India Nippon Electricals Ltd — AGM Information 2018

Aug 27, 2018

Regd. Office : 11 & 13, Patullos Road, Chennai - 600 002. CIN L31901TN1984PLC011021 (All Correspondence to be addressed to Registered Office)

Tel : +91-44-2846 0073 Fax : +91-44-2846 0631 e-mail : inelcorp@inel.co.in Web : www.indianippon.com

27 Augu�t 2018

The Manager-Listing Department National Stock Exchange of India Ltd Exchange Plaza, 5 th Floor, Plot no C 1, G Block, IFB Centre, Bandra Kurla Complex, Bandra (East), Mumbai 400051 Fax:(22) 26598237 /26598238 Scrip: INDNIPPON.

BSE Ltd Phiroze Jee Jee Towers Dalal Street, Mumbai 400001 Fax: (22) 22721072/22722061 Scrip: 532240

BSE Listing Center: on-line filing

NEAPS: on-line filing Dear Sir(s)/ Madam.

Sub: Outcome of the proceedin9s of the 33rd Annual General meeting of the company held today i.e .• 27th Aug'18 and copy of MD's Speech-reg.

1. We wish to inform you that at the 33'dAnnual General Meeting (AGM) of the members of India Nippon Electricals Limited (the Company) held today, the 27th August 2018 at 10:30 AM at Kasturi Srinivasan Hall (Music Academy Annex), 314, TTK Road, Chennai-600018, the shareholders have approved all the 7 resolutions as set out in the Notice.

2. As per the statutory requirements, the Chairman provided the facility of voting for all the resolutions as detailed below, th roug h 'b a II ot papers to a II t h h h ose s are o Id ers w o h d d h atten e t e AGM an d d'd I not part1c1pate 1n remote e-voting:

Resolution No.	Subject matter of Resolution	Type of Resolution
	Ordinary Business:
1.	Adoption of audited accounts for the year ended 31st March 2018 and the	Ordinary
	Directors' and Auditors' report thereon
2.	Declaration_ of Dividend for the year 20·17-18	Ordinary
3.	Election of Mr T Momose as Director liable for retirement by rotation	Ordi.nary
	ISpecial Business	l
4.	Election of Ms Priyamvada Balaji as Director, liable for retirement by rotation	Ordinary
5.	Ratification of the remuneration of Mr K Suryanarayanan, the Cost Auditor for	Ordinary
	the year 2018-19
6.	Approval of payment of Commission to Directors	Special
7.	Ratification/ Approval of Related Party Transactions	Ordinary

1. The details of 'consolidated voting results' of both 'physical ballot' and the 'remote e-voting' by the shareholders on all the resolutions as set out in the Notice of AGM will be forwarded separately, in the format prescribed under Regulation 44 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

2. Pursuant to Reg.30 read with Schedule III (A) (12) of the Listing Regulations, we attach a copy of the MD's Speech delivered today at the 33rd AGM. This is for your information and record.

Thanking you Yours sincerely For t' �� ;.ctricals Ltd

GV�TRAM Company Secretary

INDIA NIPPON ELECTRICALS LTD

MD's speech

Speech delivered by Mr. Arvind Balaji Managing Director at the 33rd Annual General Meeting of the Company held on 27th August 2018 at Chennai

G VENKATRAN Company Secretary

INDIA NIPPON ELECTRICALS LIMITED

LADIES AND GENTLEMEN

It is my privilege to welcome you all, on behalf of the Board of Directors and the Management Team of India Nippon Electricals Limited, to the 33rd Annual General Meeting of the Company.

The Company's Annual Report and Audited Accounts for the year ended March 31, 2018, have been with you for some time now and with your kind permission, shall take them as read.

I would like to begin by giving an outline of the macroeconomic environment which prevailed in 2017-18 as well as the overall industry performance and developments to provide a proper context for you to evaluate the performance of your Company during the year. Thereafter, I would like to present the highlights of your Company's performance and the way forward.

MACRO-ECONOMIC ENVIRONMENT

Indian economy has recorded a GDP growth of 6.6% in FY 17-18 against 7.1% last fiscal. First half has faced a temporary slowdown due to reform measure of GST implementation and cascading effect of demonetisation from previous year. Growth in Govt expenditure, which was the driver in the previous year also fell in this year. This has resulted in subdued demand in early part of the year. However, India continues to be one of the best performing economies in the world despite the temporary blip. The economy has shown signs of recovery in later part of the year. Industrial production has picked up after bottoming out in June 2017. Inflation has come down whereas Bond yields keep rising and repo rates remain flat.

While few measures like PSU Bank recapitalisation, Dynamic fuel pricing, Disinvestment from PSU will likely help revive the economy, increase in NPA in banks and increasing fuel prices in dollar terms and weakening of the Indian rupee remain a concern.

OVERALL AUTO INDUSTRY PERFORMANCE

Automobile industry recorded excellent growth of nearly 15% in FY 17-18 compared to 5.4% in FY16-17 after a lull witnessed in the last quarter of previous year due to demonetisation. The two wheeler industry registered an overall growth of ground 15% led by 20% and 16% growth in scooter and motorcycle segments respectively. Mopeds showed negative growth of 5%. Three wheeler segment recovered and showed 30% growth against negative growth of 16% last year.

Two wheeler grew due to launch of new models and also for good monsoon growth and the underlying growth in rural economy. Dynamic daily change in fuel pricing and increasing USD fuel prices have not deterred the growth in two wheelers. However, after market suffered set back due to initial hiccups in GST implementation. Two wheeler OEMs have started focussing more on speedy implementation of BS VI norms.

$\overline{2}$

Certified Copy For INDIA NIPPON ELECTRICALS LTD $\mathfrak{cV}$

Company Secretary

COMPANY PERFORMANCE IN 2017-18

Your company had a sales growth of around 29% as against industry growth of 15%, mainly due to increase in market share of our customers, robust arowth in sales of electronic parts for three wheeler seament and higher share of business from the various customers in traditional products. Business from electronic products has increased by about 36%. Your company showed sales growth in all seaments of motor cycle, scooter and moped outperforming the industry growth and also recorded a significant growth of 38% in aftermarket.

Profit before tax and exceptional items for the year 2017-18 has increased by around 49% over the previous year because of increased level of sales and profitable sales product mix and cost reduction in material cost.

Your company has embarked upon improvement of shop floor facilities with modern equipment and efficient and reliable production processes. Our customers recognised the company's efforts in cost reduction and quality improvements. De-risking of supplier base was one of the areas focused to ensure regular supplies of electronic components apart from cost reduction activities.

During the year, the shares of your Company were subdivided into 2 shares of Rs. 5 each as against a share of Rs.10 each. The Board of Directors had declared a first interim dividend of Rs.6 for every equity share of face of value of Rs.10 each on 29th January, 2018 and a second interim dividend of Rs.3.50 for every equity share of face of value of Rs.5 each on 8th May 2018. Overall, this is an increase of 30% in dividend amount distributed to you compared to 2016-17.

Transactions with your Company's main customer, TVS Motor Company Limited (TVSM) had grown to 49% of the total turnover for 2017-18 as against the last year's transaction of 45% due to the strong performance of TVSM in the market place.

Your company has started to leverage the long standing relationship of Lucas TVS Limited (LTVS) with customers which has resulted in new business opportunities. Joint sourcing of key raw materials along with Lucas TVS Limited has resulted in cost savings in both import and domestic procurement.

PERFORMANCE & OUTLOOK FOR 2018-19 AND INITIATIVES FOR THE FUTURE

Now let me brief you about your Company's performance in Q1 of 2018-19, outlook for rest of 2018-19 and few activities initiated towards the future development of the company.

During the first Quarter of 2018-19, your Company achieved a sales growth of 11.5% over the same Quarter of previous year. Profit Before interest grew by 14% from Rs.16 Crores to Rs.18.2 Crores.

Company Secretary

3

INDIA NIPPON ELECTRICALS LIMITED

As vehicles become more complex and rely more on electronics, the trend of usage of electronic components in automobiles is gradually increasing and more electronic features are added irrespective of the models. Your company is developing products to take advantage of this trend. We are in an advanced stage of setting up Advanced Engineering Technical Centre in the ongoing year which will help us commercialize various new products in the coming years.

Further, ongoing trade war among the countries is creating trade barriers and may result in disturbances in global supply chain and foreign exchange markets impacting increase in input costs. However, this could throw up opportunities due to increased focus on encouraging domestic production.

Your company is fully geared up to manufacture and roll out future electronic products keeping in mind new emission requirements. Few traditional products are likely to be phased out in the medium term. Automobile industry worldwide is undergoing a sea change in terms of technology and the Indian auto market is responding positively to it.

Notwithstanding the focus on developing new products, the automotive industry is a very competitive industry. Your company is taking aggressive cost reduction measures to eliminate waste and improve our competitiveness.

CONCLUSION

Overall, the directors are confident that your Company is ready to rise up to meet the evolving changes in the industry and that your Company will enhance its market position. Your Company is committed to enhance the scale up the efficiency and productivity of business benchmarked to world-class standards. We believe these commitments and beliefs will contribute to the successful accomplishments of all our future growth endeavours.

ACKNOWLEDGEMENT

On behalf of all my colleagues on the Board and on behalf of all of you, I wish to express sincere gratitude to M/s Lucas Indian Service Limited, Chennai and our collaborator, M/s Mahle Electric Drives Japan Corporation for their continual cooperation and support.

I also wish to thank M/s ICICI Bank, Bank of Baroda, Axis Bank, Governments at the Center and in the States of Tamil Nadu, Haryana, Puducherry, Maharashtra and other Government agencies, who have extended their co-operation.

I wish to thank all the customers, employees and suppliers for their continued support and services.

Thank you,

This does not purport to be a record of the proceedings of the Annual General Meeting

$\overline{4}$

Certified Copy For INDIA NIPPON ELECTRICALS LTD GVF Company Secretary