(Including Management Discussion & Analysis)
Your Board of Directors is pleased to present the 72 nd Annual Report of the Companytogether with Audited Accounts for the year ended 31st March 2019.
The Indian economy started the fiscal year 2018-19 with a healthy 8.2% growth in thefirst quarter on the back of domestic resilience. Growth eased to 7.3% in the subsequentquarter mainly due to global headwinds like rising trade tensions and geo-politicaluncertainties in some parts of the world and financial health of banking sector. TheIndian rupee witnessed high volatility this year falling nearly 14% between April toOctober in wake of global headwinds coupled with widening current account deficit led byhigher crude oil prices. However rupee turned around in the second half of the year asharp downward reversal in crude oil prices helped it recover from its record lows.
Despite softer growth the Indian economy remains one of the fastest-growing andpossibly the least affected by global turmoil. The effects of external shocks werecontained in part by India's strong macroeconomic fundamentals and policy reforms(including amendments to the insolvency and bankruptcy code bank recapitalisation andforeign direct investment).
With strength in consumption and a gradual revival in investments especially with agreater focus on infrastructure development the growth projections for the next few yearsare estimated to remain upwards of 7%. The improving macroeconomic fundamentals havefurther been supported by reforms that have helped foster an environment to boostinvestments and ease banking sector concerns. Together these augur well for a healthygrowth path for the economy. India has already surpassed France to become thesixth-largest economy. By 2019 it may become the fifth- largest economy and thethird-largest in the years to come.
Despite the positive outlook the economy remains vulnerable to domestic andgeopolitical risks especially economic and political changes that can affect relativeprices and hurt current and fiscal account deficit. While expectations of inflationarypressures remain benign concerns have risen on the twin deficit problem - current accountdeficit and fiscal deficit - especially as portfolio investments remain subdued whiletrade deficit stays high. While fiscal expansion remains key to accelerating growth itmay strain government coffers if private investment loses steam.
With a strong stable government in place we are optimistic that the government willtake measures which will ensure growth and India will continue to be one of the fastestgrowing economies in the world.
INDUSTRY STRUCTURE & DEVELOPMENT
After a buoyant start to the year industry slowed down considerably. The last quarterof the year under review did not bring any respite. The uncertainty ahead of the GeneralElections added to the burden of high interest rates and cost of insurance. Domestic salesof passenger vehicles grew by 2.7% during the year under review compared with 7.9% in theprevious year. However the commercial vehicle division performed better growing by 17.5%against 19.9% in the previous year. Domestic sales of three-wheelers grew by 10.2% in theyear under review against 24.2% the previous year. Two-wheeler sales saw a modest 4.9%growth in the year under review against 14.8% the previous year.
Despite domestic market conditions being tough your Company continued its leadershipposition in the Automotive Battery business during the year under review. With a widearray of products covering diverse market segments your Company reported double-digitgrowth across vehicular non-vehicular and two-wheeler segments.
Although OE demand slowed down your Company managed to maintain its high share acrossalmost all leading vehicle manufacturers. Your Company's exports grew significantly in2018-19 as it made inroads in key Middle East and South East Asian markets.
Your Company registered robust double-digit growth in the Industrial Division. The UPSbusiness which is the largest business vertical of the Industrial Division registereddoubledigit growth in all product segments and your Company's products continue to be thepreferred choice of almost all the OEMs in the country. The UPS business has become thegrowth engine of the Industrial Division with timely capacity addition and continuousupgrades and automation powering sales growth.
In the Solar Division a continuous drive to expand market reach and penetrationthrough channel partners led to significant growth. Your Company did this by offeringreliable
solutions for the government's rural electrification drive and also for Mini and Microgrids powered by renewable energy in the un-served parts of the country.
Financial stress in the Indian telecom sector speeded up consolidation of the industryand there were a number of shut-downs and M&A announcements of mobile telephonyoperators and tower infrastructure companies. Your Company's sales to the telecom sectorwere subdued following reduced offtake by telecom tower companies in view of the M&Aand consequent reduction in the tenancies of the tower infrastructure companies.
The other business verticals including Traction Power and Projects also reportedrobust growth and your Company continues to the preferred brand for most of its customers.
Batteries for submarines
During the year under review your Company successfully met the battery requirements ofthe Indian Navy with timely deliveries. It has supplied the second set of Type-IVbatteries including special copper inter-cell connectors and spares for the Indian Navy'sScorpene-class submarine two sets of Type-II (ATV) batteries for nuclear submarines andone set of Type-I batteries for Kilo-class submarines. The first set of indigenous Type-IVsubmarine batteries and inter-cell connectors supplied by your Company has passed all theharbour trials after installation on board.
Your Company also exported two sets of new-design submarine batteries along with allaccessories and spares to Vietnam Navy. The first set of batteries has passed the seatrials and the second set is due for commissioning soon.
During the year under review your Company has also secured a maiden order tomanufacture and export one set of batteries for a mini-submarine which is expected to besupplied during the financial year 2019-20. A repeat order for two sets of Type-IIsubmarine batteries for the Indian Navy along with an export order for a set of Type-Isubmarine batteries is also being pursued.
In the fiscal year 2018-19 exports of automotive batteries grew impressively throughnew markets and brands backed by promotional activities and an increase in market sharein the existing markets.
Your Company was able to extend the reach of its fourwheeler batteries to most of theGulf Cooperation Council countries South East Asia and some African nations. Thesesuccesses pushed up export sales significantly compared with the previous financial year.
For industrial batteries your Company has increased its global presence by venturinginto new traction markets in Peru Taiwan and Saudi Arabia while consolidating andincreasing market share in European and South East Asian markets. The traction business inGermany Greece and the UAE has grown significantly over the previous year. For thestandby segment your Company has entered new markets such as Congo Malawi Kazakhstanand Kuwait. It has doubled its business in key markets such as Nigeria South Africa andLebanon and established a strong foothold in the Solar market in Greece and Spain.
Your Company has achieved Global quality in its traction range and has been regularlysupplying to Jungheinrich Germany the world's largest OEM in electric fork lift market.
In order to maintain its leadership position your Company is focused on upgrading itsproducts and manufacturing technology as well as acquiring newer and advanced technologyto meet the emerging expectations of the users. The in-house Research & Development(R&D) division is recognised by the Government of India's Department of Scientific andIndustrial Research (DSIR) as a fully-accredited Research Centre in energy storage. Importsubstitution of raw materials reducing energy consumption and manufacturing time are somepriority areas.
Your Company's in-house R&D also plays a major role as the interface between itspriorities and the adoption of technology from collaborators. Your Company has technicalcollaboration and assistance agreements with East Penn Manufacturing Company Inc (EPM) aleading US manufacturer of lead-acid batteries and related items. The AdvancedManufacturing Facility for premium automotive batteries based on punched-grid technologyis now in full-scale operation. The technology has helped your Company not only introducein the country the most robust products both in terms of performance as well as in lifebut also achieve the highest level of productivity with absolute product consistency.
Your Company also has a technical assistance and collaboration agreement with FurukawaBattery Company Limited of Japan (FBJ) for various automotive applications. Your Companyis developing advanced automotive batteries with ultra-negative technology plates whichare expected to deliver unmatched fast-charge capability as well as long life currentlyconsidered to be the best globally.
The long-standing technical cooperation agreement with Hitachi Chemicals Co (formerlyShin Kobe Electric Machinery Co) for a variety of automotive and industrial VRLA productscontinues to help robust exchange of technical information
on latest developments. In recent times this has helped your Company reducemanufacturing costs substantially specifically in automotive battery production byreducing the power consumption in the manufacturing process.
Your Company also has a technical collaboration and assistance agreement with MouraBatteries (MB) Brazil for the development of advanced automotive batteries required bythe environment-friendly new-generation vehicles in compliance with Euro VI standards.Your Company is also developing under the guidance of MB engineers what is popularlyknown as Enhanced Flooded Batteries (EFB) which are scheduled to be launched by the endof the current financial year.
In the Industrial Battery segment your Company crossed a significant milestone bydeveloping during the course of the just-concluded year 28 MWH of battery storagemainly for micro-grid energy storage applications. The advanced Ultrabattery'solution developed in collaboration with EPM and Ecoult Pty Australia for grid-levelenergy storage has also started to be deployed commercially.
Together with EPM the Industrial Battery group has also developed FrontTerminal' AGM VRLA products required by international telecom customers as well as datacentres.
Development of the cutting-edge technology of bipolar battery in active cooperationwith Advanced Battery Concepts (ABC) of the US is on course. The work is scheduled to movebeyond laboratory studies to field testing in the current financial year.
HIGHLIGHTS OF PERFORMANCE
Your Company recorded net sales of Rs. 10588.31 crores in 2018-19 against Rs.9186.32 crores in the previous year and a profit before tax of Rs. 1238.58 croresagainst Rs. 1006.16 crores the previous year.
|Financial Results || ||(In Rs. Crores) |
| ||2018-19 ||2017-18 |
|Profit before depreciation finance cost & tax expenses ||1449.84 ||1299.17 |
|Depreciation and amortisation expenses ||313.50 ||245.94 |
|Finance cost ||6.05 ||5.24 |
|Profit Before Exceptional item and Tax ||1130.29 ||1047.99 |
|Exceptional income/(expense) ||108.29 ||(41.83) |
|Profit Before Tax ||1238.58 ||1006.16 |
|Tax expenses ||394.53 ||337.81 |
|Profit After Tax ||844.05 ||668.35 |
| || ||(In Rs. Crores) |
| ||2018-19 ||2017-18 |
|Other Comprehensive Income ||(0.43) ||2.90 |
|Total Comprehensive Income for the year ||843.62 ||671.25 |
|Balance brought forward ||5304.31 ||4878.59 |
|Making a total of ||6147.93 ||5549.84 |
|Out of this appropriations are : || || |
|Final Dividend for 2017-18 (80%) ||68.00 ||- |
|Final Dividend for 2016-17 (80%) ||- ||68.00 |
|Tax on Final Dividend ||13.98 ||13.84 |
|Interim Dividend for 2018-19 (160%) ||136.00 ||- |
|Interim Dividend for 2017-18 (160%) ||- ||136.00 |
|Tax on Interim Dividend ||27.96 ||27.69 |
|(Aggregate Dividend amounts to 240% (previous year - 240%) ||245.94 ||245.53 |
|And leaving a balance of (which is carried forward to next year) ||5901.99 ||5304.31 |
Consolidated Financial Statements
As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 and in accordance with the Indian Accounting Standard (Ind-AS) 110 ConsolidatedFinancial Statements of the Company and its subsidiaries form part of the Annual Reportand are reflected in the consolidated financial statements of the Company. Thesestatements have been prepared on the basis of audited financial statements received fromthe subsidiary companies as approved by their respective Boards.
Your Company has paid an interim dividend at the rate of 160% i.e. @ Rs 1.60 perequity share of Re. 1 each on the equity shares to the shareholders whose names appearedon the Register of Members on 17th November 2018. Your Directors are now pleased torecommend a final dividend at the rate of 80% i.e. Re. 0.80 per equity share of Re. 1each for the year ended 31st March 2019 subject to the approval of shareholders at theensuing Annual General Meeting. Consequently the total dividend for the year ended 31stMarch 2019 including the interim dividend during the year amounts to 240% i.e. Rs.2.40 per equity share of Re. 1/- each.
The paid up equity share capital as on 31st March 2019 was Rs. 85 crores dividedinto 850000000 equity shares of face value of Re. 1 each.
A) Issue of equity shares with differential rights
The Company did not issue equity shares with differential rights during the financialyear 2018-19.
B) Issue of sweat equity shares
The Company did not issue sweat equity shares during the financial year 2018-19.
C) Issue of employee stock options
The Company did not issue stock options during the financial year 2018-19.
D) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees
The Company does not have a scheme for purchase of its own shares by employees or bytrustees for the benefit of employees.
During the year under review the Company did not accept any deposits from the publicwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptanceof Deposits) Rules 2014.
Particulars of Loans Guarantees or Investments
Pursuant to Section 186 of the Companies Act 2013 the details of the loans given(Note numbers 6 and 13) guarantees on securities provided (Note no. 38(ii)) andinvestments made (Note nos. 4 and 9) by the Company during the year under review havebeen disclosed in the financial statements.
Material Changes and Commitments
There have been no material changes that have occurred subsequent to the close of thefinancial year of the Company to which the financial statements relate and the date of thereport for example:
> Settlement of tax liabilities;
> Operation of patent rights;
> Depression in market value of investments;
> Institution of cases by or against the Company;
> Destruction of any assets or disposal of a substantial part of undertaking;
> Changes in capital structure;
> Alteration in wage structure arising out of trade union negotiation; and
> Material changes concerning purchase of raw material and sale of the product.
Key Financial Ratios
In accordance with SEBI (Listing Obligations & Disclosure Requirements) (Amendment)Regulations 2018 the Company is required to give details of significant changes (i.e.change of 25% or more as compared to the
immediately previous financial year) in key sector-specific financial ratios includingDebtors Turnover Inventory Turnover Interest Coverage Ratio Current Ratio Debt EquityRatio Operating Profit Margin (%) and Net Profit Margin (%) and details of any change inReturn on Net Worth as compared to the immediately previous financial year along with adetailed explanation thereof.
None of the ratios except Profit After Tax (PAT) has significant changes i.e. change of25% or more compared to immediately previous financial year. PAT percentage increased by26% due to profit from exceptional item of Rs. 108.29 crores (sale of property) in currentyear versus an exceptional item charge of Rs. 41.83 crores (brand settlement cost) in theprevious year.
Return on net worth increased from 13.5% in 2017-18 to 15.7% in 2018-19. A significantdriver is the exceptional item impact as explained under previous item. Additionally thebusiness profit from operations grew by 10% over prior year.
Statutory Auditors and their Report
M/s B S R & Co. LLP Chartered Accountants (Firm's Registration No: 101248W/W -100022) were appointed as Statutory Auditors of your Company at the Annual General Meetingheld on 27th July 2017 for an initial term of five consecutive years till the conclusionof 75th Annual General Meeting of the Company.
Pursuant to the amendment in Section 139 of the Companies Act 2013 the requirement toplace the matter relating to ratification of appointment of Statutory Auditors at everyAGM has been omitted with effect from 7th May 2018.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
The Statutory Auditors have not reported any incidence of fraud to the Audit Committeeof the Company during the year under review.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 (as amended) the cost records maintained by the Companyin respect of the products manufactured by the Company are required to be audited. YourDirectors on the recommendation of the Audit Committee have appointed M/s Mani &Co. Cost Accountants (Firm Registration no. 000004) to audit the cost records of theCompany for the financial year 2019-20 at a remuneration of Rs. 900000/- plusout-of-pocket expenses and taxes as applicable.
A resolution regarding ratification of remuneration payable to M/s Mani & Co CostAccountants forms part of the Notice convening the 72nd Annual General Meeting of theCompany.
Secretarial Auditors & their Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial
Personnel) Rules 2014 the Company has appointed M/s A. K. Labh & Co. practisingcompany secretaries (FCS: 4848/CP No.: 3238) to audit secretarial and other relatedrecords of the Company for the financial year 2018-19. The Secretarial Audit Report isannexed herewith as Annexure - I. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
BUSINESS RESPONSIBILITY REPORT
In July 2011 the Ministry of Corporate Affairs Government of India came out with theNational Voluntary Guidelines on Social Environmental and Economic Responsibilitiesof Business'. These guidelines contain certain principles that are to be adopted bycompanies as part of their business practices and require disclosures regarding the stepstaken to implement these principles through a structured reporting format viz. BusinessResponsibility Report. Pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 your Company has prepared the BusinessResponsibility Report and is annexed herewith as Annexure - II.
Transparency is the cornerstone of your Company's philosophy and it adheres to allrequirements of corporate governance in letter and spirit. All the Committees of the Boardof Directors meet at regular intervals as required in terms of SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015. Your Board of Directors has takennecessary steps to ensure compliance of statutory requirements. The Directors and KeyManagement Personnel and Senior Executives of your Company have complied with the approvedCode of Conduct for Board of Directors and Senior Executives' of the Company. Thedeclaration to this effect pursuant to Schedule V of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 signed by Managing Director and CEO of theCompany forms part of the Annual Report.
The Report on Corporate Governance as required under Regulation 34(3) read along withSchedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations
2015 forms part of and is annexed herewith marked as Annexure - III. The Auditors'Certificate on compliance with Corporate Governance norms is also attached to this Report.Further as required under Regulation 17(8) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 a certificate from the Managing Director & CEO andDirector- Finance & CFO is being annexed with this Report.
Your Company has a well-designed TQM Model to drive it towards continual improvement inorder to deliver high- quality products and services to customers and fully engage allother stakeholders such as employees suppliers regulators and communities. The TQM modelis aimed at developing a TQM culture for long-term success through customer satisfaction.
Your Company has deployed a globally-proven approach for business excellence and TQMculture viz. TPM Six Sigma 5S Kaizen Quality Circle and Innovation. Given thechallenges that the organisation is facing each of these initiatives has been leveragedto set a new milestone. There is a monthly performance measurement mechanism for each ofthese initiatives. It has implemented International Standards such as ISO 9001 & IATF16949 for Quality and ISO 14001 ISO 45001 for Environment Health & Safety. The focuson health and safety performance is very high. The organisation structure policy andprocedure for health and safety is regularly reviewed and implemented.
Implementing best practices and promoting competitive capability are some importantareas on which your Company focused during the year. During the year under review yourCompany bagged many prestigious awards such as:
> Golden Peacock National Quality Award 2018
> Dun & Bradstreet Corporate Awards 2018
> Apex India Environment Excellence Award
> Commendation for Significant Achievement in Corporate Excellence - CII - ITCSustainability Award 2018
> CII ER Productivity Award
> Arogya World Trust - Gold Award
Your Company is committed to developing a robust TPM culture across the organisation.All manufacturing units have TPM practice though maturity level varies from factory tofactory. Implementation of TPM is in various stages. Four factories have secured theconsistent commitment award in TPM from JIPM Japan. Two factories have won Excellenceaward during the year under review. The JIPM Japan gave the Bawal factory in Haryana acategory A award
for TPM and the Ahmednagar factory a category B award in March 2019.
OCCUPATIONAL HEALTH SAFETY & ENVIRONMENT
Your Company has a well-designed EHS or Environment Occupational Health & Safetypolicy that is effectively deployed across all factories. All factories are certified forEMS ISO 14001 ISO 45001 & OHSAS 18001 by certification bodies of global repute.
Your Company used natural and manmade resources in an optimal and responsible mannerand ensures the sustainability of resources by reducing reusing recycling and managingwaste. Your Company regularly monitors and prevents pollution through waste minimisationat the source recovery/treatment of emissions and releases and conservation of energythus progressively improving the environment occupational health and overall carbonfootprint.
Your Company has established implemented and maintained a procedure for theidentification of hazards assessment of their risk and determining the necessarycontrols. Safety Audits Hazard Evaluation Emergency Management Planning are conductedperiodically in the factories.
Your Company's employees as well as the upstream partners are being regularly trainedand put through awareness programmes to minimise health and safety risks for employees andcontract workers.
Your Company is transparent about the sustainability challenges. Identifying whicheconomic environmental and social issues are most important for the business environmentand stakeholders is most important. The sustainability efforts include reduction ofpollution waste elimination effective use and recycling of existing natural resources(such as water oil gas and metal) and energy saving. Your Company also keeps an eye onthe sustainability of its upstream partners. It has conducted several vendorsustainability programs in all the regions involving almost all the critical vendors. Theyhave been given periodic training on Risk Assessment Environment Health & Safety andQuality for the sustainability of their businesses.
CORPORATE SOCIAL RESPONSIBILITY
Your Company always strives for long-term sustainability through inclusive growth anddevelopment involving not only the community around its main operational locations but insociety at large at the regional and national level. The core thematic areas that continueto be the main pillars of your Company's Corporate Social Responsibility (CSR) philosophyeven before CSR became regulatory compliance for organisations to follow under theCompanies Act 2013 are:
> Basic Education
> Environment Management
> Women Empowerment and
> Community Development.
The Board of Directors of your Company has approved a CSR Policy viz. EIL CSR Policyin accordance with Section 135 of the Companies Act 2013 and the Companies (CorporateSocial Responsibility Policy) Rules 2014 notified by the Ministry of Corporate AffairsGovernment of India which is available on your Company's website at http://www.exideindustries.com/investors/governance-policies . aspx. The CSR policy underlinesthe guiding principles and mechanisms for undertaking various CSR activities/ programs bythe Company.
The disclosure in line with Rule 9 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is annexed as Annexure - IV.
A total amount of Rs. 1921.89 lakh was spent during the year under review as againstthe 2% obligation of Rs. 1898.22 lakh. The main thrust during the year was not only toconsolidate the efforts made over the past few years but also achieve newer dimensionsunder the given ambit of CSR. During the year your Company established certain modelprojects especially in community solid waste management and development of vocationalskills as livelihood options and also encouraged employees to volunteer. The modelprojects that were developed in the previous year especially the ones in basic educationand public health stabilised.
Your Company made significant strides in achieving over 100% utilisation for the yearto harness all its resources for successful execution and completion of numerous CSRprojects across all locations including the manufacturing units at Haryana MaharashtraTamil Nadu Uttarakhand West Bengal and certain projects at the national level.
Projects on education health and sanitation remained the areas of thrust for 2018-19too. Your Company took some significant initiatives in public healthcare womenempowerment and promoting education including special education and employment enhancingvocational skills eradication of hunger poverty and malnutrition both with partnerorganisations as well as directly by internal teams at the plants. Your Company was alsoinvolved in other associated interventions such as support for homes for destitutechildren environmentally conscious initiatives for conservation of natural resourcestraining to promote rural sport and nationally recognised sports and setting up of old-age homes.
A strong internal control framework is an essential prerequisite of a growing business.In this context your Directors to the best of their knowledge and belief and accordingto the information and explanations obtained by them state that your Company's internalcontrol systems are commensurate with its size and scale of operations that are designedto provide reasonable assurance that the Company's financial statements are reliable andprepared in accordance with the law.
While the industry has seen an overall slowdown during the last two quarters of theyear under review the mid-to longterm outlook is quite positive. The market is expectedto once again grow in line with its potential after the General Elections.
With India expected to be the third largest consumer base by 2025 the automotiveindustry looks set for profitable and stable growth over the next few years. Initiativessuch as the "Automotive Mission Plan 2016-26" and "Make in India"should give the industry a boost.
OPPORTUNITIES AND THREATS
The market for batteries required by data centres is expected to show healthy growth inthe next few years. The Indian government's initiative to develop a 100 cities as smartcities that offer smart solutions to their citizens through the use of technologyinformation and data is expected to fuel demand for back-up power systems and hencebatteries. Further mobile broadband penetration in the form of Wi-Fi is very low in Indiaand it is estimated that there will be a significant increase in the number of Wi-Fi hotspots which will push sales of UPS and so the batteries that power them.
The latest game-changer in the energy market is expected to come in the form of BatteryEnergy Storage Systems. With more and more renewable energy being pumped into the gridfrom utilities as well as decentralised generators the distribution networks are becomingincreasingly unstable. Battery Energy Storage Systems are meant for both grid scale aswell as off-grid scale. The energy storage market for grid-connected and off-gridrenewables is likely to provide significant opportunities.
The robust growth in automobile sales over the last few years has ensured medium andlong-term opportunity for replacement battery sales an area in which your Company's brandequity and strong channel relationship give it a huge competitive edge.
While your Company has taken definitive steps in preparing for future demands ofelectric mobility it is simultaneously
ensuring technological upgrades in the lead-acid space that would keep it ahead ofcompetitive threats.
The lead-acid battery business has seen a host of new players over the last few yearsboth at a regional and national level. Being the dominant brand in the category yourCompany is susceptible to constant pressure at a market level as these new players try towean away consumers and channel partners essentially through low-price offerings. YourCompany is addressing these challenges through the adoption of latest technologies andlean manufacturing practices in order to quickly develop differentiated products that willchange the price-value equation in its favour.
RISKS AND CONCERN
There is an inherent threat from new battery technologies such as Lithium-Iontechnology which is likely to penetrate automotive applications as well as variousindustrial applications such as telecom data centers UPS solar street lights and energystorage systems. Your Company has taken the strategic step of entering the Li-Ion batterybusiness through a joint venture with Leclanche S.A. and now has a road map for the launchof Li-Ion products.
The strong brand equity of your Company its understanding of Indian market acrosssegments coupled with the partner's capability in Li-Ion technology will help it offer acompetitive product and create a big footprint in the business.
Your Company has a long and healthy association with all automotive OEM customers andmaintains a very high market share. Customers sometimes seek to offset their highdependency on a single source. But your Company has excelled in engaging these OEMcustomers by proactively fulfilling their emerging expectations on product technology andprice. The operating standards of manufacturing facilities are upgraded with highestdegree of commitment to ensure that these facilities stand above the expected standards inCustomers Audit. Projects on new product development cost reduction performanceenhancement and capacity expansion to ensure that their expectations are exceeded.
The brand equity of your Company is very high and one of its key strengths. It hastaken all necessary measures to build on it ensuring controls to protect the brand. Inview of increased penetration of social media the inherent risk of communitiesemployees and customers sharing their expectations concerns and suggestions and soimpacting the brand image has gone up. Your Company has implemented a Social MediaFramework through a technology platform to ensure effective management of its reputationby timely redressal of concern action on suggestions and enquiries.
Other actions for ensuring the protection of the brand includes the registration of thetrademark in countries where the Company intends to sell its products. Your Company isalso leveraging the know-how of collaborators to offer a great experience to the customeron product performance.
Your Company has shown healthy growth over the last several years and taken steps toexpand capacity to meet this demand and remain cost competitive. Company-wide costreduction initiatives have been launched ensuring the budgetary control in all facets ofthe business including raw material conversion marketing and distribution. Your Companyhas a focused initiative to improve productivity and control costs of energy consumablesoverheads logistics and marketing.
VIGIL MECHANISM/ WHISTLE-BLOWER POLICY
Your Company has a Whistle-Blower Policy that offers a formal mechanism to itsdirectors employees and stakeholders to report genuine concerns about unethical behavioractual or suspected fraud or violation of the Company's Code of conduct in accordancewith the provisions of the Companies Act 2013 read with the Companies (Meeting of Boardand its Powers) Rules 2014 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. The policy provides for adequate safeguards against victimisation ofpersons who use such mechanism and provides for direct access to the Chairperson of theAudit Committee in appropriate or exceptional cases. Your Company has a dedicated emailaddress for reporting such concerns. It is affirmed that no personnel of the Company hasbeen denied access to the Audit Committee. The policy was amended during the year underreview and is available on the website http://www.exideindustries.com/investors/governance-policies . aspx. The Audit Committee of Boardis entrusted with the responsibility to oversee the vigil mechanism.
Your Company has five Indian subsidiaries viz Chloride Metals Limited Chloride PowerSystems & Solutions Limited Chloride International Limited Exide Life InsuranceCompany Limited Exide Leclanche Energy Private Limited and three foreign subsidiariesviz. Chloride Batteries S.E Asia Pte. Ltd. Singapore Espex Batteries Limited UK andAssociated Battery Manufacturers (Ceylon) Limited Sri Lanka.
> Exide Life Insurance Company Limited (ELI) a 100% subsidiary of your Company isengaged in the business of life insurance and annuity offering a range of individual andgroup life pension and health products across traditional and unit-linked platforms. Itreaches customers through technology-enabled solutions and its network of 200 plus officesto cater to the needs of customers.
ELI has assets under management or AUM of over Rs. 14200 crores as of 31st March2019. The total premium collected by ELI during the year ended 31st March 2019
was Rs. 2886 crores as against Rs. 2532 crores collected during the previous year. Ithas also recorded a profit before tax of Rs. 12.03 crores during the year 31st March2019 as against a profit of Rs. 60.02 crores recorded during the previous year.
As at 31st March 2019 market consistent embedded value (MCEV) of ELI was Rs. 2404crores against MCEV of Rs. 2137 crores in the previous year.
> Chloride Metals Limited another 100% subsidiary of your Company having itsplants at Markal in Khed Taluka of Pune and at Malur in Kolar district of Karnatakaoperates smelters with integrated facilities for extracting lead from exhausted batteriesand manufacturing and supplying recycled lead and lead alloys. The net sales of ChlorideMetals Limited was Rs. 2079.63 crores and its profit before tax was Rs. 17.69 croresrepresenting an increase of 0.12% in net sales and a decrease of 40% in profit before taxcompared to the previous financial year.
> Chloride Power Systems & Solutions Limited a 100% subsidiary of your Companyhaving its factory at Sector V Salt Lake City Kolkata is engaged in manufacture andsale of battery chargers D.C. Power Systems solar installations and associatedequipment. During the year 2018-19 Chloride Power achieved a turnover of Rs. 116.62crores and a profit before tax of Rs. 2.04 crores.
> Chloride International Limited is at present not engaged in any trading ormanufacturing activity and has income from rent and interest/dividend on securities. Theincome of Chloride International Limited during 2018-19 amounted to Rs. 95.86 lakhs with aprofit before tax of Rs. 84.04 lakhs representing an increase of 41% and 49% respectivelyover the figures for the previous financial year.
> Exide Leclanche Energy Private Limited (ELEPL) the joint venture company in whichyour Company holds an equity shareholding of 74.99% was incorporated on 29th September2018 in collaboration with Leclanche SA of Switzerland. Leclanche SA is a leadingprovider of high-quality energy storage solutions and is supporting by way of providingthe desired technical support for manufacturing Li-Ion batteries. The manufacturingfacility of ELEPL is located in Gujarat. The commercial production of the Company has notyet started. There was a loss of Rs. 3.92 crores during the year under review.
> Your Company also holds 100% of the share capital in Chloride Batteries S.E AsiaPte. Ltd. Singapore. Chloride Batteries is engaged in production and distribution ofindustrial battery chargers rectifiers and parts and the distribution of industrial andautomotive batteries. It caters to the South East Asian and Australian markets. During the
year 2018-19 it achieved a turnover of SGD 27.31 million and incurred a loss of SGD0.2 million.
> Espex Batteries Limited UK a 100% subsidiary of your Company is engaged inmarketing and selling of lead- acid batteries for industrial applications in the UK andits neighboring areas. During 2018-19 the Company achieved a turnover of GBP 7.7 millionand made a profit before tax of GBP 0.17 million.
> Your Company also holds 61.5% of the share capital in Associated BatteryManufacturers (Ceylon) Limited Sri Lanka which is engaged in the business ofmanufacturing and marketing of lead-acid batteries. During the year 2018-19 this Companyachieved a turnover of SLR 3453.68 million and made a profit before tax of SLR 242.81million.
Exide Life Insurance Company Limited and Chloride Metals Limited are materialsubsidiaries as per the thresholds laid down under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The profit and loss accounts balance sheet auditors' report and directors' report ofthe subsidiaries are not attached to the annual accounts of your Company pursuant togeneral exemption granted vide general circular number 2/2011 dated 08.02.2011 issued bythe Government of India Ministry of Corporate Affairs and in terms of Section 136 of theCompanies Act 2013. Pursuant to the provisions of Section 129(3) of the Companies Act2013 read with Rule 5 of Companies (Accounts) Rules 2014 a statement containing salientfeatures of financial statements of subsidiaries in Form AOC-1 is attached to thefinancial statements. However the necessary details about the subsidiaries are given inthe consolidated financial statements. The Company will make available the financialstatements and related detailed information of the subsidiary companies upon request byany Member of the Company or its subsidiary companies. Copies of the financial statementof the subsidiaries would also be available for inspection by any such person at theregistered office of your Company on any working day as specified in the Notice conveningthe 72nd Annual General Meeting.
Pursuant to Section 136 of the Companies Act 2013 the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form No. MGT-9 attached as Annexure - V shall formpart of the Board's report. The extract is also available under the Investor section onthe website of the Company at www.exideindustries.com .
At the 71st Annual General Meeting (AGM) held on 2nd August 2018 the shareholdersapproved the appointment of Mr. Surin Shailesh Kapadia (having DIN: 00770828) as aNon-Executive Independent Director to hold office for the first term of five consecutiveyears.
Mr. Subir Chakraborty (having DIN: 00130864)
retires by rotation in accordance with the provisions of the Companies Act 2013 andbeing eligible offers himself for re-appointment at the ensuing Annual General Meeting.
Pursuant to the provisions of the Companies Act 2013 the shareholders at the 67th AGMof your Company held on 22nd July 2014 had appointed Mr. Vijay Aggarwal Mr. SudhirChand and Ms. Mona Desai as Independent Directors to hold office for a term of fiveconsecutive years up to the conclusion of the ensuing Annual General Meeting. Their termwill expire at the conclusion of the 72nd AGM.
Considering their vast knowledge experience and expertise in their respective fieldsand the contribution made by these Directors during their tenure as an IndependentDirector the Nomination & Remuneration Committee and the Board of Directors of yourCompany has recommended reappointment of Ms. Mona N Desai as Independent Director forsecond term of five consecutive years from the conclusion of the ensuing 72nd AnnualGeneral Meeting till 22nd July 2024. It has also recommended the re-appointment of Mr.Sudhir Chand as an Independent Director for a second term of three consecutive years fromthe conclusion of the ensuing 72nd Annual General Meeting till 22nd July 2022.
The Company has received declaration from Ms. Mona N Desai and Mr. Sudhir Chand thatthey continue to fulfill the criteria of independence as prescribed under the provisionsof the Companies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16 of the Listing Regulations (including statutory re-enactment thereof for thetime being in force).
The term of Mr. Gautam Chatterjee Managing Director and Chief Executive Officer (CEO)and Mr. Arun Mittal Wholetime director designated as Director-Industrial is due toexpire on the close of business hours on 30th April 2019.
The Board of Directors at its meeting held on 30th April 2019 has re-appointed Mr.Gautam Chatterjee as the Managing Director and CEO for a further period of two years witheffect from 1st May 2019 subject to the approval of the Shareholders. He will attain theage of 70 years on 25th February 2020 and hence continuation of his employment asManaging Director & CEO pursuant to Section 196(3) and Schedule V of the Act through aSpecial
Resolution proposing his re-appointment as Managing Director and CEO with effect from1st May 2019 will be placed at the ensuing Annual General Meeting for approval of theShareholders.
The term of Mr. Subir Chakraborty Whole-time director designated asDirector-Automotive is due to expire at the close of business hours on 30th April 2020.The Board of Directors at its meeting held on 30th April 2019 has appointed Mr. SubirChakraborty as Deputy Managing Director for a period of two years with effect from 1stMay 2019 subject to the approval of the Shareholders. A resolution proposing hisappointment as Deputy Managing Director with effect from 1st May 2019 will be placed atthe ensuing Annual General Meeting for approval of the Shareholders.
The Board of Directors at its meeting held on 30th April 2019 has re-appointed Mr.Arun Mittal as whole-time director designated as Director-Automotive for a period of fiveyears with effect from 1st May 2019 subject to the approval of the Shareholders. Aresolution proposing his re-appointment as a whole-time director designated asDirector-Automotive with effect from 1st May 2019 will be placed at the ensuing AnnualGeneral Meeting for approval of the Shareholders.
Necessary information pursuant to SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 in respect of directors to be appointed and re-appointedat the ensuing Annual General Meeting are given in the Annexure to the Notice conveningthe Annual General Meeting scheduled to be held on 3rd August 2019.
None of the Directors of your Company are disqualified for being appointed asdirectors as specified in Section 164(2) and Rule 14(1) of Companies (Appointment andQualification of Directors) Rules 2014.
KEY MANAGERIAL PERSONNEL
During the year the following directors/executives continued as Key ManagerialPersonnel of the Company:
> Mr. Gautam Chatterjee Managing Director & CEO
> Mr. A K Mukherjee Director - Finance & CFO
> Mr. Subir Chakraborty Whole-time director (Director - Automotive)
> Mr. Arun Mittal Whole-time director (Director - Industrial)
> Mr. Jitendra Kumar Company Secretary & EVP - Legal & Administration
DECLARATION OF INDEPENDENCE
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI(Listing
Obligations and Disclosure Requirements) Regulations 2015.
Further the Board of Directors has taken on record the declaration and confirmationsubmitted by the Independent Director under regulation 25(8) after assessing its veracity.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the performance evaluation of the Boardas a whole and of the Chairman and the NonIndependent Directors was carried out by theIndependent Directors. This exercise was carried out in accordance with the Nomination& Remuneration Policy framed by the Company within the framework of applicable laws.
The Board carried out an annual evaluation of its own performance as well as theevaluation of the working of its committees and individual directors including Chairmanof the Board. The performance evaluation of all the directors was carried out by theNomination and Remuneration Committee. The questionnaire and the evaluation process werereviewed in accordance with the SEBI guidance note on Board evaluation dated 5th January2017 and suitably aligned with the requirements.
While evaluating the performance and effectiveness of the Board various aspects of theBoard's functioning such as adequacy of the composition and quality of the Board timedevoted by the Board to Company's longterm strategic issues quality and transparency ofBoard discussions execution and performance of specific duties obligations andgovernance were taken into consideration. Committee performance was evaluated on the basisof their effectiveness in carrying out respective mandates composition the effectivenessof the committees the structure of the committees and meetings independence of thecommittee from the Board contribution to decisions of the Board. A separate exercise wascarried out to evaluate the performance of Independent Directors including the Chairman ofthe Board who were evaluated on parameters such as level of engagement and contributionto Board deliberations independence of judgement safeguarding the interest of theCompany and focus on creation of shareholders value ability to guide the Company in keymatters attendance at meetings etc.
Considering the success of the Company in most spheres and the value delivered to allits stakeholders it was evident that the Directors had been diligent sincere andconsistent in the performance of their duties. The Directors expressed their satisfactionwith the evaluation process.
NOMINATION & REMUNERATION POLICY
In accordance with the provisions of Section 178(3) of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasNomination & Remuneration policy in place. In accordance with the requirements of SEBI(LODR) (Amendment) Regulations 2018 the Board amended the policy during the year underreview to align the definition of Senior Management Personnel (SMP) and the process todetermine their remuneration. The objectives and key features of this Policy are:
(a) Formulation of the criteria for determining qualifications positive attributes ofdirectors Key Managerial Personnel (KMP) and senior management personnel and alsoindependence of independent directors;
(b) Aligning the remuneration of directors KMPs and senior management personnel withthe Company's financial position remuneration paid by its industry peers etc.;
(c) Performance evaluation of the board its committees and directors includingindependent directors;
(d) Ensuring board diversity;
(e) Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down;
(f) Directors' induction and continued training.
The revised Nomination & Remuneration Policy is available on the Company's websiteunder the link http:// www.exideindustries.com/investors/governance-policies . aspx
The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other items of business. The Board exhibits strong operationaloversight with regular presentations by business heads to the Board. The Board andcommittee meetings are prescheduled and a tentative annual calendar of Board and committeemeetings is circulated to the directors well in advance to help them plan their scheduleand to ensure meaningful participation at the meetings.
During the year under review five (5) board meetings and six (6) audit committeemeetings were convened and held the details of which are given in the CorporateGovernance report. The intervening gap between the meetings was within the periodprescribed under the Companies Act 2013.
The details of the constitution of the Board and its Committees are given in theCorporate Governance report.
COMPLIANCE WITH CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND SENIOR EXECUTIVES
All directors and senior executives have affirmed compliance with the Code of Conductfor the Board of Directors and Senior Executives. A declaration to that effect is attachedwith the Corporate Governance report.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
The Company has complied with Secretarial standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings.
RISK MANAGEMENT POLICY
In accordance with the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the Board of Directors of the Company are responsible for framingimplementing and monitoring the risk management plans of the Company. The Company has a"Risk Management Policy" to identify risks associated with the Company assessits impact and take appropriate corrective steps to minimise the risks that may threatenthe existence of the Company.
The Company's sustained leadership is an outcome of effective implementation ofstrategies. These strategies have been rolled out after a thorough diagnosis of theinternal and external business environment with special attention to competition marketemerging trends. The risks have been identified as an integral part of the business planin line with the enterprise risk management (ERM) framework of the Company ensuringadequate controls and mitigating actions to achieve the business objectives.
ERM framework of your Company is comprehensive and robust enough to respond against anyuncertainty. It has a three-tier risk identification mechanism involving the processowners at business sites corporate audit committee and board. The periodic review andaudits are conducted to ensure your Company is effectively managing the risks andconfidently progressing on the business goal. Risk management framework has beenimplemented in all the Subsidiary company.
Pursuant to regulation 21(5) of SEBI (LODR) Regulations 2015 effective from01.04.2019 the requirement of constituting Risk Management Committee is applicable to theCompany. As such your Company has duly constituted a Risk Management Committee during thefinancial year 2018-19.
The Risk Management Policy is available on the Company's website at the linkhttp://www.exideindustries.com/investors/ governance-policies.aspx
The equity shares continue to be listed on the BSE Limited (BSE) National StockExchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Companyhas paid the annual listing fee for the financial year 2019-20 to BSE NSE and CSE.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions which were entered during the financial year were in theordinary course of business and on an arm's-length basis. There were no materiallysignificant related party transactions entered into by the Company with promotersdirectors key managerial personnel or other persons which may have a potential conflictwith the interests of the Company.
All related party transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is also obtained from the Audit Committee for relatedparty transactions that are of repetitive nature and can be foreseen and accordingly therequired disclosures are made to the Audit Committee on a quarterly basis in terms of theomnibus approval of the Committee.
The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the website under link http://www.exideindustries.com/investors/governance-policies.aspx.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's-length basis there were no material related partytransactions during the year. Form AOC - 2 is therefore not applicable to the Company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the regulators/courts/tribunalswhich would impact the going concern status of the Company and its future operations.However member's attention is drawn to the statement on contingent liabilities andcommitments in the notes forming part of the financial statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information pursuant to Clause (m) of Sub-Section (3) of Section 134 of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewithas Annexure - VI.
Your Company believes that the strategic purpose of Human Resources is to be a catalystfor the transformation of our people which is required to ensure sustained businessoutperformance. Our Human Resources philosophy has been guided by the four pillars ofEmployee Efficiency Development Welfare and Culture Building.
Your Company continued its focus on talent management capability building leadershipdevelopment and performance management. Under the umbrella of the "Exide LearningAcademy" more than 2500 man-days of training were delivered on sales service andmanufacturing to improve the skills of our employees. High-potential development continuedthrough the "Exide Power" initiative of individual development planning (IDP)e-learning upskilling special assignments etc. In line with our effort of culturebuilding your Company this year had launched "Exide Coaching Academy" todevelop leaders as coaches through focused reinforcement role-modelling etc. Severalhigh potential employees have benefitted from the executive coaching extended to them.
With initiatives like the "Technocrat Programme" creation of "TechnicalSpecialists" and "Learning Labs" your Company has laid the foundation tobuild a healthy pipeline of talent in the specialist areas of Research and Development.
Your Company continues to drive performance through a quarterly evaluation process anda competitive performance- based bonus for all its employees. The "You Did It"platform to publicly recognise and reward top performers continues to motivate ouremployees.
High-quality leadership talent has also been infused across all functions to build atalent pipeline. Besides your Company continued to strengthen its position as an"Employer of Choice" across premier Business school campuses and create a strongtalent pool to drive the Company's future growth.
The total number of employees of the Company as on 31st March 2019 was 5359.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and financial statements are being sent to Members and others entitledthereto excluding the information on employees particulars which are available forinspection by the Members at the registered office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual
General Meeting. Any Member interested in obtaining a copy may write to the CompanySecretary. Further we confirm that there was no employee employed throughout thefinancial year or part thereof who was in receipt of remuneration in the financial yearwhich in the aggregate is in excess of that drawn by the Managing Director andWhole-time directors and holds by himself or along with his spouse and dependent childrennot less than two per cent of the equity shares of the Company.
Particulars of employees pursuant to Section 197 of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are annexed hereto and marked as Annexure - VII.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has zero tolerance for sexual harassment at the workplace and has adopteda Policy on prevention prohibition and redressal of sexual harassment at the workplace inline with the provisions of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (the Act') and Rules under it. It iscommitted to providing equal opportunities without regard to their race caste sexreligion colour nationality disability etc. Your Company has complied with provisionsrelating to the constitution of an Internal Complaints Committee under the Act. TheInternal Committee (IC) composes of internal members and an external member who hasextensive experience in the field.
Your Company had organised workshops and awareness programmes at regular intervals forsensitising employees on the issues and implications of workplace sexual harassment. Theseworkshops not only help create a safe and happy work environment to prevent any incidentsof such nature but also an awareness on legal laws. Employees from various functions inCorporate Marketing R&D and Projects were part of these workshops.
During the financial year 2018-19 one case of sexual harassment was reported to ICwhich was duly investigated and closed.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. That in the preparation of the annual financial statements the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any;
b. That the Directors have selected such accounting policies and applied themconsistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit or loss of the Company for that period;
c. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d. That the Directors have prepared the annual accounts on a going concern basis;
e. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and
f. That systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
This Report contains forward-looking statements that involve risks and uncertainties.
When used in this Report the words "anticipate" "believe""estimate" "expect" "intend" "will" and othersimilar expressions as they relate to the Company and/or its businesses are intended toidentify such forward-looking statements. The Company undertakes no obligation to publiclyupdate or revise any forward-looking statements whether as a result of new informationfuture events or otherwise. Actual results performance or achievements could differmaterially from those expressed or implied in such forward-looking statements. Readers arecautioned not to place undue reliance on these forward-looking statements that speak onlyas of their dates. This Report should be read in conjunction with the financial statementsincluded herein and the notes thereto.
Your Directors would like to record their appreciation for the enormous personalefforts as well as the collective contribution of all the employees to the Company'sperformance. The directors would also like to thank its customers employee unionsshareholders dealers suppliers bankers government agencies and all stakeholders fortheir co-operation and support to the Company and the confidence reposed on themanagement.
On behalf of Board of Directors Sd/-
Bharat D Shah
Place : Mumbai Chairman
Date : 30th April 2019 DIN: 00136969