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Eveready Industries India Ltd.

BSE: 531508 Sector: Consumer
NSE: EVEREADY ISIN Code: INE128A01029
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OPEN 299.90
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VOLUME 6066
52-Week high 358.80
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P/E 26.11
Mkt Cap.(Rs cr) 2,215
Buy Price 0.00
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Sell Price 0.00
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OPEN 299.90
CLOSE 301.20
VOLUME 6066
52-Week high 358.80
52-Week low 190.00
P/E 26.11
Mkt Cap.(Rs cr) 2,215
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Eveready Industries India Ltd. (EVEREADY) - Director Report

Company director report

For the financial year ended March 31 2017

Your Directors are pleased to present the Annual Report together with the AuditedFinancial Statements of your Company for the financial year ended March 31 2017.

FINANCIAL RESULTS

The Financial Results of the Company are summarized below:

Rs Crores
Particulars 2016-17 2015-16*
Net Sales 1353.81 1322.51
Other Income from operations 1.37 1.12
Total Income from Operations 1355.18 1323.63
Total Expenditure adjusted for increase/decrease of stocks 1221.88 1201.50
Profit from Operations before Other Income 133.30 122.13
Depreciation Finance Costs and Tax
Other Income 9.57 7.77
Profit from Operations before Depreciation 142.87 129.90
Finance Costs and Tax
Depreciation 14.93 13.90
Interest and Exchange Fluctuation 23.23 30.35
Profit before Tax 104.71 85.65
Provision for Tax 11.08 16.57
Profit after Tax 93.63 69.08
Balance carried forward to Balance Sheet (37.74) (121.84)

*The Company adopted Ind AS from April 1 2016 and accordingly the financial resultsof the previous year has also been restated in accordance with Ind AS 101 –First-time adoption of Indian Accounting Standards prescribed under Section 133 of theCompanies Act 2013 read with the relevant rules issued thereunder and other accountingprinciples generally accepted in India. (Refer explanation (b) to first time Ind ASadoption reconciliation attached to the financial statements).

Net sales for the year were higher by 2% over the previous financial year. Profitbefore Depreciation Interest and Tax (PBDIT) was higher by 9% at Rs 133.30 Crores(previous year- Rs 122.13 Crores). There were no exceptional items (previous year- Nil).With depreciation of Rs 14.93 Crores (previous year- Rs 13.90 Crores) and a decrease ininterest / exchange fluctuation charge of Rs 23.23 Crores (previous year- Rs 30.35Crores) Profit after Tax stood at Rs 93.63 Crores for the year as against a restatedprofit of Rs 69.08 Crores in the previous year. Net accumulated losses stood at Rs 37.74Crores after adjustments which includes the goodwill amount of Rs 478.50 Crores lyingin the books as at March 31 2015 against the General Reserves and retained earnings interms of Ind AS 38.

DIVIDEND

In terms of Section 123 of the Companies Act 2013 as amended by the Companies(Amendment) Act 2015 the Company is unable to declare any dividend as there are netaccumulated losses as stated above. Accordingly your Directors do not recommend anydividend for the year ended March 31 2017.

TRANSFER TO RESERVES

There was no transfer to General Reserves during the year under review.

OPERATIONAL REVIEW & STATE OF THE COMPANY'S AFFAIRS

Batteries & Flashlights

The battery category was adversely impacted due to lower consumer off-take andde-stocking in trade channels post demonetization announced by the Government during thelatter part of the year. The market also continued to be disturbed by poor qualityproducts imported from China at dumped prices. As a result the category volume and valueboth remained flat during the year. The market share position of the major playersremained unaltered during the year under review with your Company's share being estimatedat 50%. The flashlights market remained disturbed by proliferation of cheap flashlights ofpoor quality by the unorganized and gray market players. However in a hearteningturnaround the category could overcome the adverse impact of demonetization andregistered a robust volume growth during the last quarter of the year resulting in anoverall growth of 4% for the year. Turnover however de-grew by 4.8% due to rationalizationof MRPs necessitated to overcome the adverse impacts mentioned above.

Your Company's share of the organized flashlight market was maintained at 70%. Howeverthis has to be seen in the perspective of a large unorganized market which is estimatedat the same size as the organized market. The manufacturing operations in these productcategories continued to focus on total quality management safety energy conservation andcost control. This helped your Company in achieving efficiency in the manufacturingfunction. Operations at the manufacturing facility at Assam commenced on February 232017. This project will provide tax reliefs applicable to the area.

Lighting & Electrical Products

Your Company had diversified to the marketing of electrical & lighting products inthe recent past. These products found excellent fit to its brands–Eveready andPowerCell which are synonymous with portable energy and lighting. There was also synergyin these products with the existing distribution network of your Company.

At the point of entry to this diversification initiative the leading products wereCompact Fluorescent Lamps (CFL) and General Lighting Service (GLS). However during theprevious year the category experienced a major shift towards the Light Emitting Diode(LED) bulbs which added a significant technology edge in comparison to the traditional CFLand GLS bulbs. Your Company became part of this technology change which significantlyenhanced the product basket being offered by it. After gaining reasonable success with LEDbulbs it is now addressing a growth path in LED based Luminaires. Initial feedbacks areencouraging and it should be able to chart growth in this category too.

While your Company's distribution in general trade and modern retail provided a goodplatform to enter this category expansion has been done to tap the exclusive electricaltrade. Further expansion plans are being planned to tap electrical hubs for distributionof Luminaires. Your Company successfully serviced Energy Efficiency Services Ltd (EESL)tenders worth Rs 46.50 Crores – for supply of LED bulbs and LED Tubelights as part ofthe scheme to light up consumer homes at affordable prices.

Your Company continued to invest significantly towards brand building in the categoryduring the year with a view to enhance brand salience.

Net sales from this category for the current year stood at Rs 299.17 Crores – andit is expected that this category will provide significant turnover growth in the years tocome.

Small Home Appliances

Your Company continues to be committed to bringing new Products to its sellingbasketwithaviewtoimprovingturnoverandprofitability.TowardsthisyourCompany launched arange of ceiling fans and appliance products namely Mixer Grinders Irons Room HeatersJuicer Mixer Grinders Water Heaters Induction Cookers Sandwich Makers among manyothers. It has also launched a range of Air Purifiers to augment the portfolio.

Net sales from this category for the current year stood at Rs 39.91 Crores and isexpected to provide significant turnover growth in the years to come.

Packet Tea

The packet tea business continued with its steady performance through leveraging of thedistribution network of the Company. Current share of the market stands at 1 – 5 percent in the various markets of the country. Sales turnover for the current year stood atRs 68.73 Crores. During the latter part of the year under review your Directors hadauthorized initiation of a suitable re-organization of the packet tea operations in orderto provide greater focus to this category. Your Directors have now decided that theCompany would initiate discussions with McLeod Russel India Limited (McLeod) (the world'slargest tea plantation Company in private sector) for participating in a joint venture asa strategic business partner for development of the packet tea business through a separateentity. It is envisaged that with this measure the Company and McLeod will bring theirrespective skills of marketing & distribution and tea plantation knowledge to focusand develop the packet tea business to a much higher level and that this alliance willenable the Company to upscale its FMCG operation.

Prospects

The effect of demonetization impacted consumer demand especially in the rural segment.However various counter measures adopted by the Government to ease the money flowsituation and steps taken to encourage non-cash transactions restored normalcy to marketsby the year-end. Thus the impact on your Company's turnover on this count during theyear was a one-time occurrence. Introduction of the Goods and Services Tax (GST) in thenear future is expected to have a positive impact on the economy thereby augmentingdemand which will be beneficial to your Company. Additionally it is anticipated that theGST regime will bring in higher degree of tax compliance in the country. The battery andflashlight categories bear the impact of non-compliance with tax laws by unorganized partof the market – either through undervalued dumped imports from China for batteries orgray market local operators in the flashlights market. It is expected that the GST regimewill bring such elements into its net thereby eliminating the unfair gap in the pricingstructure with tax compliant organizations. As a consequence bothbatteriesandflashlightsshouldshowreasonablegrowthin2017-18.Thisalongwith projections fora near-normal monsoon in the forthcoming season should add fillip to the demand. YourCompany is also confident that it will be able to capture growth in this market riding onits obvious strengths of premium quality offering brand and distribution. The outlook onbattery and flashlight categories thus remains positive.

Prospects are promising in the Lighting & Electrical products category. Thisbusiness has become a key focus area and an avenue for growth. As mentioned before themarket is currently going through a demand shift from CFL to LED bulbs. The lower marginCFL bulbs now forms a small percentage of the category. LED bulbs and LED based Luminaireswith higher margins now constitute more than 70% of the category turnover and these willbe the growth drivers for the category and the overall business of your Company. Thisrange of new generation lights have been very well accepted by the market and will enhanceyour Company's efforts towards a fruitful diversification. The outlook is thus upbeat -with potential for both growth and profitability.

Growth will also come from the newly launched product segment of appliances. Though ata nascent stage initial market response and results have been encouraging.

FINANCE

Tight control was kept over the finances of your Company. Your Company could reduce itsfinance cost by 24% through judicious working capital management and operationalefficiencies. Your Company remains focused to reduce its borrowings which stood at Rs195.81 Crores at the end of the year.

Your Company met its financial commitments in servicing debt and repayment thereof in atimely manner. Capital expenditure program was fully met.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of theCompany between the end of the financial year of the Company i.e. March 31 2017 to whichthe financial statements relate and the date of this Report.

SUBSIDIARIES & CONSOLIDATED FINANCIAL STATEMENTS

Your Company's subsidiary at Hong Kong Everspark Hong Kong Private Limited registereda turnover of Rs 46.66 Crores during the current year (Rs 39.43 Crores during FY 2015-16).However it did not earn any profits during the year. Another subsidiary Greendale IndiaLimited (formerly Litez India Ltd.) registered a turnover of Rs 2.16 Crores during thecurrent year (Rs 0.03 Crores during FY 2015-16). It earned a marginal profit of Rs 0.02Crores during the year.

A Statement in Form AOC-1 containing the salient features of the said SubsidiaryCompanies is attached to the Financial Statements in a separate section and forms part ofthis Report. The separate audited accounts of the said Subsidiary Companies are availableon the website of the Company.

The Annual Report includes the audited Consolidated Financial Statements prepared incompliance with the Companies Act 2013 and the applicable Accounting Standards of theapplicable subsidiaries. The Consolidated Financial Statements shall be laid before theensuing 82nd Annual General Meeting of the Company along with the laying of the StandaloneFinancial Statements of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 forms part of this Report as Annexure1.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy formulated by your Company is available on the website of the Company(http://www.evereadyindia.com/investor-relations/pdf/ csr-policy-14.pdf). This policyencompasses the Company's philosophy for delineating its responsibility as a corporatecitizen and lays down the guidelines and mechanism for undertaking socially usefulprogrammes for welfare & sustainable development of the community at large. The AnnualReport on CSR activities to be included in the Report containing the composition of theCSR Committee disclosure of the contents of the CSR Policy and the initiatives taken aswell as the expenditure on CSR activities forms a part of this Report as Annexure 2.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act 2013 the Directorsstate that : 1. in the preparation of the annual accounts for the financial year endedMarch 31 2017 the applicable accounting standards had been followed with no materialdepartures; 2. the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period; 3. the Directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; 4. the Directors had preparedthe annual accounts on a going concern basis; 5. the Directors had laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and were operating effectively; and 6. the Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.

DIRECTORS

Mr. Brij Mohan Khaitan will retire by rotation at the forthcoming Annual GeneralMeeting and being eligible offers himself for re-appointment.

Mr. Suvamoy Saha has been re-appointed as Wholetime Director for a further period offive years effective March 22 2017 subject to the approval of the shareholders at theforthcoming Annual General Meeting. Mr. Amritanshu Khaitan has been re-appointed asManaging Director for a period of five years effective May 5 2017 subject to theapproval of the shareholders at the forthcoming Annual General Meeting. Mr. Ajay Kaul wasappointed as Additional Director of the Company in the capacity of Independent Directorand subject to the approval of the shareholders at the forthcoming Annual General Meetingalso as an Independent Director of the Company not liable to retire by rotation for aperiod of five consecutive years with effect from May 30 2017. Requisite notice inwriting under Section 160 of the Act along with the requisite deposit has been receivedfor the appointment of Mr. Kaul. Necessary declaration from Mr. Kaul that he meets thecriteria of independence as prescribed has also been received. On a Reference Applicationmade by the Central Government to the Company Law Board (CLB) under Section 408 of theCompanies Act 1956 the CLB by an order dated December 20 2004 directed the CentralGovernment to appoint three Directors on the Company's Board for three years. As the CLB'sorder suffers from various legal infirmities the Company based on legal advice haschallenged this order of the CLB before the Hon'ble High Court at Calcutta which has byan interim order stayed the operation of the CLB's order. The stay is continuing.

DECLARATIONS BY INDEPENDENT DIRECTORS

Necessary declarations from all the Independent Directors of the Company confirmingthat they meet the criteria of independence as prescribed have been received.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including the criteria for determining qualifications positive attributesindependence of a Director and other matters as required. The Remuneration Policy forms apart of this Report as Annexure 3.

BOARD EVALUATION

The Nomination & Remuneration Committee of the Board of Directors had laid down thecriteria for evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration StakeholdersRelationship and Corporate Social Responsibility Committees. Annual PerformanceEvaluations as required have been carried out. The statement indicating the manner inwhich formal annual evaluation of the Directors (including Independent Directors) theBoard and Board level Committees is given in the Corporate Governance Report which formsa part of this Annual Report.

MEETINGS

The Board meets regularly to discuss and decide on various matters as required. Due tobusiness exigencies certain decisions are taken by the Board through circulation fromtime to time. During the year five (5) Board Meetings were convened and held.Additionally several committee meetings as well as Independent Directors' meeting(s) werealso held. The details of the Meetings are given in the Corporate Governance Report whichforms a part of this Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

COMMITTEES OF THE BOARD

The details with respect to the compositions powers roles and terms of reference etc.of relevant Committees of the Board of Directors are also given in the CorporateGovernance Report which forms part of this Annual Report. All recommendations made by theAudit Committee during the year were accepted by the Board.

EMPLOYEE RELATIONS

One of your Company's key strengths is its people. Relations with employees remainedcordial and satisfactory. Your Board would like to place on record its appreciation ofemployees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards meritbased performance and playing an active role in improving employee skills. Actions duringthe year under review were supportive of this policy. The details of the ratio of theremuneration of each Director to the median employee's remuneration and other particularsand details of employees in terms of Section 197(12) read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms a part of thisReport as Annexure 4. The details of the employees' remuneration as required under thesaid Section and Rule 5(2) & 5(3) of the said Rules forms a part of this Report andare available at the Registered Office of the Company during working hours before theAnnual General Meeting and shall be made available to any Member on request.

STATUTORY AUDITORS

Messrs. Deloitte Haskins & Sells Chartered Accountants (Firm's Registration No.302009E) who hold office as Auditors till the conclusion of the forthcoming AnnualGeneral Meeting have completed more than ten years as Auditors of the Company. Inaccordance with the provisions of the Companies Act 2013 requiring the mandatoryrotation of Auditors Messrs. Price Waterhouse & Co. Chartered Accountants LLP (Firm'sRegistration No. 304026E) have been appointed as Auditors for a period of five continuousyears from the conclusion of the 82nd Annual General Meeting (AGM) till the conclusion ofthe 87th AGM of the Company. They have confirmed their eligibility to the effect thattheir reappointment if made would be within the prescribed limits under the Act and thatthey are not disqualified for appointment.

Your Directors place on record their appreciation for the services rendered by Deloitteduring its long association with the Company.

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 your Directors have appointed M/s. Mani &Co. Cost Accountants Registration No. 00004 Ashoka 111 Southern Avenue Kolkata 700029 (being eligible for the appointment) to audit the cost accounts of the Company forthe financial year ending March 31 2018. The remuneration payable to the Cost Auditorsfor the said year is being placed for ratification by the Members at the forthcomingAnnual General Meeting.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Secretarial Audit of the Companyfor the financial year 2016-17 was conducted by M/s MKB & Associates a firm ofCompany Secretaries in Practice. The Secretarial Audit Report forms a part of this Reportas Annexure 5.

AUDITORS' REPORT

There are no Audit Qualifications/Reservations/Adverse Remarks in the StatutoryAuditors Report and in the Secretarial Audit Report as annexed elsewhere in this AnnualReport.

INTERNAL FINANCIAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and efficient conduct of the businessoperations. The Statutory Auditors have also given an unmodified opinion on the internalfinancial controls on financial reporting in their Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements andforms a part of this Report.

PARTICULARS OF CONTRACTS/ARRANGEMENTS/TRANSACTIONS WITH RELATED PARTIES

Related party transactions entered into during the year under review were on arm'slength basis and in the ordinary course of business for the operational andadministrative benefits of the Company. There were no contracts/ arrangements/transactionswith related parties which could be considered as material and which may have a potentialconflict with the interest of the

Company at large. Accordingly no contracts/arrangements/transactions are beingreported in Form AOC-2. Details on related party disclosures are further given in theCorporate Governance Report which forms a part of this Report.

RISK MANAGEMENT

Your Directors have approved various Risk Management Policies. All material risks facedby the Company are identified and assessed by the Risk Management Steering Committee. Foreach of the risks identified corresponding controls are assessed and policies andprocedures are put in place for monitoring mitigating and reporting the risks on aperiodic basis.

VIGIL MECHANISM

Your Directors have adopted a Vigil Mechanism/Whistle Blower Policy. The Policy hasbeen posted on the website of the Company. None of the Company's personnel have beendenied access to the Audit Committee.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 forms a partof this Report as Annexure 6.

OTHER DISCLOSURES

During the year under review: a. There were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. b.Your Company has not accepted any deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014. c. There were no significant or material orders passed by the Regulators or Courtsor Tribunals which impact the going concern status and Company's operations in future. d.There was no change in the share capital or the nature of business or the Key ManagerialPersonnel of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

A Management Discussion and Analysis Report and a Report on Corporate Governance arepresented in separate sections forming part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT/DIVIDEND DISTRIBUTION POLICY

In terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 as amended the Business Responsibility Report describing the initiatives taken bythe Company from environmental social and governance perspective as well as the DividendDistribution Policy are presented in separate sections forming a part of the AnnualReport.

For and on behalf of the Board of Directors
Kolkata B. M. Khaitan
May 30 2017 Chairman

ANNEXURE 1

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the Companies (Accounts) Rules 2014 and forming part ofthe Directors' Report for the year ended March 31 2017

(A) CONSERVATION OF ENERGY-

i) Steps taken or impact on conservation of energy;

Energy Conservation continued to be an area of priority. There has been a total savingson electricity units of 8.2 % over last year mainly on account of consolidation of bothBattery and Zinc /Special Alloy Facility operations from a single unit at Kolkata.Additionally there has been a saving on diesel oil consumption in zinc furnace from 39litres per metric tonne of zinc to 38 litres per metric tonne by developmental initiativeson the Zinc furnace at Maddur.

(ii) Steps taken by the Company for utilising alternate sources of energy;

The Company continued to harness non-conventional energy and 1.55 Million units ofelectricity was generated and consumed through windmills.

(iii) Capital investment on energy conservation equipments;

Total capital investment of Rs16 Crores to achieve energy conservation as given inpoint (i) and other savings in fixed expenses.

(B) TECHNOLOGY ABSORPTION

-i) Efforts made towards technology absorption;

a. AA battery construction and its manufacturing process finalized for new Plant atAssam.

b. Developed new separator paper suitable for high speed lines.

c. AA Alkaline battery with improved performance developed for high drain application.

d. Import substitutes of all metal and plastic components of AAA battery developed.

e. Comprehensive Process Audits were regularly carried out in all manufacturinglocations to ensure Process compliance to quality norms.

(ii) Benefits derived like product improvement cost reduction product development orimport substitution;

The potential benefits derived from R&D are stated below

a. Consistency and Quality Improvement of the product

b. Cost effective alternate sources

c. Reduction in manufacturing costs

(iii) Information regarding imported technology (imported during the last three years)-NIL

(iv) Expenditure incurred on Research and Development:

Particulars Rs Crores
Year ended March 31 2017 Year ended March 31 2016
a. Capital - 0.33
b. Recurring 4.47 4.05
c. Total 4.47 4.38
Total % of Turnover 0.33% 0.33%

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO-

Foreign Exchange earned and the Foreign Exchange Outgo:

Rs Crores
Particulars Year ended March 31 2017 Year ended March 31 2016
Foreign Exchange Inflow 9.86 19.44
Foreign Exchange Outflow 219.28 204.56

 

For and on behalf of the Board of Directors
Kolkata B. M. Khaitan
May 30 2017 Chairman

ANNEXURE 3

REMUNERATION POLICY

1. Preamble

The remuneration policy provides a framework for remuneration paid to the members ofthe Board of Directors ("Board") the Key Managerial Personnel ("KMP")and the Senior Management Personnel ("SMP") of Eveready Industries India Ltd.("EIIL"). The expression ‘‘senior management'' means personnel of EIILwho are members of its core management team excluding Board of Directors comprising allmembers of management one level below the executive Directors including the functionalheads.

2. Objectives

The remuneration policy is framed inter alia with the following objectives: That thelevel and composition of remuneration is reasonable and sufficient to attract retain andmotivate talents of the quality required to run EIIL successfully in the interest of longterm sustainability and create competitive advantage.

That the relationship of remuneration to performance is clear and meets appropriateperformance benchmarks.

That the remuneration to Directors KMP and SMP involves a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of EIIL and its goals. To lay down criteria and terms and conditions with regardto identifying persons who are qualified to become Directors (Executive and Non-executive)and persons who may be appointed in KMP and SMP positions and to evaluate the performanceof Directors. To determine remuneration based on EIIL's size and financial position andtrends and practices on remuneration prevailing in peer companies in the industry.

3. Principles of Remuneration

EIIL strives to pay an equitable remuneration capable of attracting and retaining highquality personnel in keeping with the ongoing need to attract and retain high qualitypeople and the influence of external remuneration pressures. Reference to external marketnorms may be made using appropriate market sources including relevant and comparativesurvey data as determined to have meaning to EIIL's remuneration practices at that time.Remuneration and reward offerings shall be sufficiently flexible to meet both the needs ofindividuals and those of EIIL whilst complying with relevant legislation(s).

4. Selection and Appointment of the Directors

The qualifications and appointments shall be governed as per the provisions of theCompanies Act 2013 (the Act) and Rules thereof and the Listing Agreements as amended fromtime to time.

Directors should possess high personal and professional ethics integrity and valuesand should be able to devote sufficient time and energy as is prudent and necessary incarrying out their duties and responsibilities effectively. The Nomination &Remuneration Committee of the Board ("the Committee") along with the Boardshould consider positive attributes independence appropriate and diverse qualificationsand skills appropriate characteristics and experience required of the Board as a wholeand its individual members with the objective of having a Board with diverse backgroundand experience in business government academics technology finance and in areas thatare relevant for EIIL's operations.

The Committee is also to identify suitable candidates in the event of a vacancy beingcreated on the Board on account of retirement resignation or demise of an existing Boardmember. Based on the recommendations of the Committee the Board to evaluate thecandidate(s) and decide on the selection of the appropriate member.

5. Selection and Appointment of KMP and SMP

EIIL may conduct a wide-ranging search for candidates for the positions of KMP and SMPwithin EIIL and on the human resources market.

The Committee to liaise with the relevant departments of EIIL to study the requirementfor management personnel as may be required from time to time. The qualifications of thecandidates shall be examined on the basis of the conditions for appointment of KMP andSMP.

6. Term/Tenure

The Term/Tenure of the Directors shall be governed as per the provisions of theCompanies Act 2013 and rules made thereunder as amended from time to time.

7. Remuneration to the Managing Director and Whole time Directors (ExecutiveDirectors):

The Executive Directors shall be eligible for a monthly remuneration as may be approvedby the Board on the recommendation of the Committee. The breakup of the pay scale bonuscommission and quantum of perquisites including housing car medicals leave travelallowance club fees leave encashment insurance retiral benefits and other perquisitesand allowances shall be decided and approved by the Board on the recommendation of theCommittee and approved by the shareholders and /or Central Government wherever required.

Increments to the existing remuneration/ compensation structure may be recommended bythe Committee to the Board which should be within the slabs approved by the Shareholders.

If in any financial year EIIL has no profits or its profits are inadequate EIILshall pay remuneration to its Executive Directors in accordance with the provisions of theAct and/or with the approval of the Central Government as applicable and necessary.

8. Remuneration to Non-Executive / Independent Directors:

Sitting fees for attending meetings of Board or Committee may be paid as fixed by theBoard on the recommendation of the Committee within the amounts as may be prescribed bythe Central Government from time to time. Commission may be paid within the monetary limitapproved by shareholders subject to the limits as per the applicable provisions of theAct. An Independent Director shall not be entitled to any stock option of EIIL.

9. Remuneration to KMP SMP and other employees

The KMP SMP and other employees of EIIL shall be paid monthly remuneration as perEIIL's HR policies and / or as may be approved by the Committee. The break-up of the payscale bonus and quantum of perquisites including housing car medicals leave travelallowance club fees leave encashment insurance retiral benefits and other perquisitesand allowances etc. shall be as per EIIL's HR policies. In case any of the relevantregulations require that remuneration of KMPs or any other officer is to be specificallyapproved by the Committee and / or the Board of Directors then such approval will beaccordingly procured.

10. Removal

Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations thereunder the Committee may recommend to theBoard removal of a Director KMP or SMP subject to the provisions and compliance of thesaid Act rules and regulations.

11. Retirement

The Director KMP and SMP shall retire as per the applicable provisions of the Act andthe prevailing policy of EIIL as applicable and prevalent. The Board will have thediscretion to retain the Director KMP SMP in the same position/ remuneration orotherwise even after attaining the retirement age for the benefit of EIIL.

12. Approval and Disclosure

This Policy shall formally be implemented from the date on which they are adoptedpursuant to a resolution of the Board of Directors. This policy shall be accordinglydisclosed as part of the Board's Report.

13. Amendment

The right to interpret /amend/modify this Policy vests in the Board of Directors ofEIIL.

For and on behalf of the Board of Directors
Kolkata B. M. Khaitan
May 30 2017 Chairman

ANNEXURE 4

REMUNERATION AND OTHER SPECIFIED PARTICULARS OF EMPLOYEES

Information pursuant to Section 197(12) of the Companies Act 2013 (the Act) read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014The ratio of the remuneration of each Director to the median remuneration of the employeesand other details in terms of Section 197 (12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

Requirements Disclosure
1. The ratio of the remuneration of each director to the median remuneration of the employees for the financial year Mr Amritanshu Khaitan - Managing Director (MD) 77.33 : 1
Mr. Suvamoy Saha - Wholetime Director (WTD) 64.17 : 1
Mr. B. M. Khaitan - Non-Executive Director 0.50 : 1
Mr. A. Khaitan - Non-Executive Director 0.55 : 1
Mr. S. R. Dasgupta - Non-Executive Director 1.16 : 1
Mr. S. Sarkar - Non-Executive Director 0.55 : 1
Mr. S. Goenka - Non-Executive Director 0.33 : 1
Mrs. R. Nirula - Non-Executive Director 0.72 : 1

 

Remuneration of Non-Executive Directors constitutes of Sitting Fees received for attending Board/Committee Meetings for 2016-17
2. The percentage increase in remuneration of each Director CFO CEO CS in the financial year MD - 9.27%; WTD & CFO - 7.08% and CS -21.76% Non-Executive Directors - NA
No increase to Non-Executive Directors who have only received sitting fees for attending Board/Committee Meetings for 2016-17 and profit based commission for 2016-17 (2015-16 - Nil) - hence not applicable.
3. The percentage increase in the median remuneration of employees in the financial year 9% (Calculation based on comparable employees eligible for increment)
4. The number of permanent employees on the rolls of the Company 2866 employees as on March 31 2017
5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Average increase in employee remuneration (excluding managerial personnel – MD and WTD) for the year 2016-17 is 8%. Average increase in remuneration of the managerial personnel is 8.3%. The increase in remuneration of managerial personnel is based on their and Company's performance as well as industry benchmarks.
6. Affirmation that the remuneration is as per the remuneration policy of the Company Yes affirmed.

 

For and on behalf of the Board of Directors
Kolkata B. M. Khaitan
May 30 2017 Chairman

Annexure A

To

The Members

Eveready Industries India Ltd.

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the Management of theCompany. Our responsibility is to express an opinion on those records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the process and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management's representation about thecompliance of laws rules regulations guidelines and directions and happening eventsetc.

5. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

For MKB & Associates
Company Secretaries
Manoj Kumar Banthia
Partner
Kolkata ACS No. 11470
May 30 2017 COP No. 7596