Panasonic Carbon India Company Ltd

40^th ANNUAL REPORT OF THE COMPANY

Your Directors have pleasure in presenting to you their 40^th Annual Report together with the Audited Accounts of the Company for the year ended 31^st March, 2022 and the Auditors' Report thereon.

1. FINANCIAL RESULTS:

The summarized working results for the year ended 31^st March, 2022 as compared with the earlier year are as under:

Rs. in Lakhs

2. DIVIDEND :

Your Directors recommend a dividend of Rs. 12/- per share (i.e.) 120%. The same is in line with the financial strategy and policy of the Company. As per the present provision of the Income Tax Act, there would be no liability of dividend distribution tax on the dividend.

This dividend if approved by you at the ensuing40^th Annual General Meeting will be paid to the Shareholders whose names appear in the Register of Members as on 22^nd June 2022 (Record date for payment of dividend to the shareholders).

The dividend, when approved, will entail payment to all the shareholders of the Company. Income tax at source will not be deducted if the amount of Gross Dividend does not exceed Rs.5000/- Applicable tax will be deducted on the Dividend amount if the Gross Dividend payable exceeds Rs.5,000/-

3. TRANSFER TO RESERVE

The Board of Directors of your company, have decided to transfer an amount of Rs.6.50 Crores to the Reserves for the year under review.

4. MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY AND BUSINESS OVERVIEW OPERATIONAL AND FINANCIAL PERFORMANCE:

Our Company sold 2735 mln pieces of Carbon Rod, as against 2728 mln pieces which is 100.2% Sales of last year.

The Domestic Sales Quantity and Value were 1132 mln pieces and Rs.17.59 crores respectively in the year under review as compared to last year's quantity of 1110 Mln Pcs and value of Rs.17.09 Crores which works out to 101.9% of the Sales by quantity and 102.9% by value of last year.

The Export Sales Quantity and value were 1603 Mln. Pcs. and Rs.31.20 Crores respectively in the year under review as compared to last year's quantityof 1618 Mln. Pcs. and value of Rs.31.05 Crores which works out to 99% by quantity and 100% by value. Your Company could stabilize the exports to Panasonic Group Battery Factories in Peru, Thailand, Indonesia, Brazil, Costa Rica and other customers in Poland ,Slovenia and South Africa on regular basis and could restart supply of specil size carbons to European customers.

There had been overall steep increase in prices of all raw materials , consumables, packing materails and fuel.Your Company reduced the impact of the cost increase through Energy and fuel usage reduction and improving overall yield and productivity. By implementing various cost reduction measures .Inspite of these efforts , the profitability (before tax) compared to previous year reduced substantially by Rs. 494.32 lakhs.

OUTLOOK ON OPPORTUNITIES AND THREATS, RISKS AND CONCERNS:

The Company has developed skills to In-house design and fabricate special purpose machines/ equipment required for Carbon rod manufacturing. Introducing low cost automations to lift and transfer the materials to reduce operator fatigue, to improve working conditions and to improve productivity.

Your Company is also hopeful of improving its Domestic and Export sales by improving its competitive power compared to Chinese and Indonesia manufacturers by continually putting efforts in developing cost effective new grade carbon rods. Further by manufacturing consistent quality and timely supply, your Company is confident of achieving growth i n domestic sales and maintain export sales at the current year's level in the coming years.

The Directors assure that all steps are being taken by the Company to achieve greater growth in the coming years, in proportion to the growth of the Dry Battery Industry by giving due consideration to the adverse conditions, if any, in the Dry Battery Industry. There are no materially significant threats, risks or concerns to the Company.

5. SEGMENT-WISE PERFORMANCE:

The Company operates in only one Segment (i.e.) Carbon Rod as a component of Dry Cell Batteries. By value, while domestic sales contributed 36% and export sales constituted the remaining 64% out of the total sales.

6. FINANCIAL ARRANGEMENTS AND DEPOSITS:

Your Company continues to be free from debts - both on Long Term and on Working Capital requirements. The surplus funds available with the Company are being invested with Banks in fixed deposits at regular intervals in line with the policy of the Company. This is reflected in increased deposits.

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits)

Your Company disclose the following details as per regulation 52 of SEBI (LODR) Regulation, 2015, amended on 7^th May, 2019.

7. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures are being adopted by the Company 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. The Audit Committee evaluates the internal financial control system periodically. A firm of experienced Chartered Accountants had carried Internal Audit throughout the year. Whenever it is required, the systems and procedures are upgraded.

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

8. HUMAN RESOURCE DEVELOPMENT:

The relationship with Employees continues to be cordial. The Company always considers its human resources as its most valuable assets. Imparting adequate and specialized training to its employees is an ongoing exercise in the Company.

9. STATEMENT PURSUANT TO LISTING AGREEMENTS:

The Company's Securities are listed with BSE Ltd. The company confirms that it has paid the Annual Listing Fees to the said stock exchange for the financial year 2021-22 in time and there are no arrears.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO;

In compliance with section 134(3)(m) of the Act read with rule 8 of the Companies (Accounts) Rules, 2014 the prescribed particulars of conservation of energy, foreign exchange and technology absorption including R&D have been attached as Annexure-1 herewith.

11. CODE OF CORPORATE GOVERNANCE:

Pursuant to the Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed report on Corporate Governance as updated with the particulars of this financial year, is annexed to this report as Annexure-2 together with Report of the Auditors on the compliance with the said Code.

12. EXPORT HOUSE STATUS:

The Company had obtained ONE STAR EXPORT HOUSE Certificate from Government of India, Ministry of Commerce and Directorate General of Foreign Trade (DGFT) in recognition of good Export performance. The Company continues to enjoy the Export House Certificate status.

13. AEO-T1 Status:

Your Company has been accredited the Authorized Economic Operator (AEO-T1) status, by Central Board of Indirect Taxes and Customs, Ministry of Finance, Government of India.

14. ENVIRONMENT:

Your Company has consistently emphasized and worked towards sustainable use of natural resources. In order to promote the Environment Awareness for everybody and everywhere with an objective to create awareness and boost the PCIN brand image on a global basis, your company had observed the June month as "Environment month" .The Company actively makes effort to increase awareness among the employees about the covid-19 .

The following Specific measures taken to prevent spreading of Covid-19 in our Factory:

a. Thermal Screening and Hand Sanitization at Main entrance of the factory

b. Display Boards arranged for Awareness on Covid 19 at Main Gate.

c. Social Distance at Work place

d. Periodical Sanitization of Factory Premises

The following Environment improvement activities carried out during Environment month.

1. Environmental Education to Staff members about Environment vision 2050 & Zero CO2 Emission.

2. Tree plantation at PCIN Family quarters.

3. Celebration of world Environment Day on 5 th June, 2021.

4. Replacement of existing water taps with Eco mist water taps mainly at all handwash areas. areas. (10 LPM to 1 LPM) -

5. Introduction of rain water harvesting system i.e collection of rain water from roof tops and sending it to Well through filteration.

Eco relay activity - This year we were unable to conduct community - oriented environmental programs due to covid-19 pandemic to avoid physical gathering.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Composition of the Board of Directors and Key Managerial Personnel:

The Board of Directors of the Company as on 31^st March 2022, consisted of Mr.R. Senthilkumar (DIN: 02170079), Managing Director, and Independent Non-Executive Directors Mr.S. Kalyanaraman (DIN: 08317984) and Mrs.

Rajashree Santhanam (DIN: 07162071) and Dr. Paul Jayakar (DIN: 00692315) and Non- Executive, Promoter Director Mr. Hideyuki Okunaga (DIN : 06792183) and Mr. Akinori Isomura (DIN: 09382377).. The composition of the Board of Directors is in compliance with Section 149 of the Companies Act, 2013.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. R. Senthil Kumar, Managing Director & CEO, Mr. Vinayagam Sume, Chief Financial Officer and Ms. P.Maheswari, Company Secretary of the Company are the Whole Time Key Managerial Personnel (KMP) of the Company as on date of this report. The remuneration and other details of KMP for the FY 2021-22 are provided in Extract of the Annual Return which forms part of this Directors' report.

B. Changes in Directors and Key Managerial Personnel

Mr. Tadasuke Hosoya was resigned on 31st December 2021 and Mr Akinori Isomra was appointed on 31st December 2021. The Board recommendspassing of the Resolution set out at item No.5 of the Notice convening the Meeting in this regard.

The term of office of Mr S Kalyanaraman (DIN: 08317984) an Independent Non -Executive

Director of the Company had come to an end on 31^st March 2022.

At the Board Meeting held on 10th February 2022, Mr S Kalyanaraman (DIN : 08317984 ) was re- appointed as an Additional Independent Director of the Company in terms of section 161 of the Companies Act, 2013 and Articles of Association of the Company and accordingly his appointment isplaced for approval of the shareholders. The Board recommends passing of the Resolution set out at item No.6 of the Notice convening the Meeting.

The tenure of Mr. R. Senthil Kumar, Managing Director of the Company expired on 31^st March 2022. On the recommendation of our Collaborators, M/s. Panasonic Corporation Japan, he was again re-appointed as Managing Director of the Company for further period of one year with effect from 1^st April 2022 to 31^st March 2023 and the same was approved by the Board of Directors of the Company at their meeting held on 10th February, 2022 and accordingly his appointment is placed for approval of the shareholders.

The Board of Directors at their meeting held on 16^th May,2022, also revised his remuneration with effect from 1^st April, 2022 subject to your approval. The revised remuneration as detailed in resolution is now placed before you for your consideration and approval under item no.7.

The Board recommends passing of the Resolution set out at item No.7 of the Notice convening the Meeting in this regard.

16. MEETINGS OF THE BOARD:

Four meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and notification dated 19^th March 2020 of Ministry of Corporate Affairs Government of India

17. PERFORMANCE EVALUATION:

The Board of Directors have carried out anannual evaluation of its own performance, Boardcommittees, and Individual Directors pursuant to theprovisions of the Act and SEBI Listing Regulations. The performance of the board was evaluated by the board after seeking inputs from all the directors on

the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In the Board meeting that followed the meeting of the Independent Directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and Individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire board, excluding the independent director being evaluated.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management personnel, Key Managerial Personnel and fixing their remuneration.

The objective and broad framework of the Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, for potential, and for growth. The Remuneration Policy reflects on certain guiding principles of the Companysuch as aligning remuneration with the longer term interest of the Company and its Shareholders. It alsoensures the effective recognition of performance and encourages a focus on achieving superior operational results.

The Nomination and Remuneration Committee recommends the remuneration of executive Directors which is approved by the Board of Directors, subject to the approval of Shareholders, where ever necessary. The level and composition of remuneration shall be reasonable and sufficientto attract, retain and motivate the Directors and Key managerial personnel of the quality required to run the Company successfully.

The Company's policy on directors' appointment and remuneration and other matters provided in

Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on www.panasoniccarbon.co.in

18. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements u/s 134(5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, your Directors confirm that they have:

1. Followed in the preparation of financial Statements, the applicable Accounting Standards and given proper explanation relating to material departures , if any;

2. Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit and Loss Account of the Company for that period;

3. Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act so as to safeguard the assets of the Companyand to prevent and detect fraud and other irregularities;

4. Prepared the Annual Accounts on a Going Concern basis;

5. Laid down internal financial controls in the Company that are adequate and were operating effectively; and

6. Devised proper systems to ensure compliance with the provisions of all applicable lawsand these are adequate and are operating effectively.

19. CORPORATE SOCIAL RESPONSIBILITY:

As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Health Care, Drinking Water, Rural Development and Sanitation. These projects are largely in accordance with Section 135 read with Schedule VII of the Companies Act, 2013 (Act).. The brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the financial year under review are provided in the Annual

Report on Corporate Social Responsibility Activities 2021-22 in Annexure-3 forming part of this report. The Policy adopted by the Company can be viewed at website of the Company. (www. panasoniccarbon. co.in)

20. AUDIT COMMITTEE:

The details pertaining to the composition of the audit committee are included in the Corporate Governance Report, which is a part of this report

21. GREEN INITIATIVE:

During the year 2021-22, we continued the sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous year, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.panasoniccarbon.co.in

Electronic copies of the Annual Report 2021-22 and Notice of the 40th AGM are sent to all members whose email addresses are registered with the Company / Depository Participant(s).

As per the MCA General Circular No.3/2022 dated 5th May 2022 and SEBI Circular vide SEBI/HO/CFD/ CMD1/CIR/ P/2020/79 dated 12th May, 2021, the requirements of sending physical Annual Report to those Shareholders who have not registered their email addresses as per the Regulations 36 (1) (b) and (c) of the SEBI (LODR) are dispensed with for listed entities who conduct their AGMs during the calendar year 2022 (i.e. till December 31, 2022). However, for members who have not registered their email addresses, those Members requiring physical copies can send a request to the Company Secretary, Panasonic Carbon India Co. Limited.

The Company is providing remote e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for remote e-voting and Video conference e-voting procedures are provided in the Notice.

22. EXTRACT OF ANNUAL RETURN:

As per the requirements of Section 134 (3)(a) read with Section 92(3) of the Act and Rules framed thereunder, the extract of the annual return for FY 2021-22 is given in Annexure-4 in the prescribed Form No.MGT-9, which is a part of this report. The same is available on

23. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 (1) ofthe Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed to this report as Annexure - 5.

There are no qualifications or adverse remarks in the Secretarial Auditors' Report which require any clarification/ explanation.

24. PARTICULARS OF EMPLOYEES:

The information required pursuant to section 197(12) read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 and Companies (Particulars of Employees), Rules 1975, in respect of employees of the company and Directors is furnished in Annexure - 6.

25. DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti-Sexual Harassment Policy in line with the requirement of the Prevention of Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013. Internal complaints committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The Company has not received any complaint of Sexual harassment during the year 2021-22 under review.

26. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investmentsmade by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

27. RELATED PARTY TRANSACTIONS:

All related party transactions or arrangements entered in to by the company during the financial year were on an arm's length basis and were in the

ordinary course of business. In Compliance with the provisions of the Act and Regulation 23(2) of the SEBI Regulations, 2015, all related party transactions had been placed before the Audit Committee for prior approval.

Pursuant to Section 134(3) of the Act read withRule 8(2) of the Companies (Accounts) Rules, 2014 information pertaining to related parties are given in Form AOC-2 as Annexure-7 of the report.

28. WHISTLE BLOWER POLICY/VIGIL MECHANISIM:

In compliance with provisions of Section 177 of the Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has constituted Vigil Mechanism/Whistle Blower Policy for Directors, employees and vendors of the Company. The Whistle Blower Policy enables the Directors, employees and vendors to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or ethics Policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The said policy is available at the Company 's website at www.panasoniccarbon. co.in

We further affirm that no employee has been denied access to the audit committee during the year 2021-22.

29. STATUTORY AUDITORS:

M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) allotted by the Institute of Chartered Accountants of India (ICAI) were appointed as the Statutory Auditors of the Company at the 35th Annual General Meeting of the Company held on 8th August 2017 to hold office for a term of five years till the conclusion of 40th Annual General Meeting of the Company. The Board was authorized to fix such remuneration as may be recommended by the Audit Committee in consultation with the Auditors.

Accordingly, tenure of statutory auditors expired by the financial year ended 31st March 2022. Company has appointed BSR &Co, LLP, Statutory auditors for another five years with effect from 1st April, 2022.

Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if

made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.

There are no qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation. The Notes to financial statements are self-explanatory, and needs no further explanation.

30. COST AUDITORS:

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audits) rules, 2014, as amended, Carbon Rods manufactured by your Company are not covered under the ambit of mandatory cost audit.

31. INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, the Independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). There has been no change in the circumstances affecting their status as independent directors of the Company.

Whenever, new Non-executive and Independent Directors are inducted in the Board they are introduced to our Company 's culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, board procedures, our major risks and management strategy.

The Independent Directors of the Company had met during the year on 10th February 2022 to review the performance of Non- Independent Directors and the Board as a whole. They had assessed the quality, quantity and timelines of flow of information between the Company management and the Board.

During the year under review, the non-executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, Commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company

32. RISK MANAGEMENT:

As per Regulation 21 of SEBI (LODR) Regulations, 2015, amendments regulation with effect from 10/01/2020,

the provisions of this regulation shall be applicable to top 500 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year. Hence it is not applicable to us since we are not falling under the category of top 500 listed entities.

However, in the Board of Directors' Meeting discussed about the elements of risk in different areas of operations and to develop various suitable actions associated to mitigate the risks.

33. SHARES:

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the financial year 2021-22

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the financial year 2021-22

c. BONUS SHARES

No Bonus Shares were issued during the financial year 2021-22

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees during the financial year 2021-22

34. INFORMATION ABOUT HOLDING / SUBSIDIARY/ JV/ ASSOCIATE COMPANY:

Your Company continues to be the subsidiary of M/s. Panasonic Corporation, Japan and the Company does not have any Subsidiary, Joint Venture or Associate Company

35. OTHER DISCLOSURES:

a) No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

b) There was no change in the nature of business during FY 2021-22

c) No significant material orders were passed by the regulators or court during the financial year which would have impacted the going concern status of the Company's operation in the future.d) There is no such fraud required to be reported under section 143(12) of the Companies Act, 2013.

d) There is no such fraud required to be reported under section 143(12) of the Companies Act,2013. : 08317984 DIN: 02170079

e) The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

37. CAUTIONARY STATEMENT:

The cautionary Statement in this Report, more particularly those which relate to Management Discussion and Analysis as explained in the Directors Report, describing the Company's business overview,

projections, operational performances , estimates and expectations may constitute 'forward looking statements' within the meaning of applicable laws

and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

38. ACKNOWLEDGEMENT:

Your Directors wish to record their sincere appreciation for the support, co-operation, guidance and assistance provided by the Foreign Collaborators, M/s. Panasonic Corporation, Japan. Your Directors thank the valued Customers for their patronage,

the Suppliers for their timely and quality supply, the Shareholders for the confidence reposed and the Bankers, State and Central Governments for extending their invaluable support.

Your Directors place on record their appreciation of the dedicated services of the employees of the Company at all levels for the growth of the Company.

Your Directors are especially thankful to the esteemed Shareholders for their continued encouragement and support

By Order of the Board of Directors For Panasonic Carbon India Co. Limited