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Eveready Industries India Ltd.

BSE: 531508 Sector: Consumer
NSE: EVEREADY ISIN Code: INE128A01029
BSE 00:00 | 20 Feb 67.20 -1.15
(-1.68%)
OPEN

68.60

HIGH

69.10

LOW

66.70

NSE 00:00 | 20 Feb 67.15 -1.10
(-1.61%)
OPEN

68.70

HIGH

68.90

LOW

66.60

OPEN 68.60
PREVIOUS CLOSE 68.35
VOLUME 130965
52-Week high 218.80
52-Week low 34.40
P/E 10.42
Mkt Cap.(Rs cr) 488
Buy Price 67.20
Buy Qty 2.00
Sell Price 68.50
Sell Qty 1.00
OPEN 68.60
CLOSE 68.35
VOLUME 130965
52-Week high 218.80
52-Week low 34.40
P/E 10.42
Mkt Cap.(Rs cr) 488
Buy Price 67.20
Buy Qty 2.00
Sell Price 68.50
Sell Qty 1.00

Eveready Industries India Ltd. (EVEREADY) - Auditors Report

Company auditors report

To

The Members of

Eveready Industries India Limited

Report on the audit of the standalone financial statements

Disclaimer of Opinion

1. We were engaged to audit the accompanying standalone financialstatements of Eveready Industries India Limited ("the Company") whichcomprise the Balance Sheet as at March 31 2019 and the Statement of Profit and Loss(including Other Comprehensive Income) Statement of Changes in Equity and Statement ofCash Flows for the year then ended and notes to the standalone financial statementsincluding a summary of significant accounting policies and other explanatory information.

2. We do not express an opinion on the accompanying standalonefinancial statements of the Company. Because of the significance of the matters describedin the Basis for Disclaimer of Opinion section of our report we have not been able toobtain sufficient appropriate audit evidence to provide a basis for an audit opinion onthese standalone financial statements.

Basis for Disclaimer of Opinion

3. We draw your attention to Note 34.3 to the standalone financialstatements that describes the (i) inter-corporate deposits and (ii) corporate guaranteesand post-dated cheques given to / on behalf of certain companies that are part of thePromoter Group out of which an amount of र 23079 Lakhs (including interest) and र 28309Lakhs respectively are outstanding as at March 31 2019. Further the Company has givenadvance amounting to र 6200 Lakhs to a company on the basis of a memorandum ofunderstanding (MOU) towards transfer by way of assignment the leasehold rights of aproperty. The deed of assignment was initially agreed to be executed prior to theyear-end failing which the Company had a right to cancel the MOU and claim refund of theadvance. However neither has the deed been executed nor the refund claimed by theCompany.

We are unable to obtain sufficient appropriate audit evidence regardingthe extent of the loss allowance /impairment to be recognised on these inter-corporatedeposits and advances and of the potential liability to be recognised for the corporateguarantees/post-dated cheques if any and the consequential impact on the standalonefinancial statements as at and for the year ended March 31 2019 and accordingly forms abasis for the Disclaimer of Opinion.

Emphasis of Matter

4. We draw attention to Note 34.1 to the standalone financialstatements which relates to the penalty of र 17155 Lakhs levied by the CompetitionCommission of lndia for non-compliance with provisions of the Competition Act 2002against which an appeal has been filed by the Company with the National Company LawAppellate Tribunal New Delhi. As per legal advice obtained by the Company the amount ofpenalty cannot be reliably estimated at this stage owing to the uncertainty of the futureoutcome of the litigation.

Responsibilities of Management and those charged with Governance forthe Standalone Financial Statements

5. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

6. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

7. Our responsibility is to conduct an audit of the entity's financial statementsin accordance with Standards on Auditing and to issue an auditor's report. Howeverbecause of the matters described in the Basis for Disclaimer of Opinion section of ourreport we were not able to obtain sufficient appropriate audit evidence to provide abasis for an audit opinion on these standalone financial statements.

8. We are independent of the entity in accordance with the ethical requirements inaccordance with the requirements of the Code of Ethics issued by ICAI and the ethicalrequirements as prescribed under the laws and regulations applicable to the entity.

Report on other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

10. As required by Section 143(3) of the Act we report that:

(a) We have sought all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. However as describedin the Basis for Disclaimer of Opinion paragraph we are unable to obtain all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the audit.

(b) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and Statement of Cash Flows dealt with by thisReport are in agreement with the books of account.

(d) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Act.

(e) Due to the possible effects of the matters described in the Basis for Disclaimer ofOpinion paragraph we are unable to state whether they have any adverse effect on thefunctioning of the Company.

(f) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

(g) The reservation relating to maintenance of accounts and other matters connectedtherewith are as stated in the Basis for Disclaimer of Opinion paragraph read withparagraph 10(b) above.

(h) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A".

(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note 34.1 to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts asat March 31 2019;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2019.

For PriceWaterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Rajib Chatterjee
Place: Kolkata Partner
Date: May 27 2019 Membership Number: 057134

Annexure A to Independent Auditors' Report

Referred to in paragraph 10(h) of the Independent Auditors' Reportof even date to the members of Eveready Industries India Limited on the standalonefinancial statements for the year ended March 31 2019

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OFSUB-SECTION 3 OF SECTION 143 OF THE ACT

1. We were engaged to audit the internal financial controls withreference to standalone financial statements of Eveready Industries India Limited ("theCompany") as of March 31 2019 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tostandalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit conducted in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under Section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI.

4. Because of the matter described in Disclaimer of Opinion paragraphbelow we were not able to obtain sufficient appropriate audit evidence to provide a basisfor an audit opinion on internal financial controls system with reference to standalonefinancial statements of the Company.

Meaning of Internal Financial Controls with Reference to FinancialStatements

5. A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Basis for Disclaimer of Opinion

6. We are unable to obtain sufficient appropriate audit evidence onwhich to base our opinion on the effectiveness of Company's internal financialcontrols with reference to standalone financial statements over the assessment of theextent of the loss allowance/impairment to be recognised on inter-corporate deposits andadvances and of the potential liability to be recognised for the corporateguarantees/post-dated cheques given to / on behalf of certain companies that are part ofthe Promoter Group. Consequent to the material weakness in such internal controls thepossible effects on the financial statements of undetected misstatements could be bothmaterial and pervasive.

Disclaimer of Opinion

7. As described in the Basis for Disclaimer paragraph above because ofthe significance of the matters we are unable to obtain sufficient appropriate auditevidence to provide a basis for our opinion on whether the Company had adequate internalfinancial controls with reference to standalone financial statements and whether suchinternal financial controls were operating effectively as at March 31 2019 based on theinternal control with reference to standalone financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe ICAI.

8. We have considered the disclaimer reported above in determining thenature timing and extent of audit tests applied in our audit of the standalone financialstatements of the Company for the year ended March 31 2019 and the disclaimer hasaffected our opinion on the financial statements of the standalone Company and we haveissued a disclaimer of opinion on the financial statements for the year ended on thatdate. (Refer paragraph 2 of the main audit report).

For PriceWaterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Rajib Chatterjee
Place: Kolkata Partner
Date: May 27 2019 Membership Number: 057134

Annexure B to Independent Auditors' Report

Referred to in paragraph 9 of the Independent Auditors' Report ofeven date to the members of Eveready Industries India Limited on the standalone financialstatements as of and for the year ended March 31 2019

i (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of 3 yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the fixed assets has beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 andNote 4 on fixed assets to the financial statements are held in the name of the Companyexcept freehold land and structures thereon located at Maddur which is in the name of theerstwhile Company merged with the Company under Section 391 to 394 of the Companies Act1956 in terms of the approval of the Honourable High Court(s) of judicature.

ii. The physical verification of inventory (excluding stocks with thirdparties) have been conducted at reasonable intervals by the Management during the year. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material.

iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of the loans and investments made and guarantees andsecurity provided by it.

v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is generallyregular in depositing undisputed statutory dues in respect of provident fundemployees' state insurance income tax and professional tax though there has been aslight delay in a few cases and is regular in depositing undisputed statutory duesincluding sales tax service tax duty of customs duty of excise value added tax cessgoods and service tax and other material statutory dues as applicable with theappropriate authorities. Also refer note 34.5 to the financial statements regardingmanagement's assessment on certain matters relating to provident fund.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of income-tax and goods andservice tax which have not been deposited on account of any dispute. The particulars ofdues of sales tax service tax duty of customs duty of excise and value added tax as atMarch 31 2019 which have not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount ( र In Lakhs) Period to which the amount relates Forum where the dispute is pending
Central Sales Tax Act 1956 Sales Tax 0.35 1998-99 Additional Commissioner of Commercial Tax
The Orissa Sales Tax Act 1947 Sales Tax 0.10 1999-00 Assistant Commissioner of Commercial Tax
The Uttar Pradesh Value Added Tax Act 2008 Value Added Tax 13.79 2011-12 Additional Commissioner of Commercial Tax
The West Bengal Value Added Tax Act 2003 Value Added Tax 1.27 2013-14 Joint Commissioner of Commercial Taxes
Central Sales Tax Act 1956 Sales Tax 6.09 2001-02 Assistant Commissioner of Commercial Tax
The Kerala General Sales Tax Act 1963 Sales Tax 4.52 2000-01 to 2002-03 Assistant Commissioner of Commercial Tax
Bihar Finance Act 1981 Sales Tax 0.80 2005-06 Assistant Commissioner of Commercial Tax
Central Excise Act 1944 Excise Duty 1496.53 1997-98 to 2003-04 High Court of Lucknow
Central Excise Act 1944 Excise Duty 619.07 1993-95 1996-97 2009-10 to 2014-15 2006-17 2015-16 1997-98 2012-17 Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 79.21 1997-98 to 2000-01 1991-92 to 1998-99 2003-04 to 2004-05 to 2006- 07 Commissioner of Central Excise (Appeal)
Central Excise Act 1944 Excise Duty 0.15 2009-10 to 2010-11 Deputy Commissioner of Central Excise
Central Excise Act 1944 Excise Duty 41.47 2002-03 to 2006-07 1996-97 to 1997 -98 Assistant Commissioner of Central Excise
Central Excise Act 1944 Excise Duty 130.99 2006-07 to 2011-2012 High Court of Allahabad
Finance Act 1994 Service Tax 32.57 2004-05 to 2006-07 2009-10 to 2010-11 Customs Excise and Service Tax Appellate Tribunal
Finance Act 1994 Service Tax 0.87 2009-10 to 2011-12 Commissioner of Central Excise & Service Tax (Appeals)

viii. According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank or Government or dues todebenture holders as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments). In our opinion and according tothe information and explanations given to us except as described below the moneys raisedby way of term loans have been applied for the purposes for which they were obtained.

Particulars Nature of delay/ default Period of delay/ default Amount Subsequent rectification carried out by the Company
Term Loan obtained from a bank Loan obtained for construction / refurbishment of storage facilities for tea division though not utilized for this purpose. Since 6th July 2018 र 1000 Lakhs Not yet rectified

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For PriceWaterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Rajib Chatterjee
Place: Kolkata Partner
Date: May 27 2019 Membership Number: 057134