 2017

Dear Members,

The Directors are pleased to present the 32^nd Annual Report together with Audited Financial Statements of the Company for the year ended March 31, 2017.

1. Financial Highlights

(Rs .in lakhs)

Particulars	Year Ended
Particulars	March 31, 2017	March 31, 2016
Revenue from Operations	70,157	67,280
Other Income	1,617	1,132
Profit before depreciation and exceptional items	11,037	9,889
Depreciation	2,320	2,382
Profit before tax	8,717	7,507
Tax expenses	3,002	2,624
Profit after Tax	5,715	4,883
Balance of profit brought forward	23,135	18,984
Amount available for appropriation	28,850	23,867
APPROPRIATIONS
Dividend	761	609
Tax on Dividend	155	124
Total	916	733

Results of Operations and the state of Companyâs affairs

Your company achieved aggregate Gross sales of Rs.72,844 lakh in 2016-17 (as against Rs.70,121 lakh in 2015-16). This marks a growth of 3.9% over the previous year.

The year saw the introduction of a Petrol Run Mini Tiller and 2HP Engine for the vast and growing agriculture and horticulture markets. We expect these introductions to help boost farm productivity.

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

2. Dividend

Your Directors recommend a dividend of Rs.7.50/- per equity share of Rs.10/- each (75%) for the year ended 31⁵¹ March 2017 (previous year 60%). The total outgo on this account (including dividend tax) will be Rs.916 lakh.

3. Transfer of Amounts to Investor Education and Protection Fund

In compliance with Section 125 of the Companies Act, 2013, the Company has transferred a sum of Rs.3,52,728/- during the Financial Year 2016-17 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.

At the beginning of the financial year, reminders for claiming/ encashing dividend lying with the Company as aforesaid are sent to all such shareholders prior to transferring the same to Investor Education and Protection Fund.

4. Transfer of Shares to the Investor Education and Protection Fund

In terms of provisions of Section 124(6) of Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, shares of the Company, in respect of which dividend entitlements have remained unclaimed for seven consecutive years or more, are required to be mandatorily transferred by the Company to Investor Education and Protection Fund.

In terms of aforementioned provisions/rules, individual notices have been sent to concerned shareholders providing them an opportunity to claim dividend for 2009-10 onwards. The said notice along with the details of concerned shareholders was published in the leading news papers having wide circulation. Details have also been updated on the website of the Company (www.hondasielpower.com) simultaneously.

5. Environment Protection and Safety

Your Company is committed towards protection and safety of environment. This is depicted in overall HONDA Philosophy âBLUE SKIES FOR OUR CHILDRENâ and is adopted by your Company also. All associates strive towards controlling emissions, effluents and waste disposal arising out of manufacturing processes, product and services. Your Company has been achieving continuous improvement in safety performance through a combination of systems and processes as well as co-operation and support of all stakeholders.

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.

6. Occupational Health & Safety

Your Company believes in âZero Harm''. The Company''s vision is to improve health and safety standards for the people working in the capacity of employees, contractors or in any other role. Efforts are taken to minimize activities which may affect the health and safety in work place or adversely impact the life of communities living near our plant. To promote this, we are encouraging the use of renewable resources as well as recycled waste. Further, steps are taken for optimum utilization of plant, with least disposal of harmful gases in environment.

7. Indian Accounting Standards (IND AS)

Your Company has adopted IND-AS with effect from April 01, 2017. The Ministry of Corporate Affairs has made New Set of Accounting Standards mandatory for different types of companies with different compliance dates, vide notification dated 16^th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015. Pursuant to this, effective first quarter of the Financial Year 2017-18, the reports shall be prepared in line with the requirements of IND-AS.

8. Extract of Annual Return

Pursuant to section 92(3 ) of the Companies Act, 2013 (âthe Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is Annexed as Annexure-C and forms part of this report.

9. Details of Board Meetings

Minimum four Board meetings are held annually. In case of business exigencies or urgency of matters, resolutions are passed by circulation. Compliance reports of all laws applicable to the Company are reviewed by the Board quarterly.

The Board is given presentations / briefed on areas covering operations of the Company, business strategy and risk management practices, before approving the quarterly / annual financial results of the Company.

The agenda and notes thereon are circulated to Directors in advance and in the defined agenda format. All material information is incorporated in the agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda i.e. the document which contains price sensitive information and in respect of which consent of the Board of Directors is obtained for providing the same at a shorter notice of less than 7 days, it is placed before the meeting with specific reference to this effect in the agenda.

The Company Secretary records minutes of proceedings of each Board and Committee meeting. Draft minutes are circulated to Board/Board Committee members for their comments. The minutes are entered in the Minutes Book within 30 days from the conclusion of the meeting.

During the year under review, four Board Meetings were held as per the following details:

Resolutions by Circulation were passed on August 23, 2016 and December 27, 2016.

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

10. Committees of the Board

The details of composition of the Committees of the Board

i.e. Audit Committee; Stakeholders Relationship Committee; Nomination and Remuneration Committee; Corporate Social Responsibility Committee; Board Committee on Financial Matters; and Risk Management Committee, brief terms of reference thereof and details of meetings held and attended by the Members during the year are provided in the Corporate Governance Report forming part hereof.

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

The Company has formulated following policies with a view to adhere to ethical standards in order to ensure integrity, transparency, independence and accountability in dealing with all stakeholders:

a.) Vigil Mechanism / Whistle Blower Policy

As per the provisions of Section 177(9) of the Companies Act, 2013 read with Rules thereof and Regulation 4(2)(d) (iv) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in line with the commitment of the Company to highest standards of ethical, moral and legal business conduct and transparent approach, the Vigil Mechanism/ Whistle Blower Policy 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 https:// www.hondasielpower.com.

b.) Risk Management Policy

A key factor in determining a Company''s capacity to create sustainable value is the level of risk that the Company is willing to take (at strategic and operational levels) and its ability to manage them effectively.

For effective and efficient management of risk and to address challenges, the Company has formulated Risk Management Policy. The Company has also set up a Risk Management Committee to monitor the risks and their mitigating actions within the purview of the said policy and current risk management best practices.

To facilitate the achievement of the Company''s objectives, operational effectiveness and efficiency, protection of people and assets, informed decision-making, and compliance with applicable laws and regulations, the Company during the period under review, developed a risk Management Manual, forming part of the Risk Management Policy, to review the adequacy and effectiveness of the aforementioned policy and management procedures for providing a sound internal control framework over the Company''s major business processes (including but not limited to financial, insurance, legal, HR and IT processes).

Risk Management Policy of the Company may be accessed at Company''s website at the link https://www.hondasielpower.com.

12. Directorsâ Responsibility Statement

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

(a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable Accounting Standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) Accounting policies have been selected and applied consistently and judgments and estimates have been made 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, 2017 and of the profit of the Company for the year ended on that date;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a âgoing concern'' basis;

(e) Internal Financial Controls have been laid down and are being followed by the Company and that such Internal Financial Controls are adequate and are operating effectively; and

(f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively.

13. 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.

14. Auditors

i) Statutory Auditors

The term of office of M/s. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company will expire with the conclusion of forthcoming Annual General Meeting of the Company. Resolution for appointment of M/s. Price Water House Chartered Accountants LLP (FRN 012754N/ N500016) as Statutory Auditors of the Company in place of the M/s. B S R & Co. LLP, being the retiring Auditors, pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice.

M/s. B S R & Co. LLP over many years, have successfully met the challenge that the size, nature of the industry and scale of the Company''s operations pose for Auditors and have maintained the highest level of governance, rigor and quality in their audit. The Board places on record its appreciation for the services rendered by M/s. B S R & Co. LLP as the Statutory Auditors of the Company.

The Report given by the Auditors on the Financial Statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

ii) Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s Rakesh Singh & Co., Cost Accountants as Cost Auditors of the Company for the Financial Year 2017-18, at a remuneration as mentioned in the Notice convening 32^nd Annual General Meeting, 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 Auditor. M/s Rakesh Singh & Co., Cost Accountants have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years.

A certificate from M/s Rakesh Singh & Co., has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Companies Act, 2013 and Rules framed there under.

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 2016-17.

There were no qualifications, reservations or adverse remarks given by Secretarial Auditors of the Company. The detailed report on the Secretarial Audit is annexed as Annexure-D to this Report.

15. Related Party Transactions

In line with the requirements of the Companies Act, 2013 and Listing Regulations, all related party transactions are entered into, on arm''s length basis, in the ordinary course of business.

Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prior approval of the Audit Committee is obtained for all related party transactions. Omnibus approval is obtained for un-foreseen transactions. A report on the transactions, specifying the nature, value and terms and conditions of the same, done during the quarter vis-a-vis the approval granted are presented to the Audit Committee on a quarterly basis for its review. The transactions which are likely to cross materiality threshold, as prescribed, are placed before the Members for their approval.

The Related Party Transactions Policy, as approved by the Board, may be assessed at the Company''s website at the weblink: https://www.hondasielpower.com.

16. Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements

The Company has Internal Financial Controls (IFC) framework, commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use and embezzlement, executing transactions with proper authorization and ensuring compliance with corporate policies.

The systems, standard operating procedures and controls are implemented by the Company, reviewed by the Internal Auditors whose findings and recommendations are placed before the Audit Committee. The Internal Auditors develop an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee. The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting.

The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The framework on IFC over Financial Reporting has been reviewed by the internal and external auditors.

17. Corporate Social Responsibility initiatives

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

18. Criteria for appointment of Directors and remuneration to be paid to Directors, Key Managerial Personnel and other employees

Your Company has in place policies on âCriteria for Appointment of Directors'' and âRemuneration Policy for Directors, KMPs and all other employees of the Company''.

The policies inter-alia requires the Directors to be of high integrity with relevant expertise and experience so as to have a diverse Board. The Policies further lay down the positive attributes/ criteria which the Nomination and Remuneration Committee takes into consideration while recommending the candidature for the appointment as Director.

Policy on âCriteria for appointment of Directors'' and âRemuneration to be paid to Directors, Key Managerial Personnel (KMP) and other employees etc.'' is annexed to this Report as Annexure-F.

19. Criteria of Independence

The Nomination and Remuneration Committee assesses the independence of Directors at the time of appointment / reappointment pursuant to the criteria laid down by the Company in line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Determination of independence is being reassessed when any new interests or relationships are disclosed by a Director.

20. Declaration by Independent Directors

21. Directors and Key Managerial Personnel (KMP)

i) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the Securities & Exchange Board of India, Mr. Yoshifumi Iida (DIN 07136925), Managing Director, designated as President & CEO of the Company will retire by rotation at the forthcoming Annual General Meeting (âAGM'') and being eligible, offers himself for reappointment. The Board recommends his re-appointment.

Necessary resolution for the re-appointment of Mr. Yoshifumi Iida and disclosure in terms of the Secretarial Standard 2, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are given in the Notice convening the Annual General Meeting.

As per the confirmations received from Mr. Iida, he is not disqualified for being appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

ii) Revision in remuneration

Subsequent to the recommendation of the Nomination and Remuneration Committee on May 15, 2017, revised remuneration to be paid to Mr. Yoshifumi Iida, President & CEO and Mr. Hiroyoshi Sugimizu, Whole Time Director of the Company has been approved by the Board of Directors on May 15, 2017. Your Board recommends the revised remuneration of Mr. Yoshifumi Iida and Mr. Hiroyoshi Sugimizu for your approval.

Re-appointment and revision in remuneration

The Board of Directors in its Meeting held on February

10, 2017 considered re-appointment of Mr. Vinay Mittal as the Whole Time Director of the Company, with effect from April 01, 2017, for a period of five years, subject to the approval of the Members at the Annual General Meeting of the Company, on the existing terms and conditions as approved by the Members in their Meeting held on August 11, 2016.

Subsequently, the Board of Directors in its Meeting held on May 15, 2017, on the recommendation of Nomination and Remuneration Committee at its Meeting held on May 15, 2017, approved revision in remuneration of Mr. Vinay Mittal from 01.04.2017 to 31.03.2018 (both days inclusive).

As per the confirmations received from Mr. Mittal, he is not disqualified for being appointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act, 2013.

Your Board recommends re-appointment of Mr. Vinay Mittal as the Whole Time Director of the Company for a further period of 5 years with effect from April 01, 2017. Revision in remuneration of Mr. Vinay Mittal from 01.04.2017 to 31.03.2018 (both days inclusive), as per the details provided in the Notice convening the Annual General Meeting, is also recommended for your approval.

22. Board/Directorsâ Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ). The performance of the Board was evaluated on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning etc. The performance of the committees was evaluated on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. Performance evaluation of independent directors was done by the entire Board, excluding the Independent Director being evaluated.

The review concluded by affirming that the Board as a whole as well as all of its Members, individually and the Committees of the Board continued to display commitment to good governance, ensuring a constant improvement of processes and procedures. It was further acknowledged that every individual Member and Committee of the Board contribute its best in the overall growth of the organization.

23. 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 by the Auditors in their respective reports.

24. Deposits

The Company has not accepted any deposits from the public/ members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

25. Buy Back of Securities

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

26. Sweat Equity

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

27. Bonus Shares

No Bonus Shares were issued during the year under review.

28. Employees Stock Option Scheme

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

29. 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.

30. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the same. The new Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. A separate section on Corporate Governance is annexed to this report as Annexure-G.

The Auditorsâ Certificate certifying the Companyâs compliance with the requirements of Corporate Governance in terms of the Listing Regulations, is annexed as Annexure-J. and forms part of the Boards'' Report.

31. Sexual Harassment of Women at Workplace

The Company has zero tolerance towards sexual harassment at the workplace and to this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

All employees (permanent, contractual, temporary, trainees) are covered under the said policy. An Internal Complaints Committee (ICC) has also been set up to redress complaints received on sexual harassment.

During the Financial Year under review, one complaint of sexual harassment was filed with the Company and same is being investigated by ICC and final report along with its findings shall be submitted to Business Ethics Committee for further action, if any.

32. 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 in 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-H and forms part hereof.

33. 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 are annexed as Annexure-K hereof. Particulars of employees under Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms 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 this statement. The details 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.

34. Material changes and commitments affecting the financial position of the Company after 31^st March 2017

There were no material changes and commitments affecting the financial position of the Company after 31^st March 2017.

Acknowledgements

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,

for Honda Siel Power Products Limited,

Place : New Delhi Siddharth Shriram

Date : May 15, 2017 Chairman

Mar 31, 2016

Dear Members,

The Directors are pleased to present the 31st Annual Report together with Audited Financial Statements of the Company for the
year ended 31st March 2016.

1. Financial Highlights

(Rs. in lakhs)

Year Ended

Particulars March 31, 2016 March 31, 2015

Revenue from Operations 67,280 63,073

Other Income 1,132 709

Profit before
depreciation and 9,889 7,678

exceptional items

Depreciation 2,382 2,131

Exceptional items - (347)

Profit before tax 7,507 5,894

Tax Expenses 2,624 2,032

Profit after Tax 4,883 3,862

Balance of profit brought 18,984 15,855

forward

Amount available for 23,867 19,717

appropriation

APPROPRIATIONS

Dividend 609 609

Tax on Dividend 124 124

Balance carried to Balance 23,134 18,984

Sheet

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

Your Company achieved aggregate sales of Rs. 70,121 lakhs in 2015-16 (as against Rs. 65,725 lakhs in 2014-15).This marks a growth
of 6.69% over the previous year.

The year saw the introduction of "Diesel"Water Pump and new Gasoline Water Pump for the vast and growing agriculture and
horticulture markets.

With the introduction of Diesel Water Pump your Company now offers solutions across all major fuel categories for the Indian
farmer. Gasoline Water Pump offers unmatched portability and fuel consumption thereby making the irrigation process more
efficient and less time consuming. Both categories of Water Pumps have received a very positive response in the market and your
company expects to further increase its presence in these categories.

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

2. Dividend

Your Directors recommend a dividend of Rs. 6/- per equity share of Rs. 10/- each (60%) for the year ended 31st March 2016. The
total outgo on this account (including dividend tax) will be Rs. 733 lakh.

3. Transfer of Amounts to Investor Education and Protection Fund

In compliance with Section 205(C) of the Companies Act, 1956/Section 125 of the Companies Act, 2013, the Company has transferred
a sum of Rs. 2,73,485.00 during the financial year 2015-16 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.

4. Environment Protection and Safety

Your Company is committed towards 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 strive towards controlling emissions, effluents and waste
disposal arising out of manufacturing processes, product and services.

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.

5. 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 and forms part of this report.

6. Details of Board meetings

During the year under review, four Board Meetings were held as per the following details:

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

May 18, 2015 10 Seven (7)

August 12, 2015 10 Ten (10)

November 04, 2015 10 Eight (8)

February 10, 2016 08* Seven (7)

* Mr. O.P Khaitan ceased to be Director of the Company with effect from December 06, 2015 due to demise.

* Mr. Shinya Inamura ceased to be Director of the Company due to resignation.

Resolutions by Circulation were passed on May 20, 2015 and February 01, 2016.

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

7. Committees of the Board

The details of composition of the Audit Committee and other Committees of the Board of Directors, brief terms of reference
thereof and details of meetings held and attended by the Members during the year are provided in the Corporate Governance Report
forming part hereof.

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

a.) Vigil Mechanism / Whistle Blower Policy

As per the provisions of Section 177(9) of the Companies Act, 2013 read with Rules thereof and Regulation 4(2)(d) (iv) of the
Securities and Exchange Board of India (Listing obligations and Disclosure Requirements) Regulations, 2015, the Company is
required to establish an effective Vigil Mechanism, thereby enabling all stakeholders to communicate their concerns about illegal
or unethical practices. 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/Whistle Blower Policy 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 we blink: https:// www.hondasielpower.com.

b.) 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 constituted a Risk
Management Committee and also formulated a Risk Management Policy. The said policy covers the framework for management of risk,
categorized under three main components i.e. business risk, service/operational risk and external risk.

The Risk Management Committee has the primary responsibility of implementing the Risk Management Policy of the Company and
achieving the stated objective of developing a risk intelligent culture that supports decision making and helps improve Company
performance.

The Company manages the risk in line with current risk management best practice. 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.

Composition of Risk Management Committee and

Risk Management Policy of the Company may

be accessed at Company''s website at the link https://www.hondasielpower.com.

9. 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
that:

(a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with
requirements set out under Schedule III to the Companies Act, 2013, 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 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 as at March 31, 2016 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 Companies Act, 2013 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.

10. 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.

11. 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 has expressed their willingness to get re-appointed as the Statutory
Auditors of the Company and have furnished a certificate of eligibility and consent under Section 139 (1) and 141 of the
Companies Act, 2013 and the rules framed there under.

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 report given by the Auditors on the financial statements of the Company forms part hereof. There has been no qualifications,
reservations, adverse remarks or disclaimer by the Auditors in their report.

ii) Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment
Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Rakesh Singh & Co., Cost
Accountants as Cost Auditors of the Company for the Financial Year 2016- 17, at a remuneration as mentioned in the Notice
convening 31st Annual General Meeting, for conducting the audit of the cost records maintained by the Company, subject to the
ratification of the Members on the remuneration to be paid to the Cost Auditor.

A certificate from them has been received to the effect that their appointment as Cost Auditors of the Company, if made, would be
in accordance with the limits specified under Section 139 and 141 of the Companies Act, 2013 Act and Rules framed there under.

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 2015-16.

There were no qualifications, reservations or adverse remarks by Secretarial Auditors of the Company. The detailed report on the
Secretarial Audit is annexed as Annexure - D to this Report.

12. Related Party Transactions

All the related party transactions are entered into on arm''s length basis, in the ordinary course of business and are in
compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. Accordingly, no transactions
are being reported in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Related Party Transactions are approved
by the Audit Committee. Omnibus approval is obtained for un-foreseen transactions. A report on the transactions, specifying the
nature, value and terms and conditions of the same, done during the quarter vis-Ã -vis the approval granted are presented to the
Audit Committee on a quarterly basis for its review.

Resolution, seeking Members approval for the Material Related Party Transactions entered into prior to 2nd September, 2015 and
which have continued beyond such date forms part of the Notice of the 31st Annual General Meeting and the same is recommended for
your consideration and approval.

Further, based on the past trend, the transactions which are likely to cross materiality threshold, as prescribed, is being
placed before the Members for their approval.

The Related Party Transactions Policy, as approved by the Board, may be assessed at the Company''s website at the we blink:
https://www.hondasielpower.com.

13. Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including
adherence to Company'' s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records and the timely preparation of reliable financial information.

Further, the testing of such controls has also been carried out independently by the Statutory Auditors for the financial year
2015-16 as mandated under the provisions of the Companies Act, 2013. In the opinion of the Board, the existing internal control
framework is adequate and is commensurate to the size and nature of business of the Company.

14. 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.

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

Your Company has in place Remuneration Policy for Directors, KMP and all other employees of the Company and Criteria for
Appointment of Directors. The policies were adopted in line with the requirements of the Companies Act, 2013 and the erstwhile
Clause 49 of the Listing Agreement with the Stock Exchanges.

The policies inter-alia requires the Directors to be of high integrity with relevant expertise and experience so as to have a
diverse Board. The Policies further lay down the positive attributes/ criteria which the Nomination and Remuneration Committee
should keep in mind while recommending the candidature for the appointment as Director.

Policy on Remuneration to be paid to Directors, Key Managerial Personnel (KMP) and other employees and criteria for appointment
of Directors is annexed to this Report at Annexure-F.

Criteria of Independence

The Nomination and Remuneration Committee assesses the independence of Directors at the time of appointment / re- appointment
pursuant to the criteria laid down by the Company in line with the requirements of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. Determination of independence is being re-assessed when any new
interests or relationships are disclosed by a Director.

16. Declaration by independent directors

The Board of your Company consists of Dr. Dharam Vir Kapur, Mr. Ravi Vira Gupta, Mr. Manoj Arora and Ms. Alka Marezban Bharucha
as Independent Directors. These Directors have confrmed that they fulfl 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 there under.

17. Directors and Key Managerial Personnel (KMP) i) Cessation

a) Mr. O.P Khaitan (DIN 00027798), an Independent Director on the Board of the Company, due to demise ceased to be Director of
the Company with effect from December 06, 2015.

The Board expresses its deep sorrow on the sad demise of Mr. O.P. Khaitan.

b) Mr. Shinya Inamura (DIN 06851565), Non-Executive/ Non-Independent Director of the Company, due to his pre- occupation with
some other long term assignment, resigned from the Board with effect from February 01, 2016.

The Board wishes to place on record its appreciation for the valuable contribution made by the above Directors, during their
tenure, to the working of the Company.

ii) Retirement by Rotation

In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the Securities & Exchange Board
of India, Mr. Hiroyoshi Sugimizu (DIN 06848213), Director of the Company, will retire by rotation at the forthcoming Annual
General Meeting (''AGM'') of the Company and being eligible, offers himself for re-appointment. The Board recommends his
re-appointment.

Brief resume of Mr. Hiroyoshi Sugimizu, nature of his expertise in specific functional area and the name of the Companies in
which he holds the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, are given in the Notice convening the Annual General Meeting.

Necessary resolution for the re-appointment of the aforesaid Director has been included in the Notice convening the Annual
General Meeting.

As per the confirmations received from Mr. Sugimizu, he is not disqualified for being appointed as Director as specified in
Section 164(2) (a) and (b) of the Companies Act, 2013.

iii) Payment of remuneration

The revised remuneration to be paid to Mr. Yoshifumi Iida as President & CEO of the Company has been approved by the Board of
Directors on February 10, 2016, subsequent to the recommendation of the Nomination and Remuneration Committee on February 10,
2016. Your Board recommends the revised remuneration of Mr. Yoshifumi Iida for your approval.

The revised remuneration of Mr. Vinay Mittal from 01.04.2016 to 31.03.2017 (both days inclusive) has been approved by the Board
of Directors on May 20, 2016, subsequent to the recommendation of the Nomination and Remuneration Committee at its Meeting held
on May 20, 2016. Your Board recommends the approval of revised remuneration of Mr. Vinay Mittal. Proposal for the same is being
put up for your approval.

18. Directors'' Evaluation

In accordance with the framework approved by the Nomination and Remuneration Committee, the Board of Directors, in its Meeting
held on May 20, 2016, undertook the evaluation of its own performance, its Committees and all the individual Directors.

The review concluded by affirming that the Board as a whole as well as all of its Members, individually and the Committees of the
Board continued to display commitment to good governance, ensuring a constant improvement of processes and procedures. It was
further acknowledged that every individual Member and Committee of the Board contribute its best in the overall growth of the
organization.

19. 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.

20. Deposits

The Company has not accepted any deposits from the public/ members under Section 73 of the Companies Act, 2013 read with
Companies (Acceptance of Deposits) Rules, 2014 during the year.

21. Buy Back of Securities

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

22. Sweat Equity

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

23. Bonus Shares

No bonus shares were issued during the year under review.

24. Employees Stock Option Scheme

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

25. 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.

26. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the same. The new Companies Act,
2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the
country. Your Company is in compliance with the governance requirements provided under the new law and had proactively adopted
many provisions of the new law, ahead of time. A separate section on Corporate Governance is annexed to this report as Annexure -
G.

In line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has
adopted policies on Determination of Materiality of Information/Events and Preservation of Documents and Archival. These
policies are available on the website of the Company at www.hondasielpower.com

A certificate from a Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under
aforementioned Regulations is annexed as Annexure-J.

27. Sexual harassment of women at workplace

The Company has zero tolerance towards sexual harassment at the workplace and to this end, has adopted a policy in line with the
provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there
under.

All employees (permanent, contractual, temporary, trainees) are covered under the said policy. An Internal Complaints Committee
has also been set up to redress complaints received on sexual harassment.

During the financial year under review, the Company has not received any complaints of sexual harassment from any of the women
employees of the Company.

28. 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 in
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 - H and forms part hereof.

29. Familiarization programmes for Board Members

The Board members are provided with necessary documents, reports and internal policies to enable them to familiarize 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.

30. 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 are annexed as Annexure-K. Particulars of employees U/S 197 (12) read with Rule 5(2) of the
Companies (Appointment & remuneration of Managerial Personnel) Rules, 2014, forms part of this report. However, in terms of
Section 136(1) of the Companies Act, 2013, the Report and Financial Statements are being sent to the members and others entitled
thereto, excluding this statement. The Annexure is 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.

31. Material changes and commitments affecting the financial position of the Company after 31st March 2016.

There were no material changes and commitments affecting the financial position of the Company after 31st March 2016.

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,

for Honda Siel Power Products Ltd.

New Delhi Siddharth Shriram

May 20, 2016 Chairman

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, 2011

The Directors are pleased to present the Twenty Sixth Annual Report together with Audited Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS AND APPROPRIATIONS

(Rs. in Lacs)

Particulars Year Ended Year Ended

March 31, 2011 March 31, 2010

Sales 43,227 32,013

Job Charges 252 261

Other Income 1,059 886

Profit before finance charges, 5,275 4,723 depreciation and exceptional items

Finance Charges 10 19

Depreciation 820 743

Exceptional items - 2,004

Profit before tax 4,445 1,957

Provision for taxation

- Current 1,273 1,113

- Deferred Tax charge/(benefit) 206 (425)

Profit after Tax 2,966 1,269

Balance of profit brought forward 7,924 7,256

Amount available for appropriation 10,890 8,525

APPROPRIATIONS

Dividend 761 406

Tax on Dividend 126 69

General Reserves 297 127

Balance carried to Balance Sheet 9,706 7,923

DIVIDEND

Your Directors recommend a dividend of Rs. 7.50 per equity share of Rs. 10 each (75%) for the year ended 31st March 2011 (previous year 40%). The total outgo on this account (including dividend tax) will be Rs. 887 lacs.

APPROPRIATIONS

It is proposed to transfer Rs. 297 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. 43,227 lacs in 2010-11 (as against Rs. 32,013 lacs in 2009-10) in domestic and exports markets thereby realizing a growth of 35% over previous year.

The overall growth was led by recovery in the generator segment and good volumes in the engines and water pumping set business during the year. This year also saw introduction of new models in the EU series of Generators specially made in India 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 realized saving on account of localization of critical parts such as Switch Assembly Engine Stop, Terminal Assembly High Tension and Cap Assembly Noise Suppressor during the year 2010 - 2011.

The Company is in the process of localization of 80 parts of Generator Model EU65is and is closely monitoring the development of these parts for production as per schedule.

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 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 the following actions:

- Replacement of High Speed Diesel (HSD) fired melting furnace with gas fired energy efficient Melting cum Holding Furnace in two Pressure Die Casting Machines.

- Installation of Dust collecting systems in all grinding machines in Machine Shop, resulting in clean environment at Shop Floor.

Your Company is further planning to commence power cogeneration i.e. gas based power generation alongwith Exhaust Fuel Gas Recovery Boiler for which miscellaneous civil work and gas piping has been completed. After commissioning the power cogeneration system, around 5% CO2 reduction is expected to be achieved thus leading to cleaner environment.

The products manufactured by your Company comply with the air emission and noise regulation norms notified by the Ministry of Environment and Forests (MOEF). 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. Yasushi Watanabe had been re-appointed as Vice President & Whole Time Director of the Company from 01.01.2011 to 31.12.2011.

Your Board recommends the appointment of Mr. Yasushi Watanabe as a Director and as Vice President & Whole Time Director of the Company. Proposal for the appointment of Mr. Yasushi Watanabe is being put up for your approval.

Mr. Yasushi Watanabe ceased to be Director of the Company with effect from the close of the working hours of March 26, 2011 on being re-assigned by Honda Motor Co., Ltd., Japan (HM). Your Board places on record its deep appreciation for the services rendered by Mr. Yasushi Watanabe during his tenure with the Company.

Mr. Seiichi Yotsumoto was appointed as Director and as Vice President & Whole Time Director of the Company effective April 1, 2011.

Your Board recommends the appointment of Mr. Seiichi Yotsumoto as a Director and as Vice President & Whole Time Director of the Company. Proposal for the appointment of Mr. Seiichi Yotsumoto 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, Mr. Siddharth Shriram and Mr. Ravi Vira 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.

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

The observations of 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.

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 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 Ã 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 2011

There were no material changes and commitments affecting the financial position of the company after 31st March 2011.

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 19, 2011 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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