Nippo Batteries Company

The Directors have pleasure in presenting the Thirty Fifth Annual
 Report of your Company together with the Audited Balance Sheet as at
 March 31, 2008, the Profit & Loss Account for the year ended that date
 and the Auditors Report thereon.
 
 REVIEW OF PERFORMANCE
 
 Dry Cell Batteries
 
 The Dry Cell Battery Industry production as a whole registered a
 de-growth rate of about 0.68% for the year 2007-08. Your Companys
 production had increased from 649 million pieces to 668 million pieces
 showing an increase of 2.93%. The sales had so increased from 652
 million pieces to 670 million pieces. In terms of value, your Company
 had registered a turnover of Rs.  316 crores as against Rs.339 crores
 for the previous year with a de-growth rate of 6.78%.
 
 Torch Lights
 
 The sales volume of torchlights had increased from 8.20 lakh pieces to
 13.64 lakh pieces as compared to the previous year.
 
 FINANCIAL RESULTS
 
 The profit before tax for the year under review is at Rs. 24.58 crores
 as against Rs.9.28 crores in the previous year. The profit had been
 increased due to decrease in the prices of raw materials like zinc,
 reduced overhead expenditure and improve the per employee productivity
 at the plants.
 
 The financial results for the year 2007-08 as compared with the
 previous year are summarized as under:
                                                 2007-08        2006-07
                                         (Rs. in crores) (Rs. in crores)
 
 Profit for the year                             29.86         15.92
 Less: Depreciation for the year                  5.20          6.65
 Profit after depreciation                       24.65          9.26
 Prior period adjustments etc.                    0.06          0.02
 Profit Before Tax                               24.59          9.28
 Provision for tax including
 Deferred tax                                     8.58          3.27
 Profit after Tax                                16.01          6.01
 Surplus in P&L Account
 brought forward                                  4.81          4.91
 Profit available for appropriation              20.82         10.92
 Your Directors recommend the following 
 appropriations :
 General Reserve                                  7.50          0.62
 Proposed Dividend                                7.50          4.69
 Tax on proposed dividend                         1.27          0.79
 Surplus in P&L A/c carried forward               4.55          4.82
 Total                                           20.82         10.92
 
 DIVIDEND
 
 Your Directors are happy to recommend a dividend of 200% for the year
 2007-08. This Dividend, if approved, will be paid to the Shareholders
 whose names appear on the Register of Members as on 18th June, 2008.
 The Company intends to pay the dividend on 24th June, 2008 itself,
 instead of waiting for the statutory period of 30 days permitted by the
 provisions of the Companies Act, 1956.
 
 STATEMENT PURSUANT TO LISTING AGREEMENT
 
 The Companys Securities are listed at the Stock Exchanges of Mumbai,
 Chennai, and at the National Stock Exchange. The Company has paid the
 Annual Listing fee to all the Stock Exchanges.
 
 CORPORATE GOVERNANCE
 
 A separate report on Corporate Governance along with Auditors
 Certificate on its compliance is attached as Annexure C to this
 report.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
 
 Your Company has always been in the forefront of energy conservation.
 Several measures to conserve energy and to reduce the costs associated
 with it have been taken.  The details regarding conservation of energy,
 foreign exchange, technology absorption including R&D efforts (as
 required under Section 217(1) (e) of the Companies Act, 1 956) are
 given in Annexure A to this Report.
 
 PERSONNEL
 
 Your Directors wish to place on record their appreciation for the
 dedication and hard work put in by the employees at all levels for the
 overall growth of your Company.  Relations with the employees at both
 the Factories and Head office and other Branches were cordial during
 the year.
 
 Particulars of employees as required under Section 217(2A) of the
 Companies Act, 1956 are set out in Annexure B to this report.
 
 DIRECTORS
 
 In accordance with the Articles of Association of the Company Justice
 Mr. S. Natarajan and Mr. V.R. Gupte retire by rotation at this ensuing
 Annual General Meeting., They being eligible, offer themselves for re-
 appointment.
 
 Mr. Y.Yokoe, resigned from Board with effect from 23rd May 2007. Your
 directors wish to place on record their appreciation of services
 rendered by Mr. Y. Yokoe.
 
 Mr. M.Shiga resigned from Board with effect from 23rd May 2007. Your
 directors wish to place on record their appreciation of services
 rendered by Mr. M. Shiga.
 
 Your Collaborators M/s. Matsushita Electric Industrial Co.  Ltd.
 nominated Mr. Masaaki Watanabe in place of Mr. Y.  Yokoe and Mr.
 Maasaki Watanabe has been appointed as Additional Director of Board
 effective from 18th July 2007.
 
 Mr. Masaaki Watanabe vacates office at the ensuing Annual General
 Meeting.
 
 Your Collaborators M/s. Matsushita Electric Industrial Co.  Ltd.
 nominated Mr. Junichi Goto in place of M.Shiga and Mr. Junichi Goto has
 been appointed as Additional Director of Board effective from 18th July
 2007.
 
 Mr. Junichi Goto vacates office at the ensuing Annual General Meeting.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors Responsibility Statement, your
 Directors hereby confirm that:
 
 a) in the preparation of statement of accounts, the applicable
 Accounting Standards have been followed;
 
 b) 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 on
 31st March, 2008 and of the Profit of the Company for that period;
 
 c) 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 frauds and other irregularities;
 
 d) The annual accounts are prepared on a going concern basis.
 
 WIND MILL
 
 During the year your company has commissioned 1.5MW Wind Mill at
 Tirunelveli District., Tamil Nadu at an investment of Rs.9.26 Crores.
 The units generated are being sold to Tamilnadu Electricity Board
 (TNEB) at applicable rates as notified by the Board. The Company is
 expected to get Carbon Credit also.
 
 AUDITORS
 
 M/s. R Srinivasan & Co, Chartered Accountants, Statutory Auditors of
 the Company retire at the ensuing Annual General Meeting and are
 eligible for re-appointment.  The Company has received a Certificate
 from them confirming that this appointment will be within the limits
 laid down under Section 224(1 B) of the Companies Act, 1956.
 
 ACKNOWLEDGEMENT
 
 Your Directors thank the Central and State Governments and the Banks
 for their continued help and support. Your Directors also wish to
 record the appreciation for the guidance and co-operation received from
 the Foreign Collaborator M/s. Matsushita Electric Industrial Company
 Ltd., Japan.
 
 Your Directors also thank the Authorised Wholesale Dealers, Stockists
 and Retailers for their excellent support under difficult conditions
 and the Consumers for their continued patronage of your Companys
 products. Your Directors are specially thankful to the esteemed
 Shareholders for their continued encouragement and support.
 
                           For and on behalf of the Board of Directors 
                                    For Nippo Batteries Co.Ltd.
 
 Place: Chennai                           Justice S. Natarajan
 Date : 23rd April, 2008                      Chairman