The Directors have pleasure in presenting the 27th Annual Report together with the Company's audited financial statements for the financial year ended March 31, 2015:

FINANCIAL HIGHLIGHTS

The Company's financial performance for the year under review along with previous year's figures is given hereunder:

                                                       Rs. in Crores
 
Particulars                                  2014-2015     2013-2014

Net Sales                                       188.56        157.33

Other Income                                      0.62          0.67

Total Income                                    189.18        158.00

Profit before Interest and Depreciation           6.84          3.78

Less: Interest                                    2.87          3.83

Less: Depreciation                                3.70          3.39

Profit/(Loss) before Tax                          0.27         (3.44)

Add/(Less): Exceptional Items                     0.14             -

Tax expense                                          -          0.01

Profit/(Loss) after Tax                           0.41         (3.43)

Less: Current Income Tax                             -             -

Profit/(Loss) after Tax                           0.41         (3.43)

Balance carried forward to Balance Sheet          0.41         (3.43)

Your Company was able to register a net profit of Rs.0.41 Crores during the year 2014-15 after incurring losses for the past 3 years. The improvement in the performance of the Company under a sluggish economy and weak consumer demand is a testimony to the fact that various measures initiated by the Company to reduce cost and improve profitability have started yielding results. The increased focus on cost reduction measures at its manufacturing facility, office and branches with special emphasis on reducing input costs, overhead expenses and reduction in interest cost helped the Company to improve its financial performance. The increase in exports coupled with a favorable exchange rate also helped the Company to improve its performance in 2014 -15.

Considering that the overall consumer sentiment and business confidence which prevailed during the financial year 2014 - 15 was not conducive to the business due to a host of factors, the fact that your Company was able to increase its sales compared to previous financial year with an improvement in the bottom line is an encouraging fact. The management of the Company is of the opinion that the change in circumstances wherein the Company was successfully completed the delisting process and Panasonic buying out the stake held by the Indian Promoter will provide the Company with much needed capital back-up and operational flexibility.

During the year under review the gross sales of the Company stood at Rs. 208.33 Crores as against Rs. 176.48 Crores in the previous year. The Company recorded a profit of Rs. 0.41 Crores as against loss of Rs. 3.43 Crores incurred in the previous year.

There was no material change for commitment affecting the financial position of the Company between the end of the financial year of the Company and the date of the report other than disclosed in the financial statements. There was no change in the nature of business during the year.

Delisting of Shares from Stock Exchanges and Buyout of Shares held by Indian Promoters by Panasonic

Panasonic Corporation, foreign Promoter of the Company bought out the shares of the Indian Promoter Group viz., P.Obul Reddy Group in an off-market acquisition. Subsequent to the buyout of shares from the Indian promoters, Panasonic Corporation, conveyed its intention to the Company to voluntarily delist the Company's Equity shares from the Stock exchanges on which they were listed, viz., the BSE Limited (BSE) and Madras Stock Exchange Limited (MSE) in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.The objective of the delisting of shares by the promoters of the Company was to increase ownership of Panasonic Corporation in the Company which would help Panasonic Corporation exercise increased operational flexibility to support the Company's business and to provide an exit opportunity to the public shareholders of the Company, given the low liquidity in the Equity Shares of the Company.

The proposal to delist the equity shares of the Company from the Stock Exchange was approved by the shareholders through Postal Ballot. Thereafter the Reverse Book Building (RBB) process for discovery of the exit price and acquiring the required number of shares had been carried out in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009. The discovered price arrived by RBB was Rs.380/- per equity share which Panasonic decided to accept and the shares offered within the discovered price under RBB were accepted by Panasonic. The procedural formalities in respect of delisting had been completed during April 2015 and the trading in the equity shares of the Company had been discontinued w.e.f April 17, 2015.

The remaining public shareholders of the Company who did not or were not able to participate in the RBB process or who unsuccessfully tendered their Equity Shares in the RBB process, will be able to offer their Equity Shares to the Acquirer viz., Panasonic at the Exit Price of Rs. 380 for a period of twelve (12) months from April 24, 2015 upto April 23, 2016.

Amendment of Articles of Association

In order to align the provisions in the Articles of Association ("AoA") with the provisions of Companies Act, 2013 and to address the change in the Management Structure consequent to the exit of Indian Promoters, the Company has amended its AoA by replacing it with new set of AoA by obtaining shareholders approval through Postal Ballot effective from June 22, 2015.

Dividend

Considering that the Company does not have any retained profit and also carries accumulated losses in its books, no dividend is recommended in compliance with the Companies (Declaration and Payment of Dividend) Rules, 2014.

Board of Directors

The composition of the Board of Directors of the Company is furnished in the Corporate Governance Report annexed to this Report. Consequent to the transfer/sale of shares held by the Indian Promoter namely P. Obul Reddy Group to Panasonic Corporation, Mr. Harshad Reddy, representative of the Indian Promoter on the Board resigned from the directorship of the Company with effect from October 17, 2014.

In line with the provisions of revised Clause 49 of the Listing Agreement entered into with the Stock Exchanges and proviso to Section 149 (1) (b) of the Companies Act 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 , requiring appointment of a Woman Director on the Board of the Company, Ms. T.S. Sundarambal was appointed as an additional director (Independent) on the Board with effect from October 01, 2014. She holds office up to the date of the forthcoming Annual General Meeting and is required to seek appointment at the Annual General Meeting. Vide letter dated August 24, 2015, Ms. Sundarambal had informed the Board that she is not intending to seek appointment at the Annual General Meeting. The Rules relating to appointment and qualification of Directors, requiring appointment of Woman Director are not applicable to the Company with effect from April 24, 2015 due to the delisting of equity shares of the Company from the Stock Exchanges carried out in accordance with the SEBI Delisting Regulations.

Mr.Shigeru Dono,a non-executive director representing Panasonic Corporation on the Board of the Company resigned with effect from April 28, 2015 and Mr.Yosuke Matsunaga was appointed as Director in the causal vacancy created due to the resignation of Mr.Shigeru Dono on the same day. Since the term of Mr.Shigeru Dono as Director would have come to an end on the date of ensuing AGM had he be continued and considering that Mr. Yosuke Matsunaga was appointed in the casual vacancy created due to resignation of Mr.Shigeru Dono, the resolution seeking approval of the shareholders for the appointment of Mr. Yosuke Matsunaga as a Director of the Company liable to retire by rotation is included in the notice of Annual General Meeting to enable him to continue as a Director on the Board.

The term of Mr. Hidenori Aso as Managing Director of the Company in terms of the approval granted by the shareholders of the Company came to end on July 31, 2015. The Board of Directors based on the recommendation of Nomination and Remuneration Committee of the Board approved re-appointment of Mr. Hidenori Aso for a further period of 3 years effective August 1, 2015. The resolutions seeking approval of the Shareholder for the re-appointment of Mr. Hidenori Aso is included in the Notice of the Annual General Meeting.

Declaration by Independent Directors

All the Independent Directors submitted the declaration of Independance as required under section 149(7) of the Companies Act, 2013 stating that they meet criteria of Independance as provided under section 149(6) and clause 49 of the Listing Agreement.

Number of Meetings of the Board

The Board of Directors of your company had 11 meetings during the financial year 2014-15. Details of the Board Meetings held for the year 2014-15 have been furnished in the Corporate Governance Report and forms part of this report.

Separate Meeting of Independent Directors

As required under schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate meeting of the Independent Directors was held on February 13, 2015. The meeting reviewed the performance of Non-Independent Directors and the Board as a whole, the performance of the Chairperson, taking into account the views of other directors and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Audit Committee

The Audit Committee of the Board is constituted on the terms of reference as prescribed under Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board of Directors) Rules 2014 and Clause 49 of the Listing Agreement. The details of the Audit Committee composition, number of meetings held, etc. are disclosed in Corporate Governance Report which forms part of this Report.

Remuneration Policy and Appointment to the Board / Key Managerial Personnel

On the recommendation of the Nomination and Remuneration Committee (NRC), the Board has framed a remuneration policy for all employees of the Company including senior management and the Directors. The remuneration policy of the Company is designed to attract, motivate and retain suitable manpower in a competitive market. The remuneration package for each person is designed keeping a balance between fixed remuneration and profit and performance-linked incentives in order to achieve corporate performance targets. The Board affirms that the remuneration is as per the Remuneration Policy of the Company. The Governance policies laid down by the Board of directors of your company include:

i. Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management

ii. Policy on remuneration to the Directors, Key Management Personnel and Senior Management and other Employees

The Policy for appointment and removal of Directors, KMPs and Senior Management and their Remuneration is provided in Annexure 1 to the Board's report.

Key Managerial Personnel (KMPs)

During the year under review, Mr. Tom Antony who was holding the position of both Chief Financial Officer and Company Secretary had relinquished his position as company secretary in order to align with the provisions of Companies Act, 2013. Subsequent to this Ms. Tessa J K was appointed as the Company Secretary of the Company on August 29, 2014.

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Hidenori Aso, Managing Director, Mr. Tom Antony Chief Financial Officer and Head-Operations and Ms. Tessa J K Company Secretary served as the Key Managerial Personnel of the Company for the financial year 2014 - 2015. Ms.Tessa J.K had resigned from the service of the Company effective July 13, 2015.

Directors' Responsibility Statement

Pursuant to the requirement 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, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

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

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

e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of adequacy of Internal Financial Controls with reference to the financial statements

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the company's policies, the safe guarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

Extract of Annual Return

Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as "Annexure 2".

Related Party Transactions (RPT)

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 during the financial year were in the ordinary course of business and on an arm's length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties in the financial year which were in conflict with the interest of the Company.

All RPTs are placed before the Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. The Board of Directors of the Company, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. None of the Directors has any pecuniary relationships or transactions via-a-vis the Company.

Suitable disclosures as required by the Accounting Standards (AS18) have been made in the notes forming part of the Financial Statements. The details of transactions entered into with the Related Parties are enclosed as "Annexure 3".

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Sandeep & Associates Practicing Company Secretaries, Chennai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as "Annexure 4".

There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report.

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Companies (Accounts) Rules, 2014

The particulars as prescribed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure 5" which forms part of this report.

Statutory Auditors

The term of office of M/s. Brahmayya & Co, Chartered Accountants, [ICAI Registration No.000511S], as Statutory Auditors of the Company will expire with the conclusion of forthcoming Annual General Meeting of the Company. M/s. Brahmayya & Co., Chartered Accountants, has been acting as the Statutory Auditors of your Company since 1991.

A special notice has been received from Panasonic Corporation, Japan in its capacity as Member of the Company, proposing a resolution at the forthcoming Annual General Meeting for appointment of M/s. BSR & Co. LLP, Chartered Accountants as Statutory Auditors of the Company in place of M/s. Brahmayya & Co, Chartered Accountants being the retiring Auditor. The Board of Directors of the Company on the recommondation of Audit Committee, subject to approval of the Members, has recommended M/s. BSR & Co. LLP Chartered Accountants as the Statutory Auditors of the Company. A resolution proposing appointment of M/s. BSR & Co. LLP Chartered Accountants as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the Notice.

M/s. Brahmayya & Co, over many years, supported the Company and have maintained the highest level of governance, rigour and quality in their audit. The Board places on record its appreciation for the services rendered by M/s. Brahmayya & Co, Chartered Accountants as the Statutory Auditors of the Company

Your Company has received a written confirmation from M/s. BSR & Co. LLP Chartered Accountants that their appointment, if made, would satisfy the criteria provided in Section 141 of the Companies Act, 2013 for their appointment.

Further, the report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

Internal Auditors

The Company engaged M/s. Venkatesh & Co., Chartered Accountants, as internal Auditors of the Company. The scope of work includes review of processes for safegurding the assets of the Company, review of operational efficiency, effetiveness of systems and processess and assessing the internal control strengths in all areas.

Anti- Sexual Harassment Policy

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 became effective from December 2013 and is applicable to the Company. In line with the requirement of this Act, the Company had constituted an Internal Compliance Committee and also framed an Anti Sexual Harassment policy for prevention of sexual harassment at workplace. During the year under review there was no complaint reported under this.

Deposits / Loans & Advances, Guarantees or Investments

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

Statement under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

There are no employees drawing remuneration of more than Rs. 60 lakhs or drawing remuneration of Rs. 5 lakhs per month, if employed part of the year as required under Rule 3(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

Corporate Social Responsibility

Panasonic Company as a whole aims at a CSR Management that is trusted by the society and implements this by undertaking several initiatives that contribute to the society and promote energy saving and environmental sustainability management. Developing green and energy-efficient products, reducing CO2 emissions, resource circulation, contributing to local communities, expanding with environmental technology at the core, encouraging the spread of environmental conservation activities, developing an excellent working environment and promoting 'eco ideas' for everybody everywhere, are some of the ways Panasonic carries this out. The manufacturing process and plants of your Company adhere with the standards laid down by various regulatory authorities for the protection of environment and safety of workers engaged in the manufacturing process.

The Corporate Social Responsibility of your Company has been guided by the CSR Management philosophy of Panasonic coupled with its basic management philosophy which states that the mission of an enterprise is to contribute to the progress and development of society and the well-being of people worldwide. The sound business practices adopted by the Company are in line with its value system. As a responsible corporate citizen, your Company greatly values the conservation of our environment and is committed to conducting business activities with minimal adverse impact on the environment.

There was no mandatory requirement for the Company to spend any amount towards CSR activities as it was a loss making company in the past 3 years. However as a good corporate citizen, it has continued its green belt activities by planting tree samplings in and around the factory premises. As a part of saving energy, consumption and resources, your Company is working considerably in reducing paper usage. Ground water conservation measures include recycling the waste water with the help of sewage water treatment plants and utilizing it for purposes like gardening, cleaning, etc. In an effort to promote CSR activities in local areas, the Company sponsors healthcare Programs and also extends financial assistance to improve the infrastructure requirement of schools functioning in its neighborhood. .

Product safety and quality underline the Company's determination to deliver a sense of security and satisfaction in its products to all its customers and your Company obtained the certificate of membership from Safety Association for Everyone (SAFE). The Company ensures product safety by enhancing product designs and adhering strictly to Panasonic's Safety Design Standard, regulatory requirements and Restriction of Hazardous Substances ("RoHS") compliance. The Company has through its "eco ideas" activities contributed to the prevention of global warming by implementing measures that help to reduce CO2 emissions. The operations have been reviewed to improve energy efficiency by reducing energy, fuel and diesel consumptions in daily operations which have a direct impact on CO2 emissions.

Corporate Governance

Your Company recognizes the importance and need of good Corporate Governance as an important step in creating stakeholders confidence and for a healthy and stable Capital Market thereby enhancing the long term enterprise value. In spite of the fact that the requirements under Clause 49 is not mandatory for the Company as per the revised Clause 49, your Company endeavors to follow the corporate governance requirements under Clause 49 of the Listing Agreement.

As required under Clause 49 of the Listing Agreement, Management Discussion and Analysis Report (Annexure '6') and Corporate Governance Report (Annexure '7') along with Auditors' certificate regarding compliance of the conditions of Corporate Governance are given as part of this Annual Report. In view of the delisting of the equity shares of the Company from the Stock Exchanges with effect from April 24, 2015, the Corporate Governance requirements prescribed under clasue 49 of the Listing Agreement as well as the provisions in respect of Corporate Governance under Companies Act, 2013 applicable to listed companies are not applicable to the Company. However the Company continues to comply with most of the Corporate Governance requirements applicable to listed companies in its efforts to maintain highest degree of Corporate Governance.

Transfer of Amounts To Investor Education And Protection Fund

Pursuant to the provision of Section 205A (5) of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

Industrial Relations

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

Code of Conduct

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

Acknowledgements

Your Directors wish to express their deep sense of appreciation for the committed services of all the employees of the Company. They also place on record their appreciation for the support and co-operation your Company has been receiving from its Bankers, Customers, Distributors, Dealers, Suppliers and other Business Partners and also the valuable assistance received from the collaborator Panasonic Corporation, Japan. Your Directors take this opportunity to thank all stakeholders, banks, regulatory and government authorities for their continued support. As we continue to grow and expand, we look forward to sharing our success in the years ahead with all our stakeholders.

                             For and on behalf of the Board

Place : Chennai           Hidenori Aso         A.Raghavendra Rao