You are here » Home » Companies » Company Overview » Exide Industries Ltd

Exide Industries Ltd.

BSE: 500086 Sector: Auto
NSE: EXIDEIND ISIN Code: INE302A01020
BSE 00:00 | 20 Feb 178.00 -0.15
(-0.08%)
OPEN

178.95

HIGH

179.75

LOW

177.60

NSE 00:00 | 20 Feb 178.05 -0.20
(-0.11%)
OPEN

179.10

HIGH

179.90

LOW

177.40

OPEN 178.95
PREVIOUS CLOSE 178.15
VOLUME 39981
52-Week high 234.40
52-Week low 166.00
P/E 17.00
Mkt Cap.(Rs cr) 15,130
Buy Price 177.50
Buy Qty 100.00
Sell Price 180.00
Sell Qty 3032.00
OPEN 178.95
CLOSE 178.15
VOLUME 39981
52-Week high 234.40
52-Week low 166.00
P/E 17.00
Mkt Cap.(Rs cr) 15,130
Buy Price 177.50
Buy Qty 100.00
Sell Price 180.00
Sell Qty 3032.00

Exide Industries Ltd. (EXIDEIND) - Auditors Report

Company auditors report

To the Members of Exide Industries Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the standalone financial statements of Exide Industries Limited("the Company") which comprise the Standalone Balance Sheet as at 31 March2019 the Standalone Statement of Profit and Loss (including Other Comprehensive Income)the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matter Provision for warranties

See note 25 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company's business involves the sale of products under warranty. Accordingly the Company has recorded significant warranty provisions which are inherently judgmental in nature. These provisions are required for the Company to record an appropriate estimate of the ultimate costs of repairing and replacing product that is ascertained to be faulty. Our audit procedures included among other things the evaluation of the process to calculate the provision for product warranties and the evaluation of the relevant assumptions and their derivation for the measurement of the provisions. Based on historical data used by the Company to estimate its provisions for product warranties we assessed the permanence of methods used the relevance and reliability of underlying data and calculations applied.

We also compared costs incurred to the previously recognized provisions to assess the quality of the management estimates. Based on evidence obtained we concluded that management's process for identifying and quantifying warranty provisions was appropriate and that the resulting provision was reasonable.

Incentive payout

See note 23 and 24 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
Revenue is measured taking into account the incentives earned by the dealers on the Company's sales. Due to the multitude and variety of contractual terms across the Company's markets the estimation of incentives recognised based on sales made during the year is considered to be complex.

We determined this matter to be a key audit issue due to the variety of incentives offered the absolute amount of such incentive as well as the complexity associated with the estimates that management has to make to record them at year end.

Our audit procedures included considering the appropriateness of the Company's accounting policies pertaining to revenue recognition including those relating to incentives and assessing compliance with the applicable accounting standards.

We tested the effectiveness of the Company's controls over calculation of incentives actual payout against such incentive provisions and appropriateness of the timing of revenue recognition. Based on historical data used by the Company to estimate its accruals for dealers' incentive we assessed the permanence of methods used the relevance and reliability of underlying data and calculations applied. We also compared amounts paid with previously recognized corresponding provisions to assess the quality of the management estimates. Based on evidence obtained we concluded that management's process for identifying and quantifying incentive provisions and recognition of revenue was appropriate.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India

including the Indian Accounting Standards (Ind AS) specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

> Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

> Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

> Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

> Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

> Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143(11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) I n our opinion the aforesaid standalone financial statements comply with the IndAS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2019 onits financial position in its standalone financial statements - Refer Note 37 to thestandalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

I n our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP Chartered Accountants Firm's registration number:101248W/W-100022

Sd/-

Jayanta Mukhopadhyay

Place: Mumbai Partner

Date: 30 April 2019 Membership no: 055757

Annexure A to the Independent Auditor's Report on the standalone financial statementsof Exide Industries Limited for the year ended 31 March 2019 (Referred to in our report ofeven date)

The Annexure referred to in Independent Auditor's Report to be members of the Companyon the Ind AS financial statements for the year ended 31 March 2019 we report that:

(i) (a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. In accordance with this programme certainfixed assets were verified during the year and no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except the following:

Total number of Cases Class of Asset Gross Block at 31 March 2019 (Rs in Crores) Net Block at 31 March 2019 (Rs in Crores)
3 Residential Apartments 2.55 1.69
1 Leasehold land 41.00 39.62

(ii) The inventory except goods in transit and stocks lying with third parties havebeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. The discrepancies noticed on verification between thephysical stock and the book records were not material. For stocks lying with third partiesat the year-end written confirmations have been obtained by the Management.

(iii) According to the information and explanation given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct. Accordingly the provisions of paragraph 3(iii) of the Order are not applicable tothe Company.

(iv) According to the information and explanations given to us the Company has notgranted any loans or

provided any guarantee or security during the year that would attract provisions ofsection 185 and 186 of the Act. The provisions of section 186 of the Act in respect ofinvestments made have been complied with by the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of section 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly the provisions of paragraph 3(v) of theOrder are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations

given to us and on the basis of our examination of the records of the Company amountsdeducted/ accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Service taxduty of customs cess and other material statutory dues have been regularly depositedduring the year by the Company with the appropriate authorities. As explained to us by themanagement the Company did not have any dues on account of Sales-tax Service Tax dutyof excise and value added tax.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Goods andService tax duty of customs cess and other material statutory dues were in arrears as at31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise and value added taxwhich have not been deposited with the appropriate authorities on account of any disputeexcept the following.

Name of the Statute Nature of the dues Amount in Rupees* (in Crores) Period to which the amount relates Forum where dispute is pending
The Central Sales Tax Act 1956 Sales tax (including interest and penalty as applicable) 8.17 1997-98 to 2017-18 Appellate Authority up to Commissioner's level
The Central Sales Tax Act 1956 Sales tax (including interest and penalty as applicable) 7.61 2000-01 to 2015-16 Sales Tax Appellate Tribunals of various states
Various State Sales Tax Act Sales tax (including interest and penalty as applicable) 37.03 1997-98 to 2015-16 Appellate Authority up to Commissioner's level
Various State Sales Tax Act Sales tax (including interest and penalty as applicable) 19.13 2000-01 to 2015-16 Value Added Tax Appellate Tribunals of various states
Various State Sales Tax Act Sales tax (including interest and penalty as applicable) 1.43 2000-01 and 2009-10 High Courts of various states
Service tax (Finance Act 1994) Service tax (including interest and penalty as applicable) 0.41 2009-10 Appellate Authority up to Commissioner's level
Service tax (Finance Act 1994) Service tax (including interest and penalty as applicable) 35.09 2005-06 to 2015-16 Tribunal of various states
The Central Excise Act 1944 Excise duty (including interest and penalty as applicable) 4.04 1998-99 to 2016-17 Appellate Authorities up to Commissioner level
The Central Excise Act 1944 Excise duty (including interest and penalty as applicable) 0.13 2001-02 to 2005-06 High Court of Calcutta
The Central Excise Act 1944 Excise duty (including interest and penalty as applicable) 0.37 1993-94 to 2009-10 Supreme Court of India
The Central Excise Act 1944 Excise duty (including interest and penalty as applicable) 87.29 1996-97 to 2016-17 Customs Excise and Service Tax Appellate Tribunals of various states
Customs Act 1962 Custom duty (including interest and penalty as applicable) 4.52 2010-11 Customs Excise and Service Tax Appellate Tribunals of various states
Income Tax Act 1961 Income tax 3.70 2012-13 and 2015-16 Commissioner of Income Tax (Appeals)

*Amounts are net of pre-deposits made under protest aggregating to Rs.16.88 crores.

(viii) I n our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings from financialinstitutions or banks. The Company did not have any outstanding loan or borrowings fromgovernment or debenture holders during the year.

(ix) According to the information and explanation given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly the provisions of paragraph3(ix) of the Order are not applicable to the Company.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

(xii) I n our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly the provisions of paragraph 3(xii) of theOrder are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly the provisions of paragraph 3(xiv) ofthe Order are not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records

of the Company the Company has not entered into noncash transactions with directors orpersons connected with him. Accordingly the provisions of paragraph 3(xv) of the Orderare not 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 paragraph 3(xvi) of the Order arenot applicable to the Company.

For B S R & Co. LLP Chartered Accountants Firm's registration number:101248W/W-100022

Sd/-

Jayanta Mukhopadhyay

Place: Mumbai Partner

Date: 30 April 2019 Membership no: 055757

Annexure - B to the Independent Auditors' report on the standalone financial statementsof Exide Industries Limited for the year ended 31 March 2019 (Referred to in our report ofeven date)

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

OPINION

We have audited the internal financial controls with reference to financial statementsof Exide Industries Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to 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 (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 ("the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted

accounting principles. A company's internal financial controls with reference tofinancial statements include those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP Chartered Accountants Firm's registration number:101248W/W-100022

Sd/-

Jayanta Mukhopadhyay

Place: Mumbai Partner

Date: 30 April 2019 Membership no: 055757