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Directors Report of Exide Industries Ltd.

Mar 31, 2023

We are pleased to present the 76th Annual Report of your Company together with the Audited Financial Statements for the year ended 31st March 2023

Economic Environment

Global Economic Overview

The global outlook remained uncertain with the financial sector under stress, stubborn inflation, and the continuation of the Ukraine war, apart from the residual effects of three years of COVID. According to the IMF, “The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024.” In 2022, the rapid spread of COVID-19 in China, and Europe’s food and energy crises, further exacted a heavy toll on world economic activity. The negativity affected consumer and investor confidence, which further pressured the global economy''s near-term growth prospects.

The slowdown is particularly noticeable in the advanced economies which contribute majorly to global demand. Growth is expected to plummet from 2.7 percent in 2022 to 1.3 percent in 2023. If conditions worsen this could fall below 1 percent, says the IMF report.

On the positive side global inflation is likely to abate in the coming months, though energy and food prices were yet to show any major respite. Economic activity has beer improving since the third quarter of 2022, with some rebounc in household consumption and a pick-up in business activity. The opening of the Chinese economy towards the end ol the year also paved the way for recovery in demand. As the

India, along with China, is expected to contribute 50% of global growth in 2023

remaining headwinds are mainly in the Western world, global growth is projected to be held up by the Asian economies. In 2022, emerging markets and developing economies achieved a growth rate of approximately 4%, contributing significantly to overall global growth. In the coming year, these regions are expected to continue bolstering the global economy by sustaining a growth rate of 3.9%.

Several counter countermeasures are underway to prevent further downtrend in growth. Sustained wage rise and Government’s push to boost pent-up demand in large economies may gradually drive consumer demand while reducing supply constraints. This, in turn, should curb inflation and minimise the need for additional interest rate

hikes, thereby supporting growth. On the political front, the cessation of the Ukraine war will give a significant boost to the world economy. Greater cooperation among countries would ease the road to recovery.

Indian Economic Overview

India appeared to be the bright spot in a struggling world economy retaining its position as the world''s fastest-growing major economy in the financial year (FY) 2022-23. The country clocked a real gross domestic product (GDP) growth rate of 7.2 percent as per the estimate of the Central Statistical Organisation (CSO), backed by strong investment activity, the Government’s capex and infra push, and buoyant private consumption, particularly among higher-income earners.

The Indian economy demonstrated remarkable resilience, which is reflected in a rebound in post-pandemic consumption, increased economic activity, and a resurgent service sector. The Government of India''s initiatives for driving infrastructure investments have also facilitated growth.

While post-COVID private investment recovery is still at a nascent stage, there are early signals indicating that India is poised for a stronger investment upcycle in both manufacturing and services sectors. The number of private investment projects underway in the manufacturing sector has been steadily growing over the years. The GST collection for FY 2022-23 has increased by 22% compared to last year.

Backed by its strong fundamentals, the Indian economy is in a sweet spot to witness sustained growth in the years ahead. As per the Economic Survey presented in parliament in January 2023, India is expected to witness a 6.0-6.8 percent GDP growth rate in FY 2023-24. Multiple international and domestic agencies forecast India’s GDP growth to be in the range of 6.0%-7.0% for FY 2023-24.

The growth drivers will continue to be private consumption and investment, supported by favourable Government policies focused on improving infrastructure, and the business and banking ecosystem. India is optimistic about its future prospects because of its macroeconomic stability as well as its growing economic and political prominence on the international stage. On 1st December 2022, India assumed the presidency of the G20 forum taking over from Indonesia. As an emerging economic powerhouse, it is expected that India will take on other crucial roles in the coming years.

High-frequency indicators, including GST collections, railway and air traffic, electronic toll collection, the volume of e-way invoices, etc., point towards a strong economic recovery. Increasing UPI transactions and a higher credit demand also indicate sustained expansion. However, the key risks to the growth rate can be a slowdown in the global economy if the geopolitical situation becomes further tense or persistent high inflation leads to an increase in interest rates by central banks of major countries.

Multiple international and domestic agencies forecast India’s GDP growth to be in the range of 6.0%-7.0% for FY 2023-24

Industry Structure & Development

After a couple of years of lacklustre performance induced by the pandemic, the tide has largely turned in favour of the automotive industry and brought cheer to the Original Equipment Manufacturers (OEMs). Even last year, apart from the lingering threat of a new Covid variant, Omicron, the industry continued to face headwinds owing to the global semiconductor shortage. These anxieties now appear to have eased out to a large extent, and the industry is looking at a phase of sustained growth. The trend, however, is not equal across verticals: while some are set to soar higher, others still have to deal with challenges such as price hikes, rising operating expenses, and financing costs.

Upbeat consumer sentiment, increased mobility, new launches, and easing supply-side constraints are driving demand for passenger vehicles. According to the Society of Indian Automobile Manufacturers (SIAM), passenger vehicles registered the highest-ever domestic sales in 202223, surpassing the previous peak of 2018-19. Commercial vehicles too did well coming close to the previous sales peak of 2018-19. 3-wheelers gained traction compared to the past two years, though sales are yet to reach the pre-Covid levels. It is only in 2-wheelers that the growth failed to keep pace with other automobile segments.

Overall, domestic sales of passenger vehicles recorded a growth of about 27% during the year under review compared with 13% growth in the previous year. The commercial vehicles segment saw a growth of over 34% this year against a growth of 26% last year. 3-wheeler domestic sales grew by 87% compared to a 19% growth during the previous year. 2-wheeler sales increased by about 17% compared to a de-growth of 11% last year. SIAM believes that positive policy initiatives will help the industry to continue with its growth momentum.

Company Performance

While the year 2022-23 saw recovery from COVID-19, multiple complex and interconnected challenges such as inflation, slowdown in global economic growth, and geopolitical tensions affected businesses in different ways. We are however pleased to state that Exide steered through the challenges and remained focused on delivering value to its stakeholders. In this journey, we have also been blessed with continued support from customers who have trusted our brands and value proposition over the decades.

Automotive Division

As the year under review was free from pandemic-related mobility restrictions that marked the preceding two years, the demand from both OEM and the aftermarket rebounded sharply. Exide was well positioned to tap the resulting opportunities, successfully leveraging its long-standing relationship with OEMs to expand market share with both 4-wheeler and 2-wheeler manufacturers, despite stiff competition. Market share gains in the OEM market, along with the growth of domestic vehicle production, gave us sizeable volume expansion in this vertical.

The digital transformation in Exide’s aftermarket business over the last few years has started paying dividends by enabling micro-market level visibility. Today the sales team can monitor real time data on primary and secondary sales in a specific area to determine sharper strategies -- widening the gap with competition and reinforcing our leadership across segments. With clearer visibility of performance -- both across input factors that drive sales and output parameters that measure outcome -- there is also better focus on the task at hand.

Dealers, distributors and other channel partners also enjoy greater transparency and tools to enable growth for their businesses. Hyperlocal marketing initiatives further help our channel partners draw more customers. In media terms brand awareness and promotions across a variety of digital platforms continue to be the focus area for drawing customers. The post-Covid resurgence of traditional media like cinema is also being effectively used to supplement brand-building initiatives wherever required.

Leveraging our understanding of emerging trends, we continued to build on our product offering. This included cementing the first-mover advantage in critical segments such as batteries for hybrid vehicles with our Exide Mileage ISS & SF HybridX range of batteries.

Market share gains in the OEM market and growth in domestic vehicle production, gave us sizeable volume expansion

Exports

Globally, key automotive markets were impacted by geopolitical tensions, appreciation of the US dollar, imposition of anti-dumping duty in Gulf Cooperation Council (GCC) countries and the slowdown of demand from North America and some other markets. Despite these challenges, Exide remained focused on expanding the export footprint of automotive batteries.

To drive exports, the Company is focusing on strengthening presence in key markets, expanding its distributor base, exploring new product options, private labelling, and contract manufacturing.

The team has been able to steer through the logistical challenges and cater to the requirement of global channel partners successfully. Our personnel in overseas markets continue to play a key role in staying connected with the customers and addressing market requirements on a war footing.

We are pleased to state that we have been able to make inroads into the Russian market where we are well poised to take advantage of power storage demand in the next year.

There has been outstanding growth in Southeast Asia, which we could fully exploit due to our strategic geographical location.

Sales in the Middle East and the USA were stressed. Antidumping duties were imposed in the GCC countries, stifling demand. However, we have been able to retain our business volume by introducing new products. In the US market, we are trying to regain our volume of business through aftermarket retail chains.

After-Sales Service

After-sales service plays a pivotal role in augmenting the Exide brand equity. With rising sales in recent years, the service team’s responsibility has widened, and it is fully geared to meet the expectation of our customers. Apart from regular services, Exide has launched several service initiatives during the year with the objective of greater responsiveness to customer demands and to enhance customer delight. In the last year, initiatives such as annual maintenance contract (AMC) for inverter batteries and HUPS, dealer empowerment programs, were added to the services list. The launch of AMC for inverter batteries and HUPS has helped Exide gain popularity among customers, apart from generating revenue.

In the year under review we have adopted a dynamic tertiary model, enabling dealers to take faster decisions on battery servicing by either directly empowering them or by tagging them to the nearest empowered dealers. A journey cycle plan for service engineers and Regional Service Heads to meet dealers regularly is another step introduced during the year.

In keeping with Exide’s ‘customer first’ approach, we have launched several marketing initiatives over the years, of which Exide Batmobile Doorstep Service is a runaway winner. This service is now also available for all Inverter battery and HUPS customers. It offers a free pick-up-and-drop facility for end-customers and facilitates the purchase of new batteries. Under this unique service scheme, a customer needs to simply send a message to a dedicated WhatsApp number (700440 00000) and the service team provides quick on-site help. In line with our service goals, we have also reached out with a superior service model for upcountry customers to reduce turnaround time across the country.

The Indian automobile industry was into a deep structural slowdown even before the Covid-19 pandemic started and was further impacted by the pandemic. However, the tide has finally turned in favour of the industry in 2022-23. During the year, the passenger vehicles segment posted its highest ever domestic sales, while commercial vehicles posted the 2nd highest domestic sales. Although domestic sales of 3-wheelers remain below pre-Covid levels, they grew by 87% over the previous year.

Strong automobile sales augur well for your Company as higher vehicle sales not only help the OEM business but also expand the aftermarkets in years to come. As your Company has a dominant presence in the aftermarket and enjoys strong customer loyalty, we are well-positioned to tap the opportunities. In 2023, the India Meteorological Department (IMD) has predicted ‘above-normal maximum temperatures’ in most parts of the country, which is expected to drive the demand for inverter batteries, HUPS, and Integra, our integrated inverter with lithium-ion technology.

In the year under review, our OEM business has further consolidated Exide’s leadership position by enhancing market share. We expect to continue our strong relationship with OEMs.

In the Trade market, our strategy is to consolidate the leadership of Exide and strengthen our distribution reach as well as strength of our other two brands - ‘SF Batteries’ and ‘Dynex’. We believe that the strategic initiatives undertaken for these brands will bolster our dominance of the trade segment in the coming quarters.

From all indicators, it appears that the worst is over for the automotive battery vertical. Exports, which faced headwinds in multiple geographies, are poised for strong growth from here on. Besides recovery in our existing markets, the new geographies that we have added to our list will help to generate additional business.

Higher vehicle sales not only help the OEM business but also expand the aftermarkets in years to come

Opportunities and Threats

In 2021, India was the largest manufacturer of 2-wheeler and 3-wheeler vehicles, and the world’s fourth-largest manufacturer of passenger cars. In December 2022, the country became the 3rd largest automobile market, surpassing Japan and Germany in terms of sales. In 202223, the automobile industry touched two key milestones in terms of highest-ever passenger vehicle sales and second-highest commercial vehicle sales ever. Therefore, we believe

that the demand for lead-acid batteries will remain strong in the foreseeable future for both OEMs and aftermarkets. Our manufacturing plants and supply chain are fully equipped to cater to the growing demand.

In Electric Vehicles (EVs) too, a 12-volt Lead Acid Battery is required to operate lights, audio system, and other equipment, which we are supplying to EV manufacturers. Therefore, we do not see any immediate threat to our lead-acid battery business.

However, competition is intensifying in lead acid batteries, especially in the inverter segment. A number of competitors have emerged who have invested heavily in brand building and distribution to make market inroads. Exide is countering

competition with product innovations - as demonstrated by the launch of ‘Exide Integra’, the integrated inverter with lithium-ion technology and hi-tech features, conveniences, and looks. We are also reinforcing our brand equity to build a gap with competitive brands.

Risk Mitigation

We take several steps to mitigate various risks that arise in the natural course of business. We believe that data plays a key role in identifying emerging risks and therefore, it is necessary to get real-time data across business functions. We have therefore continued to make investments in deepening

digitization of the business processes across functions in order to fetch real-time data for agile decision-making.

We are also making a comprehensive effort towards manufacturing cost reduction as we constantly strive to maintain cost competitiveness. Over the past year, we have made the supply chain leaner and streamlined logistical operations to reduce costs. We have also adopted predictive modelling and are following a leaner inventory model.

In the overseas market, we are launching new product variants in order to mitigate regulatory risks. At the same time, we are entering new markets such as Russia, Europe, and North America in order to mitigate geopolitical and commercial risks affecting opportunities in specific locations.

We believe these initiatives are helping your Company to minimize the impact of uncertainties and to achieve its planned business objectives.

Industrial Division

The year under review was a year characterised by strong demand across all the end-market verticals of Exide’s Industrial Division. External headwinds in the form of input cost inflation and geopolitical tensions impacted margins and overseas demand but, with domestic demand remaining strong, profits rebounded as these headwinds eased and the business delivered on all fronts.

The Uninterrupted Power System (UPS) vertical, which is the largest business vertical of the Industrial Division, registered robust growth over last year. The Trade demand reflected the rising requirement for critical power backup in the country. The OEM business also contributed significantly toward the numbers due to rising demand as the overall economic activity continued to improve. The UPS business vertical continues to be our nucleus of strength, driven by a diversified portfolio, continuous product/ process innovations, and backed up by our strong sales and service network across India.

In 2022, the renewable energy industry thrived as India’s energy transition efforts were encouraged by the rapid decline in the cost of generating solar and wind energy. Coupled with the enabling policy ecosystem this has accelerated green energy investments. The

industry, however, experienced significant headwinds throughout the year, due to the implementation of basic customs duty, leading to higher imported component prices. Our Solar vertical saw strong revenue growth in this financial year, aided by increasing sales of our Solar Power Generation System (SPGS) combination comprising Solar Battery, PV Panel Solar Hybrid Inverter/ Charge Controller.

The year 2022 witnessed the much-awaited launch of 5G services in India at the India Mobile Congress, which opened new opportunities in several sectors. From manufacturing, healthcare, and augmented entertainment to smart city projects, 5G holds the promise of truly transforming connectivity. This directly translated into higher demand for our Telecom batteries, especially towards the end of the financial year when 5G implementation reached full swing. As a result, our Telecom vertical posted doubledigit growth for the year under review.

In the Infrastructure vertical, Exide achieved its best-ever results on the back of robust public spending. The Company remains the undisputed leader with unparalleled dominance in the infrastructure batteries market. Orders, which were delayed by the pandemic, are now being executed and the vertical will shortly reach pre-Covid revenue status. Net margins were satisfactory as we were able to pass on the raw material cost increases to the customers.

Exide makes motive power batteries for forklifts and other material handling equipment in its Traction vertical. This year we registered significant growth in both OEM and replacement market. Growth in warehousing and Third Party Logistics (3PL) markets also contributed to the demand for motive power. In the next financial year, our traction battery portfolio will be enriched by two new introductions. The first is Opportunity Rapid Charge (ORC) traction batteries, which utilize rapid charging to facilitate two-shift operations with a single battery. The second is Exide’s high-performance traction batteries which boast of a very high service life setting a new industry benchmark. These two new additions will supplement our existing portfolio of conventional Gen X batteries.

The Company also reported double-digit growth in the Railways vertical, owing to rapid execution of the orders since activities resumed after the pandemic.

Industrial Exports

Exide has been able to register appreciable growth in exports,

despite bumps on the road due to the slowdown in Europe as

an aftermath of the Russia-Ukraine war, followed by the winter

recession. We have achieved this growth by mining existing accounts in South Korea, Italy, Portugal, and Australia. The Company has embarked upon a detailed reach-out plan in the Traction vertical for customers in Europe and is adding multiple destinations with the same customers to have a wider spread of availability in the region. Efforts are also being made to enrich the product portfolio while offering complete battery solutions with ORC batteries.

In Standby batteries, Exide has achieved impressive allround growth with particular success in West Asia and Middle East. We have made inroads in Europe and continue to pitch our products in these markets. The Company has also initiated the approval process in power companies in the Middle East to gain a foothold in this sector. To summarise, the year recorded a healthy performance that stands out in the backdrop of the lacklustre macro environment.

Going forward, we will continue our extensive outreach program for Traction batteries in Europe and the regions mentioned above. We expect the export market to remain on an upward trajectory. Similarly, the Standby battery vertical is also likely to witness significant growth owing to new customers and rising demand in the Middle East and West Asia.

Outlook

The year-on-year growth registered in the IUPS business is testimony to the successful strategies implemented by the business vertical through improved portfolio management and go-to-market alignment. With an expected increase in Government and private spending on infrastructure projects during the run-up to the 2024 elections, we expect to continue our growth trajectory in IUPS business in the coming financial year. Going forward, the IUPS business is increasing its array of products, offering a comprehensive range along with exceptional customer experience.

The Solar vertical has diversified its portfolio by adding the AGM VRLA product range, which will fill the whitespace for maintenance-free solar batteries in the market.

This year we launched Exide SUNDAY Rooftop Solar Solutions (RTSS), offering a first-of-its-kind 5-year comprehensive warranty. The warranty covers all components of the system to provide a hassle-free brand experience to customers. The highlight of this solution is the fully digital customer

journey, right from the first enquiry through planning, and until installation. The initial market feedback to RTSS has been encouraging and we plan to scale up this business. To this end, we have launched a digital campaign, consisting of a series of ads that introduce our Exide Sunday concept to the customers with compelling reasons to consider Exide SUNDAY Rooftop Solar Solutions. The campaign is on popular platforms like YouTube, Google & Facebook (Meta) to drive awareness and generate demand.

In the Infrastructure space, Exide expects to scale new heights in the next year. For the Power vertical, this expectation is based on the strength of large orders expected from nuclear power plants and thermal power plants The ‘Make in India’ government policy has provided additional tailwinds for us in this sector.

In the Projects vertical, substantial orders from metro railways combined with Plante orders from the defence establishment will drive growth. Another growth driver is the flooded batteries required for signalling and telecommunications in the Indian Railways, which we have been able to re-enter after a 5 year hiatus.

As rural tele-density keeps improving and 5G services get rolled out in more and more cities, the Telecom vertical faces attractive prospects. The 5G rollouts are progressing at a rapid pace with operators working towards a pan-India 5G rollout in the next 12-15 months. The rollout is anticipated to create a surge in battery requirements.

In the Traction vertical, our Company has been growing consistently for two consecutive years after the pandemic. The Material Handling Equipment OEMs have strengthened their portfolio in the green products category, propelling the demand for electric forklifts. Exide is well equipped with the needed capacities to address this rising demand. Increased demand from warehouse and logistics hubs is also anticipated. Luggage puller trolley batteries for the aviation sector is another niche growth market going into next year.

The ongoing volatility in input costs, along with uncertainty about the timely availability of imported bought out items may pose some threats in the coming financial year but on an overall level, the IUPS business is expecting a surge in demand from emerging technological infrastructure. A digital-heavy capital expenditure (Capex) super-cycle spurred by both public and private investments in the next financial year, especially in the backdrop of upcoming general elections, bodes well for the vertical.

The Solar Rooftop market is showing signs of recovery and the demand is back to pre-covid levels. High module and other project Balance of System (BoS) prices and continued supply chain challenges, impacted capacity-addition plans during the year. However, with the supply situation easing and issues with shipping/ availability ironing out, we are optimistic about the market outlook, especially in the residential and small commercial and industrial rooftop market, which has been waiting to break out.

In the Power sector, we are seeing resurgence in thermal power plants including the revival of the thermal power plants in which operations had been suspended. This is demonstrated in the strong order pipeline. Furthermore, we are seeing growing requirements for Battery Energy Storage Systems (BESS), which is slated to become a major sector. We envisage these requirements will contribute to a large volume of business in the years to come.

For the Infrastructure Projects vertical, we are seeing strong demand across the industry on the back of robust public spending on infrastructure. The major opportunities are in Metro, Railways, Defence, and Data centre sectors. Another opportunity in this space is in the conversion of existing nickel-cadmium technology into lead-acid technology based on the application requirements.

Demand for lithium batteries in material handling, especially in the rental segment, is increasing day by day and is expected to grow further, indicating a partial shift in market preferences. Low-cost small Indian manufacturers, who get the advantage in tender-based platforms, pose a threat in the traditional lead-acid battery solutions market.

Looking forward, we expect a huge opportunity for 2V standby business in Europe, Middle East, Africa, and South-East Asia markets. The market for 12V batteries will continue to expand in West Asia and the Middle East. The recent consolidation in competitive space in Europe has set in motion a de-risking approach with the major distributors looking at Exide as a potential partner.

However, the Ukraine war, the ensuing slowdown, and the escalating energy prices in the European markets pose considerable threats.

A recurring outbreak of COVID-19, like China’s Covid ‘Exit Wave’, new SARS-CoV2 variants/ sub-variants could pose fresh challenges. There are additional threats of a looming global recession that may impact the world economy negatively. Even though a limited impact is expected in India, this could lead to weaker consumer sentiment and muted demand.

An escalation in energy/ raw material prices due to the ongoing conflict between Russia and Ukraine could have a cascading effect across commodities.

The Solar power industry has seen its fair share of challenges in 2022. Several solar projects were delayed because of the increased project costs and challenges around the supply chain, land availability, and timely power evacuation.

Conventional Integral Coach Factory (ICF)-design AC coaches of Mail/ Express trains are being replaced with Linke Hofmann Busch (LHB) design coaches in a phased manner. Since FY 2017-18, only LHB Coaches are being manufactured by the production units of Indian Railways. This trend can be seen in the Vande Bharat rakes, which require lithium-ion battery technology. This has led to gradual shrinkage in the market size for lead-acid batteries and consequently, reduction in the ticket size of the battery requirement.

The recent consolidation among European competitors has impacted demand owing to the shift in the buying strategy of some of our existing customers. Additionally, the recent withdrawal of Generalised System of Preferences (GSP) concession from European geographies has also introduced an element of uncertainty that can impact our overall competitiveness in Europe. Exide is taking steps to address these risks by acquiring new customers, entering new geographies, and diversifying the overall export customer base.

In response to the increase in commodity costs due to inflationary pressure, we have implemented a series of measures aimed at reducing and optimizing our costs across operations. Our focus on operational efficiencies has allowed us to identify areas where cost reductions can be made without compromising quality or safety. Additionally, we have adopted a calibrated pricing strategy that considers the current market conditions while ensuring our competitiveness.

Submarine Division

During the Financial Year (FY) 2022-23, the performance of your Company in the export market was satisfactory. In this period, we manufactured and delivered two sets of

submarine batteries, along with all accessories and spares for export to different countries. The batteries were delivered after the successful completion of all Factory Acceptance Tests (FAT) in the presence of the customer and with the prior permission of the Government of India.

In pursuit of new opportunities to expand the export business, Exide has been engaging actively with potential customers to promote its products. Globally, we compete with established international players as well as new entrants in this high-value arena. We are also continuing our efforts at innovation to enhance battery performance and add further value to the customer for gaining competitive advantage.

Due to inherent nature of the business, new opportunities are expected to fructify in the medium to long term.

Technology Upgrades

As in previous years, this year too, Exide’s R&D engineers have come up with several new products and new technologies to meet emerging user needs. The overall direction has been towards the development of product solutions that address the net-zero aspirations of the generation. Accordingly, a great deal of emphasis has been placed on ‘how to manufacture’ - in addition to ‘what to manufacture’ -- so that the net load on the environment is reduced holistically. The R&D and manufacturing engineers have come together to examine every opportunity to reduce energy costs in the manufacturing cycle. Optimization of process cycle time, selection of low-cost energy sources, and introduction of low-energy consumption equipment have been key considerations in this effort. The results are major steps towards a reduced carbon footprint with lower manufacturing process costs.

First introduced in this country by Exide, punched plate technology in four-wheeler batteries has been a great success, The time has now come to extend this technology to batteries for two-wheelers. Continuous plate production and environment-friendly manufacturing are the twin themes of new-age two-wheeler battery manufacturing to ensure higher performance consistency at a lower cost.

As the automobile industry transforms to produce cleaner cars, the expectations from batteries have risen commensurately. Exide has kept pace by introducing Enhanced Flooded Battery (EFB) and Idle Stop Start (ISS) batteries for most vehicle manufacturers in the country. The demand is now shifting towards completely sealed AGM VRLA batteries for under-bonnet automobile applications in order to achieve improved fuel efficiency and ensure cleaner emissions. We are in the process of setting up manufacturing units for the production of such advanced batteries in the next financial year. The basic development at the prototype level has been completed and we intend

to formally introduce the batteries on a commercial scale during the coming year.

On the export front, a huge demand has been building up for advanced technology batteries for vehicles. Users, particularly from the Middle East, Far East, and North America, are demanding customized batteries with advanced features as per the priorities of their respective countries. Exide’s design and plant engineers are working tirelessly to turn out batteries suited to specific customer requirements.

On the industrial front, Exide’s traction cells have long established a top-of-the-mind place among global customers. During the year under review, our engineers took the traction technology one step further by launching the ‘Opportunity Recharge Cell” (ORC) version which helps users with a limited budget, to find a material-handling solution with an extended duty cycle.

In the current year, Exide launched another game-changing traction technology to step further ahead of the competition. The resulting batteries have about 50% extra cycle life as compared to the conventional version and a warrantied life of three years. The new configuration features superior design and modern, eco-friendly manufacturing technology at its core.

In the telecom sector, with the arrival of 5G networks, there is a growing demand for compact, high-performance sealed batteries for outdoor deployment. In a short space of time, our R&D engineers have been able to come up with a design package that is now deployed at various locations in the country.

Battery energy storage systems (BESS) are slowly emerging as the core of future stationary battery storage. Exide is therefore developing multiple solutions -- at different life and price points -- for future deployment. In a significant association with the Calcutta Electric Supply Corporation (CESC), a 400 KWH lead-acid storage system has been installed and commissioned in the outskirts of Kolkata city for a micro-grid duty cycle. The offered technology comprises Exide’s advanced OPzV Tubular Gel product backed by an indigenously developed management system. The bank is in satisfactory duty now for more than nine months.

The drive towards the use of recycled lead has continued through the year as more and more lead and lead compound sourcing are being brought under the broad specification of recycled lead. Additionally, this year there

has been a significant focus on recycled plastics. Although the numbers are still modest, we have set ambitious targets for the percentage of recycled plastics to be used in the coming years.

Information Technology & Digital Initiatives

The recent disruptions due to technology such as Open AI, ChatGPT, DALL-E, and other AI tools, have forced businesses to re-evaluate and adjust how they work. As a result, it is now necessary for all market segments to structurally re-invent their approach. This means that all functions must abandon their old ways in favour of fresh ones that are more transformative.

With the growing scale of the business, the Company is constantly focusing on innovation to enhance its operational efficiency, and resource optimisation to achieve important business goals. In FY 2022-23, Exide continued its innovation journey with a focus on digitally transforming and nurturing Exide’s ecosystem to create sustainable value. During the year, Exide implemented predictive and rule-based AI systems across its dealership network with the intent to automate decision-making on process parameters and remove discretion, limitations, and estimation errors. The year also saw the successful implementation of key projects to optimise the logistics cost of both inbound and outbound operations. We also focused on upskilling the workforce and equipping them with the necessary tools to adopt and sustain the digital initiatives implemented during the year. We have taken all possible measures to ensure we are ready for any technology disruption.

Multiple layers of proactive controls are adopted to address the heightened concerns and consequences of cyber security threats resulting from rapid digitalization. This includes imparting regular training to the employees and conducting cyber security examinations, investment in multilayer firewalls, ongoing mock drills, periodic penetration assessment tests, testing of backup servers readiness, establishing a 24x7 security operations centre for real-time monitoring of threats, digitally signed email and data loss prevention tools, as well as ISO 27001 certification.

Some of our digital initiatives include the implementation of conversational artificial intelligence, the use of video analytics to enhance security and monitor operations, the adoption of drone technology for surveillance, and the implementation of augmented reality to enhance training and customer experiences. These initiatives can potentially reduce future costs by improving process efficiency, reducing manual labour, and enhancing customer satisfaction for increased loyalty and repeat business. By embracing innovative technologies, we are positioning ourselves to be more competitive, agile, and adaptable in the changing market conditions.

Driving a sustainable business

Your Company is committed to the Environmental, Social & Governance (ESG) goals for creating sustainable long-term value for all its stakeholders. With sustainability at the core of the Company’s strategy, it has built-in processes and initiated measures that make it a force for good: ensuring responsible business conduct and the overall well-being of its employees and communities.

In sync with Exide’s sustainability vision, we endeavour to demonstrably contribute in a socially, ethically, and environmentally responsible way to develop a society where the needs of all are met. The Company is supported by a sustainability framework based on focus areas across various ESG facets, and all sustainability interventions broadly fall under these focus areas. Exide consistently aims to achieve targets set under each focus area. We remain cognizant of the needs of the dynamic world and are aligned to making it a better place for the wider community.

The second Sustainability Report, which includes the Company’s performance in line with the Global Reporting Initiative (GRI) framework for the period 1st April 2022 to 31st March 2023 is published separately. The Company has also provided the requisite mapping of principles of the National Guidelines on Responsible Business Conduct to fulfil the requirements of the Business Responsibility and Sustainability Report (BRSR) as per SEBI’s directive. It is

available on your Company’s website and can be accessed by using the link - https://www.exideindustries.com/ investors/annual-reports.aspx

Highlights of Performance

Your Company recorded net sales of H 14,592 crore in 2022-23, against H 12,410 crore in the previous year. The profitability of your Company was adversely impacted due to unprecedented input cost inflation, as a result of which the raw material prices remained high throughout the year. The prevailing high logistics cost and supply chain disruption also affected the profitability of the Company. As a result, Profit before depreciation, finance cost & tax expenses (EBITDA) grew to H 1,568 crore from H 1,398 crore and Profit Before Exceptional Items and Tax grew from H 1,026 crore to H 1,215 crore with a growth of 18.4%.

Standalone Financial Results

(In H Crore)

Financial Results

2022-23

2021-22

Revenue from operations

14,591.93

12,410.13

Other income

132.39

80.46

Total Income

14,724.32

12,490.59

Profit before depreciation, finance cost, tax expenses & exceptional item

1,700.40

1,478.73

Less: Depreciation and amortisation expenses

455.78

413.14

Less: Finance cost

29.53

39.42

Profit Before Exceptional Item and Tax

1,215.09

1,026.17

Exceptional income/ (expense)

-

4,693.75

Profit Before Tax

1,215.09

5,719.92

Less: Tax expenses

311.46

1,035.59

Profit After Tax

903.63

4,684.33

Other Comprehensive Income

(291.98)

(801.29)

Total Comprehensive Income for the year

611.65

3,883.04

Balance brought forward

10,513.10

6,800.06

Making a total of

11,124.75

10,683.10

Out of this, appropriations are:

Interim Dividend for 2021-22 (200%)

-

170.00

And leaving a balance of (which is carried forward to next year)

11,124.75

10,513.10

Transfer to Reserves

The Board of Directors has decided to retain the entire profit as retained earnings. Accordingly, the Company has not transferred any amount to the reserves for the year ended 31st March 2023.

Consolidated Financial Statements

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations) and in line with the Indian Accounting Standard (Ind-AS) 110, the Consolidated Financial Statements (CFS) of the Company, its subsidiaries, and Associates form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company. These statements have been prepared based on the Audited Financial Statements received from the subsidiary companies and associates, as approved by their respective Boards.

The separate audited financial statements in respect of each subsidiary company and associates are available on the website of the Company at: https://www.exideindustries. com/investors/annual-reports.aspx

Dividend

The Board of Directors of the Company approved a Dividend Distribution Policy on 25th January 2017, in accordance with the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is described and annexed at the end of the Boards’ report and is also available on the Company’s

website: https://www.exideindustries.com/investors/ governance-policies.aspx

In terms of the Policy, equity shareholders of the Company may expect dividends if the Company has surplus funds for the declaration of dividends, after taking into consideration the relevant internal and external factors enumerated in the Policy.

In line with the said Policy, the Board of Directors has recommended a final dividend of 200% i.e. H 2.00 per equity share of face value of H 1/- each of the Company, for the year ended 31st March 2023, subject to the approval of the Members at the ensuing Annual General Meeting. This dividend payout ratio works out to 19% of the net profit after tax for the year ended 31st March 2023. The total outflow on account of equity dividend will be H 170 crore, vis a vis H 170 crore in FY 2021-22.

Share Capital

The paid-up equity share capital as on 31st March 2023 was H 85 crore divided into 85,00,00,000 equity shares of the face value of H 1 each.

During the year, the Company did not issue any shares with differential rights or convertible securities. The Company does not have any scheme for the issue of shares, including sweat equity to the employees or directors of the Company. The Company does not have a scheme for the purchase of its shares by employees or by trustees for the benefit of employees.

Change in the nature of the business, if any

During the year, there was no change in the nature of the business of the Company. Further, there was no significant change in the nature of business carried on by its subsidiaries. However, with the merger of the wholly owned subsidiary, Chloride Power Systems & Solutions Limited with your Company w.e.f. 29th March 2023, Exide will have a unified interface with customers for offering complete DC power solutions for industrial customers by manufacturing industrial battery chargers, DC power solutions, and solar power systems in India. This will ensure on-time supplies, efficiency of management, and maximum value for the shareholders.

Deposits

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 (Act), and the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification/s or re-enactment/s thereof) for the time being in force.

Particulars of Loans, Guarantees or Investments

The Company has not granted any loans or provided any guarantee or security pursuant to Section 186 of the Act except the corporate guarantee of H 2000 cr. to its wholly owned subsidiary, Exide Energy Solutions Limited. The details of investments and guarantees made by the Company during the year under review have been disclosed in the financial statements under Notes 5 and 10.

Material Changes and Commitments

There have been no material changes after the close of the Company’s financial year to which the financial statements relate and before the date of this report.

Key financial ratios

Under the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018, the Company has to give details of significant changes (i.e. change of 25% or more as compared with the immediately previous financial year) in key sector-specific financial ratios, including debtors turnover, inventory turnover, interest coverage ratio, current ratio, debt-equity ratio, operating profit margin (%) and net profit margin (%) and details of any change in Return on Net Worth as compared with the immediately previous financial year along with a detailed explanation thereof.

Return on Net Worth for the financial year 2022-23 was 8.29% as compared to 53.59% in the previous year, which included profit from Exceptional Item on account of sale of Exide Life Insurance Company Limited shares of H 3,919 crore (after tax) in the previous year 2021-22. Return on Net Worth from operations for the financial year 2022-23 was 14.1% as compared to 11.3% in the previous year due to significant growth in business volume.

Net Profit margin for the financial year 2022-23 was 6.19% as compared to 37.75% in the previous year, which included profit from Exceptional Item on account of sale of Exide Life Insurance Company Ltd shares. Net profit margin from operations excluding Exceptional Item during the previous year was 6.16%.

To note, all the above ratios have been disclosed in the notes to financial statements, as required by amendment notification dated 24th March 2021, in Division II of Schedule III to the Companies Act, 2013 and Companies (Audit & Auditor) Amendment Rules, 2021.

Your directors draw your attention to note no. 48 of the financial statements that set out key financial ratios.

Auditors

Statutory Auditors and their Report

BSR & Co. LLP Chartered Accountants (Registration No: 101248W/W-100022), were re-appointed as Statutory Auditors of the Company at the Annual General Meeting held on 22nd September 2022, for a second term of five consecutive years, till the conclusion of the 80th Annual General Meeting of the Company.

Cost Auditors

Under Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your directors, on the recommendation of the Audit Committee, have appointed Mani & Co., Cost Accountants (Registration no. 000004), to audit the cost records of the Company for the financial year 2023-24 at a remuneration of H 10,00,000/- (Rupees Ten Lakh only) plus out-of-pocket expenses and taxes as applicable.

A resolution regarding the ratification of the remuneration payable to Mani & Co., Cost Accountants, forms part of the Notice convening the 76th Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Anjan Kumar Roy & Co., Practising Company Secretaries (FCS: 5684/CP No:4557), to audit secretarial and other related records of the Company for the financial year 2022-23. The Secretarial Audit Report is given as Annexure-I.

Secretarial Audit of Material Unlisted Subsidiary Company

M/s Anjan Kumar Roy & Co., Practising Company Secretaries, had undertaken a Secretarial audit of the Company’s material subsidiary, Chloride Metals Limited, for the financial year 2022-23. The Audit report confirms that the material subsidiary has complied with the provisions of the Act, Rules, Regulations and Guidelines, and that there were no deviations or non-compliance. As required under Regulation 24A of the SEBI Listing Regulations, the report of the Secretarial Audit is given as Annexure IA.

Annual Secretarial Compliance Report

During the period under review, the Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India. The Company has also undertaken an audit for FY 2022-23, in line with SEBI circular no. CIR/CFD/CMD/l/27/2019 dated 8th February 2019, for all applicable compliances, in line with the SEBI Listing Regulations and circulars/guidelines issued thereunder. The Annual Secretarial Compliance Report will be submitted to stock exchanges within 60 days of the end of the financial year 2022-23.

Auditors’ Qualifications, Reservations or Adverse Remarks or Disclaimers made

There are no qualifications, reservations or adverse remarks by the statutory auditors in their report, or by the Practising Company Secretary in the secretarial audit report. The emphasis of matter and the key audit matters paragraphs are self-explanatory and require no clarification.

During the year, there were no instances of fraud reported by auditors under Section 143(12) of the Act.

Business Responsibility & Sustainability Report

The Company is committed to pursuing its business objectives ethically, transparently, and with accountability to all its stakeholders. We believe in demonstrating responsible behaviour while adding value to society and the community, as well as in ensuring environmental well-being from a longterm perspective.

Pursuant to Regulation 34(2)(f) of SEBI Listing Regulations, the Company voluntarily prepared the Business Responsibility & Sustainability Report for the year 2021-22. The report for FY 2022-23 is given in Annexure-II.

Corporate Governance

Transparency is the cornerstone of Exide’s philosophy and your Company adheres to all requirements of corporate governance in letter and spirit. All the Committees of the Board of directors meet at regular intervals as required in terms of SEBI Listing Regulations. The Board of Directors has taken the necessary steps to ensure compliance with statutory requirements. The directors, key management personnel, and senior management personnel of the Company have complied with the approved ‘Code of Conduct for Board of Directors and Senior Management Personnel’. A declaration to this effect, according to Schedule V of the SEBI Listing Regulations, signed by the Managing Director and CEO of the Company, forms part of the Annual Report.

The Report on Corporate Governance as required under Regulation 34(3), read along with Schedule V of the SEBI Listing Regulations, is given in Annexure-III. The Auditors’ Certificate on compliance with corporate governance norms is also attached to this Report. Furthermore, as required under Regulation 17(8) of SEBI Listing Regulations, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

Business Excellence

Your Company has implemented a comprehensive Total Quality Management (TQM) program for scaling up performance. There is considerable focus on improving the operating KPI and cost savings through the effective integration of TQM practices with functions. The proven capability of the organization in TPM and Quality Circle has been leveraged to deliver impactful projects.

Capability development in all facets of the organisation is also one of the priority areas. Training, workshops & capability assessments have undergone significant changes over the last few years. In view of various transformations taking place across functions, we have converged our attention into building cutting-edge knowledge to meet emerging requirements on key capability areas.

During the year, there were notable upgrades in the system and standards, as well as external certifications and the addition of new certifications to keep the customers assured and best practices absorbed. The Company has achieved new certifications in Energy Management Systems (ISO 50001) while successfully sustaining existing certifications such as IATF 16949, ISO 9001, ISO 45001 & ISO 14001 Standards.

The focus areas of TQM and business excellence during the year were operational excellence, competitive capability, capability development, TQM score framework, and TQM. During the year, TQM & Business Excellence drives for supplier partners were conducted through an online assessment and onsite audit.

Over the last year, there has been double-digit growth in project magnitude impacting both operational KPI and cost savings.

Awards & Accolades

Best-in-class approach, process and technology is a way of life at Exide. For external benchmarking on capability, the Company, during the year under review, has significantly accelerated the magnitude, pace, and focus by participating in various awards and recognition programmes. This has

resulted in winning a larger number of awards during the year as compared to previous years.

Summarised below are some of the Awards conferred to Exide during the year:

TQM & Business Excellence

Golden Peacock Excellence Award 2022 -- Leadership for Business Excellence

Quality Leadership Award for integrated all-out performance from Quality Circle Forum of India Kaizen Platinum Award, CII National Kaizen Competition Quality Award, Manufacturing Today

Safety & Environment

India Green Manufacturing Challenge Award

Best Company in Innovative Energy Management

Control

Sustainability & CSR

Golden Peacock Award 2022 for Sustainability The Economic Times Sustainable Organizations 2022 Manufacturing Today Award for Excellence in CSR 7th CSR Excellence Award, ICSI HR & Leadership

HR Excellence Award, QCFI

Power Brand of Atmanirbhar India from Sanmarg Business Award

IT & Infrastructure

Technology Excellence Award - Analytics Implementation (IBM & Quantic)

Technology Excellence Award - Best Technology of the Year, Infrastructure (Organised by HP & Quantic)

Tech Senate Award 2022, Big Data & Analytics, Indian Express Group

Cyber Security Excellence Award 2022 (Z Scaler & Quantic)

Occupational Health, Safety and Environment

Exide places utmost importance on the safety of its employees and assets, as well as the protection of the environment through various initiatives in areas of sustainability. The Company has implemented best-inclass Employee Health & Safety (EHS) procedures for ensuring and improving the safety of employees and their surroundings.

During the year under review, all of our manufacturing plants, regional marketing offices, corporate offices, and research facilities were certified for ISO 45001, the international standard for occupational health and safety, and ISO 14001, the international standard for environmental management by reputed global certification body.

We are committed to providing safe working places for our employees. For this, we have implemented various initiatives, one of which is identifying approximately 70 Safety Champions at our manufacturing sites across India. Safety Champions have the responsibility to promote a safety culture among workers through education, monitoring, and identification of near misses for preventing adverse incidents. Total Productive Maintenance (TPM), Safety Health and Environment (SHE) pillar approach is followed to implement the best practices of safety in our organization.

Safety structures and protocols have also been implemented in the regional offices where EHS committees drive the culture of safety. These committees are working towards improving the safety of those employed in sales and service.

We are committed to utilizing natural and man-made resources in an optimal and responsible manner to ensure the sustainability of resources by reducing, reusing, recycling, and managing waste. We regularly monitor and

prevent pollution through waste minimization at the source; recovery/treatment of emissions, and conservation of energy. Greenhouse Gas (GHG) emissions are being monitored and improvements are made to reduce environmental damage.

Reduction in hazardous waste is a focus area at Exide. Various steps such as reducing the usage of plastic, reduction in raw material consumption through design changes, and yield improvement through superior products and processes are being undertaken.

Audits are conducted by corporate teams to assess the health of safety practices on a quarterly basis. The gaps identified by these audits are closed on a priority basis to make workplaces safe and secure.

All employees, suppliers, and visitors are made aware of and trained on the Company’s EHS practices through regular sessions. Non-managerial workers are made part of safety committees, which initiates appropriate actions for improving the EHS culture for the direct benefit of all employees.

To conclude, Exide follows industry-accredited best practices in health, safety, and environment-related aspects to constantly set higher benchmarks -- and strives to exceed the same.

Corporate Social Responsibility

Exide’s commitment to creating significant and sustainable societal value is manifested in Corporate Social Responsibility (CSR) initiatives that focus on the most vulnerable sections of society. The CSR framework demonstrably contributes towards holistic and sustainable development of communities who live in the neighbourhood of our operations.

Exide’s CSR is governed by a Board-driven policy that is aligned with section 135 of the Companies Act and rules made thereunder. The CSR policy provides guidelines for CSR planning, budgeting, preparation of annual action plans, impact assessment of CSR interventions, monitoring, selection of ongoing projects, treatment of unspent CSR funds (if any), and the role of implementing agency.

The CSR policy of the Company is available on the Company’s website https://www.exideindustries.com/ sustainability/. The CSR plan for the year 2022 - 23 is available on the Company’s website https://docs. exideindustries.com/pdf/approved-csr-project-22-23.pdf.

In compliance with section 135 of the Companies Act and the CSR policy of Exide, the Company has constituted a CSR committee comprising 4 members. During the year the

CSR committee met four times to deliberate, recommend and monitor the progress of CSR interventions. Details of the CSR committee are available on the Company’s website https://www.exideindustries.com/about/board-committees.aspx

The disclosures, as mandated under Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 are placed in Annexure-IV.

The executive summary of the Impact Assessment Report of the Company’s CSR interventions is placed along with Annexure IV. The detailed Impact Assessment Report is available on the Company’s website https://www. exideindustries.com/sustainability/

The Company spent H 2134.70 lakh towards its CSR activities against the obligation of H 2132.03 lakh in the year 2022-23.

During the year Exide implemented CSR interventions aligned to the identified themes of: -

Promoting Education (through Exide Akshar),

Promoting Better Health Outcomes (through Exide Aarogya),

Promoting Employability (through Exide Kausha!),

Empowering Communities (through Exide Saksham) and

Protecting Environment (through Exide Paryavaran).

The CSR activities of the Company are estimated to have positively impacted over 3.1 Lakh people. More than 80% of our beneficiaries are from less privileged and vulnerable sections of the society.

Even as the world emerged from the Covid pandemic a significant challenge remained in the form of learning losses for children and livelihood losses for adults. Therefore 75% of Exide’s CSR spent during the year 2022-23 was devoted to these two causes. The most significant was a school transformation project in 41 government and charitable schools. The mission was to upgrade classrooms to smart classes, modernise water, sanitation, and health (WASH) facilities and establish STEM laboratories for sharpening science and mathematical skills. The school transformation projects undertaken by the Company positively impact more than 40,000 students. It is spread across 7 districts in 4 states. We also facilitated infrastructure upgrades and development in 20 schools, in 8 districts of 6 states.

Another initiative we are proud of is the Marrow Donor Registry India. This has enabled the registration and profiling of more than 60,000 voluntary marrow donors. Bone Marrow donation is the best chance of survival and treatment for many patients suffering from life-threatening diseases like leukaemia, lymphoma, other cancer, sickle cell anaemia, etc. The registration and profiling will enable many patients to easily reach out to matching donors and get quick treatment. The initiative has already saved 18 precious lives.

Under Exide Excellence Program, your Company has continued to support the scholastic endeavour of 150 girls (shalinis) through scholarships, career-boosting infusions, and more than 600 hours of mentorship from officials of Exide.

Through our Exide Paryavaran project, more than 20,000 individuals are positively impacted. The initiative includes rejuvenation and restoration of ponds, protection of flora and fauna, etc., which has a cascading effect on the lives and livelihoods of the local communities.

Besides the above-mentioned interventions, Exide has implemented many other highly impactful projects, aligned to the identified core themes to create a shared value for all stakeholders.

Internal Controls

A robust internal control framework is essential for sustainable growth. Exide has an independent Internal Audit department, assisted by a reputed external firm, for carrying out the internal audit reviews. The Internal Audit’s scope and authority stem from the Audit Committee’s approved Internal Audit Charter. The Internal Audit controls operate alongside a robust risk management framework, mutually reinforcing each other’s efforts.

Audit reviews are conducted on an ongoing basis, following an audit committee-approved comprehensive, risk-based audit plan. Periodically, the Audit Committee is presented with a summary of significant audit observations and followup actions thereon.

The Company’s internal financial controls framework is based on the ‘three lines of defence’ model. Exide has ensured compliance with Section 134(5)(e) of the Companies Act 2013 by implementing a strong system and framework for internal financial controls. The framework includes various measures such as entity-level policies, process control, IT general controls, and standard operating procedures (SOPs) to ensure internal controls over financial reporting.

The entity-level policies include anti-fraud policies such as a Code of Conduct and Whistle-Blower policy, along with other policies like Insider Trading policy, DOA, HR policy, and IT security policy, to bolster the internal control systems. These internal controls are reviewed by the senior management as well as internal auditors periodically.

The Audit Committee has evaluated the design and effectiveness of these controls and found no significant material weaknesses or deficiencies that could impact financial reports.

On the strength of these controls and systems, your directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that your Company’s internal control systems are commensurate with its size and scale of operations and that they are designed to provide reasonable assurance that the Company’s financial statements are reliable and prepared according to the law. To continually improve these internal controls, the Company has established a well-defined system of internal audits to independently review and strengthen them.

Vigil Mechanism/Whistle-Blower Policy

Exide has a Whistle-Blower Policy that offers a formal mechanism for its directors, employees, and other

stakeholders to report genuine concerns about unethical behaviour, actual or suspected, fraud, or violation of the Company’s Code of Conduct in accordance with the provisions of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, and SEBI Listing Regulations. It contains a reporting mechanism, how all reported concerns are dealt with, the confidentiality of the investigations and processes, protection of the whistleblower against any retaliation, guidelines for retention of records during the investigation/ reporting of the case, etc.

The policy provides for adequate safeguards against victimisation of persons who use such a mechanism. It provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The Company has a dedicated email address for reporting such concerns at [email protected] Company investigates any incident that is reported and takes suitable action in line with the Whistle-Blower Policy. It is affirmed that no personnel of the Company was denied access to the Audit Committee. The Audit Committee of the Board oversees the vigil mechanism.

The policy is available on the website:https://www. exideindustries.com/investors/governance-policies.aspx

Subsidiaries, Joint Ventures and Associates

A statement containing the salient features of financials of subsidiaries and associates of the Company, in the prescribed Form AOC-1, is part of the Consolidated Financial Statement. This form highlights the financial performance of each subsidiary and associate company along with their contribution to the overall performance of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014. The report is not repeated here for the sake of brevity.

In line with Section 136 of the Act, the financial statements of the subsidiary and associate companies will be available for inspection up to the date of AGM. Members can inspect these by sending an email to [email protected].

Any member who wants a copy of the financial statements may write to the Company Secretary at the registered office of the Company. The financial statements including the Consolidated Financial Statement (CFS) and all other documents required to be attached to this report have been uploaded on the website of the Company at www.exideindustries.com.

Exide Industries Ltd. had seven subsidiaries and two associate companies as on 31st March 2023. During the

year under review, Chloride Power Systems & Solutions Limited (“CPSSL’), erstwhile wholly-owned subsidiary, merged with the Company vide Hon’ble National Company Law Tribunal, Kolkata Bench order dated 17th February 2023, read with rectified order dated 22nd February 2023. The Scheme of Amalgamation has become operative and CPSSL, Transferor Company ceased to exist from the effective date upon filing the order with the Registrar of Companies, Kolkata, on 29th March 2023.

The acquisition has been successfully turned around and integrated with the operations of Exide.

Chloride Metals Limited (CML) is a secondary smelting and refining company that is a wholly owned material subsidiary company of Exide. It plays a strategic role in backward integration and meets the lead and lead alloy requirements of the Company. The subsidiary is in line with the concept of circular economy. The scrap batteries are collected from dealers, recycled and the recovered lead is sent to Exide to produce new batteries.

CML has a national presence with manufacturing units in the states of Karnataka (Malur), Maharashtra (Markal), and West Bengal (Haldia) with state-of-the-art machinery and technology to boost eco-friendly production of lead. Chloride Metals Limited production capabilities are backed by an immaculate design engineering cell, and tested at the quality control department to conform to Exide’s exacting material standards. The R&D team keeps the Company abreast with new technologies and the product mix is tailored to suit the required specifications by qualified engineers and metallurgists. The total installed capacity of CML is 2,52,000 tonnes a year.

During the year, your Company invested H 57 crore in the equity share capital of CML for setting up a greenfield project at SUPA, Maharashtra.

CML is a secondary lead smelting and refining company and plays a strategic role in backward integration for Exide

nexcharge

Known by its Nexcharge brand, Exide Energy Private Limited (formerly known as Exide Leclanche Energy Private Limited) is a subsidiary of Exide, which started in

2018 as a joint venture between Exide Industries Limited and Leclanche SA of Switzerland (“LSA"). The Company is in the business of developing and manufacturing lithium-ion-based modules and packs with Battery Management Systems (BMS) for e-mobility (EV) as well as stationary power application.

Nexcharge has received substantial commercial orders for its various verticals such as 2-wheeler, 3-wheeler, commercial vehicles, and telecom for execution in the next 2 years. It has successfully developed 2-wheeler and 3-wheeler batteries that demonstrate superior thermal management along with multiple protective control features to safeguard the battery from adverse climatic conditions or abuse. An in-built testing facility for the cells and battery packs and automated production lines turn out premium quality batteries that are safe as well as durable.

Nexcharge is also focusing on developing its own Battery Management System (BMS) for transport as well as industrial applications. They have successfully completed the prototypes and are now moving towards finalizing Standard Operating Protocols (SOPs) within the next 6 months.

On 4th November 2022, Nexcharge bought back the entire paid-up and issued equity shares held by “Leclanche S.A." (‘LSA’) through a buy-back scheme. It has therefore become a wholly owned subsidiary of Exide Industries Limited. Consequently, the name of the company was changed from Exide Leclanche Energy Private Limited to Exide Energy Private Limited w.e.f. 4th January 2023. The registered office of the Company was also shifted from the state of Gujarat to the state of West Bengal.

During the year 2022-23, your Company invested H 25 crore through 0.01% Compulsorily Convertible Preference Shares (CCPS) in Nexcharge to meet funding requirements.

HMHIIIRIIHRIMRRIII exide

Exide Energy Solutions Limited (EESL) was incorporated on 24th March 2022, as a wholly owned subsidiary of Exide Industries Limited in the state of West Bengal. The main object of the Company is to carry on the business of manufacturing battery cells of advanced chemistry and form factor, including but not limited to cylindrical, pouch, and prismatic, (the “Battery Cells"), as well as manufacturing, assembling, selling battery modules, battery packs and other related activities.

The Company represents a significant step to strengthen Exide’s position in the emerging lithium-ion battery market. Its greenfield factory spread over 80 acres of land at the

Hi-Tech Defense & Aerospace Park Phase 2, Bengaluru, is designed to produce technology-leading lithium-ion batteries to meet EV & Industrial requirements. In view of this objective, EESL has entered into a multi-year technical collaboration agreement with SVOLT Energy Technology Co. Ltd (SVOLT), a global technology company that makes and develops lithium-ion batteries and battery systems for EVs as well as for energy storage. In addition to technology, SVOLT is providing support for setting up the plant on a turnkey basis. It will also set up a state-of-the-art R&D lab and pilot line to support new product development for the Indian market.

EESL has secured all necessary permissions to initiate construction activity, including environment clearance, fire NOC, building height and Consent to Establish. Siteenabling work for construction is expected to be largely completed by April 2023. Post receipt of all necessary approvals, EESL has onboarded leading construction vendors for civil & PEB works. On-ground construction activity has been initiated and foundation-laying work is in progress. Site progress is on target to achieve SOP by the second half of FY 2024-25.

As on date of this report, EESL has recruited close to a 50 member team, comprising experienced and senior personnel and has strengthened all key functions to support project execution and delivery such as R&D, sales, procurement, facility, quality, IT, HR & others.

During the year 2022-23, your Company invested around H 715 crore through equity in EESL for setting up the greenfield unit.

Amalgamation of Exide Energy Private Limited with Exide Energy Solutions Limited

During the year under review, the Board of Exide Energy Private Limited (“Transferor Company”) and Exide Energy Solutions Limited (“Transferee Company”), wholly owned subsidiaries of Exide Industries Limited, (collectively, the “Amalgamating Companies”), have approved the Scheme of Amalgamation involving the merger of both the Companies. The Scheme is subject to the receipt of approval from the requisite majority of shareholders and creditors of the amalgamating parties (unless dispensed with), approval by the Kolkata bench of the National Company Law Tribunal (NCLT), having jurisdiction over the Amalgamating Companies, and such other approvals, permissions, and sanctions by regulatory and other statutory / quasi-judicial authorities, as may be necessary. A joint application in this regard has been submitted to the Kolkata bench, NCLT in the financial year 2023-24.

Subsidiary Monitoring Framework:

All the subsidiary companies of Exide Industries Limited are board-managed with their boards having the rights and obligations to manage such companies in the best interests of their stakeholders. As a majority shareholder, your Company nominates its representatives on the Board of subsidiary companies and monitors the performance of such companies, inter alia, by the following means:

a) The financial results along with the investments made by the unlisted subsidiaries are placed before the Audit Committee and the Exide Board, quarterly;

b) A copy of the minutes of the meetings of the Board of Directors of the Company’s subsidiaries are circulated, along with the agenda papers, to the Exide Board;

c) A summary of the minutes of the meetings of the Board of Directors of the Company’s subsidiaries is circulated to the Exide Board, quarterly;

d) A statement containing all significant transactions and arrangements entered into by the subsidiary companies is placed before the Exide Board;

Exide Industries has one material subsidiary i.e. Chloride Metals Limited whose income is more than 10% of the consolidated income of the Company during the previous financial year. A policy for the determination of material subsidiaries has been formulated and has been posted on the Company’s website https://www.exideindustries.com/ investors/governance-policies.aspx

Annual Return

In terms of Section 92(3) of the Companies Act, 2013, and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Company’s website at the link: https://www. exideindustries.com/investors/annual-reports.aspx

Directors and Key Managerial Personnel

During FY 2022-23, Members of the Company approved the re-appointment of Mr Surin Kapadia (DIN 00770828) as an Independent director of the Company for five years with effect from 25th October 2022 to 24th October 2027, whose office shall not be liable to retire by rotation.

Mr Sridhar Gorthi (DIN 003535824) was appointed as Independent director for a term of five years with effect from 29th July 2022 to 28th July 2027, whose office shall not be liable to retire by rotation.

Mr R B Raheja (having DIN 00037480) retires by rotation under the provisions of the Companies Act, 2013, and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Necessary information under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Secretarial Standard 1 (SS-1) issued by Institute of Company Secretaries of India (ICSI), regarding directors to be reappointed at the forthcoming Annual General Meeting, is given in the Annexure to the Notice convening the Annual General Meeting.

None of the directors of your Company is disqualified from being appointed as directors, as specified in Section 164(1) and Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of directors) Rules, 2014.

During the year under review, the following directors/executives served as Key Managerial Personnel of the Company:

Mr Subir Chakraborty, Managing Director & CEO

Mr A K Mukherjee, Whole-time Director (Director-Finance & CFO)

Mr Arun Mittal, Whole-time Director (Director-Automotive)

Mr Avik Roy, Whole-time Director (Director-Industrial)

Mr Jitendra Kumar, Company Secretary & President-Legal & Corporate Affairs

Declaration of Independence

In line with Section 149(7) of the Act, each independent director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Act and complies with Rule 6(3) of the Companies (Appointment and Qualifications of directors) Rules, 2014 and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent directors of the Company. Furthermore, they have affirmed compliance with the code of conduct for independent directors as prescribed in Schedule IV of the Act.

Board Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations, the performance evaluation of the Board as a whole, and the Chairman and the Non-independent directors was carried out by the Independent directors. This exercise was carried out following the Nomination and Remuneration Policy framed by the Company within the framework of applicable laws.

The Board carried out an annual evaluation of its performance and also evaluated the working of its committees and individual directors, including the Chairman of the Board. The performance evaluation of all the directors was carried out by the Nomination and Remuneration Committee. The questionnaire and the evaluation process were reviewed in line with the SEBI guidance note on Board evaluation dated 5th January 2017, and suitably aligned with the requirements.

The purpose of the Board’s evaluation is to achieve consistent improvements in the governance of the Company at the Board level with the participation of all concerned in an environment of harmony. The Board acknowledges its intention to establish and follow ‘best practices’ in Board governance in order to fulfil its fiduciary obligations to the Company. The Board believes that the evaluation will lead to a closer working relationship among Board members, greater efficiency in the use of the Board’s time, and increased effectiveness of the Board as a governing body.

While evaluating the performance and effectiveness of the Board, various aspects of the Board’s functioning, such as adequacy of the composition and quality of the Board, time devoted by the Board to the Company’s long-term strategic issues, the quality and transparency of Board discussions, and execution and performance of specific duties, obligations, and governance were taken into consideration. Committee performance was evaluated on their effectiveness in carrying out respective mandates, composition, the effectiveness of the committees, the structure of the committees and meetings, independence of the committee from the Board, and its contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of independent directors including the Chairman of the board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgement, safeguarding the interests of the Company, focus on the creation of shareholder’s value, ability to guide the Company in key matters, attendance at meetings, etc.

The following comments, inter alia, were received during the Board evaluation:

The Company is transparent, and endeavors to follow good corporate governance practices;

All significant issues are brought to the Board. The agenda and proceedings are well-structured and focused;

The Board is balanced and diverse views are expressed freely;

The quality, quantity, and timeliness of the flow of information between the management and the Board is satisfactory;

The management responds to the queries and requests, whenever sought, in a timely manner;

Increased frequency of the Risk Management Committee meetings helped to bring rightful attention to the important topics of risk;

The cohesive working of other Board committees was appreciated.

Considering the success of the Company in most spheres, and the value delivered to all its stakeholders, it is evident that the directors have been diligent, sincere and consistent in the performance of their duties. The directors expressed their satisfaction with the evaluation process.

Nomination & Remuneration Policy

Following the provisions of Section 178(3) of the Act and the SEBI Listing Regulations, Exide has a Nomination and Remuneration policy in place. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, key managerial personnel (KMP), senior management personnel and also the independence of independent directors

(b) Aligning the remuneration of directors, KMPs and senior management personnel with the Company’s financial position, remuneration paid by its industry peers, etc

(c) Performance evaluation of the Board, its committees and directors including independent directors

(d) Ensuring Board diversity

(e) Identifying persons who are qualified to become directors and who may be appointed to senior management, in line with the criteria laid down

(f) Directors’ induction and continued training

The Nomination and Remuneration Policy is available on the Company’s website under the link:https://www. exideindustries.com/investors/governance-policies.aspx

Meetings

The Board meets at regular intervals to discuss and decide on Company’s business policy and strategy apart from other items of business. The Board exhibits strong operational oversight with regular presentations by business

heads to the Board. The Board and committee meetings are pre-scheduled and a tentative annual calendar of Board and committee meetings is circulated to the directors well in advance to help them plan their schedule and to ensure meaningful participation at the meetings.

During the year under review, six (6) Board meetings and six (6) Audit Committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of the constitution of the Board and its Committees are given in the Corporate Governance report.

Compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel

All directors and senior management personnel have affirmed compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel. A declaration to that effect is attached to 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 Company Secretaries of India on Board Meetings and Annual General Meetings.

Approach to Risk Management

Risk management is integral to your Company’s strategy and to the achievement of long-term goals. Our organization understands that identifying and capitalizing on business opportunities and market trends is crucial to its business. Therefore, we have implemented a comprehensive risk management framework that places a strong emphasis on assessing both risks and opportunities.

To address continuously evolving risks, your Company has established a comprehensive Enterprise Risk Management framework, incorporating a holistic approach that balances both bottom-up and top-down perspectives and has undergone significant development over the years, The ERM framework enables the management to proactively identify specific risks, evaluate their potential impact, and determine the best course of action to manage overall exposure. The allocation of resources and active management of risks are integral components of this framework, ensuring that potential threats are managed effectively.

Oversight of risk management is conducted by a four-level governance structure as follows:

Board of Directors

Risk Management Committee (RMC)

Executive Committee (EXCOM)

Heads of functions and process owners

The existing Risk Management Policy incorporates traditional as well as emerging risks such as cyber security, business continuity processes, disaster management and ESG. The Risk Management Policy of Exide is available on the Company’s website at the link: https://www.exideindustries. com/investors/governance-policies.aspx

Risk identification and prioritization are achieved through continuous scanning of the business environment and monitoring of internal risk factors including emerging risk areas. The RMC, in particular, monitors key risks, tracks progress on mitigation plans, and addresses any challenges that arise.

Formal reviews of identified risks are held thrice a year by the EXCOM and the RMC with ongoing monitoring and evaluation taking place throughout the year.

Your Company has adopted comprehensive ERM, which involves using a risk matrix to plot risks on a 5 X 5 scale. The matrix is divided into four categories, each represented by a different color. This allows us to quickly assess risk visually and determine the appropriate levels of oversight, review, and escalation for notification and action.

The resurgence of COVID, recent central bank interventions, shifting ESG standards, and geopolitical developments may introduce unforeseen risks. Our Company remains committed to implementing a dynamic and robust risk management strategy that can adapt to changing circumstances and evolving information.

Listing

The equity shares continue to be listed on the BSE Limited (BSE), the National Stock Exchange of India Limited (NSE), and The Calcutta Stock Exchange Limited (CSE). The Company has paid the annual listing fee for FY 2022-23 to BSE, NSE and CSE.

Particulars of contracts or arrangements with related parties

All related-party transactions (RPT) which were entered during the financial year were in the ordinary course of business and on an arms-length basis. There were no materially significant related-party transactions entered into by the Company with promoters, directors, key managerial personnel, or other persons that may have had a potential conflict with the interests of the Company.

All related-party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for related-party transactions that are repetitive and can be foreseen. The required disclosures are accordingly made to the Audit Committee every quarter in terms of their omnibus approval.

As per Regulations 23(5) of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, as amended, approval of the Audit Committee is not applicable for the RPTs entered into between a holding company and its wholly-owned subsidiary and RPT transactions entered into between two wholly owned subsidiaries of the listed holding company, whose accounts are consolidated with such a holding company and placed before the shareholders at the general meeting for approval. Since the majority of transactions of the Company are with its subsidiaries, omnibus approval of the Audit Committee is obtained for such transactions also and reviewed quarterly, as a measure of good corporate governance.

The policy on the materiality of related-party transactions and on dealing with related-party transactions is in line with SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, as amended, and is uploaded on the website under the link: http://www.exideindustries.com/ investors/governance-policies.aspx.

The disclosure of material related-party transactions is required to be made under Section 134(3)(h) read with Section 188(2) of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014 in Form AOC 2. As a result, related-party transactions that individually or taken together with previous transactions during a fiscal year, exceed rupees one thousand crore or ten per cent of the annual consolidated turnover as per the last audited financial statements, whichever is lower, and were entered into during the year by the Company are included as Annexure-V to this Report. These transactions are with a wholly-owned subsidiary in the ordinary course of business and on an arm’s length basis which do not require shareholder’s approval under the fifth proviso of Section 188(1) of the Act and regulation 23(5) of SEBI Listing Regulations.

Your directors draw your attention to notes to the financial statements that set out related-party disclosures.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the ‘going concern’ status and the Company’s operations in the future

There are no significant material orders passed by the regulators/courts/tribunals which 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 and commitments 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 Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure-VI.

Human Resources

The Company’s human resource philosophy broadly focuses on five key areas of development & culture, managing talent, productivity and cost, optimising organisation structure, and enforcing efficient systems and processes.

Developing talent and building a transformational work culture was prioritised during the fiscal as the Company continued its focus on promoting leadership behaviour among employees. A 360-degree “Pearl” Survey was conducted for senior leadership on the identified pillars under Exide Leadership Behaviour (ELB), followed by a series of activities to promote and cascade these behaviours.

Exide is witnessing a transformational journey featuring interventions in digital technologies, manufacturing, sales, service, and supply chain management. In addition to improving productivity and cost metrices, these enable the building of effective organisation structures, crossfunctional participation, problem-solving, and collaboration. As a way forward, we aim to incorporate more cross-domain responsibilities at the senior leadership level.

Exide has initiated a series of interventions to drive the performance of its front-line sales team. It continues to offer an aggressive policy of incentives. To combat attrition periodic

pulse surveys are launched to resolve issues pertaining to employee satisfaction, job role, communication, and work environment. Customised sales profiling and aptitude tests by an external agency have also been initiated at the recruiting stage to ensure the right talent is infused into the sales team. In addition, sales trainees from management institutes are being recruited in batches to take up front-line sales roles after structured functional induction. This also ensures that front-line positions are constantly manned, shielding any attrition impact on the turnover.

The Company promotes a strong performance-driven culture through continuous evaluation and an aggressive reward policy for performance differentiation. “Win It Now” and “You Did It” schemes reward the top performers publicly and are a strong driver of sales performance.

The management recognises that employees are the key differentiator in success and constantly strives to create an ecosystem of continuous learning. Sales and manufacturing academies provide regular training to ensure knowledge and skills remain up-to-date. To foster the right values, and promote dignity, equality, and sustainability, the Company conducted awareness sessions on human rights, prevention of sexual harassment, and code of conduct. Given the growing dependency on information technology in all spheres, quarterly awareness sessions were also conducted on IT security for all employees. Apart from various statutory grievance redressal forums, we have launched an Apex Employee Grievance Redressal Forum with senior leadership as part of the committee to address problems of any employee facing injustice, unfairness, violation of human rights, or any other major grievance.

During the year under review, industrial relations at all plant locations remained harmonious with successful wage settlements. Sustained efforts were made towards building a transformational work culture by adopting industry best practices of flexible manufacturing, productivity enhancements, total quality management (TQM), workmen engagement, plant trainee schemes, quality circles, etc. The well-being and safety of our employees continue to be our top priority, and the Company undertakes numerous measures to ensure this.

The total number of employees of the Company as on 31st March 2023 was 5,208.

Particulars of Employees

The information required under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request. In terms of

Section 136 of the Act, the report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees’ particulars, which will be available for inspection up to the date of the AGM. Members can view such information by sending an email to [email protected].

Further, we confirm that there was no employee employed throughout the financial year or part thereof, who received remuneration in the financial year which, on the aggregate, was more than that drawn by the Managing Director and Whole-time directors, and holds by himself or along with his spouse and dependent children, more than 2% of the equity shares of the Company.

The Managing Director and CEO and whole-time directors of the Company have not received any remuneration or commission from any of the subsidiary companies.

Particulars of employees under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure-VII.

Prevention of Sexual Harassment at the Workplace

Exide has zero tolerance for sexual harassment at the workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at the workplace that is in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, (‘the Act’) and Rules thereunder. It is committed to providing equal opportunities to all employees without regard to their race, caste, sex, religion, colour, nationality, disability, etc.

The Company has complied with provisions relating to the constitution of an Internal Complaints Committee. The Apex Internal Committee conducts meetings on a regular basis for updates and awareness building measures of the policy and provisions of the Act. The Committee members have participated in external workshops to strengthen their subject knowledge.

The Company has formulated and circulated to all the employees, a policy on prevention of sexual harassment at the workplace, which provides for a proper mechanism for redressal of complaints of sexual harassment. Virtual Workshops were organized for the Internal Apex and Regional Committee members to understand their role as committee members and comprehend the provisions of the Act in detail.

Awareness programmes were organised for all employees to ensure that employees are fully aware of the aspects of sexual harassment and of the redressal mechanism.

During the financial year 2022-23, one complaint was reported which was investigated and appropriate action was taken. No complaint was pending at the end of FY 2022-23.

Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your directors make the following statements in terms of Section 134(3)(c) of the Act:

a. That, in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in line with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Forward-looking Statements

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as on their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgment

Your directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company’s performance. The directors would also like to thank the Company’s customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies, and all stakeholders for their cooperation and support to the Company and the confidence reposed in the management.


Mar 31, 2022

It gives us immense pleasure to inform you that 2022 has been a momentous year for Exide Industries Limited ("Exide" or "Company"). The journey began 75 years ago, in 1947, when your Company was formally incorporated. It is undoubtedly a moment of pride for all of us who have been part of this inspiring journey. Pride, most certainly, in the many achievements of your Company. It is indeed a matter of great satisfaction that together we have built a national asset that will continue to grow and accumulate value for all our endeavours.

Your Board of Directors would like to convey its deepest gratitude to all valued stakeholders for your faith and support throughout this inspiring journey. Your continued encouragement has helped us give shape to our shared aspiration of creating one of India''s most admired and valuable corporations.

We are pleased to present the 75th Annual Report of your

Company together with the Audited Financial Statements for the year ended March 31, 2022.

Economic Environment

Despite headwinds, global economy grows

During the year under review, the global economy made significant progress in its recovery from the effect of the COVID-19 pandemic as we learnt to tackle the disruptions. Progressively more countries or regions opened up following large-scale vaccination drives. According to the International Monetary Fund''s World Economic Outlook, the global economy is projected to have grown at 6.1% in the calendar year (CY) 2021, albeit on a lower base of CY 2020 when the pandemic and the lockdowns caused a 4.9% contraction. However, on the downside, more coronavirus variants resulted in new waves of infection that forced many countries to slow the reopening of their economies and bring back partial lockdowns to protect susceptible populations. This remained a major headwind that slowed the sustained global economic recovery.

During the year under review, there were significant supply-side bottlenecks across sectors. Labour market challenges

and an increase in energy and commodity prices were major concerns. This triggered inflationary pressures in almost all major economies of the world leading to a sharp rise in the cost of production. Supply disruptions alone shaved 0.5%-1% off the global GDP in CY 2021 while adding 1% to core inflation. The rising inflation also led to a debate on the need for central banks to move away from the accommodative monetary policy stance they had taken to help economic activities recover from the pandemic''s disruption. Central banks were forced to play a balancing act of maintaining growth rates while reversing the monetary stimulus to tackle strong inflationary pressures. This change in stance of central banks around the world added volatility to financial markets as they calibrated their actions to a new monetary policy direction.

Geopolitical tensions also rose during the year when Russia invaded Ukraine in late February 2022. The war made it even more difficult for economic recovery to stay on course. While the war itself is limited to Ukraine, its economic impact is being felt worldwide as the West''s economic sanctions on Russia have led to further increase in the price of energy and commodities.

Globally, various agencies predict the world economy will grow by 3.5% to 4.0% in CY2022. Growth projections have been recently lowered because of the geopolitical challenges, the spike in energy prices and a faster-than-anticipated pace of US interest rate increase. However, demand-supply imbalances are expected to decline in CY2022, although energy and food prices are expected to rise moderately during the year. In general, experts are anticipating that the supply side will improve, demand will gradually rebalance from goods to services, and extraordinary policy support shall be withdrawn. Economic reforms in developing countries would drive productivity leading to better economic growth.

Indian economy gains momentum

The government''s efforts to revive economic growth were dampened by the 2nd wave of coronavirus infections, which hit India at the start of the financial year 2021-22. But, as the situation improved from June 2021 and state governments eased restrictions, economic activity regained some momentum in various parts of the country.

According to the Reserve Bank of India, after the GDP contraction of around 6.6% in the financial year 2020-21, the Indian economy is expected to have grown by 8.7% in 2021-22. The growth is expected to be driven by a rebound in consumer spending and improved manufacturing activity. This recovery shall be broad-based with contributions from

segments such as mining, construction, and real estate, which were significantly impacted in the previous year.

Inflation has been a concern for the Indian economy as well, as global commodity and energy prices soared. Raw material costs, freight costs and other production costs have seen unprecedented increases, which has dented profitability across industries. India''s inflation has been continuously increasing since October 2021 and surged in March 2022, going way above the worst forecasts. Consumer price inflation, as measured by the consumer price index (CPI), increased to 6.95% in March 2022. The RBI, like most central banks around the world, has the challenging task of balancing growth while tackling inflationary pressures. Though the RBI did not raise policy rates at its bi-monthly monetary policy meeting in April 2022, it has indicated that it will move towards normalisation by withdrawing its accommodative stance, to keep inflation within the target range. At the same time, the central bank has said that it would ensure sufficient liquidity in the system.

The Indian government is continually pushing for economic growth either by increasing public capital expenditure or by incentives to the private sector for its investments in new projects. Production-linked incentive schemes for various sectors are a positive step to encourage private sector investments. Even in the 2022-23 Union Budget, the government has increased the allocation for capital expenditure by a massive 35% to H 7.5 lakh crore. The budget has laid special emphasis on infrastructure development, including water, housing, railways, roads, ports, and the logistics supply chain.

Various agencies expect the Indian economy to grow by 7-8% during the financial year 2022-23, with risks being largely balanced. Growth is expected to be supported by widespread vaccination against COVID-19, gains from supply-side reforms, easing of regulations, robust export growth, and the availability of fiscal space to ramp up capital spending. Private sector investment is expected to pick up, with the financial system in a good position to provide support for the revival of the economy. Moreover, India''s focus on the ''Make in India'' initiatives, government incentives, and increased service exports because of global digitalization demand, are expected to contribute to the growth of the country.

Industry Structure & Development

After a COVID affected 2020-21, just as the automotive industry was hoping to recover, the second wave of COVID-19 struck in the first quarter of 2021-22. This turned out to be

more widespread and virulent than the first, affecting almost all businesses. As the second wave started to ebb, sales of OEMs or original equipment manufacturers picked up in the first half of the year under review but then flagged because of multiple factors.

In the passenger vehicles industry, most of the auto manufacturing companies faced chip shortages. The sports and premium segments of the two-wheeler industry faced the same problem. The commercial vehicle segment showed some demand recovery but rising fuel prices and the relatively cautious stance of financiers remained constraining issues. It was only in the medium and heavy commercial vehicles (M&HCV) segment that volume recovery mirrored improving economic activity and led to fleet operator profitability. The two-wheeler segment went through a difficult phase with demand pickup being tepid as consumer sentiments were hammered by multiple COVID-19 waves. In other segments, manufacturers were forced to pass on part of the rise in raw material cost by raising vehicle prices. Spiralling fuel prices further curtailed demand. As a result, in most segments, OEMs and auto part manufacturers are still trying to reach optimum capacity utilisation.

Overall, domestic sales of passenger vehicles recorded a growth of 13.2% during the year under review, compared

with a 2.2% degrowth in the previous year. The commercial vehicles segment saw a growth of 26% this year against degrowth of 20.8% last year. Domestic sales of three-wheelers have also grown, by 18.9% compared with a 66.1% degrowth the previous year. Two-wheeler sales, however, declined by about 10.9% compounding the degrowth of 13.2% last year.

Policy initiatives and the Budget focused on promoting sales of electric vehicles (EVs) and reducing the emission levels of vehicles running on fossil fuels to increase clean mobility. The formulation of a battery-swapping policy and interoperability standards will help promote clean energy. The expansion of the National Highways network by 25,000 km during 202223, as promised in the budget, is expected to spur demand for commercial vehicles.

Company Performance

Two COVID-19 waves affected your Company during the year 2021-22, although less intensely than the first one that began in March 2020 and caused governments to enforce long stretches of lockdown. Towards the latter part of the financial year, high inflation and geopolitical tensions dampened consumer sentiments. Despite these challenges, your Company put up a resilient performance, driven by

strategic decisions taken across key functions, seamless execution, and the commitment of the workforce. The customer loyalty that Exide has built over the last 75 years helped us ride through this tough time.

Automotive Batteries

While sales to OEMs faced headwinds, your Company managed to maintain its high share across almost all leading vehicle manufacturers. Several new models have been launched in the market exclusively with Exide batteries, such as Maruti Suzuki''s new Baleno, Hyundai''s Alcazar, and MG Motor''s Astor. Your Company''s performance in the face of lockdowns and resultant challenges showed that the employees and partners have completely acclimatised to the ''new normal''. Your Company stood by its dealers by setting up a Covid Helpline and extending the COVID-19 Hospitalisation Insurance Policy to about 10,000 dealers. These initiatives helped reinforce Exide''s relationship with dealers and got overwhelming appreciation.

Several products and variants were launched during the year with different objectives, such as meeting evolving customer needs, on-boarding first-time users, countering competition or strengthening our presence in the automotive division. Streamlining the inverter battery portfolio and renewing our marketing strategies have started to bear results. The digitalisation of the sales function proved to be a game-changer in terms of tracking performance, inventory and effectiveness of marketing strategies. Our continued presence on online and social media platforms, along with the sponsorship of a leading IPL team, helped to bolster the brand image. The tactical use of television for promoting Inverter batteries helped reinforce Exide''s leadership status across all operating verticals.

Exports

Automotive battery exports continued to grow and gained momentum during the year. We successfully managed to steer through the unprecedented logistic challenges faced and cater to the requirements of our global channel partners. Despite lockdowns in many countries, we have reported higher exports to West Asia, Africa, America, and other regions. There was, however, some degrowth in Southeast Asia, where the pandemic had slowed down business significantly.

Your Company made significant inroads into all countries of the Gulf Cooperation Council to become a leading supplier of batteries to the region. Our United Arab Emirates office continued to play a key role in staying connected with the distributors even when travel from India was restricted.

Our growth in the North American markets of the USA and Canada continues, with penetration into automotive aftermarket giants.

To strengthen its presence in international markets your Company has focused on several key areas. These include: increase in manpower in export destinations, expanding the distributor base, exploring private labelling and contract manufacturing opportunities, introducing new products and technologies, and investing in brand-building with an eye on the future.

After-Sales Service

As a continuation of our ''customer first'' approach, Exide has launched several initiatives during the year to be more responsive to customer demands and enhance customer delight. Exide Batmobile Doorstep Service is now available for all the Inverter and Home UPS (HUPS) battery customers. This service offers a free pick up and drop facility for end customers and facilitates the purchase of new batteries. Under this unique service initiative, a customer has to simply send a message to a dedicated WhatsApp number (700440 00000) and the service team provides on-site help, usually within two hours. In line with our service goals, we have also reached out with a superior service model for upcountry customers to reduce turnaround time across the country.

Outlook

According to the Reserve Bank of India''s (RBI) Monetary Policy Committee (MPC), the GDP growth rate for FY 2022-23 is estimated at 7.2 percent. Factors such as high input costs, consumer inflation, sharply rising commodity prices, and disruptions in global business operations are the anticipated negatives. Geopolitical risks and future waves of COVID19 infections would also have a significant bearing on GDP growth. Supply chain constraints are not fully resolved and keep plaguing auto companies. The Russia-Ukraine conflict, which expanded significantly in February 2022, could further dent the prospects of recovery as supply chains face more disruptions.

However, all the indicators of demand, such as pending bookings and enquiries, are positive. India''s automobile exports are at an all-time high, with shipments during 202122 crossing five million units for the first time, driven by demand for Made-in-India two-wheelers in Africa, Latin America and Southeast Asia.

Going forward, a substantial increase in exports of agricultural products such as wheat, sugar and cotton will help improve the financial position of the farmers which will create a better cash flow in rural markets, and so boost demand.

The automobile sector is cautiously optimistic about FY 2022-23 and expects the improvement in the economic index to push up sales. With the stabilisation of the semiconductor supply chain and moderation in fuel prices, domestic sales could reach pre-COVID levels.

Opportunities and Threats

After three of the toughest years in recent history, the Indian automobile industry is set for much-needed growth in 202223. Experts predict that automobile unit sales will grow by 5-9% year-on-year in 2022-23.

Improvements in consumer sentiments, continued preference for personal mobility, an uptick in economic activity and increased infrastructure spending will be the key drivers in supporting growth. On the other hand, increased cost of ownership, slower revival in rural demand and the semiconductor shortage could be dampeners on the demand and supply side.

As the majority of the eligible age groups have already been vaccinated and the third wave of COVID-19 turned out to be relatively mild and short-lived, people are moving out of their

homes more frequently for work and visiting markets and malls. This augurs well for our industry. As more and more people opt for public transport as well as personal vehicles,

the OEM and replacement demand get a boost, which will be beneficial for the industry as well as your Company.

Your Company, equipped with three brands operating in distinct price and value segments, is well-positioned to tap into the market opportunity. While the flagship Exide brand

continues to strengthen its leadership position, SF and Dynex are witnessing rapid growth. All three brands continue to command unparalleled loyalty amongst their respective target segments.

While there is a possibility of a resurgence of COVID-19, we are well equipped to tackle the challenges if they reappear. We draw confidence from the resilience shown by our team in the markets, plants and offices during the second wave of the pandemic. Learning from the experience of the first wave, we successfully minimised the impact of the second wave, which had a far more severe impact on lives and businesses.

E-mobility

While your Company continues to maintain its leading position in the lead-acid battery (LAB) market for the past 75 years, and firmly believes in its prospects for the foreseeable future, it has simultaneously taken significant steps to strengthen its position in the emerging Li-Ion battery market.

With electric vehicles (EVs) penetrating India fast, your Company is gearing up to capitalise on the growing opportunities in this segment.

Your Company is marking its presence in the EV segment through two subsidiaries: Exide Leclanche Energy Private Ltd (Brand name: Nexcharge), which is a joint venture in collaboration with Switzerland''s Leclanche S.A., and the newly formed wholly-owned subsidiary, Exide Energy Solutions Ltd (EESL).

Nexcharge manufactures lithium-ion battery packs, modules, and racks, along with Battery Management System (BMS) and other control software at its facility in Gujarat. This factory is the largest such manufacturing unit in India and has fully-automated assembly lines for the manufacture of Li-Ion battery packs and modules (pouch/ prismatic/ cylindrical), with its cell testing labs. Its R&D facility in Bengaluru is also operational. Nexcharge is engaged with several marquee clients in the EV, telecom, and power sector.

Recently, your Board of Directors approved a plan to set up a multi-gigawatt hour Li-Ion cell manufacturing facility through

EESL. It has also taken firm steps to realise the potential of this emerging business and to gain early-mover advantage in this space. Your Company has entered into a multi-year technical collaboration agreement with SVOLT Energy Technology Co. Ltd (SVOLT), a global technology company that makes and develops lithium-ion batteries and battery systems for EVs as well as for energy storage. As part of the agreement, SVOLT will grant Exide an irrevocable right and licence to use, exploit and commercialise necessary technology and knowhow owned by them for Li-Ion cell manufacturing in India. SVOLT will also provide the support required for setting up a new manufacturing plant on a turnkey basis.

Risk Mitigation

To mitigate various risks significant to its business, your Company took several strategic initiatives during the year, such as:

Vaccination drive against COVID-19 for all its employees at plants and offices

Ensure adherence to COVID behaviour across all premises Follow a leaner inventory model Focus on manufacturing cost reduction

Deepen digitalisation of the business processes for better tracking and control of the entire supply chain

New after-sales service models to reach every corner of the country and reduce turnaround time

Expand export base to mitigate geopolitical and commercial risks, if any, affecting opportunities in any location

Put strategies in place to capture the battery replacement market and markets vacated by unorganised sectors.

Restructure the marketing network and activate a series of new regional offices

Put in place a monitoring and control mechanism to ensure the availability of critical resources like manpower, material and power

• Implement Industry 4.0 for productivity, quality and

reliability

Implement S/4 HANA and extended warehouse management (EWM)

Form a special task force to develop alternative sources for critical supplies

These initiatives have helped minimise the impact of uncertainties and helped the Company achieve its planned business objectives during the year.

The year under review began with marked uncertainty but ended with significant optimism and an upside. With the resurgence of the pandemic, there were lockdowns in the first two months of the year across the country, slowing down sales of industrial batteries. However, with new COVID-19 cases falling sharply and more people getting vaccinated, the economy reopened at a faster pace compared with last year, resulting in a cascading effect on the broader market with demand emerging from all quarters. This directly translated

into market opportunities that the industrial end-market verticals were quick to recognise and grab.

The Industrial Uninterrupted Power Supply (IUPS) business, which is the largest business vertical of the Industrial Division, grew by around 30% over last year, on the back of the trade segment reflecting the buoyant macro-economic environment. The OEM business growth was lower due to a lack of government/ private project orders but was boosted by rising demand from various sectors of the economy such as healthcare, education, and construction as the economy reopened. The IUPS business vertical continues to be the growth engine of the Industrial division, with continuous product and process innovation, backed by a strong sales and service network across India.

The renewable energy industry remained remarkably resilient during the year under review. Rapid technology improvements and decreasing costs of renewable energy resources, along with the increased competitiveness of battery storage, have made renewables one of the most competitive energy sources in many areas. The industry faced significant headwinds throughout the year, beginning with increase in basic customs duty and import restrictions to global supply chain, and high component prices. The delay in signing power-sale agreements (PSA) and lack of clarity regarding applicable duties led to a slowdown in tender and auction activities.

The Indian telecom sector, reeling with financial stress in FY21, turned over a new leaf after it consolidated in FY22. The interim cash flow relief provided by the Government of India to the financially stressed operators was a much-needed breather. The sector also implemented tariff increases to improve ARPU or average revenue per user. Your Company''s telecom vertical nearly doubled its revenues, due to increased market share.

In the Infra Power and Projects vertical, your Company remains the undisputed market leader with unparalleled dominance. Your Company has bagged several large and prized orders during the year, and the order pipeline remains strong. Product differentiation and service support remain key factors in maintaining dominance in this vertical.

In the Traction vertical, your Company was able to consolidate its high market share and notch up a significant growth due to increased demand. Your Company expects to roll out its Opportunity Rapid Charge (ORC) traction batteries that can be charged faster and intermittently, enabling double shift operation with a single battery, for specific application areas such as airports, where the recharging of batteries is a challenge. Another technological innovation to improve quality is the development of Polyethylene (PE) coated steel for the trays and casing of traction batteries, replacing the existing Epoxy coated steel. This offers superior corrosion resistance and enables our batteries to keep powering through even in the toughest of conditions. Once validations are complete, this development will enable us to compete against global players in the market, substituting imports.

Your Company reported double-digit growth in the railway market vertical, following a rebound in demand as new tenders and projects started coming up in the year.

Outlook

The year-on-year (YoY) growth reported by your Company''s UPS business is testimony to its success in identifying and utilising emerging opportunities as the market gradually reopened during the year. Your Company expects its Industrial UPS business to grow in double-digits during the current financial year, riding on the back of higher Government and private spending on infrastructure projects over the last few years. We also plan to launch the NXT range of products, which offers several industry-first features that represent the pioneering strides your Company is making in this UPS business vertical.

Despite a challenging business environment, Exide''s Solar market vertical maintained decent sales momentum by combining new products with an expanded trade network. We are prioritising the emerging business segments within the solar market, taking advantage of our geographical reach and category leadership. The Solar vertical has expanded its product portfolio by launching Exide Aditya® a brand of Maximum Power Point Tracking (MPPT) Inverters which will be a part of an integrated renewable energy solution for channel partners and consumers. This will ensure brand presence and gain market share in the Grid Tie segment to increase segmental revenue and customer reach.

The outlook for your Company''s Infra Power and Projects in FY22-23 is promising. Your Company has been awarded the contract for providing batteries for the Gorakhpur Nuclear

Power Plant''s first phase. The ''Make in India'' government policy has provided additional tailwinds for us in this market vertical.

In the Traction Vertical, your Company has done consistently well since the 2nd wave of the pandemic and continues to foresee strong demand in the next year as well. The key demand driver will be the increase in the number of logistics hubs. Demand is also going up as major industries resume two/ three-shift operations.

If the experience of FY22 is anything to go by, the export market will continue to grow, driven by the warehousing boom across several geographies. We expect to deepen the ties with our export customers and steadily grow with them.

Opportunities & Threats

The continuous increase in input costs along with uncertainty in the timely availability of imported components may pose some threats in the coming financial year but, overall, we expect a surge in demand for our IUPS range from emerging technological infrastructure. The healthcare, educational, and real estate sectors will keep your Company''s sales buoyant.

The Solar Rooftop market is showing signs of recovery and is already back to pre-COVID levels. The Ministry of Power''s notification, allowing net metering for prosumers with a load up to 500KW, boosted rooftop installations. The Ministry gave directions for simplifying the Rooftop Solar Programme so that people can install it easily. However, the market''s growth is being throttled by a rise in component costs and the availability of materials.

For Infra Power and Projects, the market has fully opened since the 4th quarter of FY22. On the one hand, many new project orders are expected to be executed in FY23. On the other hand, the purchase enquiry pipeline is very promising. Several projects are planned across various infra segments such as power generation, transmission and distribution, railway freight corridor, urban metro railway systems and oil pipelines. The execution of new urban metro projects is gaining momentum but it will take a few more months for the associated battery demand to pick up. We are renegotiating all old Metro railway orders where we see a threat of competition.

Telecom companies have said that if 5G auctions are conducted (as targeted) in the third quarter of FY23, they plan to roll out

some services in a few cities by the end of this financial year. Tower Companies are looking for a disruptive technology with lighter cells and lower capacity. Li-Ion cells will have an edge in this regard because of their lighter weight and faster rechargeability. However, this will be implemented first as a pilot run with Li-Ion cells and most tower infrastructure companies are expected to continue with our VRLA Batteries, at least for the next two to three years.

The demand for Material Handling Equipment is slated to grow further in India and the conversion to electric power from diesel power will gather momentum. Replacement of lead-acid batteries with lithium-ion and cheap lead-acid batteries offered by small competitors remain as threats in this market.

Your Company expects a huge opportunity in the 2V standby business in Middle East Asia, Africa, and the South-East Asian market. The market for 12V business will continue to expand in West Asia, Middle East Asia, and the South-East Asian market.

The unprecedented increase in ocean freight has hurt margins. The Ukraine war and the uncertainty of its outcome can have further impact. Some Asian countries have ordered fresh lockdowns following a rise in COVID-19 cases, while Europe is beset by resurgence in COVID-19 cases and geopolitical tensions.

Risks and Concern

A recurring outbreak of COVID-19 caused by new SARS-CoV2 variants/ sub-variants could pose challenges in the coming year. The IUPS segment may be impacted by reduced economic activity due to partial lockdowns/ weaker sentiments and by delays in the execution of projects planned by the government and private sectors.

The Russia-Ukraine conflict has pushed up energy and raw material prices, and could have a cascading effect across commodities.

Supply chain disruptions have affected the solar industry and the high price of solar modules and solar cells continues to be an area of concern for solar installations. Projects may get delayed if developers start deferring module purchases in anticipation of softening prices.

The government''s renewed focus on renewable and clean power may offset the focus on conventional thermal power.

In telecom, following a leading player''s success with Li-ion, other telecom companies have begun pilot drives with Li-ion cells. With 5G opening up, the requirement may tilt more

toward Li-ion once the average price of Li-ion cells drops below a certain threshold, posing a threat to the batteries supplied by us.

Indian Railways is replacing the old air-conditioned coaches of its mail and express trains with LHB rakes, which need fewer batteries for lighting, fans and air-conditioning. As a result, the market for lead-acid batteries is shrinking. The Indian Railways is conducting a trial run with Li-ion cells for train lighting and EMU applications, and we have engaged our subsidiary company Exide Leclanche Energy Solutions Pvt. Ltd to develop products suitable for those applications.

Submarine Batteries

During the year under review, your Company secured an order for one set of mini-submarine batteries for export, which was executed and delivered on time in the second quarter despite the challenges posed by COVID-19.

We have also secured an order in the third quarter from the Indian Navy to manufacture one set of submarine batteries along with a full set of accessories and spares for a nuclear submarine. The battery set was manufactured and delivered on time in the fourth quarter, after the successful completion of all acceptance tests overseen by the Directorate-General of Quality Assurance, Ministry of Defence.

Production capacity utilisation and sales of submarine batteries in the FY 22 were subdued compared to the past due to lack of adequate demand. Two export orders were unduly delayed by a COVID-19 pandemic in those areas. Your Company is making efforts to expedite these export orders for submarine batteries. We have also submitted our readiness to utilise the spare capacity to manufacture and supply submarine batteries to the Indian Navy.

For the current Financial Year, 2022- 23, your Company is set to export one set of Type-I submarine batteries along with all accessories and spares. We are also working to bag two separate orders for the export of submarine batteries.

Technology Upgrades

From the technology point of view, the year under review was a very remarkable one. Every single development work during the period is in some way contributing to protecting our environment. Whether it is in the vehicular segment or the industrial standby application, the emphasis has been on delivering environment-friendly products.

Your Company''s R&D engineers, together with the help of their Brazilian collaborators, Moura Batteries, have successfully

launched the first M3 level compliant ''EFB'' battery for fitment in the most stringent emission-controlled vehicles of Volkswagen and Skoda, After a gruelling certification process spread over months in the Baumustergenehmigung (BMG) workshops in Germany, the samples made by our engineers proved to be on par with the global best. Encouraged by the quality, the users are already developing further models for other global vehicles manufactured by them.

Your Company''s association with East Penn Manufacturing (EPM), the US battery powerhouse, reached a new high during the year. For the first time, EPM started sourcing significant quantities of car batteries from your Company for sale in the United States. This remains a fine testament to the collaboration between the R&D and plant engineers of your Company.

Your Company''s SF division, working closely with its

technology partner, Furukawa Battery Company, has introduced a series of emission-friendly ''Intermediate Start Stop (ISS)'' batteries both in the OEM and trade market. You will be proud to know that the country''s largest vehicle manufacturer sources these advanced ISS batteries exclusively from your Company.

The SF division is in the final phase of launching the pathbreaking ''Ultra'' battery for automobiles. The SF prototypes, which use technology patented by Furukawa and are manufactured in the Taloja plant, are going through intense field validation before their launch in the market. The energy-efficient ''Ultra'' range will help in charging the batteries efficiently and thus give batteries a new role in keeping the environment green.

The two-wheeler battery technology has been one of the key focus areas for R&D engineers of your Company. They now propose to deploy the learning accumulated in two-wheeler batteries over the years for making the bigger four-wheeler batteries. These would include continuous plate-making and modern fast-process technologies, leading to significantly more power-efficient and affordable end-products with longer life. The development work is at a very advanced stage and products are expected to roll out before the end of the current calendar year.

In industrial applications, your Company has gone significantly ahead in the global markets. While its traction application products have always enjoyed an enviable reputation even among the most discerning west European truck manufacturers, the standby application products have also started receiving a lot of attention in recent years. Two new product ranges developed by the R&D engineers, COPzS and COPzV, both suited for renewable energy storage, have received excellent response from the western market.

Following the digital explosion across the country, particularly since the COVID-19 pandemic, the IT industry has become increasingly more demanding in terms of reliability and robustness of the solutions they want. Keeping in line with changing expectations, your R&D team has brought out two game-changing backup power solutions in the form of the EHP and NXT ranges in UP batteries. While the EHP range delivers an extra 15% power from the same footprint with improved energy density, the NXT symbolises robustness and safety as it comes with added fire-protected design features and an extended three years of guaranteed life.

Going beyond the large number of product solutions that are part of every year''s agenda, your Company''s R&D has also been especially engaged in developing green manufacturing solutions this year. In close consultation and joint development with in-house smelting units, the R&D engineers have been able to develop a superior grade of recycled lead, almost on par with primary lead. The R&D team is now focused on using recycled materials for all packaging. Manufacturing processes are being revisited for energy optimisation, while emitting zero or minimal effluents.

Information Technology & Digital Initiatives

The COVID-19 pandemic has pushed enterprises to rethink and recalibrate how they operate. It has forced them to structurally reimagine their growth, development, and sustainability strategies across market segments, and shift from traditional approaches to embrace new, more transformational methods. Today, information technologies have a vital role across segments in redesigning business strategies to alleviate any adverse impact on revenues, and for secure and sustainable business plans.

Due to the exceptional length of the pandemic, and the physical distancing guidelines it enforced, there is a never-before-imagined dependency on technology. The learnings of the last two years will significantly impact how technology shapes up in the current and coming years. Frontier technologies such as artificial intelligence (AI), machine learning (ML), augmented reality (AR), robotics process

automation (RPA), and Industrial internet-of-things (IIoT) are set to be a part of every industry now.

At Exide, nurturing a digital culture has become a core focus area of the Management. To make your Company more cost-efficient, nimble-footed, cloud-based, and green, we have been able to evolve a digital mindset across the Company. Our digitalisation journey began in a focused manner in 201920 when we created a dedicated Digital Centre of Excellence, with a team of domain experts. We involved various stakeholder groups such as partners, dealers, employees and customers in our digitalisation journey, ensuring their active participation to meet the desired objectives.

The digitalisation journey of your Company has so far penetrated several key functions such as sales and service network, supply chain, projects and human resources. This initiative is helping us immensely to harness the power of analytics and automation.

Besides enhancing digitalisation in this way, your Company has taken some key initiatives in the information technology space. The key initiatives are:

Automation with New Technology: We have initiated the journey towards smart factories by implementing Industry 4.0 at our Hosur plant, which includes

technologies that improve automation, machine-to-machine communication, manufacturing oversight, and decision making. The production lines are expected to suffer less downtime because of enhanced machine monitoring and automated/semi-automated decisionmaking of 350 shop floor activities with 200 parameters and 10 KPI real-time monitoring.

We have deployed Augmented Reality (AR) with Smart Glass technology in all our factories and have started successfully conducting remote maintenance, organising events, conducting remote visits, etc. AR is a new-age collaborative and immersive technology transforming customers'' collaboration and interactive experiences. Smart glasses, the eyewear technology that layers information onto a user''s field of view, help our people perform complex tasks and bring us multiple advantages.

Data Governance: Your Company has implemented a master data governance (MDG) tool to streamline our management processes in S4 Hana and other cloud solutions like C4C. Along with this, MDG further brings benefits like getting a single trusted view of your data, automated approval workflows for master data creation, enforcing compliance with corporate data standards, creating an audit trail for master data changes, and improving data quality.

Cyber Security: Besides focusing on technical controls and bringing operational efficiencies, we have developed a holistic programme that protects the Company''s critical assets, wards off insider threats and creates an active defence by continuously analysing our networks. Your Company has achieved the ISO 27001:2013 certification in Information Security Management System, which not only certifies the good security practices prevailing in the Company but also demonstrates our proven marketing edge towards the elimination of weaker areas and its risk mitigation plan.

Driving a sustainable business

Your Company is committed to the Environmental, Social & Governance (ESG) goals of creating sustainable long-term value for all its stakeholders. With sustainability at the core of the Company''s strategy, it has built-in processes and initiated measures that make it strive to be a force for good, ensuring responsible business conduct and the overall wellbeing of its employees and its communities.

In sync with Exide''s sustainability vision, your Company endeavours to demonstrably contribute in a socially, ethically and environmentally responsible way to the development of a society where the needs of all are met. The Company is

supported by a sustainability framework based on focus areas across the ESG facets and all sustainability interventions broadly fall under these focus areas. Exide consistently endeavours to achieve targets set under each of these focus areas and remains cognizant of the needs of the dynamic world and is aligned to making it a better place for the wider community.

This year marks the first year of the Company''s transition toward sustainability reporting. The Sustainability report includes the Company''s performance in line with the Global Reporting Initiative (GRI) framework for the period April 1, 2021 to March 31, 2022 and is published separately. It is available on your Company''s website and can be accessed by using the link - https://www.exideindustrigs.com/invgstors/ annual-reports.aspx

Highlights of Performance

Your Company recorded net sales of H 12,382 crore in 2021-22, against H 10,041 crore in the previous year. The profitability of your Company was adversely impacted due to unprecedented input costs inflation, as a result of which the raw material prices remained high throughout the year. The prevailing high logistics cost and supply chain disruption also affected the profitability of the Company. As a result, Profit before depreciation, finance cost & tax expenses (EBIDTA) grew marginally to H 1,396 crore from H 1,356 crore and Profit Before Exceptional Items and Tax grew from H 1,018 crore to H 1,025 crore, with a growth of 0.7%.

Standalone Financial Results

(In Rupees Crores)

Financial Results

2021-22

2020-21

Revenue from operations

12,381.69

10,040.84

Other income

80.34

65.44

Total Income

12,462.03

10,106.28

Profit before depreciation, finance cost, tax expenses & exceptional item

1,475.93

1,421.02

Less: Depreciation and amortisation expenses

412.61

379.35

Less: Finance cost

38.43

23.77

Profit Before Exceptional Item and Tax

1,024.89

1,017.90

Exceptional income/ (expense)

4,693.75

-

Profit Before Tax

5,718.64

1,017.90

Less: Tax expenses

1,035.11

259.62

Profit After Tax

4,683.53

758.28

Other Comprehensive Income

(801.46)

9.12

Total Comprehensive Income for the year

3,882.07

767.40

(In Rupees Crores)

Financial Results

2021-22

2020-21

Balance brought forward

6,808.51

6,211.11

Making a total of

Out of this, appropriations

are:

10,690.58

6,978.51

Interim Dividend for 202021 (200%)

-

170.00

Interim Dividend for 202122 (200%)

170.00

-

And leaving a balance of (which is carried forward to next year)

10,520.58

6,808.51

Transfer to Reserves

The Board of Directors has decided to retain the entire profit in the retained earnings. Accordingly, the Company has not transferred any amount to the reserves for the year ended March 31,2022.

Consolidated Financial Statements

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations) and in line with the Indian Accounting Standard (Ind-AS) 110,

the Consolidated Financial Statements (CFS) of the Company, its subsidiaries and Associates form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company. These statements have been prepared based on the Audited Financial Statements received from the subsidiary companies and associates as approved by their respective Boards.

The separate audited financial statements in respect of each subsidiary company and associate are also available on the website of the Company at: https://www.exidgindustries.com/ investors/annual-reports.aspx

Dividend

During the year under review, your Company has paid an interim dividend at the rate of 200% or H 2.00 per equity share of H 1/- each to shareholders whose names appeared in the Register of Members on February 08, 2022. The interim dividend was paid to shareholders on February 16, 2022. Your Board did not recommend a final dividend and therefore the above dividend distribution resulted in a cash outgo of H 170 crore.

The Board of Directors of your Company has approved and adopted the dividend distribution policy of the Company and

the dividend declared/recommended during the year is in line with the said policy. The policy is available on the Company''s website at: https://www.exideindustries.com/investors/ governance-policies.aspx

Share Capital

The paid-up equity share capital as on March 31, 2022 was H 85 crore divided into 85,00,00,000 equity shares of the face value of H 1 each.

During the year, the Company did not issue any shares with differential rights or convertible securities. The Company does not have any scheme for the issue of shares, including sweat equity to the employees or Directors of the Company. The Company does not have a scheme for the purchase of its shares by employees or by trustees for the benefit of employees.

Change in the nature of the business, if any

During the year, there was no change in the nature of the business of the Company. Further, there was no significant change in the nature of business carried on by its subsidiaries.

Deposits

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 (Act), and the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof) for the time being in force.

Particulars of Loans, Guarantees or Investments

The Company has not granted any loans or provided any guarantee or security pursuant to Section 186 of the Act. The details of investments made by the Company during the year under review have been disclosed in the financial statements under Notes 4 and 10.

Material Changes and Commitments

There have been no material changes after the close of the Company''s financial year to which the financial statements relate and before the date of this report.

Key financial ratios

Under the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018, the Company has to give details of significant changes (i.e. change of 25% or more as compared with the immediately previous financial year) in key sector-specific financial ratios, including debtors turnover, inventory turnover, interest coverage ratio, current ratio, debt-equity ratio, operating profit margin (%) and net profit margin (%) and details of any change in Return on Net Worth as compared with the immediately previous financial year along with a detailed explanation thereof.

Return on Net Worth for the financial year 2021-22 was 53.5% including profit from Exceptional Item on account of sale of Exide Life Insurance Company Limited shares of H 3,919 crore (after tax). Return on Net Worth from operations

for the same financial year was 11.3% against 11.5% in the previous year.

Net profit margin (%) for the financial year 2021-22 was 38% including profit from exceptional item on account of sale of Exide Life Insurance Company Ltd shares. PBT from operation for the financial year 2021-22 was marginally higher than the previous year, despite significant growth in top-line, mainly due to higher material cost consequent to all round cost inflation.

To note, all the above ratios have been disclosed in the notes to financial statements, as required by amendment notification dated March 24, 2021, in Division II of Schedule III to the Companies Act, 2013 and Companies (Audit & Auditor) Amendment Rules 2021.

Your Directors draw your attention to note no. 47 of the financial statements that set out key financial ratios.

Auditors

Statutory Auditors and their Report

B S R & Co. LLP, Chartered Accountants (Firm''s Registration No: 101248W/W-100022),were appointed as Statutory Auditor of the Company at the Annual General Meeting (AGM) held on July 27, 2017, for an initial term of five consecutive years till the conclusion of the 75th Annual General Meeting of the Company.

Consequently, B S R & Co. LLP, Chartered Accountants, complete their first term of five consecutive years as the Statutory Auditor of the Company at the end of the 75th AGM of the Company. In line with Section 139(2) of the Act,

the Company can appoint an auditor firm for a second term of five consecutive years.

B S R & Co. LLP, have consented to their re-appointment and confirmed that their reappointment, if made, would be within the limits specified under Section 141(3) (g) of the Act. They have further confirmed that they are not disqualified

to be reappointed as the Statutory Auditor in terms of the provisions of the Act, and the provisions of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time.

The audit committee and the board of directors recommend to the Members the re-appointment of B S R & Co. LLP, Chartered Accountants, as Statutory Auditor of the Company from the conclusion of the 75th AGM till the conclusion of the 80th AGM.

Cost Auditors

Under Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014,(as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your Directors, on the recommendation of the Audit

Committee, have appointed Mani & Co., Cost Accountants (Firm Registration no. 000004), to audit the cost records of the Company for the financial year 2022-23 at a remuneration of H 10,00,000/- plus out-of-pocket expenses and taxes as applicable.

A resolution regarding the ratification of the remuneration

payable to Mani & Co., Cost Accountants, forms part of the Notice convening the 75th Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed A.K. Labh & Co., Practicing Company Secretaries (FCS: 4848/CP No:3238), to audit secretarial and other related records of the Company for the financial year 2021-22. The Secretarial Audit Report is given as Annexure-I.

Secretarial Audit of Material Unlisted Subsidiary Company

M R & Associates, Practicing Company Secretaries, had undertaken a Secretarial audit of the Company''s material subsidiary, Chloride Metals Limited, for the financial year 2021-22. The Audit report confirms that the material subsidiary has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations or non-compliances, as required under Regulation 24A of the SEBI Listing Regulations. The report of the Secretarial Audit is given as Annexure IA.

Annual Secretarial Compliance Report

During the period under review, the Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India. The Company has also undertaken an audit for FY 2021-22, in line with SEBI circular no. CIR/CFD/CMD/l/27/2019 dated February 8, 2019, for all applicable compliances, in line with the SEBI Listing Regulations and circulars/guidelines issued thereunder. The Annual Secretarial Compliance Report will be submitted to stock exchanges within 60 days from the end of the financial year 2021-22.

Auditors'' Qualifications, Reservations or Adverse Remarks or Disclaimers made

There are no qualifications, reservations or adverse remarks by the statutory auditor in their report, or by the Practicing Company Secretary in the secretarial audit report. The

emphasis of matter and the key audit matters paragraphs are self-explanatory and require no clarification.

During the year, there were no instances of fraud reported by auditors under Section 143(12) of the Act.

Business Responsibility/Sustainability Report

The Company is committed to pursuing its business objectives ethically, transparently and with accountability to all its stakeholders. It believes in demonstrating responsible behaviour while adding value to society and the community, as well as ensuring environmental well-being from a longterm perspective.

In July 2011, the Ministry of Corporate Affairs came up with the ''National Voluntary Guidelines on Social, Environmental

and Economic Responsibilities of Business''. These guidelines contain certain principles that are to be adopted by companies as part of their business practices and require disclosures regarding the steps taken to implement these principles through a structured reporting format, viz., the Business Responsibility Report. The Business Responsibility Report (BRR) of the Company is being presented to the stakeholders as required by Regulation 34(2)(f) of SEBI Listing Regulations describing the Environmental, Social and Governance initiatives taken by the Company. Subsequently, SEBI vide SEBI (Listing Obligations & Disclosure Requirement) (Second Amendment) Regulations, 2015 dated May 05, 2021 has made Business Responsibility and Sustainability Reporting (BRSR) applicable for top 1000 listed entities (by

market capitalization) for reporting on a voluntary basis from FY 2021-22 and mandatory from FY 2022-23.

Pursuant to Regulation 34(2)(f) of SEBI Listing Regulations, the Company has voluntarily prepared the Business Responsibility & Sustainability Report for the year 2021-22, which is given in Annexure-II.

Corporate Governance

Transparency is the cornerstone of Exide''s philosophy and your Company adheres to all requirements of corporate governance in letter and spirit. All the Committees of the Board of Directors meet at regular intervals as required in terms of SEBI Listing Regulations. Your Board of Directors has taken the necessary steps to ensure compliance with statutory requirements. The Directors and Key Management Personnel and Senior Management Personnel of the Company have complied with the approved ''Code of Conduct for Board of Directors and Senior Management Personnel'' of the Company. The declaration to this effect, according to Schedule V of the SEBI Listing Regulations, signed by the Managing Director and CEO of the Company, forms part of the Annual Report.

The Report on Corporate Governance as required under Regulation 34(3), read along with Schedule V of the SEBI Listing Regulations, is given in Annexure-III. The Auditors'' Certificate on compliance with Corporate Governance norms is also attached to this Report. Furthermore, as required under Regulation 17(8) of SEBI Listing Regulations, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

Business Excellence

Your Company remained focused on capability development in key areas such as Lean Six Sigma, Total Productive Maintenance (TPM), Employee, Health & Safety (EHS), Sustainability, International Standards and various other emerging domains of TQM and business excellence. During the year, there was a significant increase in Business Excellence projects and initiatives, which resulted in a performance-improvement drive in the organisation. Over the last year, there has been double-digit growth in project magnitude as well as an impact both on operational KPI as well as cost savings.

TPM remains the core manufacturing excellence approach for the factory and effectiveness improvement projects on all facets of manufacturing transformation were executed to improve metrics in key areas such as battery scrap, breakdown, yield, manpower productivity, OEE, inventory consumables and material cost reduction. During the year

under review, your Company undertook a significantly higher number of projects on TPM SGA and Lean Six Sigma.

The organisation is committed to establishing a strong foundation for a sustainable performance culture with the total involvement of its people. The Quality Circle initiative''s penetration has doubled during the year from the previous year. Besides manufacturing metrics improvement, these initiatives help the Company to build a strong foundation for leadership, team building, communication and healthy IR relations.

The Kaizen initiative across the organisation has matured both in terms of approach as well as participation level of people. Your Company has assigned a strong monthly tracking mechanism for every individual.

Occupational Health, Safety & Environment

Exide remains committed to the safety of all its stakeholders, assets and protection of the environment, through a variety of initiatives in areas of sustainability. Towards this, your Company follows industry-accredited best practices in health, safety and environment-related aspects to constantly set higher benchmarks, and strives to exceed the same.

All of our manufacturing plants, regional offices, corporate office and R&D facility are certified for ISO 45001, an international standard for occupational health and safety, as well as ISO 14001, an international standard for environmental management, by reputable international certification bodies.

Exide has taken various measures to counter the inherent risk to the safety and health of employees across all functions and locations of the Company arising out of the COVID19 pandemic. Your Company also prioritised a vaccination drive across factories and offices, which has so far covered 95% of its entire workforce across all age groups.

Exide is committed to utilising natural and man-made resources optimally and responsibly and ensuring the sustainability of resources by reducing, reusing, recycling and managing waste. We regularly monitor and prevent pollution

through waste minimisation at the source; recovery/treatment of emissions and energy conservation. Stakeholders of your Company are trained and made aware of EHS practices being followed in the Company through regular sessions. Safety Committees are established in all regions to emphasise safety and health practices so that the safety culture is made a part of our day-to-day work life.

Corporate Social Responsibility

Exide is committed to its social responsibility and envisions sustainable and inclusive growth by creating values for society at large. We believe that the community around our operational areas is a key stakeholder of our business and its well-being is intrinsically linked to the growth of the Company. Your Company''s CSR initiatives are aligned to national and global development goals and are relatable to five major pillars of socio-economic development of communities, viz.:

Promoting education through Exide Akshar Enhancing health outcomes through Exide Aarogya Enhancing employability through Exide Kaushal Empowering communities through Exide Saksham • Protecting the environment through Exide Paryavaran

Exide has a board-approved Corporate Social Responsibility policy in compliance with section 135 of the Companies Act and rules made thereunder. It inter-alia, provides guiding principles for implementation and monitoring of CSR projects, roles and responsibilities of CSR Committee,

guidance for the formulation of an annual action plan, defining obligations of implementing partners, methodology for impact assessment and disclosures. In pursuance of the amendment to Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company suitably amended its CSR policy on January 22, 2021. The revised policy is available on the company''s website https://www.exidgindustries.com/ sustainability/

The disclosures, as mandated under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, are placed in Annexure IV.

In continuation with its practice, the Company spent H 2,109.39 lakh against various social initiatives as against the obligation of H 2,106.16 lakh, positively impacting the lives of more than 2.15 lakh people. Nearly 80% of our beneficiaries come from socially and economically disadvantaged sections of society.

During the year, the Company executed several CSR interventions designed with the active participation of local communities to meet the immediate needs of the society. As the year witnessed a second wave of the COVID-19 pandemic, your Company continued to support the health care system with a significant financial contribution towards Exide Arogya. Under the ''Abhaar Campaign'', nutritional and immunity booster kits were distributed to the frontline workers in the critical healthcare sector. The initiative impacted nearly 30,000 people. We continued our support of the healthcare system through contributions for augmenting healthcare facilities.

As schools got ready to welcome the students back to physical classrooms, a significant challenge that faced us all was to address the issue of learning losses and to gradually guide the students back to classroom learning. With the help of our implementing partner, we facilitated enhanced learning by installing 37 smart classrooms across the country. Smart classrooms make learning more interesting and interactive, thereby facilitating smooth acclimatisation of the students to the classrooms. Nearly 17,000 students are estimated to benefit from this initiative.

More than 17,000 people were impacted by our initiative

Exide Kaushal for empowerment. The initiative includes providing livelihood training to women and employability enhancement for youths.

Despite the challenges, the employees of your Company continued the tradition of volunteering their time towards

various social initiatives as part of Project Jyotirmoy. This voluntary initiative helped us to increase the impact and bring smiles on the faces of the beneficiaries.

Internal Controls

A strong internal control framework is an essential prerequisite for a growing business. The Company has an independent Internal Audit function with a well-established risk management framework. The scope and authority of the Internal Audit function are derived from the Internal Audit Charter approved by the Audit Committee.

The Company has engaged a reputable external firm to support the Internal Audit function for carrying out the Internal Audit reviews. Reviews are conducted continually, based on a comprehensive risk-based audit plan approved by the Audit Committee. The Audit Committee meets periodically to review and discuss the observations arising from the Internal Audit reports.

In line with the requirements of Section 134(5)(e) of the Companies Act 2013, Exide has implemented a robust system and framework for internal financial controls. It has developed

and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity-level policies, processes control, IT general controls, and standard operating procedures (SOPs).

The entity-level policies include anti-fraud policies, such as a Code of Conduct and Whistle-Blower policy. Your Company has framed other policies, such as an Insider Trading policy, HR policy, and IT security policy to strengthen the internal control systems. A risk control matrix has been framed for key processes functions, such as procure-to-pay, order-to-cash, hire-to-retire, treasury, fixed assets, inventory, and manufacturing operations. These internal controls are reviewed by the senior management as well as internal auditors each year.

The Audit Committee has evaluated the design and effectiveness of these controls and has noted no significant material weaknesses or deficiencies that can impact financial reports. On the strength of these controls and systems, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that your Company''s internal control systems are commensurate with its size and scale of operations, and that they are designed to provide reasonable assurance that the Company''s financial statements are reliable and prepared according to the law. It has a well-defined system of internal audits to independently review and strengthen these internal controls continually.

Vigil Mechanism/Whistle-Blower Policy

Exide has a Whistle-Blower Policy that offers a formal mechanism to its directors, employees and other stakeholders to report genuine concerns about unethical behaviour, actual or suspected, fraud or violation of the Company''s Code of conduct in accordance with the provisions of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, and SEBI Listing Regulations. It contains a reporting mechanism, how all reported concerns are dealt with, the confidentiality of the investigations and processes, protection of the whistle-blower against any retaliation, guidelines for retention of records during the investigation/ reporting of the case, etc. The policy provides for adequate safeguards against victimisation of persons who use such a mechanism and provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The Company has a dedicated email address for reporting such concerns at [email protected]. Your Company investigates any incident that is reported and takes suitable action in line with the Whistle-Blower Policy. It is affirmed that no personnel of the

Company was denied access to the Audit Committee. The Audit Committee of the Board oversees the vigil mechanism.

The policy is available on the website: https://www. gxidgindustrigs.com/invgstors/govgrnancg-policies.aspx

Subsidiaries, Joint Ventures and Associates

A statement containing the salient features of financials of subsidiaries and associates of the Company, in the prescribed Form AOC-1, is part of the Consolidated Financial Statement. This Form highlights the financial performance of each subsidiary and associate company along with their contribution to the overall performance of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014. The report is not repeated here for the sake of brevity.

In line with Section 136 of the Act, the financial statements of the subsidiary and associate companies will be available for inspection up to the date of AGM. Members can inspect these by sending an email to [email protected].

Any member who wants a copy of the financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the CFS and all other documents required to be attached to this report have been uploaded on the website of the Company at www. exidgindustries.com.

Your Company had eight subsidiaries and two associate

companies as on March 31, 2022. During the year under review, your Company floated one wholly-owned subsidiary company viz. Exide Energy Solutions Limited (EESL), to set

up a new Li-ion cell manufacturing facility in India.

It also divested the entire equity shareholding in Exide Life Insurance Company Limited (ELI), erstwhile a material wholly-owned subsidiary of the Company, by way of sale to HDFC Life Insurance Company Limited, for an aggregate consideration of H 6,687 crore (Indian Rupees Six Thousand Six Hundred Eighty-Seven crore). Hence, Exide Life Insurance Company Limited ceased to be a subsidiary of your Company w.e.f January 01,2022.

Greenyana Solar Private Limited (Greenyana), one of the associate companies, was formed to procure energy from captive solar power plants to be set up in the state of Haryana. Since necessary permissions were not received from the statutory authorities, your Company sold its entire equity shareholding in Greenyana in favour of the holding company of Greenyana for a consideration of H 5.25 Crore. Hence, it ceased to be an associate company w.e.f. December 30, 2021.

Chloride Metals Limited (CML) is a secondary smelting and refining company that is a 100% material subsidiary company of Exide. It plays a strategic role in backward integration and meets the lead and lead alloy requirements of your Company.

Besides the two existing units located in Karnataka and Pune, CML added a new secondary smelting and refining unit in Haldia, West Bengal. The recycling plant is spread over more than 21 acres and is equipped with modern technology from the global engineering firm, Engitec Technologies S.PA, Italy. The total installed capacity of the plant is 108,000 tonnes a year.

Exide Leclanche Energy Private Limited (known by its Nexcharge brand), is a subsidiary of Exide, which had its beginning in 2018 as a joint venture between Exide Industries Limited and Leclanche SA of Switzerland, one of the world''s leading Li-ion battery manufacturers. The objective was to make lithium-ion batteries and provide energy storage systems for India''s electric vehicle market and grid-based applications.

Today, Nexcharge is one of the leading companies in India in the production of lithium-ion battery packs, modules and racks, along with BMS and other control software. Its factory in Gujarat is the largest such manufacturing unit in India and is equipped with six fully-automated production lines (Cylindrical, Prismatic and Pouch-to-module and Module-to-pack lines that include HV LV) as well as a finished goods capacity testing line in fire-safe chambers. Its growth strategy during the last year was to develop customised energy solutions with high quality and safety standards for the transport and industrial segment.

Nexcharge also designs batteries with superior thermal management along with multiple in-built protection features that control and protect the battery not only from diverse climatic conditions but also from abuse. Nexcharge also has a strong focus on safety and has developed technology that exceeds current standards. It also believes in the Indian vision of Atmanirbhar Bharat and therefore localises more and more battery components. At present, nearly 95% of the components, excluding the cells, are sourced in India.

During the year 2021-22, your Company invested around H 85 crore in Nexcharge to meet its funding requirements, thereby increasing its stake to 84.90%.

Amalgamation of Chloride Power Systems & Solutions Ltd with Exide

The Board of your Company has approved the scheme of amalgamation involving the merger of its wholly-owned

subsidiary, Chloride Power Systems & Solutions Limited ("CPSSL") with Exide (collectively, the "Amalgamating Companies") The Scheme is subject to the receipt of approval

from the requisite majority of shareholders and creditors of the Amalgamating Parties (unless dispensed with), approval by the Kolkata Bench of the National Company Law Tribunal (NCLT) having jurisdiction over the Amalgamating Companies, and such other approvals, permissions, and sanctions by regulatory and other statutory / quasi-judicial authorities, as may be necessary.

Annual Return

In terms of Section 92(3) of the Companies Act, 2013, and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Company''s website at the link: https://www. gxidgindustrigs.com/investors/annual-rgports.aspx

Directors and Key Managerial Personnel

During FY 2021-22, Members of the Company approved the appointment of Mr. Subir Chakraborty as a Managing Director and CEO of the Company for three years with effect from May 01, 2021. The Members also approved the appointment of Mr. Avik Kumar Roy as a Whole-time director (designated as Director-Industrial), for five years with effect from May 01, 2021. Mr. Gautam Chatterjee ceased to be Managing Director & CEO upon retirement w.e.f. May 01,2021.

Mr. Arun Mittal (having DIN 00412767) retires by rotation

under the provisions of the Companies Act, 2013, and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Mr. Surin Shailesh Kapadia was appointed as an independent director for the first term of five years effective October 25, 2017. His office of directorship is due for retirement on October 24, 2022. Based on the recommendation of the Nomination and Remuneration Committee and after taking into account the performance evaluation of his first term of five years and considering the knowledge, acumen, expertise, experience and the substantial contribution he brings to the Board, the Committee has recommended the appointment of Mr. Surin Shailesh Kapadia to the Board for a second term of five years. The Board, approved the reappointment of Mr. Kapadia as an independent director of the Company with effect from October 25, 2022 to October 24, 2027, whose office shall not be liable to retire by rotation.

Necessary information under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Secretarial Standard 1 (SS-1) issued by ICSI, in respect of directors to be

appointed and re-appointed at the ensuing Annual General Meeting is given in the Annexure to the Notice convening the Annual General Meeting.

None of the Directors of your Company are disqualified from being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

During the year under review, the following directors/executives served as Key Managerial Personnel of the Company:

Mr. Subir Chakraborty, Managing Director & CEO

Mr. Gautam Chatterjee, Managing Director & CEO

(till April 30, 2021)

Mr. A K Mukherjee, Whole-Time Director (Director-Finance & CFO)

Mr. Arun Mittal, Whole-Time Director (Director-Automotive)

Mr. Avik Roy, Whole-Time Director (Director-Industrial) Mr. Jitendra Kumar, Company Secretary and President-Legal & Corporate Affairs

Declaration of Independence

In line with Section 149(7) of the Act, each independent director has confirmed to the Company that he or she meets the criteria of independence laid down in Section 149(6) of the Act, and complies with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company. Furthermore, they have affirmed compliance with the code of conduct for independent directors as prescribed in Schedule IV of the Act.

Board Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations, the performance evaluation of the Board as a whole, and the Chairman and the Non-Independent Directors was carried out by the Independent Directors. This exercise was carried out following the Nomination and Remuneration Policy framed by the Company within the framework of applicable laws.

The Board carried out an annual evaluation of its performance, and also evaluated the working of its committees and individual directors, including the Chairman of the Board. The performance evaluation of all the directors was carried

out by the Nomination and Remuneration Committee. The

questionnaire and the evaluation process were reviewed in line with the SEBI guidance note on Board evaluation dated January 5, 2017, and suitably aligned with the requirements.

While evaluating the performance and effectiveness of the Board, various aspects of the Board''s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to the Company''s long-term strategic issues, the quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on their effectiveness in carrying out respective mandates, composition, the effectiveness of the committees, the structure of the committees and meetings, independence of the committee from the Board, and contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgement, safeguarding the interests of the Company, and focus on the creation of shareholder''s value, ability to guide the Company in key matters, attendance at meetings, etc.

Considering the success of the Company in most spheres and the value delivered to all its stakeholders, it was evident that the Directors had been diligent, sincere and consistent in the performance of their duties. The Directors expressed their satisfaction with the evaluation process.

Nomination & Remuneration Policy

Following the provisions of Section 178(3) of the Act and the SEBI Listing Regulations, Exide has a Nomination and Remuneration policy in place. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, Key Managerial Personnel (KMP), senior management personnel and also independence of independent directors

(b) Aligning the remuneration of directors, KMPs and senior management personnel with the Company''s financial position, remuneration paid by its industry peers, etc

(c) Performance evaluation of the board, its committees and directors including independent directors

(d) Ensuring board diversity

(e) Identifying persons who are qualified to become directors and who may be appointed to senior management, in line with the criteria laid down

(f) Directors'' induction and continued training

The Nomination and Remuneration Policy is available on the Company''s website under the link: https://www. gxidgindustrigs.com/invgstors/govgrnancg-policies.aspx

Meetings

The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other items of business. The Board exhibits strong operational oversight with regular presentations by business heads to the Board. The Board and committee meetings are pre-scheduled and a tentative annual calendar of Board and committee meetings is circulated to the directors well in advance to help them plan their schedule and to ensure meaningful participation at the meetings.

During the year under review, seven (7) board meetings and seven (7) audit committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of the constitution of the Board and its Committees are given in the Corporate Governance report.

Compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel

All directors and senior management personnel have affirmed compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel. A declaration to that effect is attached with 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 Company Secretaries of India on Board Meetings and Annual General Meetings.

Approach to Risk Management

Over the years, the Enterprise Risk Management process has evolved into a mature process entailing a balanced bottom-up and top-down approach.

The Risk Management Policy of the Company lays down the Enterprise Risk Management framework. The existing Risk Management framework in your Company provides a mechanism for proactive identification, evaluation, prioritisation, reporting, and mitigation of risks.

The Risk Management policy was reviewed during the current year and amendments were made to align with the SEBI Listing Regulations requirements. The existing Risk Management Policy incorporates traditional as well as emerging risks such as Cyber security, Business Continuity processes, Disaster Management and ESG.

The Risk Management Policy of the Company is available on the Company''s website at the link: http://www.gxideindustries. com/invgstors/governancg-policigs.aspx

Mechanisms for the identification and prioritisation of risks include scanning the business environment and continuous monitoring of internal risk factors. The risk oversight function consists of the Board of Directors, the Risk Management Committee (RMC), the Executive Committee (EXCOM), process owners, and respective Heads of functions. The RMC, amongst others, reviews the key risks, the progress of Risk Mitigation plans, and deliberates on the challenges faced.

Concerns and Risks

The unprecedented COVID19 pandemic followed by the recent geopolitical tensions emerging from the Russia-Ukraine conflict, and inflationary pressure, stress-tested our Risk Management framework.

Based on continuous engagement with the business process owner, and continuous scanning of the external and internal business environment, relevant risk registers have been suitably recalibrated to monitor and mitigate the risks caused by the above disruptions.

Some of the key potential risk areas identified by your management and their mitigation strategies adopted and reviewed by the Risk Management Committee during the year under review include, risk arising from Health & Safety, Trade and OE business, increases in commodity cost due to inflationary pressure, supply chain disruption, high logistic and fuel costs, technology absorption & disruption in Industry, environmental and sustainability, cyber and liquidity risk.

To pursue value-driven growth opportunities and mitigate

disruption-related risk, your Company has planned a significant investment plan for setting up a multi-gigawatt lithium-ion cell manufacturing plant through its wholly-owned subsidiary company, Exide Energy Solutions Limited.

Your Company has already entered into a long-term technical collaboration with SVolt Energy Technology Co. Ltd (SVOLT), a global technology company, engaged in the production and development of lithium-ion batteries and battery systems for electric vehicles as well as for energy storage.

The resurgence of COVID and the current geo-political scenario on account of the Russia-Ukraine conflict may pose unforeseen risks. Your company continues to work on a resilient and adaptive Risk Management strategy as various events continue to unfold, and new information emerges.

Listing

The equity shares continue to be listed on the BSE Limited (BSE), the National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has paid the annual listing fee for the financial year 2021-22 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 the ordinary course of business and on an arm''s-length basis. There were no materially significant related-party transactions entered into by the Company with promoters, directors, key managerial personnel or other persons that may have had a potential conflict with the interests of the Company.

All related-party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for related-party

transactions that are repetitive and can be foreseen, and accordingly, the required disclosures are made to the Audit Committee every quarter in terms of the omnibus approval of the Committee.

During the year under review, the policies on materiality

of related-party transactions and on dealing with related-party transactions were amended to bring into effect the changes, in line with SEBI (Listing Obligations & Disclosure Requirements) (Sixth Amendment) Regulations 2021 by the Board of Directors on the recommendation of the Audit Committee. The revised policy is uploaded on the website under the link: http://www.gxideindustrigs.com/invgstors/ govgrnancg-policies.aspx.

The disclosure of material related-party transactions is required to be made under Section 134(3)(h) read with

Section 188(2) of the Act and Rule 8 (2) of the Companies

(Accounts) Rules, 2014 in Form AOC 2. As a result, related-party transactions that individually or taken together with previous transactions during a fiscal year, exceed 10% of the consolidated annual turnover as per the last audited financial statements, and were entered into during the year by the Company are included as Annexure-V to this Report. These transactions are with a wholly-owned subsidiary in the ordinary course of business and on an arm''s length basis which need not require shareholder''s approval under the fifth proviso of Section 188(1) of the Act.

Your Directors draw your attention to notes to the financial statements that set out related-party disclosures.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in the future

There are no significant material orders passed by the regulators/courts/tribunals which would impact the going-concern status of the Company and its future operations. However, the member''s attention is drawn to the statement on contingent liabilities and commitments 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 Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure-VI.

Human Resources

The Company''s Human Resource philosophy continues to be guided by the four pillars of Employee Efficiency, Development, Welfare and Cultural Building. To build a transformational work culture, the Company launched the "Exide Leadership Behaviour (ELB) Framework" focusing on eight leadership behaviours. These behaviours are being cascaded to the last mile through the Senior Leadership Team and internal promotions. Key HR processes will be aligned to ELB.

The Company has invested and will continue to invest in technology and digitalisation to create a future-ready workforce. HR Chatbot was launched to provide a quick guide to all employees on policies and benefits. "Project Lakshya" is institutionalised to build manufacturing excellence through

initiatives such as Industry 4.0, Lean management, safety-first culture and sustainable growth.

To further drive transformation and development, CrossFunctional Teams (CFTs) have been introduced in all key projects with the specific purpose of enhancing problemsolving and collaboration. Business Activation Teams have been formed to guide the front-line employees in sales and service management. Sales and manufacturing academies provide regular training to ensure continuous up-gradation of knowledge and skills.

Exide continues to drive performance through a continuous evaluation process and a competitive performance-based bonus for its employees. The "You Did It" and "Win it Now" platform to recognise and reward top performers publicly continues to motivate our employees. Periodic Pulse Surveys are conducted in Automotive SBU & Manufacturing to resolve issues of employee satisfaction, job role, communication, and work environment. A Turn Around Time (TAT) of 48 hours is maintained for all employee grievances.

Your Company has the talent management process in place to develop a robust talent pipeline for the organisation. People''s committees at various functional levels are formed to review employee performance. These interventions support employee development and career planning in a structured manner. Succession plans are discussed with the Apex People committee which constitutes the senior leadership. For High Potential managers, the Company has kicked off a robust 18-month Leadership Development Programme called "Lead@Exide". Internal Coaches have also been assigned to High Potential Managers. For new leaders, the Company initiated the ''Assimilation Programme'' and assigned senior leaders as guides to help them settle down in the organisation.

The Industrial Relations scenario continued to be positive across all our manufacturing locations. During the year under review, wage settlements were successfully carried out. Sustained efforts were made towards building a transformational work culture by adopting industry best practices of flexible manufacturing, productivity enhancements, total quality management (TQM), workmen engagement, plant trainee schemes, quality circles, etc.

The human resource function continuously drives employee motivation and performance in alignment with the business needs. Your Company recognises its employees as its greatest asset and constantly strives to create an ecosystem of continuous learning to help our workforce be future-ready.

The Company had a total of 5,163 employees as of March 31,2022.

Particulars of Employees

The information required under Section 197 read with Rule

5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees'' particulars which will be available for inspection up to the date of the AGM. Members can view it by sending an email to cosec@exide. co.in. Further, we confirm that there was no employee employed throughout the financial year or part thereof, who received remuneration in the financial year which, in the aggregate, was more than that drawn by the Managing Director and Whole-time Directors and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company.

The Managing Director and CEO and whole-time directors of the Company have not received any remuneration or commission from any of the subsidiary companies.

Particulars of employees under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure-VII.

Prevention of Sexual Harassment at the Workplace

Exide has zero-tolerance for sexual harassment at the workplace and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, (''the Act'') and Rules thereunder. It is committed to providing equal opportunities without regard to race, caste, sex, religion, colour, nationality, disability, etc.

The Company has complied with provisions relating to the constitution of an Internal Complaints Committee. The Apex Internal Committee meets regularly for updates and to build awareness of the policy and provisions of the Act. Virtual Workshops were organised for the Internal Apex and Regional Committee members to help them understand their role as committee members and comprehend the provisions of the Act in detail.

During the financial year 2021-22, no complaints were reported, and no cases were pending as of the end of the financial year 2021-22.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to

the information and explanations obtained by them, your

Directors make the following statements in terms of Section

134(3)(c) of the Act:

a. That, in the preparation of the Annual Financial Statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in line with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Forward-looking Statements

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements may differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as on their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

Your Directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company''s performance. The directors would also like to thank the Company''s customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies, and all stakeholders for their cooperation and support to the Company and the confidence reposed in the management.


Mar 31, 2021

Highlights of Performance

Your Company recorded net sates of H 10,041 Crores in 2020-21, against H 9,857 Crores in the previous year, and a profit before tax of H 1,018 Crores against H 1,035 Crores in the previous year.

Standalone Financial Results

(In H Crore)

2020-21

2019-20

Revenue from operations

10,040.84

9,856.66

Other income

65.44

63.94

Total Income

10,106.28

9,920.60

Profit before depreciation, finance cost & tax expenses

1,421.02

1,428.92

Depreciation and amortization expenses

379.35

362.63

Finance cost

23.77

9.40

(In H Crore)

2020-21

2019-20

Profit Before Exceptional item and Tax

1,017.90

1,056.89

Exceptional income/ (expense)

-

(21.70)

Profit Before Tax

1,017.90

1,035.19

Tax expenses

259.62

209.68

Profit After Tax

758.28

825.51

Other Comprehensive Income

9.12

(17.78)

Total Comprehensive Income for the year

767.40

807.73

Balance brought forward

6,211.11

5,901.99

Making a total of

6,978.51

6,709.72

Out of this, appropriations are:

Final Dividend for 2018-19 (80%)

-

68.00

Tax on Final Dividend

-

13.98

Interim Dividend for 2020-21 (200%)

170.00

-

1st Interim Dividend for 2019-20 (160%)

-

136.00

Tax on above Interim Dividend

-

26.47

2nd Interim Dividend for 2019-20 (250%)

-

212.50

Tax on 2nd Interim Dividend

-

41.66

Aggregate Dividend amounts to 200% for 2020-21 (previous year - 410%)

170.00

498.61

And leaving a balance of (which is carried forward to next year)

6,808.51

6,211.11

Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit in the retained earnings.

Consolidated Financial Statements

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations) and in accordance with the Indian Accounting Standard

(Ind-AS) 110, the Consolidated Financial Statements (CFS) of the Company, its subsidiaries and Associates form part of the Annual Report and are reflected in the consolidated financial statements of the Company. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies and associates as approved by their respective Boards.

The separate audited financial statements in respect of each subsidiary company and associates are also available on the website of the Company at https://www. exideindustries.com/investors/annual-reports.aspx

Dividend

During the year under review, your Company has paid an interim dividend at the rate of 200 per cent or H 2.00 per equity share of H 1/- each to shareholders whose names appeared in the Register of Members on February 6, 2021. Your Board did not recommend a final dividend and therefore the above dividend distribution resulted in a cash outgo of H 170 crore (including withholding tax of H 13.66 crore).

The Board of Directors of your Company has approved and adopted the dividend distribution policy of the Company and dividend declared/recommended during the year are in accordance with the said policy. The policy is available on the website of the Company at https://www. exideindustries.com/investors/governance-policies.aspx

Share Capital

The paid-up equity share capital as on March 31, 2021, was H 85 crore divided into 85,00,00,000 equity shares of the face value of H 1 each.

During the year, the Company did not issue any shares with differential rights or convertible securities. The Company does not have any scheme for the issue of shares, including sweat equity to the Employees or Directors of the Company. The Company does not have a scheme for the purchase of its shares by employees or by trustees for the benefit of employees.

Deposits

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 (Act), and the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof) for the time being in force.

as Statutory Auditors of the Company at the Annual General Meeting held on July 27, 2017, for an initial term of five consecutive years tiLL the conclusion of 75 th Annual GeneraL Meeting of the Company.

The Report given by the Auditors on the financial statements of the Company is part of the AnnuaL Report. There have been no qualification, reservation, adverse remark or discLaimer given by the Auditors in their Report. The emphasis of matter and the key audit matters paragraphs are seLf-expLanatory and require no cLarification.

The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review.

Cost Auditors

Under Section 148 of the Act, read with the Companies (Cost Records and Audit) RuLes, 2014, (as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your Directors, 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 the Company for the financiaL year 202122 at a remuneration of H 9,00,000/- plus out-of-pocket expenses and taxes as applicable.

A resolution regarding the ratification of the remuneration payable to M/s Mani & Co., Cost Accountants, forms part of the Notice convening the 74th Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, the Company has appointed M/s A.K.Labh & Co., practising company secretaries (FCS: 4848/CP No:3238), to audit secretariaL and other related records of the Company for the financial year 2020-21. The Secretarial Audit Report is given as Annexure-I. The Secretarial Audit Report does not contain any quaLification, reservations or adverse remark.

Business Responsibility Report

In July 2011, the Ministry of Corporate Affairs came out with the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business''. These guideLines contain certain principLes that are to be

of ever-improving vaLue to customers and stakehoLders, contributing to organizationaL sustainability, improvement of overaLL organizationaL effectiveness and capabiLities, organizationaL and personaL Learning to fuLfiLL the expectations.

Your Company reguLarLy participates in externaL assessments conducted by various nationaL and internationaL organizations; competes for prestigious awards aiming to evaLuate findings to improve the framework continuaLLy. Some of the externaL awards won by the Company are the TamiL Nadu State Safety Award, QFCI CCQC / NCQC Award, BML MunjaL Award-Achieving Expert PaneL MiLestone for ExceLLence through L&D.

Your Company has depLoyed internationaLLy recognized approaches for business exceLLence and TQM such as TPM, QuaLity CircLe, 5S and SOP-driven business processes. Business units of Exide are certified to InternationaL Standards such as ISO 9001 & IATF 16949 for QuaLity, ISO 14001 for Environment, and ISO 45001 for OccupationaL HeaLth & Safety, being focused on the heaLth and safety of empLoyees and other stakehoLders. We encourage our business partners to opt for these standards. Our Test House Laboratories are certified to ISO/IEC 17025 and have NABL accreditation. NABL and audited annuaLLy as a part of compLiance to a standard.

Over the years, the company has deveLoped and depLoyed a robust TPM cuLture across the organization. ALL manufacturing units foLLow TPM practices with varying LeveL of maturity. Six out of the seven factories have won prestigious TPM awards for different categories from the Japan Institute of PLant Maintenance (JIPM). During the year under review, your Company has continued its focus on depLoying the TPM poLicies effectiveLy to achieve zero accidents, zero waste, zero breakdowns and zero Losses. This year, greater focus was given on the safety of empLoyees from COVID-19 infection and, at the same time, improving process effectiveness and efficiency to remain cost-competitive. Unique SGA or SmaLL Group Activity teams were formed under the TPM PiLLars to achieve the improvement objective and target set by the management.

Occupational Health, Safety & Environment

Exide is committed to the safety of its peopLe and assets and protecting the environment through various initiatives in areas of sustainabiLity. Towards this, it foLLows industry-accredited best practices in heaLth, safety and environment-reLated aspects to constantLy set higher benchmarks.


Particulars of Loans, Guarantees or Investments

The Company has not granted any Loans or provided any guarantee or security pursuant to Section 186 of the Act. The details of investment made by the Company during the year under review have been disclosed in the financial statements under Note nos. 4 and 9.

Material Changes and Commitments

Except for the materiaL changes and commitments arising out of COVID-19, there have been no material changes subsequent to the close of the company''s financial year to which the financiaL statements reLate and prior to the date of this report.

Key financial ratios

Under the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018, the Company has to give detaiLs of significant changes (i.e. change of 25 per cent or more as compared with the immediateLy previous financiaL year) in key sector-specific financiaL ratios, incLuding debtors turnover, inventory turnover, interest coverage ratio, current ratio, debt-equity ratio, operating profit margin (per cent) and Net Profit Margin (per cent) and detaiLs of any change in Return on Net Worth as compared with the immediateLy previous financial year along with a detailed explanation thereof.

Interest coverage ratio shows significant change, i.e. an increase of 53 per cent compared with the immediately previous financiaL year due to significant decrease in interest cost (excluding interest on lease liabilities) in the current year.

Return on Net Worth decreased from 13.8 per cent in 201920 to 12.0 per cent in year 2020-21. A significant driver is exceptionaL items. In 2020-21, there were no exceptional items as compared with an exceptionaL item charge of H 22 crore [Indirect tax settlement expenses incurred under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019] in 2019-20. Additionally, the business profit from operations decreased by eight per cent in 2020-21 over the prior year.

Auditors

Statutory Auditors and their Report

M/s B S R & Co. LLP, Chartered Accountants (Firm''s Registration No: 101248W/W- 100022), were appointed adopted by companies as part of their business practices and require discLosures regarding the steps taken to implement these principles through a structured reporting format, viz., the Business Responsibility Report. Pursuant to Regulation 34(2)(f) of SEBI Listing Regulations, the Company has prepared the Business ResponsibiLity Report, which is given in Annexure-II.

Corporate Governance

Transparency is the cornerstone of Exide''s philosophy and your Company adheres to aLL requirements of corporate governance in Letter and spirit. ALL the Committees of the Board of Directors meet at reguLar intervaLs as required in terms of SEBI Listing ReguLations. Your Board of Directors has taken the necessary steps to ensure compLiance of statutory requirements. The Directors and Key Management PersonneL and Senior Management PersonneL of the Company have compLied with the approved ''Code of Conduct for Board of Directors and Senior Management PersonneL'' of the Company. The decLaration to this effect pursuant to ScheduLe V of the SEBI Listing ReguLations signed by the Managing Director and CEO of the Company forms part of the AnnuaL Report.

The Report on Corporate Governance as required under ReguLation 34(3), read aLong with ScheduLe V of the SEBI Listing ReguLations, is given in 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 ReguLations, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

Business Excellence

Business ExceLLence or BE is about deveLoping and strengthening the management systems and processes of the organization to improve performance and create vaLue for stakehoLders. It is about achieving exceLLence in everything that an organization does, incLuding Leadership, strategy, customer focus, information management, peopLe and processes and, most importantLy, achieving superior business resuLts.

Your Company has adopted a gLobaLLy proven modeL to drive exceLLence across the organization, engaging aLL its stakehoLders incLuding empLoyees and business partners. Exide''s modeL of exceLLence is dynamic, ever-evoLving, designed to use an integrated approach to performance management that resuLts in the deLivery

Your Company is committed to utilizing natural and manmade resources optimally and responsibly, and reducing, reusing, recycling and managing waste. We regularly monitor and prevent pollution through waste minimization at the source; recovery/treatment of emissions and energy conservation.

Exide has a well laid down Corporate EHS structure, where Head- EHS oversees EHS practice across the organization and ensures compliance with statutory and regulatory requirements. The Head- EHS is supported by dedicated teams headed by an EHS head in each factory to ensure effective compliance and implementation of EHS policy and practices.

Your Company has taken various measures to counter the inherent risk to the safety and health of employees across all functions and locations of the Company arising out of the COVID-19 pandemic. The Company implemented a comprehensive standard operating procedure, work-from-home/ work-from-anywhere policy. To support the COVID-19 vaccination process initiated by the Government of India and to take care of its employees'' safety and wellbeing, your Company has decided to bear the cost of COVID-19 vaccination of all its employees and their spouses.

Corporate Social Responsibility

Exide always seeks ways to create long-term sustainability through inclusive growth and development not only within the adjoining community at its main operational locations but in society at large at the regional or national level. The core thematic areas that continue to be the main pillars of the Company''s CSR philosophy are:

• Basic Education

• Health

• Environment Management

• Women Empowerment

• Community Development

The Board of Directors of Exide has approved a Corporate Social Responsibility (CSR) Policy, namely "EIL CSR Policy", in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, notified by the Ministry of Corporate Affairs, Government of India. The CSR policy underlines the guiding principles and mechanisms for undertaking various CSR activities/ programmes by the Company. Pursuant to the

notification of Companies (Corporate Social Responsibility) Amendment Rules, 2021, and The Companies (Amendment) Act, 2020 effective from January 22, 2021, the Board of Directors at its meeting held on April 29, 2021, amended the CSR policy to include, inter-alia, guidelines relating to selection, implementation and monitoring of CSR activities, impact assessment studies as well as formulation of the annual action plan. The revised policy is available on the Company''s website at http://www.exideindustries.com/ investors/governance-policies.aspx.

The disclosures as required by Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, are given in Annexure-IV.

In continuation with its legacy, the Company met more than its CSR obligation by investing H 2,093.59 lakh during the year under as against its spending obligation of H 2,091 lakh.

During the year, the Company took significant strides to execute and complete numerous CSR projects under the broad five thematic areas mentioned. There were myriad volunteering contributions for other COVID-19 relief services such as community sanitation, distribution of basic education materials etc. to students, who found it challenging to continue their education since their basic survival was at stake. However, the main thrust for the year was to provide support for health and disaster management relief to combat COVID-19 exigencies.

Through the signature employee volunteering engagement, viz., "ABHAAR", your Company distributed essential nutrition, hygiene and immunity booster kits to more than 23,000 school students and their families. The campaign benefited 55 schools adopted by Exide across all the manufacturing units and its offices. Overall, the project impacted over 1,20,300 beneficiaries from the most vulnerable and worst-hit population group.

Most of the health projects undertaken by the Company were towards providing COVID safe medical facilities, developing adequate maternity care facilities in rural hospitals, contributions for cancer care, especially for children and supporting adequate healthcare for the most vulnerable stakeholders.

Niche women empowerment projects for health and safety, livelihood and higher education were undertaken during the year. Street food vendors were provided with business revival support and training to ensure that they get back to work armed with confidence and knowledge to safely run and gain back from their small businesses during the post lockdown period.

Though the year threw up exceptionally challenging situations due to the pandemic, the CSR projects at the plant level continued to perform with extra grit and delivered results despite all odds. Among the highlights were development of a model school and village projects for inclusive growth in basic education, and watershed and waste management initiatives. These projects were initiated in the north and the southern zones to mitigate social and environmental concerns especially in the local areas around the Company''s operational units. It is envisaged that these model initiatives will bring in planned and consistent development in a sustained manner.

The social initiatives undertaken by the Company during the year essentially stepped up in creating long-term sustainable development through inclusive growth amongst the neighboring communities along with strong contribution through the employee engagement efforts.

Internal Controls

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 according to the information and explanations obtained by them, state that your Company''s internal control systems are commensurate with its size and scale of operations, and that they are designed to provide reasonable assurance that the Company''s financial statements are reliable and prepared in accordance with the law. It has a well-defined system of internal audit to independently review and strengthen these internal controls continually. The Audit Committee of your Company regularly reviews the reports of the internal auditors and recommends actions for further improvement of the internal controls.

Vigil Mechanism/ Whistle-Blower Policy

Exide has a Whistle-Blower Policy that offers a formal mechanism to its directors, employees and stakeholders to report genuine concerns about unethical behavior, actual or suspected, fraud or violation of the Company''s Code of conduct in accordance with the provisions of the Act, read with the Companies (Meeting of Board and its Powers) Rules, 2014, and SEBI Listing Regulations. It contains a reporting mechanism, the manner in which all reported concerns are dealt with, confidentiality of the investigations and processes, protection of the whistle-blower against any retaliation, and guidelines for retention of records during the investigation/ reporting of the case etc. The policy provides for adequate safeguards against victimization of persons who use such mechanism

and provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The Company has a dedicated email address for reporting such concerns at [email protected]. Any incidents that are reported are investigated and suitable action is taken in line with the Whistle-Blower Policy. It is affirmed that no personnel of the Company were denied access to the Audit Committee. The Audit Committee of Board oversees the vigil mechanism.

The policy is available on the website http://www. exideindustries.com/investors/governance-policies.aspx

Subsidiaries, Joint Ventures and Associates

A statement containing the salient features of financials of subsidiaries and associates of the Company in the prescribed Form AOC-1, forms part of the Consolidated Financial Statement (CFS). This Form highlights the financial performance of each subsidiary and associate company along with their contribution to the overall performance of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014. The said report is not repeated here for the sake of brevity.

In accordance with Section 136 of the Act, the financial statements of the subsidiary and associate companies will be available for inspection in electronic mode up to the date of AGM. Members can inspect the same by sending an email to [email protected].

Any member who wants a copy of the financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at www.exideindustries.com.

Exide Life Insurance Company Limited (ELI) and Chloride Metals Limited (CML) are material subsidiaries of Exide as prescribed under the provisions of SEBI Listing Regulations. ELI has assets under management or AUM of over H 18,381 crore as of March 31, 2021. The total premium collected by ELI during the year ended March 31, 2021 was H 3,325 crore, against H 3,220 crore collected during the previous year.

Chloride Metals Limited (CML) is a secondary smelting & refining unit, a 100 per cent subsidiary company of Exide Industries Limited. It was promoted by Exide strategically as a part of backward integration to meet the lead and lead alloys demand of Exide. CML is operating with two units located in Karnataka and Pune, while the third new

greenfield secondary smelting and refining unit in Haldia in West Bengal, with a capacity of 110,000 MT is expected to start its commercial production in the first quarter of the current financial year 2021-22. The new unit is made with the latest technology from Engitec Italy with improved environment-friendly facilities to control air and water pollution. During the year under review, the Company invested around H 35 crore for meeting its capital and other funding requirements.

Exide Leclanche Energy Private Limited (known as Nexcharge brand), a subsidiary of Exide, had its beginning in 2018 as a Joint Venture between Exide Industries Limited and one of the leading Lithium-ion or li-ion battery manufacturers based in Switzerland, Leclanche SA, to build lithium-ion batteries and provide energy storage systems for India''s electric vehicle market and grid-based applications.

Nexcharge envisions to fast-track the world''s transformation towards sustainable energy solutions by developing solutions to increase the amount of renewable energy to reduce India''s dependence on fossils fuels. The Company aims to become a leading supplier of (i) e-transport solutions, which will power the electrification of the transport in the form of efficient and reliable energy storage solutions and (ii) diverse segments of industry and utility markets with state-of-art products and end-to-end solutions made available through li-ion batteries of different chemistries such as NMC, LFP, LTO etc.

To fulfil its mission, Nexcharge has built India''s largest factory with fully automated lithium-ion battery pack and modules (pouch/ prismatic/ cylindrical) assembly lines and Cell testing labs, at Prantij, Sabarkanta, Gujarat.

Nexcharge is also supported by state-of-the-art inhouse R&D. with a well-resourced teams of engineers enthusiastic in designing these battery packs to their customer requirements and offer high-quality products at competitive pricing.

During the year 2020-21, your Company invested H 66.35 crore in Nexcharge for meeting its funding requirement, thereby increasing its stake to 80.15 per cent.

Annual Return

In terms of Section 92(3) of the Companies Act, 2013, and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link: https://www. exideindustries.com/investors/annual-reports.aspx

Directors

Mr Asish Kumar Mukherjee (having DIN 00131626) retires by rotation in accordance with the provisions of the Companies Act, 2013, and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

During the year, Mr Nawshir H Mirza, Non-executive & Independent Director, retired from the Company w.e.f. October 28, 2020. Your Board of Directors wishes to place on record its sincere appreciation for the contribution made by Mr Mirza during his tenure as Independent director in the Company.

The term of Mr Gautam Chatterjee, Managing Director and Chief Executive Officer (CEO), is due to expire at the close of business hours on April 30, 2021. Your Board of Directors wishes to record its sincere appreciation for the exemplary services rendered by Mr Chatterjee during his long association with the Company and his immense contribution to the success of the Company.

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, at its meeting held on April 29, 2021 has appointed Mr Subir Chakraborty as the Managing Director and CEO for a period of three (3) years with effect from May 1, 2021 subject to the approval of the Shareholders. Mr Subir Chakraborty joined the services of the Company in 1996 and was appointed a Whole-time Director (designated as Director-Industrial) with effect from May 1, 2013. After heading the automotive section and submarine business for three years, Mr Chakraborty was appointed as Deputy Managing Director with effect from May 1, 2019 and is overseeing the automotive and industrial business of the Company. A resolution proposing his appointment as Managing Director & CEO with effect from May 1, 2021 will be placed at the ensuing Annual General Meeting for the approval of the Shareholders.

At the said Meeting, the Board, on the basis of the recommendation of the Nomination and Remuneration Committee, appointed Mr Avik Kumar Roy as an Additional director w.e.f May 1, 2021. He shall hold office up to the ensuing AGM. It is also proposed to appoint him Wholetime Director to be designated as Director-Industrial, for a period of five (5) years, with effect from May 1, 2021. A Notice has been received from a Member under Section 160(1) of the Companies Act, 2013 proposing the appointment of Mr Roy as a Director at the ensuing Annual General Meeting.

Necessary information pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Secretarial Standard 1 (SS-1) issued by ICSI,

in respect of directors to be appointed and re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting.

None of the Directors of your Company is disqualified for being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

Key Managerial Personnel

During the year under review, the following directors/ executives continued as Key Managerial Personnel of the Company:

• Mr Gautam Chatterjee, Managing Director & CEO

• Mr Subir Chakraborty, Deputy Managing Director

• Mr A K Mukherjee, Whole-time Director (Director-Finance & CFO)

• Mr Arun Mittal, Whole-time Director (Director-Automotive)

• Mr Jitendra Kumar, Company Secretary & EVP - Legal & Administration

Declaration of Independence

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

Board Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations, the performance evaluation of the Board as a whole, and of the Chairman and the Non-Independent Directors was carried out by the Independent 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 the evaluation of the working of its committees and individual directors, including Chairman of the Board. The performance evaluation of

all the directors was carried out by the Nomination and Remuneration Committee. The questionnaire and the evaluation process were reviewed in accordance with the SEBI guidance note on Board evaluation dated January 5, 2017, and suitably aligned with the requirements.

While evaluating the performance and effectiveness of the Board, various aspects of the Board''s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to the Company''s long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on their effectiveness in carrying out respective mandates, composition, the effectiveness of the committees, the structure of the committees and meetings, independence of the committee from the Board, and contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgement, safeguarding the interest of the Company and focus on the creation of shareholder''s value, ability to guide the Company in key matters, attendance at meetings, etc.

Considering the success of the Company in most spheres and the value delivered to all its stakeholders, it was evident that the Directors had been diligent, sincere and consistent in the performance of their duties. The Directors expressed their satisfaction with the evaluation process.

Nomination & Remuneration Policy

In accordance with the provisions of Section 178(3) of the Act and the SEBI Listing Regulations, Exide has a Nomination & Remuneration policy in place. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, Key Managerial Personnel (KMP) and senior management personnel and also independence of independent directors

(b) Aligning the remuneration of directors, KMPs and senior management personnel with the Company''s financial position, remuneration paid by its industry peers, etc.

(c ) Performance evaluation of the board, its committees and directors including independent directors

(d) Ensuring board diversity

(e) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down

(f) Directors'' induction and continued training

The Nomination & Remuneration Policy is available on the Company''s website under the link http://www. exideindustries.com/investors/governance-policies.aspx

Meetings

The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other items of business. The Board exhibits strong operational oversight with regular presentations by business heads to the Board. The Board and committee meetings are prescheduled and a tentative annual calendar of Board and committee meetings is circulated to the directors well in advance to help them plan their schedule and to ensure meaningful participation at the meetings.

During the year under review, five (5) board meetings and six (6) audit committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of the constitution of the Board and its Committees are given in the Corporate Governance report.

Compliance with Code of Conduct for the Board of Directors and Senior Management Personnel

All directors and senior management personnel have affirmed compliance with the Code of Conduct for the Board of Directors and Senior Management Personnel. A declaration to that effect is attached with the Corporate Governance report.

Compliance with Secretarial Standards on Board and Annual General Meetings

The Company has complied with Secretarial Standards

Listing

The equity shares continue to be listed on the BSE Limited (BSE), National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has paid the annual listing fee for the financial year 202021 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 the ordinary course of business and on an arms-length basis. There were no materially significant related-party transactions entered into by the Company with promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interests of the Company.

All related-party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for related-party transactions that are repetitive and can be foreseen, and accordingly the required disclosures are made to the Audit Committee on a quarterly basis in terms of the omnibus approval of the Committee.

The policy on materiality of related-party transactions and on dealing with related-party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website under link http:// www.exideindustries.com/investors/governance-policies.aspx

The disclosure of material related party transactions is required to be made under Section 134(3)(h) read with Section 188(2) of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014 in Form AOC 2. Accordingly, related party transactions that individually or taken together with previous transactions during a financial year, exceed 10 per cent of the consolidated annual turnover as in the last audited financial statements, which were entered into during the year by the Company are enclosed as Annexure-V to this Report.

Your Directors draw your attention to Notes to the financial statements which set out related-party disclosures.

issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

Risk Management Policy

In accordance with the SEBI Listing Regulations, the Board of Directors of the Company is responsible for framing, implementing and monitoring the risk management plans of the Company. The Company has a "Risk Management Policy" to identify risks associated with the Company, assess its impact and take appropriate corrective steps to minimize the risks that may threaten the existence of the Company.

The Enterprise Risk Management (ERM) framework of the Company is comprehensive and robust enough to respond against any uncertainty. It has risk identification, analysis, evaluation and treatment mechanism, ensuring that smallest factor of uncertainty present in any layer is identified, evaluated and treated suitably. Annual risk assessment exercise is conducted in line with the framework, existing risks, their mitigation actions are evaluated and new risks are identified. Risk Management Committee (RMC) of the organization reviews the risks, adequacy of mitigating actions and also identifies the new risks.

The committee has half-yearly meetings as well as when triggered by a major risk. The executive committee of the Company reviews the risk register and effectiveness of mitigating actions and takes strategic decisions to ensure that organization successfully achieves the business objectives and fulfils expectations of all its stakeholder. Corporate Risk Register is reviewed annually by Board. An update on ERM activities is presented and deliberated upon in the RMC meetings on half yearly basis and at least once in a year at the Board level. The Audit Committee has additional oversight over financial risks and controls.

During the year under review, the RMC reviewed the potential impact of COVID-19 on the Company''s critical areas of operations like health & safety, customer, supplier, manufacturing, liquidity risk, etc. It also reviewed the mitigating factor and action initiated by the management to minimize the impact on the Company.

It noted that due to distinct surge in demand of both Automotive and Industrial batteries from Q2 of FY 2020-21, the Company was able to ride out challenges and risks in all areas of operations and gain comfortable liquidity position.

The Risk Management Policy is available on the Company''s website at the link https://www.exideindustries.com/ about/policies-certifications.aspx

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future

There are no significant material orders passed by the regulators/courts/tribunals which would impact the going-concern status of the Company and its future operations. However, the members'' attention is drawn to the statement on contingent liabilities and commitments 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 Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure-VI.

Human Resources

Your Company recognizes its employees as its greatest asset and constantly strives to create an ecosystem of continuous learning to help our workforce be future-ready.

Amidst the pandemic, the safety of our employees has been our top-most priority and the Company had taken several measures to ensure their well-being. Most of the employees in our offices had been working from home in accordance with the guidelines issued by the central, state and municipal authorities. The Company created an exclusive helpline namely "Exide Corona Mitra" for its employees for helping them to navigate issues arising out of the pandemic.

Your Company has been increasingly leveraging digital learning as a way to develop skills and enable learning on the go. This year under the umbrella of the "Exide Learning Academy" most of the functional trainings were conducted online. A social collaboration platform for employees called "Exide One" was launched to connect, collaborate and communicate amongst each other.

In line with our effort of culture building, the Company during the year under review initiated its "Exide Leadership Behaviour (ELB) 360 Degree survey" for its leadership and also identified "Exide Master Coaches" to further help in developing and nurturing talent for Exide in an ongoing basis.

Exide continues to drive performance through a continuous evaluation process and a competitive performance-based bonus for its employees. The "You Did It" platform to recognize and reward top performers publicly continues to motivate our employees. This year, Recognition scheme for corporate functions called ''Win it Now'' awards, have also been introduced by the Company.

High-quality leadership talent has also been infused across all functions to build a robust talent pipeline. The Industrial Relations scenario continued to be positive across all our manufacturing locations. During the year under review, wage settlements were successfully carried out. Sustained efforts were made towards building a transformational work culture by adopting industry best practices of flexible manufacturing, productivity enhancements, total quality management (TQM), workmen engagement, plant trainee schemes, quality circles, etc.

The total number of employees of the Company as on March 31, 2021, was 5,202.

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 of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees'' particulars which will be available for inspection in electronic mode up to the date of AGM. Members can inspect the same by sending an email to [email protected]. Further, we confirm that there was no employee employed throughout the financial year or part thereof, who was in receipt of remuneration in the financial year which, in the aggregate, is in excess of that drawn by the Managing Director and Whole-time Directors and holds by himself or along with his spouse and dependent children, not less than two per cent of the equity shares of the Company.

The Managing Director & CEO and whole-time directors of the Company have not received any remuneration or commission from any of the subsidiary companies.

Particulars of employees pursuant to Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure-VII.

Prevention of Sexual Harassment at Workplace

Exide has zero tolerance for sexual harassment at the workplace and has adopted a Policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, (''the Act'') and Rules thereunder. It is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc.

The Company has complied with provisions relating to the constitution of an Internal Complaints Committee which was reconstituted in May 2020. The Apex Internal Committee conducts meeting on a regular basis for updates and building awareness on the policy and provisions of the Act.

The Company had organized virtual sessions and awareness programmes for sensitizing employees on the issues and implications of workplace sexual harassment. These workshops not only help create a safe and conducive work environment to prevent any incidents of such nature, but also impart an awareness of legal laws. Virtual Workshops were also organized for the Internal Apex and Regional Committee members to understand their role as a committee member and comprehend the provisions of the Act in detail.

During the financial year 2020-21, no complaints were reported, and no case is pending as on end of financial year 2020-21.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

a. That, in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any

b. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Forward-Looking Statements

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 other similar

expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

Your Directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company''s performance. The directors would also like to thank the Company''s customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies and all stakeholders for their co-operation and support to the Company and the confidence reposed on the management.

On behalf of the Board of Directors

Sd/- Sd/-

Bharat D Shah Gautam Chatterjee

Chairman Managing Director & CEO

DIN: 00136969 DIN: 00012306

Date: 29.04.2021 Place: Mumbai Place: Kolkata



Mar 31, 2019

Directors’ Report to the Shareholders

(Including Management Discussion & Analysis)

The Board of Directors is pleased to present the 72 nd Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2019.

ECONOMIC ENVIRONMENT

The Indian economy started the fiscal year 2018-19 with a healthy 8.2% growth in the first quarter on the back of domestic resilience. Growth eased to 7.3% in the subsequent quarter mainly due to global headwinds, like rising trade tensions and geo-political uncertainties in some parts of the world, and financial health of banking sector. The Indian rupee witnessed high volatility this year, falling nearly 14% between April to October, in wake of global headwinds coupled with widening current account deficit led by higher crude oil prices. However, rupee turned around in the second half of the year, a sharp 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 and possibly the least affected by global turmoil. The effects of external shocks were contained in part by India’s strong macroeconomic fundamentals and policy reforms (including amendments to the insolvency and bankruptcy code, bank recapitalisation, and foreign direct investment).

With strength in consumption and a gradual revival in investments, especially with a greater focus on infrastructure development, the growth projections for the next few years are estimated to remain upwards of 7%. The improving macroeconomic fundamentals have further been supported by reforms that have helped foster an environment to boost investments and ease banking sector concerns. Together, these augur well for a healthy growth path for the economy. India has already surpassed France to become the sixth-largest economy. By 2019, it may become the fifth-largest economy, and the third-largest in the years to come.

Despite the positive outlook, the economy remains vulnerable to domestic and geopolitical risks, especially economic and political changes that can affect relative prices and hurt current and fiscal account deficit. While expectations of inflationary pressures remain benign, concerns have risen on the twin deficit problem - current account deficit and fiscal deficit - especially as portfolio investments remain subdued while trade deficit stays high. While fiscal expansion remains key to accelerating growth, it may strain government coffers if private investment loses steam.

With a strong stable government in place, we are optimistic that the government will take measures which will ensure growth and India will continue to be one of the fastest growing economies in the world.

INDUSTRY STRUCTURE & DEVELOPMENT

After a buoyant start to the year, industry slowed down considerably. The last quarter of the year under review did not bring any respite. The uncertainty ahead of the General Elections added to the burden of high interest rates and cost of insurance. Domestic sales of passenger vehicles grew by 2.7% during the year under review, compared with 7.9% in the previous 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 the year 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.

COMPANY PERFORMANCE

Automotive Batteries

Despite domestic market conditions being tough, your Company continued its leadership position in the Automotive Battery business during the year under review. With a wide array of products covering diverse market segments, your Company reported double-digit growth across vehicular, non-vehicular and two-wheeler segments.

Although OE demand slowed down, your Company managed to maintain its high share across almost all leading vehicle manufacturers. Your Company’s exports grew significantly in 2018-19 as it made inroads in key Middle East and South East Asian markets.

Industrial Batteries

Your Company registered robust double-digit growth in the Industrial Division. The UPS business, which is the largest business vertical of the Industrial Division, registered doubledigit growth in all product segments and your Company’s products continue to be the preferred choice of almost all the OEMs in the country. The UPS business has become the growth engine of the Industrial Division, with timely capacity addition and continuous upgrades and automation powering sales growth.

In the Solar Division, a continuous drive to expand market reach and penetration through channel partners led to significant growth. Your Company did this by offering reliable solutions for the government’s rural electrification drive and also for Mini and Micro grids powered by renewable energy in the un-served parts of the country.

Financial stress in the Indian telecom sector speeded up consolidation of the industry, and there were a number of shut-downs and M&A announcements of mobile telephony operators and tower infrastructure companies. Your Company’s sales to the telecom sector were subdued following reduced offtake by telecom tower companies in view of the M&A and consequent reduction in the tenancies of the tower infrastructure companies.

The other business verticals including Traction, Power and Projects also reported robust 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 of the Indian Navy with timely deliveries. It has supplied the second set of Type-IV batteries including special copper inter-cell connectors and spares for the Indian Navy’s Scorpene-class submarine, two sets of Type-II (ATV) batteries for nuclear submarines and one set of Type-I batteries for Kilo-class submarines. The first set of indigenous Type-IV submarine batteries and inter-cell connectors supplied by your Company has passed all the harbour trials after installation on board.

Your Company also exported two sets of new-design submarine batteries along with all accessories and spares to Vietnam Navy. The first set of batteries has passed the sea trials and the second set is due for commissioning soon.

During the year under review, your Company has also secured a maiden order to manufacture and export one set of batteries for a mini-submarine, which is expected to be supplied during the financial year 2019-20. A repeat order for two sets of Type-II submarine batteries for the Indian Navy along with an export order for a set of Type-I submarine batteries is also being pursued.

Exports

In the fiscal year 2018-19, exports of automotive batteries grew impressively through new markets and brands backed by promotional activities, and an increase in market share in the existing markets.

Your Company was able to extend the reach of its fourwheeler batteries to most of the Gulf Cooperation Council countries, South East Asia and some African nations. These successes pushed up export sales significantly, compared with the previous financial year.

For industrial batteries your Company has increased its global presence by venturing into new traction markets in Peru, Taiwan and Saudi Arabia, while consolidating and increasing market share in European and South East Asian markets. The traction business in Germany, Greece and the UAE has grown significantly over the previous year. For the standby segment, your Company has entered new markets such as Congo, Malawi, Kazakhstan and Kuwait. It has doubled its business in key markets such as Nigeria, South Africa and Lebanon 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 regularly supplying to Jungheinrich, Germany, the world’s largest OEM in electric fork lift market.

Technology Upgrade

In order to maintain its leadership position, your Company is focused on upgrading its products and manufacturing technology as well as acquiring newer and advanced technology to 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 and Industrial Research (DSIR) as a fully-accredited Research Centre in energy storage. Import substitution of raw materials, reducing energy consumption and manufacturing time are some priority areas.

Your Company’s in-house R&D also plays a major role as the interface between its priorities and the adoption of technology from collaborators. Your Company has technical collaboration and assistance agreements with East Penn Manufacturing Company Inc (EPM), a leading US manufacturer of lead-acid batteries and related items. The Advanced Manufacturing Facility for premium automotive batteries based on punched-grid technology is now in full-scale operation. The technology has helped your Company not only introduce in the country the most robust products, both in terms of performance as well as in life, but also achieve the highest level of productivity with absolute product consistency.

Your Company also has a technical assistance and collaboration agreement with Furukawa Battery Company Limited of Japan (FBJ), for various automotive applications. Your Company is developing advanced automotive batteries with ultra-negative technology plates, which are expected to deliver unmatched fast-charge capability as well as long life, currently considered to be the best globally.

The long-standing technical cooperation agreement with Hitachi Chemicals Co (formerly Shin Kobe Electric Machinery Co) for a variety of automotive and industrial VRLA products continues to help robust exchange of technical information on latest developments. In recent times, this has helped your Company reduce manufacturing costs substantially, specifically in automotive battery production, by reducing the power consumption in the manufacturing process.

Your Company also has a technical collaboration and assistance agreement with Moura Batteries (MB), Brazil, for the development of advanced automotive batteries required by the environment-friendly new-generation vehicles in compliance with Euro VI standards. Your Company is also developing, under the guidance of MB engineers, what is popularly known as Enhanced Flooded Batteries (EFB), which are scheduled to be launched by the end of the current financial year.

In the Industrial Battery segment, your Company crossed a significant milestone by developing, during the course of the just-concluded year, 28 MWH of battery storage, mainly for micro-grid energy storage applications. The advanced ‘Ultrabattery’ solution, developed in collaboration with EPM and Ecoult Pty, Australia, for grid-level energy storage, has also started to be deployed commercially.

Together with EPM, the Industrial Battery group has also developed ‘Front Terminal’ AGM VRLA products required by international telecom customers as well as data centres.

Development of the cutting-edge technology of bipolar battery, in active cooperation with Advanced Battery Concepts (ABC) of the US is on course. The work is scheduled to move beyond laboratory studies to field testing in the current financial year.

HIGHLIGHTS OF PERFORMANCE

Your Company recorded net sales of Rs. 10,588.31 crores in 2018-19, against Rs. 9,186.32 crores in the previous year, and a profit before tax of Rs. 1,238.58 crores against Rs. 1,006.16 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

843.62

671.25

the year

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

136.00

-

(160%)

Interim Dividend for 2017-18

-

136.00

(160%)

Tax on Interim Dividend

27.96

27.69

(Aggregate Dividend amounts to

245.94

245.53

240% (previous year - 240%)

And leaving a balance of (which

5901.99

5304.31

is carried forward to next year)

Consolidated Financial Statements

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and in accordance with the Indian Accounting Standard (Ind-AS) 110, Consolidated Financial Statements of the Company and its subsidiaries form part of the Annual Report and are reflected in the consolidated financial statements of the Company. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by their respective Boards.

Dividend

Your Company has paid an interim dividend at the rate of 160%, i.e. @ Rs 1.60 per equity share of Re. 1 each, on the equity shares to the shareholders whose names appeared on the Register of Members on 17th November, 2018. Your Directors are now pleased to recommend a final dividend at the rate of 80% i.e. Re. 0.80 per equity share of Re. 1 each, for the year ended 31st March, 2019, subject to the approval of shareholders at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2019, including the interim dividend during the year, amounts to 240%, i.e. Rs. 2.40 per equity share of Re. 1/- each.

Share Capital

The paid up equity share capital as on 31st March, 2019, was Rs. 85 crores, divided into 85,00,00,000 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 financial year 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 by trustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or by trustees for the benefit of employees.

Deposits

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013, and the Companies (Acceptance of 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)) and investments made (Note nos. 4 and 9) by the Company during the year under review, have been disclosed in the financial statements.

Material Changes and Commitments

There have been no material changes that have occurred subsequent to the close of the financial year of the Company to which the financial statements relate and the date of the report, 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 including Debtors Turnover, Inventory Turnover, Interest Coverage Ratio, Current Ratio, Debt Equity Ratio, Operating Profit Margin (%) and Net Profit Margin (%) and details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

None of the ratios except Profit After Tax (PAT) has significant changes i.e. change of 25% or more compared to immediately previous financial year. PAT percentage increased by 26% due to profit from exceptional item of Rs. 108.29 crores (sale of property) in current year versus an exceptional item charge of Rs. 41.83 crores (brand settlement cost) in the previous year.

Return on net worth increased from 13.5% in 2017-18 to 15.7% in 2018-19. A significant driver is the exceptional item impact as explained under previous item. Additionally, the business profit from operations grew by 10% over prior year.

AUDITORS

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 Meeting held on 27th July, 2017, for an initial term of five consecutive years till the conclusion of 75th Annual General Meeting of the Company.

Pursuant to the amendment in Section 139 of the Companies Act, 2013, the requirement to place the matter relating to ratification of appointment of Statutory Auditors at every AGM has been omitted with effect from 7th May, 2018.

The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013, read with the Companies (Cost Records and Audit) Rules, 2014, (as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your Directors, 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 the Company for the financial year 2019-20 at a remuneration of Rs. 9,00,000/- plus out-of-pocket expenses and taxes as applicable.

A resolution regarding ratification of remuneration payable to M/s Mani & Co, Cost Accountants, forms part of the Notice convening the 72nd Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. K. Labh & Co., practising company secretaries (FCS: 4848/CP No.: 3238) to audit secretarial and other related records of the Company for the financial year 2018-19. The Secretarial Audit Report is annexed herewith as Annexure - I. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

BUSINESS RESPONSIBILITY REPORT

In July 2011, the Ministry of Corporate Affairs, Government of India, came out with the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’. These guidelines contain certain principles that are to be adopted by companies as part of their business practices and require disclosures regarding the steps taken to implement these principles through a structured reporting format, viz. Business Responsibility Report. Pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, your Company has prepared the Business Responsibility Report and is annexed herewith as Annexure - II.

CORPORATE GOVERNANCE

Transparency is the cornerstone of your Company’s philosophy and it adheres to all requirements of corporate governance in letter and spirit. All the Committees of the Board of Directors meet at regular intervals as required in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Your Board of Directors has taken necessary steps to ensure compliance of statutory requirements. The Directors and Key Management Personnel and Senior Executives of your Company have complied with the approved ‘Code of Conduct for Board of Directors and Senior Executives’ of the Company. The declaration to this effect pursuant to Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 signed by Managing Director and CEO of the Company forms part of the Annual Report.

The Report on Corporate Governance as required under Regulation 34(3) read along with Schedule 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 & Disclosure Requirements) Regulations, 2015, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

BUSINESS EXCELLENCE

Your Company has a well-designed TQM Model to drive it towards continual improvement in order to deliver high-quality products and services to customers and fully engage all other stakeholders such as employees, suppliers, regulators and communities. The TQM model is 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 TQM culture, viz., TPM, Six Sigma, 5S, Kaizen, Quality Circle and Innovation. Given the challenges that the organisation is facing, each of these initiatives has been leveraged to set a new milestone. There is a monthly performance measurement mechanism for each of these initiatives. It has implemented International Standards such as ISO 9001 & IATF 16949 for Quality and ISO 14001, ISO 45001 for Environment, Health & Safety. The focus on health and safety performance is very high. The organisation structure, policy and procedure for health and safety is regularly reviewed and implemented.

Implementing best practices and promoting competitive capability are some important areas on which your Company focused during the year. During the year under review, your Company 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 - ITC Sustainability 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 to factory. Implementation of TPM is in various stages. Four factories have secured the consistent commitment award in TPM from JIPM, Japan. Two factories have won Excellence award during the year under review. The JIPM Japan gave the Bawal factory in Haryana a category 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 & Safety policy that is effectively deployed across all factories. All factories are certified for EMS ISO 14001, ISO 45001 & OHSAS 18001 by certification bodies of global repute.

Your Company used natural and manmade resources in an optimal and responsible manner and ensures the sustainability of resources by reducing, reusing, recycling and managing waste. Your Company regularly monitors and prevents pollution through waste minimisation at the source, recovery/treatment of emissions and releases and conservation of energy thus progressively improving the environment, occupational health and overall carbon footprint.

Your Company has established, implemented and maintained a procedure for the identification of hazards, assessment of their risk and determining the necessary controls. Safety Audits, Hazard Evaluation, Emergency Management Planning are conducted periodically in the factories.

Your Company’s employees, as well as the upstream partners, are being regularly trained and put through awareness programmes to minimise health and safety risks for employees and contract workers.

Your Company is transparent about the sustainability challenges. Identifying which economic, environmental and social issues are most important for the business, environment and stakeholders is most important. The sustainability efforts include reduction of pollution, 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 on the sustainability of its upstream partners. It has conducted several vendor sustainability programs in all the regions involving almost all the critical vendors. They have been given periodic training on Risk Assessment, Environment, Health & Safety and Quality for the sustainability of their businesses.

CORPORATE SOCIAL RESPONSIBILITY

Your Company always strives for long-term sustainability through inclusive growth and development, involving not only the community around its main operational locations but in society at large at the regional and national level. The core thematic areas that continue to be the main pillars of your Company’s Corporate Social Responsibility (CSR) philosophy even before CSR became regulatory compliance for organisations to follow under the Companies Act 2013 are:

- Basic Education

- Health

- Environment Management

- Women Empowerment, and

- Community Development.

The Board of Directors of your Company has approved a CSR Policy, viz., EIL CSR Policy, in accordance with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014 notified by the Ministry of Corporate Affairs, Government of India, which is available on your Company’s website at http:// www.exideindustries.com/investors/governance-policies. aspx. The CSR policy underlines the guiding principles and mechanisms for undertaking various CSR activities/ programs by the Company.

The disclosure in line with Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure - IV.

A total amount of Rs. 1921.89 lakh was spent during the year under review as against the 2% obligation of Rs. 1898.22 lakh. The main thrust during the year was not only to consolidate the efforts made over the past few years but also achieve newer dimensions under the given ambit of CSR. During the year, your Company established certain model projects, especially in community solid waste management and development of vocational skills as livelihood options, and also encouraged employees to volunteer. The model projects that were developed in the previous year, especially the ones in basic education and public health, stabilised.

Your Company made significant strides in achieving over 100% utilisation for the year to harness all its resources for successful execution and completion of numerous CSR projects across all locations including the manufacturing units at Haryana, Maharashtra, Tamil Nadu, Uttarakhand, West Bengal and certain projects at the national level.

Projects on education, health and sanitation remained the areas of thrust for 2018-19 too. Your Company took some significant initiatives in public healthcare, women empowerment and promoting education including special education and employment enhancing vocational skills, eradication of hunger, poverty and malnutrition, both with partner organisations as well as directly by internal teams at the plants. Your Company was also involved in other associated interventions such as support for homes for destitute children, environmentally conscious initiatives for conservation of natural resources, training to promote rural sport and nationally recognised sports and setting up of old-age homes.

INTERNAL CONTROLS

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 according to the information and explanations obtained by them, state that your Company’s internal control systems are commensurate with its size and scale of operations that are designed to provide reasonable assurance that the Company’s financial statements are reliable and prepared in accordance with the law.

OUTLOOK

While the industry has seen an overall slowdown during the last two quarters of the year under review, the mid-to longterm outlook is quite positive. The market is expected to 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 automotive industry looks set for profitable and stable growth over the next few years. Initiatives such 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 in the next few years. The Indian government’s initiative to develop a 100 cities as smart cities that offer smart solutions to their citizens through the use of technology, information and data is expected to fuel demand for back-up power systems and hence batteries. Further, mobile broadband penetration in the form of Wi-Fi is very low in India and it is estimated that there will be a significant increase in the number of Wi-Fi hot spots, 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 Battery Energy Storage Systems. With more and more renewable energy being pumped into the grid from utilities as well as decentralised generators, the distribution networks are becoming increasingly unstable. Battery Energy Storage Systems are meant for both grid scale as well as off-grid scale. The energy storage market for grid-connected and off-grid renewables is likely to provide significant opportunities.

The robust growth in automobile sales over the last few years has ensured medium and long-term opportunity for replacement battery sales, an area in which your Company’s brand equity and strong channel relationship give it a huge competitive edge.

While your Company has taken definitive steps in preparing for future demands of electric mobility, it is simultaneously ensuring technological upgrades in the lead-acid space that would keep it ahead of competitive threats.

The lead-acid battery business has seen a host of new players over the last few years, both at a regional and national level. Being the dominant brand in the category, your Company is susceptible to constant pressure at a market level as these new players try to wean away consumers and channel partners essentially through low-price offerings. Your Company is addressing these challenges through the adoption of latest technologies and lean manufacturing practices in order to quickly develop differentiated products that will change the price-value equation in its favour.

RISKS AND CONCERN

There is an inherent threat from new battery technologies such as Lithium-Ion technology, which is likely to penetrate automotive applications as well as various industrial applications such as telecom, data centers, UPS, solar street lights and energy storage systems. Your Company has taken the strategic step of entering the Li-Ion battery business through a joint venture with Leclanche S.A. and now has a road map for the launch of Li-Ion products.

The strong brand equity of your Company, its understanding of Indian market across segments, coupled with the partner’s capability in Li-Ion technology, will help it offer a competitive product and create a big footprint in the business.

Your Company has a long and healthy association with all automotive OEM customers and maintains a very high market share. Customers sometimes seek to offset their high dependency on a single source. But your Company has excelled in engaging these OEM customers by proactively fulfilling their emerging expectations on product, technology and price. The operating standards of manufacturing facilities are upgraded with highest degree of commitment to ensure that these facilities stand above the expected standards in Customers Audit. Projects on new product development, cost reduction, performance enhancement 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 has taken all necessary measures to build on it, ensuring controls to protect the brand. In view of increased penetration of social media, the inherent risk of communities, employees, and customers sharing their expectations, concerns and suggestions and so impacting the brand image has gone up. Your Company has implemented a Social Media Framework through a technology platform to ensure effective management of its reputation by timely redressal of concern, action on suggestions and enquiries.

Other actions for ensuring the protection of the brand includes the registration of the trademark in countries where the Company intends to sell its products. Your Company is also leveraging the know-how of collaborators to offer a great experience to the customer on product performance.

Your Company has shown healthy growth over the last several years and taken steps to expand capacity to meet this demand and remain cost competitive. Company-wide cost reduction initiatives have been launched, ensuring the budgetary control in all facets of the business including raw material, conversion, marketing and distribution. Your Company has a focused initiative to improve productivity and control costs of energy, consumables, overheads, logistics and marketing.

VIGIL MECHANISM/ WHISTLE-BLOWER POLICY

Your Company has a Whistle-Blower Policy that offers a formal mechanism to its directors, employees and stakeholders to report genuine concerns about unethical behavior, actual or suspected, fraud or violation of the Company’s Code of conduct in accordance with the provisions of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The policy provides for adequate safeguards against victimisation of persons who use such mechanism and provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. Your Company has a dedicated email address for reporting such concerns. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy was amended during the year under review and is available on the website http:// www.exideindustries.com/investors/governance-policies. aspx. The Audit Committee of Board is entrusted with the responsibility to oversee the vigil mechanism.

SUBSIDIARIES

Your Company has five Indian subsidiaries viz, Chloride Metals Limited, Chloride Power Systems & Solutions Limited, Chloride International Limited, Exide Life Insurance Company Limited, Exide Leclanche Energy Private Limited and three foreign subsidiaries, viz. Chloride Batteries S.E Asia Pte. Ltd., Singapore, Espex Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

- Exide Life Insurance Company Limited (ELI), a 100% subsidiary of your Company, is engaged in the business of life insurance and annuity, offering a range of individual and group life, pension, and health products across traditional and unit-linked platforms. It reaches customers through technology-enabled solutions and its network of 200 plus offices to cater to the needs of customers.

ELI has assets under management or AUM of over Rs. 14,200 crores as of 31st March, 2019. The total premium collected by ELI during the year ended 31st March, 2019, was Rs. 2,886 crores as against Rs. 2,532 crores collected during the previous year. It has also recorded a profit before tax of Rs. 12.03 crores during the year 31st March, 2019, 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. 2,404 crores against MCEV of Rs. 2,137 crores in the previous year.

- Chloride Metals Limited, another 100% subsidiary of your Company, having its plants at Markal in Khed Taluka of Pune and at Malur in Kolar district of Karnataka, operates smelters with integrated facilities for extracting lead from exhausted batteries and manufacturing and supplying recycled lead and lead alloys. The net sales of Chloride Metals Limited was Rs. 2,079.63 crores and its profit before tax was Rs. 17.69 crores representing an increase of 0.12% in net sales and a decrease of 40% in profit before tax compared to the previous financial year.

- Chloride Power Systems & Solutions Limited, a 100% subsidiary of your Company having its factory at Sector V, Salt Lake City, Kolkata, is engaged in manufacture and sale of battery chargers, D.C. Power Systems, solar installations and associated equipment. During the year 2018-19, Chloride Power achieved a turnover of Rs. 116.62 crores and a profit before tax of Rs. 2.04 crores.

- Chloride International Limited is at present not engaged in any trading or manufacturing activity and has income from rent and interest/dividend on securities. The income of Chloride International Limited during 2018-19 amounted to Rs. 95.86 lakhs with a profit before tax of Rs. 84.04 lakhs representing an increase of 41% and 49% respectively over the figures for the previous financial year.

- Exide Leclanche Energy Private Limited (ELEPL), the joint venture company in which your Company holds an equity shareholding of 74.99%, was incorporated on 29th September, 2018, in collaboration with Leclanche SA of Switzerland. Leclanche SA is a leading provider of high-quality energy storage solutions and is supporting by way of providing the desired technical support for manufacturing Li-Ion batteries. The manufacturing facility of ELEPL is located in Gujarat. The commercial production of the Company has not yet 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 Asia Pte. Ltd., Singapore. Chloride Batteries is engaged in production and distribution of industrial battery chargers, rectifiers and parts and the distribution of industrial and automotive 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 SGD 0.2 million.

- Espex Batteries Limited, UK, a 100% subsidiary of your Company, is engaged in marketing and selling of lead-acid batteries for industrial applications in the UK and its neighboring areas. During 2018-19, the Company achieved a turnover of GBP 7.7 million and made a profit before tax of GBP 0.17 million.

- Your Company also holds 61.5% of the share capital in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka, which is engaged in the business of manufacturing and marketing of lead-acid batteries. During the year 2018-19, this Company achieved a turnover of SLR 3453.68 million and made a profit before tax of SLR 242.81 million.

Exide Life Insurance Company Limited and Chloride Metals Limited are material subsidiaries as per the thresholds laid down under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The profit and loss accounts, balance sheet, auditors’ report and directors’ report of the subsidiaries are not attached to the annual accounts of your Company pursuant to general exemption granted vide general circular number 2/2011 dated 08.02.2011 issued by the Government of India, Ministry of Corporate Affairs and in terms of Section 136 of the Companies Act, 2013. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiaries in Form AOC-1 is attached to the financial statements. However, the necessary details about the subsidiaries are given in the consolidated financial statements. The Company will make available the financial statements and related detailed information of the subsidiary companies upon request by any Member of the Company or its subsidiary companies. Copies of the financial statement of the subsidiaries would also be available for inspection by any such person at the registered office of your Company on any working day as specified in the Notice convening the 72nd Annual General Meeting.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited 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 form part of the Board’s report. The extract is also available under the Investor section on the website of the Company at www.exideindustries.com.

DIRECTORS

At the 71st Annual General Meeting (AGM) held on 2nd August 2018, the shareholders approved the appointment of Mr. Surin Shailesh Kapadia (having DIN: 00770828) as a Non-Executive Independent Director to hold office for the first term of five consecutive years.

Mr. Subir Chakraborty (having DIN: 00130864) retires by rotation in accordance with the provisions of the Companies Act, 2013, and being 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 AGM of your Company held on 22nd July, 2014, had appointed Mr. Vijay Aggarwal, Mr. Sudhir Chand and Ms. Mona Desai as Independent Directors to hold office for a term of five consecutive years up to the conclusion of the ensuing Annual General Meeting. Their term will expire at the conclusion of the 72nd AGM.

Considering their vast knowledge, experience and expertise in their respective fields and the contribution made by these Directors during their tenure as an Independent Director, the Nomination & Remuneration Committee and the Board of Directors of your Company has recommended reappointment of Ms. Mona N Desai as Independent Director for second term of five consecutive years from the conclusion of the ensuing 72nd Annual General 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 from the 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 that they continue to fulfill the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16 of the Listing Regulations (including statutory re-enactment thereof for the time 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 to expire 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 with effect from 1st May, 2019, subject to the approval of the Shareholders. He will attain the age of 70 years on 25th February, 2020, and hence continuation of his employment as Managing Director & CEO pursuant to Section 196(3) and Schedule V of the Act through a Special

Resolution proposing his re-appointment as Managing Director and CEO with effect from 1st May, 2019, will be placed at the ensuing Annual General Meeting for approval of the Shareholders.

The term of Mr. Subir Chakraborty, Whole-time director, designated as Director-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. Subir Chakraborty as Deputy Managing Director for a period of two years with effect from 1st May, 2019, subject to the approval of the Shareholders. A resolution proposing his appointment as Deputy Managing Director with effect from 1st May, 2019, will be placed at the 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 five years with effect from 1st May, 2019, subject to the approval of the Shareholders. A resolution proposing his re-appointment as a whole-time director designated as Director-Automotive with effect from 1st May, 2019, will be placed at the ensuing Annual General Meeting for approval of the Shareholders.

Necessary information pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of directors to be appointed and re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting scheduled to be held on 3rd August, 2019.

None of the Directors of your Company are disqualified for being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

KEY MANAGERIAL PERSONNEL

During the year, the following directors/executives continued as Key Managerial Personnel 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 of independence 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 confirmation submitted by the Independent Director under regulation 25(8) after assessing its veracity.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, and of the Chairman and the Non-Independent Directors was carried out by the Independent 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 the evaluation of the working of its committees and individual directors, including Chairman of the Board. The performance evaluation of all the directors was carried out by the Nomination and Remuneration Committee. The questionnaire and the evaluation process were reviewed in accordance with the SEBI guidance note on Board evaluation dated 5th January, 2017, and suitably aligned with the requirements.

While evaluating the performance and effectiveness of the Board, various aspects of the Board’s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Company’s longterm strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on the basis of their effectiveness in carrying out respective mandates, composition, the effectiveness of the committees, the structure of the committees and meetings, independence of the committee from the Board, contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgement, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc.

Considering the success of the Company in most spheres and the value delivered to all its stakeholders, it was evident that the Directors had been diligent, sincere and consistent in the performance of their duties. The Directors expressed their satisfaction with the evaluation process.

NOMINATION & REMUNERATION POLICY

In accordance with the provisions of Section 178(3) of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has Nomination & Remuneration policy in place. In accordance with the requirements of SEBI (LODR) (Amendment) Regulations, 2018, the Board amended the policy during the year under review to align the definition of Senior Management Personnel (SMP) and the process to determine their remuneration. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, Key Managerial Personnel (KMP) and senior management personnel and also independence of independent directors;

(b) Aligning the remuneration of directors, KMPs and senior management personnel with the Company’s financial position, remuneration paid by its industry peers, etc.;

(c) Performance evaluation of the board, its committees and directors including independent directors;

(d) Ensuring board diversity;

(e) Identifying persons who are qualified to become directors and who may be appointed in 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 website under the link http:// www.exideindustries.com/investors/governance-policies. aspx

MEETINGS

The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other items of business. The Board exhibits strong operational oversight with regular presentations by business heads to the Board. The Board and committee meetings are prescheduled and a tentative annual calendar of Board and committee meetings is circulated to the directors well in advance to help them plan their schedule and to ensure meaningful participation at the meetings.

During the year under review five (5) board meetings and six (6) audit committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of the constitution of the Board and its Committees are given in the Corporate 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 Conduct for the Board of Directors and Senior Executives. A declaration to that effect is attached with 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 Company Secretaries 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 framing, implementing and monitoring the risk management plans of the Company. The Company has a “Risk Management Policy” to identify risks associated with the Company, assess its impact and take appropriate corrective steps to minimise the risks that may threaten the existence of the Company.

The Company’s sustained leadership is an outcome of effective implementation of strategies. These strategies have been rolled out after a thorough diagnosis of the internal and external business environment with special attention to competition, market, emerging trends. The risks have been identified as an integral part of the business plan in line with the enterprise risk management (ERM) framework of the Company, ensuring adequate controls and mitigating actions to achieve the business objectives.

ERM framework of your Company is comprehensive and robust enough to respond against any uncertainty. It has a three-tier risk identification mechanism involving the process owners at business sites, corporate, audit committee and board. The periodic review and audits are conducted to ensure your Company is effectively managing the risks and confidently progressing on the business goal. Risk management framework has been implemented in all the Subsidiary company.

Pursuant to regulation 21(5) of SEBI (LODR) Regulations, 2015, effective from 01.04.2019, the requirement of constituting Risk Management Committee is applicable to the Company. As such, your Company has duly constituted a Risk Management Committee during the financial year 2018-19.

The Risk Management Policy is available on the Company’s website at the link http://www.exideindustries.com/investors/ governance-policies.aspx

LISTING

The equity shares continue to be listed on the BSE Limited (BSE), National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has 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 the ordinary course of business and on an arm’s-length basis. There were no materially significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interests of the Company.

All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for related party transactions that are of repetitive nature and can be foreseen, and accordingly the required disclosures are made to the Audit Committee on a quarterly basis in terms of the omnibus approval of the Committee.

The policy on materiality of related party transactions and also on dealing with related party transactions as approved by the Audit Committee and the Board of Directors is 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 ordinary course of business and were on an arm’s-length basis, there were no material related party transactions 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 OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no significant material orders passed by the regulators/courts/tribunals which 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 and commitments 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 Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - VI.

HUMAN RESOURCES

Your Company believes that the strategic purpose of Human Resources is to be a catalyst for the transformation of our people, which is required to ensure sustained business outperformance. Our Human Resources philosophy has been guided by the four pillars of Employee Efficiency, Development, Welfare and Culture Building.

Your Company continued its focus on talent management, capability building, leadership development and performance management. Under the umbrella of the “Exide Learning Academy”, more than 2500 man-days of training were delivered on sales, service and manufacturing to improve the skills of our employees. High-potential development continued through the “Exide Power” initiative of individual development planning (IDP), e-learning, upskilling, special assignments, etc. In line with our effort of culture building, your Company this year had launched “Exide Coaching Academy” to develop leaders as coaches through focused reinforcement, role-modelling, etc. Several high potential employees have benefitted from the executive coaching extended to them.

With initiatives like the “Technocrat Programme”, creation of “Technical Specialists” and “Learning Labs”, your Company has laid the foundation to build a healthy pipeline of talent in the specialist areas of Research and Development.

Your Company continues to drive performance through a quarterly evaluation process and a competitive performance-based bonus for all its employees. The “You Did It” platform to publicly recognise and reward top performers continues to motivate our employees.

High-quality leadership talent has also been infused across all functions to build a talent pipeline. Besides, your Company continued to strengthen its position as an “Employer of Choice” across premier Business school campuses and create a strong talent pool to drive the Company’s future growth.

The total number of employees of the Company as on 31st March, 2019, was 5,359.

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 of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees particulars which are available for inspection by the Members at the registered office of the Company during business hours on working 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 Company Secretary. Further, we confirm that there was no employee employed throughout the financial year or part thereof, who was in receipt of remuneration in the financial year which, in the aggregate, is in excess of that drawn by the Managing Director and Whole-time directors and holds by himself or along with his spouse and dependent children, not 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 with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, 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 adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, (‘the Act’) and Rules under it. It is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. Your Company has complied with provisions relating to the constitution of an Internal Complaints Committee under the Act. The Internal Committee (IC) composes of internal members and an external member who has extensive experience in the field.

Your Company had organised workshops and awareness programmes at regular intervals for sensitising employees on the issues and implications of workplace sexual harassment. These workshops not only help create a safe and happy work environment to prevent any incidents of such nature, but also an awareness on legal laws. Employees from various functions in Corporate, Marketing, R&D and Projects were part of these workshops.

During the financial year 2018-19, one case of sexual harassment was reported to IC which was duly investigated and closed.

DIRECTOR’S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. That, in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

FORWARD-LOOKING STATEMENTS

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGMENT

Your Directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company’s performance. The directors would also like to thank its customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies and all stakeholders for their co-operation and support to the Company and the confidence reposed on the management.

On behalf of Board of Directors

Sd/-

Bharat D Shah

Place : Mumbai Chairman

Date : 30th April, 2019 DIN: 00136969


Mar 31, 2018

Directors'' Report to the Shareholders

(Including Management Discussion & Analysis)

The Board of Directors are pleased to present the 71st Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2018.

Technology Up gradation

In order to maintain its leadership position, your Company is continuously focused on upgrading its products and manufacturing technology as well as acquiring new and advanced technology to meet the emerging expectations of the customers. The in-house Research & Development (R&D) division is recognized by the Department of Scientific and Industrial Research (DSIR), Government of India, as a fully accredited Research Centre in the field of energy storage. Import substitution of raw materials, reducing energy consumption and manufacturing cycle time reduction are some of the areas where the priorities are highest.

The in-house R&D also plays a major role in providing the interface between the Company priorities and the adoption of collaborators'' technology. Your Company has ongoing technical collaboration and assistance agreements with East Penn Manufacturing Company Inc., USA (EPM), a leading US manufacturer of lead acid batteries and related items. An advanced manufacturing facility has been installed and commissioned at Haldia Plant and new range of advanced products (with Punched Grids) has been launched in Exide MGRID & Exide EGRID brands. The introduction of state-of-the-art Punched Grid Technology ensures enhanced battery life with higher corrosion/float life than conventional battery and allows for high level of productivity with performance consistency. Also, higher power to weight ratio than present equivalent conventional products is another key feature of this technology.

Your Company has also an ongoing technical assistance and collaboration agreement with ''Furukawa Battery Company Limited, Japan" for various automotive applications. Additionally, your Company has a long standing technical cooperation agreement with Hitachi Chemicals Co. (formerly, Shin Kobe Electric Machinery Co.), Japan, for a variety of automotive as well as VRLA industrial range of products. Based on the research inputs received from Hitachi Chemicals, during the course of the recently concluded financial year, a new ''Zero Maintenance Sealed Flooded automotive battery'' has been launched in replacement market.

In the Industrial Battery segment, the state-of-the-art ''Ultra Battery'' with outstanding charge acceptance characteristics, nearly at par with lithium technology has been introduced for field trials in Telecom. It is also a proven technology globally, and is vigorously being pursued for MW scale renewable energy storage, grid stabilization, diesel abatement and other allied operating modes. New machinery has been installed & commissioned for manufacturing of Ultra Battery. The development has taken place in collaboration with East Penn Manufacturing, USA and Ecoult Pty, Australia.

Your Company has also been pursuing the development of appropriate lithium-ion technology for applications in the country particularly for the emerging demands of electric vehicles. Prototypes have been assembled and are undergoing laboratory and field tests to be followed by submission for certification by regulatory authorities. The work is closely being done under the technical collaboration and guidance of IIT Madras and associated organization.

Your Company has recently entered into a Technical License Agreement with ''Advanced Battery Concepts, LLC, USA'' (ABC) for acquiring the Know-how and Technology in the field of BiPolar Lead Acid Storage Batteries.

HIGHLIGHTS OF PERFORMANCE

Your Company recorded a Net Sales of Rs. 9186.32 crores in 2017-18 as compared to Rs. 7583.47 crores in the previous year with a corresponding profit before tax of Rs. 1006.16 crores as compared to Rs. 975.73 crores.

Financial Results

(Rs. in Crores)

2017-18

2016-17

Profit before depreciation, finance cost & tax expenses

1299.17

1186.36

Depreciation and amortization expenses

245.94

206.32

Finance cost

5.24

4.31

Profit Before Exceptional item and Tax

1047.99

975.73

Exceptional item

41.83

-

Profit Before Tax

1006.16

975.73

Tax expenses

337.81

282.09

Profit After Tax

668.35

693.64

Other Comprehensive Income

2.90

1.90

Total Comprehensive Income for the year

671.25

695.54

Balance brought forward

4878.59

4426.43

Making a total of

5549.84

5121.97

Out of this appropriations are :

Final Dividend for 2015-16 (80%)

-

68.00

Final Dividend for 2016-17 (80%)

68.00

-

Tax on Final Dividend

13.84

11.69

Interim Dividend for 2016-17 (160%)

-

136.00

Interim Dividend for 2017-18 (160%)

136.00

-

Tax on Interim Dividend

27.69

27.69

(Aggregate Dividend amounts to 240% (previous year - 240%)

245.53

243.38

And leaving a balance of (which is carried forward to next year)

5304.31

4878.59

Effect of Lead Price Movement

Lead and Lead Alloys are the primary materials consumed in the manufacturing of batteries representing more than 70% of total material consumption by value. Your Company procures about 30% of its Lead and Lead Alloys requirement through imports or import parity pricing based on prices quoted on London Metal Exchange (LME). The balance 70% is procured locally at prices which are influenced by demand/supply situation as well as LME movement.

Your Company procures Lead and Lead Alloys mostly at current prices or on LME averages and there is no long-term contract for pricing. About 30% of your Company''s business with OEM''s as well as institutional customers is having “Lead price variation clause" and thus this portion of the business is protected from lead price volatility. The balance 70% of the Company''s business to retail customers is exposed to lead price volatility, the risk of which is reduced to an extent by increasing the usage of recycled lead which is cheaper than pure lead and not directly exposed to LME price movement.

The exposure to currency fluctuations and its impact on Company''s business is significant since about 30% of Lead and Lead Alloys procurement is based on “import parity price". Further, your Company imports few other materials and capital goods. Exports made by your Company which constitutes about 5% of the Company''s business, acts as an automatic hedge against risks resulting from currency fluctuation.

Your Company as a policy does not enter into commodity hedging or currency hedging. In a few cases forward covers are taken against import liabilities.

During FY 2017-2018 the average LME price of pure lead increased by 19% as compared to FY 2016-2017, while the average landed cost of Lead and Lead Alloys, including recycled lead, in 2017-2018 indicates a rise of 14% as compared to the previous financial year.

Consolidated Financial Statements

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and in accordance with the Indian Accounting Standard (Ind-AS) 110, Consolidated Financial Statements of the Company and its subsidiaries form part of the Annual Report and are reflected in the consolidated financial statements of the Company. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by their respective Boards.

Dividend

Your Company has paid an interim dividend at the rate of 160% i.e. @Rs 1.60 per equity share of Re.1 each on the equity shares to the shareholders, whose names appeared on the Register of Members on 6th November, 2017. Your Directors are now pleased to recommend a final dividend at the rate of 80% i.e. Re. 0.80 per equity share of Re.1 each for the year ended 31st March, 2018, subject to approval of the shareholders at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2018 including the interim dividend paid during the year, shall be 240% i.e. Rs. 2.40 per equity share of Re.1/- each.

Share Capital

The paid up equity share capital as on 31st March, 2018 was Rs. 85 crores, divided into 85,00,00,000 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 financial year 2017-18.

B) Issue of sweat equity shares

The Company did not issue sweat equity shares during the financial year 2017-18.

C) Issue of employee stock options

The Company did not issue stock options during the financial year 2017-18.

D) Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or by trustees for the benefit of employees.

Deposits

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of 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 nos. 6 and 13), guarantees on securities provided (Note no. 38(ii)) and investments made (Note nos. 4 and 9) by the Company during the year under review, have been disclosed in the financial statements.

Material Changes and Commitments

There have been no material changes which have occurred subsequent to the close of the financial year of the Company to which the financial statements relate and the date of the report, 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.

AUDITORS Statutory Auditors and their Report

M/s B S R & Co. LLP, Chartered Accountants, were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 27th July, 2017, for a term of five consecutive years till the conclusion of 75th Annual General Meeting of the Company.

The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your Directors, on the recommendation of the Audit Committee has appointed M/s Shome & Banerjee, Cost Accountants to audit the cost records of the Company for the financial year 2018-19 at a remuneration of Rs. 9,00,000/plus out-of pocket expenses and taxes as applicable.

A resolution regarding ratification of remuneration payable to M/s Shome & Banerjee, Cost Accountants, forms part of the Notice convening the 71st Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. K. Labh & Co., Practising Company Secretaries to undertake audit of secretarial and other related records of the Company for the financial year 2017-18. The Secretarial Audit Report is annexed herewith as “Annexure - I". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

BUSINESS RESPONSIBILITY REPORT

The Ministry of Corporate Affairs, Government of India, in July 2011, came out with the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business''. These guidelines contain certain principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these principles through a structured reporting format, viz. Business Responsibility Report. Pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, your Company has prepared the Business Responsibility Report and is annexed herewith as “Annexure - II"

CORPORATE GOVERNANCE

Transparency is the cornerstone of your Company''s philosophy and all requirements of corporate governance are adhered to both in letter and spirit. All the committees of the Board of Directors meet at regular intervals as required in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Your Board of Directors has taken necessary steps to ensure compliance with all statutory requirements. The directors and key management personnel and senior executives of your Company have complied with the approved ''Code of Conduct for Board of Directors and Senior Executives'' of the Company. The declaration to this effect pursuant to Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 signed by Managing Director and CEO of the Company forms part of the Annual Report.

The Report on Corporate Governance as required under Regulation 34(3) read along with Schedule 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 & Disclosure Requirements) Regulations, 2015, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

BUSINESS EXCELLENCE

Your Company has a well-designed TQM Model to drive the organization towards continuous improvement in order to deliver high-quality products and services to customers. The TQM model is aimed at developing TQM culture for long-term success through customer satisfaction. All members of the organization participate in improving processes, products, services aligned to the business needs.

The TQM initiatives deployed in your company are: TPM, Six Sigma, 5S, Kaizen, Quality Circle, and Suggestions. Your Company has implemented International Standards like ISO 9001 & IATF 16949 for Quality and ISO 14001 & OHSAS 18001 for Environment, Health & Safety. The Organizational learning and development was one of the key focus areas during the financial year. There is a structured framework for monitoring and measurement in your Company for all these TQM initiatives that flashes the monthly report on various TQM performance metrics.

Implementation of best practices and promoting competitive capability of the organization is one of the important areas your Company focused during the year and is committed to excel in the years ahead. The excellence in areas of operation, supply chain sustainability, quality, innovation, corporate governance etc. were assessed by external professional bodies like JIPM, CII, Institute of Directors, ACFI, Greentech, Arogya Health, GCI etc. 119 Awards have been received by your Company in various categories during the financial year.

Quality Circle is an effective approach to voluntarily involve people in the continuous improvement journey. The QC projects are aligned to the business strategy to achieve the business goals and produce tangible and intangible benefits through involvement of workmen. This initiative is deployed in all the factories and to extended supply chain.

TQM Ranking Assessment System has been introduced for transparent rating and evaluating with an intensive focus to regularly monitor and measure the various TQM initiatives practiced in the factories. It helped in identifying the gaps and improving the system and process along with cross functional learning. This ranking system has been institutionalized for building competitiveness among factories and flow of best practices from one factory to other. The audit is conducted at quarterly intervals and factories are ranked as per the audit outcome.

DIRECTORS

Mr. A K Mukherjee, Director-Finance and CFO and Mr. Arun Mittal, Director - Industrial, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Mr. Surin Shailesh Kapadia, was appointed as additional director (Independent) with effect from 25th October, 2017 on the recommendation of nomination & remuneration committee and board of directors.

Necessary information pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of directors to be appointed and re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting scheduled to be held on 2nd August, 2018.

None of the Directors of your Company is disqualified for being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

KEY MANAGERIAL PERSONNEL

During the year, the following directors/executives continued as Key Managerial Personnel of the Company:

- Mr. Gautam Chatterjee, Managing Director & CEO

- Mr. A K Mukherjee, Director - Finance & CFO

- Mr. Subir Chakraborty, Director - Automotive

- Mr. Arun Mittal, Director - Industrial

- Mr. Jitendra Kumar, Company Secretary & EVP - Legal & Administration

DECLARATION OF INDEPENDENCE

All independent directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, Chairman and the non-independent directors was carried out by the independent directors. This exercise was carried out in accordance with the 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 the evaluation of the working of its committees and individual directors, including Chairman of the Board. The performance evaluation of all the directors was carried out by the Nomination and Remuneration Committee. The questionnaire and the evaluation process were reviewed in accordance with the SEBI guidance note on Board evaluation dated 5th January, 2017 and suitably aligned with the requirements.

While evaluating the performance and effectiveness of the board, various aspects of the Board''s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Company''s long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on the basis of their effectiveness in carrying out respective mandates, composition, effectiveness of the committees, structure of the committees and meetings, independence of the committee from the Board, contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgment, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings, etc.

The Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

In accordance with the provisions of Section 178(3) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has remuneration policy in place. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, Key Managerial Personnel (KMP) and senior management personnel and also independence of independent directors;

(b) Aligning the remuneration of directors, KMPs and senior management personnel with the Company''s financial position, remuneration paid by its industry peers etc.;

(c) Performance evaluation of the board, its committees and directors including independent directors;

(d) Ensuring board diversity;

(e) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down;

(f) Directors'' induction and continued training.

The Remuneration Policy is available on the Company''s web-site under the following web-link http://www.exideindustries.com/ investors/governance-policies.aspx

MEETINGS

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other items of business. The Board exhibits strong operational oversight with regular presentation by business heads to the Board. The Board and committee meetings are pre-scheduled and a tentative annual calendar of Board and committee meetings is circulated to the directors well in advance to help them plan their schedule and to ensure meaningful participation at the meetings.

During the year under review four (4) board meetings and six (6) audit committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of constitution of the board and its committees are given in the Corporate Governance report.

COMPLIANCE WITH CODE OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES

All directors and senior management personnel have affirmed compliance with the code of conduct for board of directors and senior executives. A declaration to that effect is attached with 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 Company Secretaries of India on Board Meetings and Annual General Meetings.

LISTING

The equity shares continue to be listed on the BSE Limited (BSE), the National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has paid annual listing fee for the financial year 2018-19 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 the ordinary course of business and on an arm''s length basis. There were no materially significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interests of the Company.

All related party transactions are placed before the audit committee for review and approval. Prior omnibus approval is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and which can be foreseen and accordingly the required disclosures are made to the audit committee on quarterly basis in terms of the omnibus approval of the committee.

The policy on materiality of related party transactions and also on dealing with related party transactions as approved by the audit committee and the board of directors is uploaded on the website under the following web-link http://www. exideindustries.com/investors/governance-policies.aspx.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm''s length basis, there were no material related party transactions 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 OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

There are no significant material orders passed by the regulators/ courts/tribunals which 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 and commitments 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 Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure - VI".

DIRECTOR''S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. That in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

FORWARD LOOKING STATEMENTS

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

Your Directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company''s performance. The directors would also like to thank its customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies and all stakeholders for their co-operation and support to the Company and the confidence reposed on the management.

On behalf of the Board of Directors

Sd/-

(Bharat D Shah)

Place: Mumbai Chairman

Date: 7th May, 2018 DIN: 00136969


Mar 31, 2017

The Board of Directors are pleased to present the 70th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2017.

ECONOMIC ENVIRONMENT

The economic environment for the year 2016-17 was dominated by the single event of demonetisation of larger currency notes in November 2016. While this had certain positives for the battery industry, in that it rang the death knell for the largely illegal and unorganised sector of the economy, it also meant a temporary setback in certain product categories like two wheeler battery.

On the external front several developments took place that will have significant implications for the Indian economy. To be precise, these two external developments are of importance. In the short run, the outlook for global interest rates have changed in the aftermath of the US elections. India’s capital flows and exchange rates would be impacted by US fiscal and monetary policy. Markets are factoring in a regime change in advanced countries, especially US macroeconomic policy, with high expectations of fiscal stimulus and unwavering exit from unconventional monetary policies.

While GDP data for 2016-17 is yet to be out, India is likely to lose the tag of being the fastest growing major economy to China. International Monetary Fund has already downgraded India’s GDP growth forecast from 7.6% announced earlier to 6.6%. However, belying analysts’ growth expectations of the Indian economy grew by 7% in the quarter October-December 2016. Except construction and real estate all the other sectors of the economy grew at a faster clip during this period than earlier.

INDUSTRY STRUCTURE & DEVELOPMENT

The Passenger Vehicle Industry during the year under review grew by about 9% over the previous year. The Commercial Vehicle Division grew by 3% after 12% growth last year. Overall the 3/4 Wheeler market grew by about 5%. The 2-Wheeler Sales grew by around 6%.

COMPANY PERFORMANCE

Automotive Batteries

Sales of automotive batteries registered a double digit growth in volume in the financial year 2016-2017 as compared to the previous year. The aftermarket sales of four wheeler batteries witnessed a substantial growth in units as compared to the previous year. In the two wheelers aftermarket, there was a double digit growth during the financial year 2016-2017. Sale of batteries in the four wheeler OEM division was also considerably higher during the financial year 2016-2017. In the OEM two wheelers, your Company witnessed a growth in volume as compared to that of the previous year.

Inspite of the competitive market conditions, your Company continues to remain the preferred supplier to most of the vehicle manufacturers in the country.

Industrial Batteries

Your Company registered a robust growth in the Industrial division. It has become the preferred choice of majority of OEM’s in the UPS segment because of superior product performance, excellent after sales service and cordial relationship with the customers.

Your Company’s advanced VRLA products have received great response from the telecom customers and the products have been found to be superior in charge acceptance and performance and your Company has made significant inroads in establishing itself as a preferred vendor in the Telecom segment. The Solar division has registered a robust growth and your Company has now forayed in offering the complete package of Modules, Solar Hybrid Inverters and Solar Batteries for the home usage of the customers.

In Motive Power business, your Company continues to be the market leader in the domestic market and has added new Distributors in Spain, Italy and France in the export market.

Industrial R&D shall be shortly launching the Ultra Batteries in Collaboration with East Penn for the Telecom market and Energy Storage and this technology will give substantial competitive advantage to your Company in the coming years.

Submarine

Your Company achieved the highest ever production and supply of submarine batteries in the financial year 2016-17 without adding any additional infrastructure, recording an impressive 38% growth over last year.

During the financial year 2016-17 your Company received the first order from M/s Mazagon Dock Shipbuilders Limited for indigenous battery for the new French Scorpene class submarine inducted into the Indian navy.

In addition to our regular supplies to Indian Navy, two sets of submarine batteries were exported to Admiralty shipyard, Russia during the financial year 2016-17. Your Company is also continuing its efforts to acquire new export customer and expand export business.

Exports

In the fiscal year 2016-17, both Automotive and Industrial have registered substantial growth - primarily through penetrating into new markets and increasing the market shares in the existing markets.

For automotive batteries, during the financial year, your Company was able to increase its reach by entering four wheeler battery markets in Uzbekistan, Indonesia, all GCC (Gulf Cooperation Council) countries and selective African nations including Mozambique and Angola. As a result of such efforts made in exports, there was a double digit growth in sales as compared to the previous financial year.

For industrial batteries, during the year your Company increased its reach by entering into new traction markets in Europe comprising of Spain, Italy and Greece while increasing its market share in Germany, the biggest traction market of Europe. In the Standby segment, the Company made inroads into Chile, Vietnam and Zambia. As a result of such efforts your Company registered robust growth in exports of industrial batteries over the previous financial year.

Technology Upgradation

In order to maintain its leadership position, your Company is continuously focused on upgrading its products and manufacturing technology as well as acquiring new and advanced technology to meet the emerging expectations of the customers. The in-house Research & Development (R & D) Division is recognised by the Department of Scientific and Industrial Research, Government of India, as a fully accredited Research Centre in the field of energy storage. Import substitution of raw materials, reducing energy consumption and manufacturing cycle time reduction are some of the areas where the priorities are highest.

The in-house R&D also plays a major role in providing the interface between the Company priorities and the adoption of collaborators technology. Your Company has ongoing technical collaboration and assistance agreements with East Penn Manufacturing Company Inc, USA, (EPM), a leading US manufacturer of lead acid batteries and related items. A major program on up-gradation in manufacturing systems and introduction of advanced products had been taken up in consultation with EPM engineers and are now at different stages of completion. The introduction of state of the art Punched Grid Technology ensures electrodes with superior corrosion resistance which optimises product consistency and allows for high levels of productivity. Additionally, your Company has a long standing technical cooperation agreement with Hitachi Chemicals Co. (formerly, Shin Kobe Electric Machinery Co.), Japan, for a variety of automotive as well as VRLA industrial range of products. The other ongoing technical cooperation program is with Furukawa Batteries, Japan and it covers some very advanced maintenance free batteries for 4 Wheeler and 2 Wheeler vehicles.

During the year under review, your Company has signed a technology co-operation agreement for the design and manufacture of ‘Lithium Ion’ family of products with Chaowei Group, a large, renowned company of China.

With bulk energy storage being a major priority in the country, your Company has signed two technical collaboration agreements during the year under review: (a) with EPM for Ultra Battery Technology for Stationary Industrial Applications viz., integration of a lead acid battery with an Ultra Capacitor; and (b) with Smart Storage Pty Ltd (ECoult, Australia), a hundred percent subsidiary of EPM, for Technology cooperation and joint marketing agreement for testing and study of energy storage solutions centered on Ultra Battery Technology and indigenisation of Storage Blocks.

HIGHLIGHTS OF PERFORMANCE

Your Company recorded a Net Sales of Rs. 7620.28 crores in 2016-17 as compared to Rs. 6847.65 crores in the previous year with a corresponding profit before tax of Rs. 975.73 crores as compared to Rs. 908.18 crores.

Financial Results

(Rs. in Crores)

2016-17

2015-16

Profit before depreciation, finance cost & tax expenses

1186.36

1067.78

Depreciation and amortisation expenses

206.32

157.93

Finance cost

4.31

1.67

Profit Before Tax

975.73

908.18

Tax expenses

282.09

283.72

Profit After Tax

693.64

624.46

Other Comprehensive Income

1.90

(10.26)

Total Comprehensive Income for the year

695.54

614.20

Balance brought forward

4426.43

4046.62

Making a total of

5121.97

4660.82

Out of this appropriations are :

Final Dividend for 2014-15 (70%)

-

59.50

Final Dividend for 2015-16 (80%)

68.00

-

Tax on Final Dividend

11.69

11.20

Interim Dividend for 2015-16 (160%)

-

136.00

Interim Dividend for 2016-17 (160%)

136.00

-

Tax on Interim Dividend

27.69

27.69

Aggregate Dividend amount paid

243.38

234.39

And leaving a balance of (which is carried forward to next year)

4878.59

4426.43

Your Company has adopted Indian Accounting Standards (“Ind-AS”) as prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, with effect from 1st April, 2016 with the date of transition to Ind-AS as 1st April, 2015. Consequently, General Reserves appearing in the Balance Sheet as at 31st March, 2015, has been subsumed into Retained Earnings with effect from 1st April, 2015.

Effect of Lead Price Movement

Lead and Lead Alloys are the primary materials consumed in the manufacturing of batteries representing more than 70% of total material consumption by value. Your Company procures about 30% of its Lead and Lead Alloys requirement through imports or import parity pricing based on prices quoted on London Metal Exchange (LME). The balance 70% is procured locally at prices which are influenced by demand/ supply situation as well as LME movement.

Your Company procures Lead and Lead Alloys mostly at current prices or on LME averages and there is no long-term contract for pricing. About 30% of your Company’s business with OEM’s as well as institutional customers is having “Lead price variation clause” and thus this portion of the business is protected from lead price volatility. The balance 70% of the Company’s business to retail customers is exposed to lead price volatility the risk of which is reduced to an extent by increasing the usage of recycled lead which is cheaper than pure lead and not directly exposed to LME price movement.

The exposure to currency fluctuations and its impact on Company’s business is significant since about 30% of Lead and Lead Alloys procurement is based on “import parity price”. Further, your Company imports few other materials and capital goods. Exports made by your Company which constitutes about 5% of the Company’s business, acts as an automatic hedge against risks resulting from currency fluctuation.

Your Company as a policy does not enter into commodity hedging or currency hedging. At times forward covers are taken against import liabilities but they are very few and far between.

During FY 2016-2017 the average LME price of pure lead increased by 13% as compared to FY 2015-2016, while the average landed cost of Lead and Lead Alloys, including recycled lead, in 2016-2017 indicates a rise of 10% as compared to the previous financial year.

Consolidated Financial Statements

As required under the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 and in accordance with the Indian Accounting Standards (Ind-AS) 110, consolidated financial statements of the Company and its subsidiaries form part of the Annual Report and are reflected in the consolidated financial statements of the Company. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 160% i.e. Rs. 1.60 per equity share of Re. 1/- each on the equity shares to the shareholders, whose names appeared on the Register of Members on November 05, 2016. Your Directors are now pleased to recommend a final dividend at the rate of 80% i.e. Re. 0.80 per equity share of Re.1/- each for the year ended March 31, 2017, subject to approval of the shareholders at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended March 31, 2017 including the interim dividend paid during the year, amounts to 240% i.e. Rs. 2.40 per equity share of Re.1/- each.

Share Capital

The paid up equity share capital as on March 31, 2017 was Rs. 85 crores, divided into 85,00,00,000 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 financial year 2016-17.

B) Issue of sweat equity shares

The Company did not issue sweat equity shares during the financial year 2016-17.

C) Issue of employee stock options

The Company did not issue stock options during the financial year 2016-17.

D) Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or by trustees for the benefit of employees.

Deposits

During the year under review the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of 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 nos. 6 and 13), guarantees on securities provided (Note no. 38 (ii)) and investments made (Note nos. 4 and 9) by the Company during the year under review, have been disclosed in the financial statements.

Material Changes and Commitments

There have been no material changes which have occurred subsequent to the close of the financial year of the Company to which the financial statements relates and the date of the report, 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.

AUDITORS

Statutory Auditors and their Report

Pursuant to Section 139 of the Companies Act, 2013, S. R. Batliboi & Co. LLP, Chartered Accountants would complete their current term as Statutory Auditors as permitted under the Companies Act, 2013 read with the relevant rules thereof at the conclusion of the ensuing 70th Annual General Meeting of the Company. Accordingly, the Board of Directors has recommended the appointment of B S R & Co. LLP, Chartered Accountants as Statutory Auditors to hold office for a period of five (5) consecutive years from the conclusion of 70th Annual General Meeting till the conclusion of 75th Annual General Meeting, of the Company subject to approval of shareholders.

B S R & Co. LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for appointment as auditors of the Company. As required under Regulation 33(1 )(d) of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Statutory Auditors have not reported any incidence of fraud to the Audit Committee of the Company during the year under review.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (as amended), the cost records maintained by the Company in respect of the products manufactured by the Company are required to be audited. Your Directors, on the recommendation of the Audit Committee has appointed M/s Shome and Banerjee, Cost Accountants to audit the cost records of the Company for the financial year 2017-18 at a remuneration of Rs. 9,00,000/- plus out-of-pocket expenses and taxes as applicable. A resolution regarding ratification of remuneration payable to M/s Shome & Banerjee, Cost Accountants, forms part of the Notice convening the 70th Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s A. K. Labh & Co., Practicing Company Secretaries to undertake audit of secretarial and other related records of the Company for the financial year 2016-2017. The Secretarial Audit Report is annexed herewith as”Annexure - I”. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

BUSINESS RESPONSIBILITY REPORT

The Ministry of Corporate Affairs, Government of India, in July 2011, came out with the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ These guidelines contain certain principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these principles through a structured reporting format, viz. Business Responsibility Report. Pursuant to Regulation 34(2)(f) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has prepared the Business Responsibility Report and is annexed herewith as “Annexure - II”

CORPORATE GOVERNANCE

Transparency is the cornerstone of your Company’s philosophy and all requirements of corporate governance are adhered to both in letter and spirit. All the committees of the Board of Directors have held meetings at regular intervals as required in terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory requirements. The Directors and key management personnel and senior executives of your Company have complied with the approved ‘Code of Ethics for Board of Directors and Senior Executives’ of the Company. The declaration to this effect pursuant to Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 signed by Managing Director and CEO of the Company forms part of the Annual Report.

The Report on Corporate Governance as required under Regulation 34(3) read along with Schedule V of the Securities and Exchange Board of India (Listing Obligations and 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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

BUSINESS EXCELLENCE

Your Company has a well-designed TQM model to drive the organisation towards continual improvement in order to deliver high-quality products and services to customers. The TQM model is aimed at developing TQM culture for long-term success through customer satisfaction. All members of the organisation participate in improving processes, products, services aligned with the business needs.

The TQM initiatives deployed in your Company at present are: 5S, Kaizen, Quality Circle, Suggestion, TPM, Six Sigma and implementation of International Standards. The organisational learning and development is one of the key focus areas during the financial year. Over 65 training programs covering 1272 people across the organisation have been trained on various TQM modules during the financial year. There is structured monitoring and measurement system in your Company that flashes the monthly report on various TQM Performance metrics for each initiative.

Quality Circle is an effective approach to voluntarily involve people in continuous improvement journey. The QC projects are aligned to the business strategy to achieve the business goals and produce tangible and intangible benefits through involvement of workmen. This initiative is deployed in all the factories and extended supply chain. Workmen participation during the financial year was achieved at 47% in this initiative and 164 QC projects have been completed. There is mechanism to evaluate and recognise the projects in Exide Regional Conferences which were conducted at Kolkata, Delhi and Pune. These conferences are learning and sharing platform for factories and suppliers.

The QC teams regularly participate in external competitions organised by QCFI as well as internal competitions organised by your Company. During the year, a total of 99 Quality Circle awards have been received by the QC teams.

Implementation of best practices and promoting competitive capability of the organisation is one of the important areas your Company focused during the year and committed to excel in the years ahead. The excellence in areas of supply chain, operation, sustainability, quality, innovation, corporate governance etc. were assessed by external organising bodies like CII, Institute of Directors, JIPM, ACFI, Greentech etc. Your Company received 112 Awards in various categories during the financial year.

Your Company is committed to develop robust TPM culture across the organisation. All manufacturing units have TPM practice, though maturity level varies from factory to factory. There is a road map for each factory to take to the next level. JIPM regularly monitors and assesses the maturity of TPM practices. Hosur factory has been awarded for Excellence in Consistent TPM Commitment in March 2017 by JIPM, Japan. The TPM initiative has been extended to upstream partners to build their manufacturing competitiveness and increase their operating performance.

A new TQM ranking assessment system has been introduced for transparent rating and evaluation with an intense focus to regularly monitor and measure the various TQM initiatives practiced in the factories. It helped in identifying the gaps and improving the system and process along with cross functional learning. This ranking system has been institutionalised for building competitiveness among factories and flow of best practices from one factory to other. The audit is conducted quarterly and factories are ranked depending on the results of audit.

In order to meet the compliance with ISO/IEC 17025:2005 (International standard) and continually improve the effectiveness of the management systems, laboratory quality policy has been framed and the same is being deployed across the organisation. R & D Centre Laboratory has achieved accreditation to ACCAB for ISO/IEC 17025 Standard in March 2017. Laboratories at Haldia and Hosur are in process of accreditation. Your Company has planned to have 100% accreditation for ISO/IEC 17025 Standard by next financial year.

OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT

Your Company has effectively deployed the policies on occupational health, safety and environment in all factories. During the year EHS (Environment, Health and Safety) standards have been implemented and certified in Ahmednagar factory.

Your Company has a well designed EHS policy. Your Company utilises natural and man-made resources in an optimal and responsible manner and ensure the sustainability of resources by reducing, re-using, recycling and managing waste. Your Company regularly monitors and prevents pollution through waste minimisation at the source, recovery / treatment of emissions and releases and conservation of energy. Thus, it has helped in progressively improving environment, occupational health and the overall carbon footprint.

Your Company has established, implemented and maintained a procedure for the ongoing identification of hazards, assessment of their risk and determining the necessary controls. Safety audits, hazard evaluation, emergency management planning is conducted periodically in the factories.

Your Company’s employees as well as the upstream partners are being regularly trained and awareness programmes are conducted to ensure that health and safety risks are minimised for the employees and contract workers. National Safety Day is celebrated annually by your Company. Various training and awareness programs based on safety are conducted in the week.

The maturity level of Occupational Health, Safety and Environment system are assessed by different external certification bodies. During the financial year 2016-2017, your Company has been awarded with:

- Annual Greentech Gold Award in Safety Category for Hosur factory;

- Annual Greentech Silver Award in Safety Category for Ahmednagar factory; and

- Annual Greentech Silver Award in Safety Category for Taloja factory.

Your Company is transparent about the sustainability challenges. Identifying which economic, environmental and social issues are most important for the business, environment and stakeholders is most important. The sustainability efforts include reduction of pollution, waste elimination, effective utilisation and recycling of existing natural resources (like as water, oil, gas, metal) and energy saving. Your Company complies with applicable legal, statutory, regulatory, customer specific and other requirements related to the environmental aspects, occupational health and safety. Your Company has always focused on the sustainability of its upstream partners for business sustainability. Several vendor sustainability programs have been conducted in all the regions involving almost all the critical vendors. Periodic training on risk assessment, environment, health and safety and quality have been provided to them for sustainability of their business. In view of driving sustainability in vendors, supply chain assessment was done by CII in 2016. Your Company was awarded the CII-ITC Award 2016 for commendable achievement in SCM Sustainability.

CORPORATE SOCIAL RESPONSIBILITY

Your Company always seeks ways to make a positive impact on the society at large through various CSR activities. Environment, basic education, health, women empowerment and community development have been the main pillars of your Company’s CSR philosophy, even before the passing of the Companies Act, 2013.

The Board of Directors of your Company has approved a Corporate Social Responsibility (CSR) Policy namely “EIL CSR Policy” in accordance with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 notified by the Ministry of Corporate Affairs, Government of India, which is available at http://www. exideindustries.com/investors/governance-policies.aspx.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed hereto as (“Annexure - IV”).

During the year, the Company has made significant strides in accomplishing social outcomes and impacts in the immediate and greater community at large at the national level. These were achieved by investing considerable amount of resources and efforts in laying down a strong foundation for CSR project planning, identification, implementation, monitoring and evaluation mechanism. The Company has also put in place institutional arrangements for further expansion to newer geographical locations. Preference was given to allocate and spend higher amount on activities pertaining to local area and areas around the Company’s factories.

As part of its CSR initiatives in 2016 - 2017, the Company has spent (including committed to spent) INR 1394 lakhs, which is significantly higher as compared to the previous year’s CSR spend. The projects undertaken by the Company includes in the areas of education, health, safe drinking water, sanitation, women empowerment and livelihood generation, rural development, eradication of hunger, poverty and malnutrition etc. These projects were mainly executed directly or in association with some renowned and local partner organisations, around our operations in West Bengal, Maharashtra, Tamil Nadu, Uttarakhand, and Haryana. In addition to these national level CSR investments we have contributed to the Prime Minister’s National Relief Fund and Swachh Bharat Kosh. The WASH project with Unicef covers different districts in West Bengal, Assam and Bihar.

Some of the projects identified by the Company which were engaged in social activities aligned with the Company’s CSR Policy, could not materialise due to procedural delays in getting requisite approvals. As a result of this, there was a shortfall in the total CSR spent from its total obligations of at least 2% of the average net profits (before tax) made during the three immediately preceding financial years.

The social initiatives taken by the Company will certainly help in impacting the larger community in a sustainable manner over a period of time. The Company plans to rapidly scale up in utilising its full CSR budget in the coming financial years. The Company remains committed to the cause of CSR and will take necessary steps to fulfill its CSR obligations during the coming financial years.

DIRECTORS

At its meeting held on 18th July, 2016, your Board appointed Mr. Bharat D Shah as the Chairman of the Board of Directors.

During the year Mr. Rajesh G. Kapadia, Non-Executive Independent Director expired on 22nd October, 2016. Your directors wish to record their deep regret on the untimely demise of Mr. Kapadia and also wish to place on record their sincere appreciation for the guidance provided by Mr. Kapadia during his tenure as a member of the Board and as Chairman of the Company. In his death, your Company has lost a visionary leader who has made an immense contribution towards the growth and development of your Company over a period spanning two decades.

Mr. Nadeem Kazim, Director - HR & Personnel resigned w.e.f. 28th November, 2016. Your Directors placed on record their sincere appreciation and gratitude towards valuable services rendered by Mr. Kazim during his tenure as a Whole-time Director of the Company.

Mr. R. B. Raheja, Non-Executive Director and Mr. Subir Chakraborty, Director - Automotive, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Necessary information pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of Directors to be re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting scheduled to be held on 27th July, 2017.

None of the Directors of your Company are disqualified for being appointed as Directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

KEY MANAGERIAL PERSONNEL

During the year, Mr. Nadeem Kazim, Whole-time Director designated Director-HR & Personnel resigned w.e.f. 28th November, 2016 and the following directors/executives continued as Key Managerial Personnel of the Company:

Mr. Gautam Chatterjee, Managing Director & CEO Mr. A. K. Mukherjee, Director - Finance & CFO Mr. Subir Chakraborty, Director - Automotive Mr. Arun Mittal, Director - Industrial Mr. Jitendra Kumar, Company Secretary & Sr. Vice President - Legal

DECLARATION OF INDEPENDENCE

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, Chairman and the Non-Independent Directors was carried out by the Independent Directors. This exercise was carried out in accordance with the 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 the evaluation of the working of its committees and individual Directors, including Chairman of the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. The evaluation process was reviewed in the light of the guidance note issued by the Securities and Exchange Board of India on Board evaluation dated January 5, 2017 and aligned in accordance with the requirements specified therein.

While evaluating the performance and effectiveness of the Board, various aspects of the Board’s functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Company’s long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration. Committee performance was evaluated on the basis of their effectiveness in carrying out respective mandates, composition, effectiveness of the committees, structure of the committees and meetings, independence of the committee from the Board, contribution to decisions of the Board. A separate exercise was carried out to evaluate the performance of Independent Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution to Board deliberations, independence of judgement, safeguarding the interest of the Company and focus on creation of shareholders value, ability to guide the Company in key matters, attendance at meetings etc.

The Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

In accordance with the provisions of Section 178(3) of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has remuneration policy in place. The objectives and key features of this Policy are:

(a) Formulation of the criteria for determining qualifications, positive attributes of directors, Key Managerial Personnel (KMP) and senior management personnel and also independence of Independent Directors;

(b) Aligning the remuneration of Directors, KMPs and senior management personnel with the Company’s financial position, remuneration paid by its industry peers etc.;

(c) Performance evaluation of the Board, its committees and Directors including Independent Directors;

(d) Ensuring Board diversity;

(e) Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down; and

(f) Directors’ induction and continued training.

The Remuneration Policy is available on the Company’s website under the following web-link http://www.exideindustries. com/investors/governance-policies.aspx.

MEETINGS

During the year under review four (4) board meetings and six (6) audit committee meetings were convened and held, the details of which are given in the Corporate Governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

The details of constitution of the Board and its committees are given in the Corporate Governance report.

COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES

All Directors and senior management personnel have affirmed compliance with the code of ethics for Board of Directors and senior executives. A declaration to that effect is attached with the Corporate Governance report.

RISK MANAGEMENT POLICY

In accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company are responsible for framing, implementing and monitoring the risk management plans of the Company. The Company has a “Risk Management Policy” to identify risks associated with the Company, assess its impact and take appropriate corrective steps to minimise the risks which may threaten the existence of the Company.

In your Company’s endeavor to become global power house, it is exposed to certain risks that may adversely affect its ability to service customer, achieve objective and protect assets. The risk management policy of the Company has been reviewed and revised in September, 2016. The policy stresses on exploring the new opportunities, strengthening corporate governance while achieving the business objectives.

The Policy also stresses on optimisation of risk situations, sharing the experience on dealing with risks, allocation of necessary resources for mitigation of risks and effective working of risk management system. In line with the policy, the procedure has also been revised and implemented across the organisation.

The corporate risk register of the organisation is reviewed by audit committee and Board to ensure adequacy of mitigating actions. Risk management framework of your Company is well grounded. It involves the executives across the organisation and promotes risk evaluation as an integral part of decision making.

The Risk Management Policy is available on the Company’s web-site under the following web-link http://www. exideindustries.com/investors/governance-policies.aspx.

LISTING

The equity shares continue to be listed on the BSE Limited (BSE), the National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has paid annual listing fees for the financial year 2017-18.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions those were entered during the financial year were in the ordinary course of business and on an arm’s length basis. There were no materially significant related party transactions entered into by the Company with promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interest of the Company.

All related party transactions are placed before the audit committee for review and approval. Prior omnibus approval is also obtained from the audit committee for the related party transactions which are of repetitive nature and which can be foreseen and accordingly the required disclosures are made to the audit committee on quarterly basis in terms of the omnibus approval of the committee.

The policy on materiality of related party transactions and also on dealing with related party transactions as approved by the audit committee and the Board of Directors is uploaded on the web-site under the following web-link http://www. exideindustries.com/investors/governance-policies.aspx.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis and there were no material related party transactions during the year, Form AOC - 2 is not applicable to the Company.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no significant material orders passed by the regulators/courts/tribunals which 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 and commitments 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 Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure - VI”

HUMAN RESOURCES

Your Company believes in engaging human resources as they are the key differentiator for the success of the organisation. Keeping the employees engaged and committed can go a long way in attainment of objectives and ensuring sustained business performance. In line with this, your Company has initiated several interventions that will enhance the engagement of the employees. Your Company has established systems which promote transparency and bring objectivity in people practices. Being a people centric organisation, your Company recognises the significance of building next generation leadership by developing internal talent to meet the organisational objectives. Through this, the human resources function continues to align its strategic interventions and processes, while simultaneously addressing the needs of multiple stakeholders and maintaining a competitive employee cost. Your Company has a robust talent acquisition process and continues to invest in people development activities to keep them attuned with the dynamic business requirements. This is practiced by retaining and developing talent through appropriate platforms and performance management process.

Your Company continues to have cordial and harmonious industrial relations across all the manufacturing units. During the year under review, long term agreements were signed with the Trade Union at Chinchwad Plant.

The total number of employees of the Company as on March 31, 2017 stood at 5157.

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 of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees particulars which are available for inspection by the Members at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy thereof, may write to the Company Secretary. Further, we confirm that there was no employee employed throughout the financial year or part thereof, who was in receipt of remuneration in the financial year which, in the aggregate, is in excess of that drawn by the Managing Director and Whole-time Directors and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

Particulars of employees pursuant to Section 134(3)(q) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and marked as (“Annexure - VII”).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition & redressal of sexual harassment at workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules thereunder. The Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability etc. Your Company has constituted Internal Complaints Committees (ICC). The Company has designated the external independent member as a Chairperson of the Committee. During the year, no complaints with allegations of sexual harassment were filed with the Company.

DIRECTOR’S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. That in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

FORWARD LOOKING STATEMENTS

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

ACKNOWLEDGEMENT

Your Directors would like to place on record their appreciation to employees at all levels for their contribution to the Company’s performance. The Directors would also like to thank its customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies and all stakeholders for the cooperation and support given by them to the Company and the confidence and trust reposed by them in the management.

On behalf of the Board of Directors

Sd/-

(Bharat D. Shah)

Place: Mumbai Chairman

Date: 4th May, 2017 DIN: 00136969


Mar 31, 2015

Dear Members,

The Board of Directors are pleased to present the 68th Annual Report of the Company together with Audited Accounts for the year ended March 31, 2015.

HIGHLIGHTS OF PERFORMANCE

Your Company recorded a Net Sales of Rs. 6,874.21 Crores in 2014-15 as compared to Rs. 5,964.24 Crores in the previous year with a corresponding profit before tax of Rs. 798.49 Crores as compared to Rs. 723.08 Crores.

Financial Results

Rs. Crores

2014-15 2013-14

Profit before depreciation, finance 939.68 849.87 cost & tax expenses

Depreciation and amortisation 139.52 125.60 expenses

Finance Cost 1.67 1.19

Profit Before Tax 798.49 723.08

Tax expenses 252.62 236.00

Profit After Tax 545.87 487.08

Balance brought forward 1,779.86 1,520.99

Making a total of 2,325.73 2,008.07

Out of this appropriations are :

General Reserve 20.00 50.00

Leaving a balance of 2,305.73 1,958.07

Interim Dividend (150%) 127.50 93.50 (Previous year - 110%)

Tax on Interim Dividend 21.67 15.89

Proposed Final Dividend (70%) 59.50 59.50 (Previous Year - 70%)

Tax on Final Dividend 11.40 9.32 (Aggregate Dividend amounts to 220% (previous year - 180%)

And leaving a balance of (which is 2,085.66 1,779.86 carried forward to next year)

The Company proposed to transfer an amount of Rs. 20 Crores to the General Reserve.

Consolidated Financial Statements

In accordance with Accounting Standard 21- Consolidated Financial Statements form part of the Annual Report & Accounts. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 150% i.e. @ Rs. 1.50 per equity share of Re. 1 each (Previous Year 110%) on the equity shares to the shareholders, whose names appeared on the Register of Members on August 28, 2014. Your Directors are now pleased to recommend a final dividend at the rate of 70% i.e. Re. 0.70 per equity share of Re. 1 each (Previous year 70%) for the year ended March 31, 2015, subject to approval of the members at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended March 31, 2015 including the interim dividend paid during the year, amounts to 220% i.e. Rs. 2.20 per equity share of Re. 1/- each (Previous year 180%).

During the year, the unclaimed dividend of Rs. 20,22,107 pertaining to the final dividend of financial year ended March 31, 2007 were transferred to Investor Education and Protection Fund of Government of India. The details including last date of claiming of unclaimed / unpaid dividend amount are given at the end of the Notice of the Annual General Meeting.

SHARE CAPITAL

The paid up equity share capital as on March 31, 2015 was Rs. 85 Crores, divided into 850,000,000 equity share 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 financial year 2014-15.

B) Issue of sweat equity shares

The Company did not issue sweat equity shares during the financial year 2014-15.

C) Issue of employee stock options

The Company did not issue stock options during the financial year 2014-15.

D) Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees

The Company does not have a scheme for purchase of its own shares by employees or by trustees for the benefit of employees.

DEPOSITS

During the year under review, the Company did not accept any deposits from the public within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of 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 nos. 14 and 20), guarantees on securities provided (Note no. 38) and investments made (Note nos. 13 and 16) by the Company during the year, have been disclosed in the financial statements.

MATERIAL CHANGES AND COMMITMENTS

There has been no material changes which have occurred subsequent to the close of the financial year of the Company to which the Balance Sheet relates and the date of the report, for example:

- Settlement of tax liabilities;

- Operation of patent rights;

- Depression in market value of investments;

- Institution of cases by or against the Company;

- Sale or purchase of capital assets;

- 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.

AUDITORS

Statutory Auditors and their Report

M/s S R Batliboi & Co LLP, Chartered Accountants, who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Your Directors wish to clarify that the Statutory Auditors' have made an observation in point no (xii) of the Annexure referred to in paragraph 1 of the section on "Report on other legal and regulatory requirements" under the Companies (Auditors' Report) Order 2015 ('CARO') regarding misappropriation of physical stock of batteries in the warehouse amounting to Rs. 1.52 Crores by two carrying and forwarding agents of the Company during the financial year ended March 31, 2015. As explained in their observation, the Company has terminated the services of the agents and has also filed legal cases against them. The cost of inventory shortage has also been provided for fully in the books.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company in respect of the products manufactured by the Company is required to be audited. Your Directors, on the recommendation of the Audit Committee has appointed M/s Shome & Banerjee, Cost Accountants to audit the cost records of the Company for the financial year 2015-16 at a remuneration of Rs. 9,00,000/- plus out- of pocket expenses and taxes as applicable. A resolution regarding ratification of remuneration payable to M/s Shome & Banerjee, Cost Accountants, forms part of the Notice convening the 68th Annual General Meeting of the Company.

Secretarial Auditors & their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s S M Gupta & Co., Company Secretaries to undertake audit of secretarial and other related records of the Company. The draft Secretarial Audit Report is annexed herewith as "Annexure-N". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

BUSINESS RESPONSIBILITY REPORT

The Ministry of Corporate Affairs, Government of India has issued the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business'. These Guidelines contain certain Principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these Principles through a structured reporting format, viz. Business Responsibility Report. Pursuant to the Listing Agreement your Company is required to include a Business Responsibility Report as part of the Annual Report and accordingly such Report is Annexed herewith maked as "Annexure - III".

CORPORATE GOVERNANCE

Transparency is the cornerstone of your Company's philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. All the Committees of the Board of Directors meet at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key managerial personnel of your Company have complied with the approved 'Code of Ethics for Board of Directors and Senior Executives' of the Company.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed herewith marked as "Annexure - IV". The Auditors' Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further as required under Clause 49(IX) of the Listing Agreement a certificate from the Managing Director & CEO and Director-Finance & CFO is being annexed with this Report.

BUSINESS EXCELLENCE

Your Company has implemented TQM model aimed at developing TQM culture to continuously improve and sustain the business performance. The initiatives include 5S, Kaizen, Quality Circle, Suggestion Box, TPM, Six Sigma. Most of these TQM initiatives are matured, and stands at global standards. In order to transform the Company's vision into reality, the initiatives are being implemented as per 3 years TQM plan, with clearly defined milestones, means & mechanisms.

Your company has been recognised by CII, QCFI & Customers for effective deployment of Quality Circle initiatives. 72 Quality Circle Teams have been recognised, including 17 teams in Par Excellence category.

During 2014-15, TPM initiative was launched in Ahmednagar plant and kicked off in Shamnagar plant. With this, initiative has been penetrated to all battery plants in India. Hosur and Taloja plants have matured this initiative and are undergoing JIPM Japan assessment for Excellence in Consistent TPM Commitment Award 2015. The competitive strength of your company in areas of operational excellence was recognised by Manufacturing Today & CII. Taloja plant received the excellence in operation award by Manufacturing Today in September 2014 and Hosur plant received CII Office TPM Award during December, 2014.

OCCUPATIONAL HEALTH, SAFETY & ENVIRONMENT

Your Company has effectively deployed the occupational health, safety and environment management policies, in line with core value of being recognised as a responsible corporate citizen.

The maturity level of occupational health, safety and environment system are audited by external certification bodies (TUV Nord for OHSAS 18001 Certifications) and Global Entities JIPM TPM (SHE Pillar Audit). During 2014- 15 focus has been given to mature the organisational understanding at operator's level, on hazards, associated risks and improvement of control through regular internal workshops, participation in external seminars and trainings. All dimensions of control - PPE, Administrative, Engineering, substitution, and elimination have been leveraged to deliver safe and healthy work environment in factories. Medical surveillance plan, work permit system, monitoring & measurement, inspection of safety equipments and emergency preparedness have been made robust and competent to successfully deliver the Occupational Health & Safety Performance.

Your Company's occupational health and safety management systems have been recognised by several external bodies. Some of the awards received during 2014- 15 include, Arogya Healthy Workplace Award (November 2014), Tamil Nadu State Safety Award (November 2014) and Annual Greentech Safety Silver Award (September, 2014). Your Company has been recognised for its competitive capabilities on environment management system by Greentech Environment Award 2015.

CORPORATE SOCIAL RESPONSIBILITY

Your Company always seeks ways to make a positive impact on the society at large through various CSR activities. Environment, basic education, health, women's empowerment and community development continues to remain the main pillars of your Company's CSR philosophy, even before the passing of the Companies Act, 2013.

The Board of Directors of your Company has approved a Corporate Social Responsibility (CSR) Policy namely "EIL CSR Policy" in accordance with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 notified by the Ministry of Corporate Affairs, Government of India. The broad objective of this Policy is inter-alia to:

- increasingly contribute to activities that are beneficial to the society and the community at large;

- establish mechanism for undertaking the CSR activities;

- engage with the Company's key stakeholders in matters related to CSR activities; and

- align the CSR activities undertaken by the Company with the applicable laws.

As part of its CSR initiatives, the Company has undertaken projects in the areas of education, livelihood, health, water and sanitation. It has also made contributions to the Marrow Donor Registry (India), Prime Minister's National Relief Fund and Swachh Bharat Kosh. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed hereto as ("Annexure - V").

Being the first year of implementation of CSR as mandated under the provisions of the Companies Act, 2013, the Company has been judicious to choose the activities which need to be undertaken for its CSR activities and also to identify the areas. During the year, the Company has received applications from few organisations, who are engaged in social activities which are aligned with the Company's CSR Policy, requesting the Company to make appropriate contributions. However, due to certain procedural delays in getting the requisite approval at their end, the Company could not make its contribution during the year and therefore there was a shortfall in the total amount spent on CSR activities from its total obligations of atleast 2% of the average net profits made during the three immediately preceding financial years.

The Company is however committed to the cause of CSR and will take necessary steps to fulfill its CSR obligations during the coming financial years.

EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form No. MGT - 9 (Attached as "Annexure - VI") forms part of the Board's report.

DIRECTORS

Mr S B Raheja, who was a Director of your Company resigned from the Board of Directors with effect from May 27, 2014 due to personal reasons. Your Board records its deep appreciation for the services rendered by Mr Raheja as a Director of the Company. Mr Deepak Parekh, Director also stepped down from the Board of Directors since he was alternate to Mr S B Raheja. Your Board records its deep appreciation for the services rendered by Mr Parekh as an Alternate Director of the Company.

At its Meeting held on April 30, 2015, your Board appointed Mr Bharat D h i raj Lai Shah as an Additional Director to hold office till conclusion of the ensuing Annual General Meeting of the Company. The Company has received a Notice as per the provisions of Section 160(1) of the Companies Act, 2013, from a Member proposing the appointment of Mr Bharat Dhirajlal Shah. The Company has received a confirmation from Mr Bharat Dhirajlal Shah stating that he meets the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and in the opinion of your Board he is a person of integrity and posses relevant expertise and experience for being appointed as Independent Director.

Mr R B Raheja, Director, retires by rotation and being eligible offers himself for re-appointment.

None of the Directors of your Company are disqualified for being appointed as Directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Mr Supriya Coomer, Company Secretary and Compliance Officer resigned from the services of the Company at the close of business on March 31, 2015. Mr Jitendra Kumar

Mohanlal has been appointed as the Company Secretary and Compliance Officer of the Company on April 30, 2015.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an Annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration which includes criteria for performance evaluation of non-executive and executive directors. The Remuneration Policy of the Company is annexed herewith marked as "Annexure VII".

MEETINGS

During the year under review six Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The details of constitution of the Board and its Committees are given in the Corporate Governance Report.

COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES

All Directors and Senior Management Personnel have affirmed Compliance with the Code of Ethics for Board of Directors and Senior Executives. A Declaration to that effect is attached with the Corporate Governance Report.

RISK MANAGEMENT POLICY

In accordance with Clause 49 of the Listing Agreement the Board of Directors of the Company are responsible for framing, implementing and monitoring the Risk Management plans of the Company. The Company has a defined "Risk Management Policy" and the same has been approved by the Board of Directors of the Company.

The Risk Management Policy is available on the Company's web-site under the following web-link http://www. exideindustries.com/corporate/about-us/our-policies

LISTING

The equity shares continue to be listed on the BSE Limited (BSE), the National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company has paid annual listing fee for the financial year 2015-16 to BSE, NSE and CSE.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered during the financial year were in the ordinary course of business and on an arm's length basis. There were no materially significant related party transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval is also obtained from the Audit Committee for the related party transactions which are of repetitive nature which can be foreseen and accordingly the required disclosures are made to the Audit Committee on quarterly basis in terms of the approval of the Committee.

The policy on materiality of related party transactions and also on dealing with related party transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website under the following web-link http://www. exideindustries.com/corporate/about-us/our-policies.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm's length basis, Form AOC - 2 is not applicable to the Company.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant material orders passed by the Regulators/Courts which would impact the Going Concern status of the Company and its future Operations.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Clause (m) of Sub-Section (3) of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure I".

HUMAN RESOURCES

Your Company recognises that nurturing and development of Human Capital is of key importance and the HR policies are geared to attain these objectives. The processes for attracting, retaining and rewarding talent are well laid down and the systems are transparent to identify and reward performance. Training interventions are made on a regular basis at all levels and exercises such as Skill Gap Analysis are carried out. Succession planning and talent management continues to receive priority.

Industrial relations at all units remained cordial. During the year under review long term agreement was signed with the Trade Union at Ahmednagar plant.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to Members and others entitled thereto, excluding the information on employees particulars which are available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. Further, we confirm that there was no employee employed throughout the financial year or part thereof, who was in receipt of remuneration in the financial year which, in the aggregate, is in excess of that drawn by the Managing Director and Whole-time Directors and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company. Particulars of employees pursuant to Section 134(3)(Q) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules 2014 is annexed hereto and marked as "Annexure VIII".

DIRECTOR'S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. That in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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; and

e. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the Board of Directors

Place: Mumbai R. G. Kapadia

Date : April 30, 2015 Chairman


Mar 31, 2014

The Board of Directors are pleased to present the 67th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2014.

Financial Results

2013-2014 2012-2013

Profit before depreciation & tax expenses 848.68 855.76

Depreciation and amortisation expenses 125.60 113.48

Profit before tax 723.08 742.28

Tax expenses 236.00 219.50

Profit after tax 487.08 522.78

Balance brought forward 1520.99 1208.75

Making a total of 2008.07 1731.53

Out of this appropriations are:

General Reserve 50.00 55.00

Leaving a balance of 1958.07 1676.53

Interim Dividend (110%)

(Previous year-100%) 93.50 85.00

Tax on Interim Dividend 15.89 13.79

Proposed Final Dividend (70%)

(Previous year-60%) 59.50 51.00

Tax on Final Dividend

[Aggregate Dividend amounts to 180% (Previous year-160%)] 9.32 5.75

And leaving a balance of (which is carried forward to next year) 1779.86 1520.99

Consolidated Financial Statements

In accordance with Accounting Standard 21- Consolidated Financial Statements form part of the Annual Report & Accounts. These statements have been prepared on the basis of audited financial statements received from the subsidiary companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 110%, i.e. @Rs 1.10 per equity share of Re.l each (Previous Year 100%) on the equity shares to the shareholders, whose names appeared on the Register of Members on 12th November, 2013. Your Directors are now pleased to recommend a final dividend at the rate of 70%, i.e. Re.0.70 per equity share of Re.l each (Previous year 60%) for the year ended 31st March, 2014, subject to your approval at the ensuring Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2014, including the interim dividend paid during the year, amounts to 180%, i.e. Rs.1.80 per equity share of Re.l/- each (Previous year 160%).

Corporate Governance

Transparency is the cornerstone of your Company''s philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. The Audit Committee of the Board of Directors meets at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors have taken all necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key management personnel of your Company have complied with the Code of Conduct which was approved by the Board of Directors.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed to this Report. The Auditors'' Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further, as required under Clause 49 (V) of the Listing Agreement, a certificate from the CEO and CFO is being annexed with this Report.

Business Responsibility Report

The Ministry of Corporate Affairs, Government of India has issued the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business''. These Guidelines contain certain Principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these Principles through a structured reporting format, viz. Business Responsibility Report, has been specified. Pursuant to the Listing Agreement your Company is required to include a Business Responsibility Report as part of the Annual Report and accordingly such Report is annexed to and forms part of this Annual Report.

Business Operational Excellence

Stretching over one and a half decade, the TQM system has been continuously improved and upgraded to fulfill the stringent and changing requirements of customers, as well as to meet the strategic challenges of the business. International standards of Quality, Environment, Occupational Health & Safety; the latest techniques of Total Productive Maintenance (TPM), Lean Manufacturing, 6- Sigma and various problem solving tools constitute the TQM framework for your Company''s endeavour towards Business Excellence.

The sophisticated techniques of Advanced Product Quality Planning (APQP), Failure Mode & Effect Analysis (FMEA), Statistical Process Control (SPC), Measurement System Analysis (MSA), Process Capability Studies, Poka Yoke (mistake-proofing) and cut-open analysis of products are used to ensure adherence to specifications, continuous monitoring and measurement, and minimal scrap / rework, aimed towards maximizing customer satisfaction and efficient use of resources.

With respect to the Quality Management System (QMS), the Automotive SBU is certified to ISO/TS-16949:2009 and the Industrial SBU and Submarine SBU to ISO 9001:2008. The certifications awarded, after rigorous auditing by the renowned Certification Body TUV- Nord (headquartered in Germany), including all business processes of Corporate, R&D,

Manufacturing, Marketing, Sales and After- Sales-Service.

Keeping up the momentum and carrying the tradition forward, Haldia plant has won the Award for Most Significant Improvement in TQM from Cll in 2011 and Productivity Award from Cll for 2013-14. As a mark of recognition your Company has won several awards and accolades during the last few years from valued customers like Toyota, Tata Motors, Bajaj, Suzuki, Mahindra & Mahindra - to name a few. Your Company has also won acclaim and recognition award for Design & Development from Maruti Suzuki in 2013-14. In recognition for its efforts towards other stakeholders, the Chinchwad plant in 2013 has won the Renault Special Prize for Coordination of Supplier Forum and also Quality Award for PPM achievement from John Deere in 2013. The QC teams from Shamnagar, Haldia and Hosur plants have been regularly winning awards and prizes at state and national levels from Quality Circle Forum of India and Cll.

Our concept of Excellence extends to improvements in efficiency and effective utilisation of plant and equipment. Towards this important objective, your Company has implemented Total Productive Maintenance (TPM) in the factories. The best methodology as defined by the Japanese Institute of Plant Maintenance (JIPM) is being followed. In recognition of its efforts in TPM, the JIPM has conferred the "Award of TPM Excellence" to Haldia plant in 2008, to Hosur and Chinchwad plants in 2010 and to Taloja plant in 2011. The Shamnagar and Bawal plants are expected to achieve it in the near future. Efforts are on to reach higher levels of achievement.

Environment and Safety

In line with its core value of being recognized as a responsible corporate citizen, an effective Environment Management System (EMS) has been designed and implemented in your Company. The Shamnagar, Haldia, Hosur, Taloja, Chinchwad and Bawal plants are certified to ISO 14001:2004. Rigorous surveillance audits by TUV-Nord has proved that your Company not only fulfills all applicable statutory and regulatory environmental norms, but has also continuously improved its environmental performance over the years.

Keeping in line with global expectations and stakeholder interests, the Environmental Policy has been revised in March 2014 to make it more stringent and forward looking towards sustainability. Optimal utilization of resources, minimization of waste, prevention of pollution and minimizing the adverse impact of activities, products and services continue to be fundamentals of the Environmental Policy, while new dimensions have been added like, reducing carbon footprint, promotion of energy efficiency and introduction of environment friendly technologies. Your Company''s commitment extends to supporting other stakeholders in the value chain.

As part of the QMS and EMS, various improvement projects are undertaken to improve quality, conserve energy and reduce cost and any adverse environmental impacts. The Hosur plant has obtained "3- Star"ratingin E-H-S from Cll for 2013.

The issue of Occupational Health & Safety (OH&S) of employees continue to be a focus area in your Company. We not only comply to all applicable legal and other OH&S requirements but also ensure that all operations, processes and activities are aimed towards prevention of injury and ill health. This commitment is demonstrated through the implementation of the OHSAS 18001:2007 international standard in the factories. The Hosur and Taloja plants have been certified, and other plants are expected to be so in the near future.

Corporate Social Responsibility

Your Company''s well entrenched CSR philosophy recognizes the following areas as the thrust areas for its activities - Environment, Healthcare, Basic Education, Women''s Empowerment and Community Development.

Your Company''s factories in the far flung areas of the country develop and execute their own annual agenda for CSR work in the immediate vicinity. Within the broader framework of your Company''s CSR policy, individual factories develop their own annual plan of action based on their interactions with the local community leaders and execute them throughout the year.

These activities typically involve running health camps in villages, helping the local community develop their social infrastructure like schools, health centers or village roads, planting of trees in environmentally sensitive areas to check soil erosion, flood relief work etc.

At a national level your Company''s works with the noted international body of UNICEF to improve the health and environment of children in rural India under its WASH (Water, Sanitation and Health) program. The association has been working successfully since 2009 whereby a fixed amount is donated to the global body for every used battery that is returned to the Company us by the customers. This serves several socially desirable purposes. On the one hand it encourages customers to return used batteries that are recycled in an environment friendly manner, on the other it also generates funds for health and sanitation work in rural India where safe sanitation projects are undertaken by UNICEF. Through this activity your Company''s customers also feel integrated into the overall CSR activities of your Company by being an active participant in the effort.

The national activity through UNICEF is supplemented by other local activities through reputed NGOs. In Kolkata, near your Company''s headquarter, in active collaboration with the reputed NGO, CINI- Asha, basic education of some 150 slum children in the age group of two to six years is being provided on a sustained basis.

Internal Controls

Your Company has proper and adequate system of internal controls. The Internal Audit team conducts both systems and financial audit which are carried out in two phases at each factory, branch, regional and corporate offices. Apart from the in-house internal audit team, external audit firms have been appointed as internal auditors to conduct regular audits. The audit findings are reviewed by the Audit Committee of Directors and corrective action, as deemed necessary, is taken. Your Company also has laid down procedures and authority levels with suitable checks and balances encompassing the entire operations.

Your Company has identified various business risks and has laid down the procedure for mitigation of the same. The Risk Management & Mitigation Systems are reviewed periodically by the management.

Outlook

Inspite of the depressed economic conditions during the past two years, the prospects for the medium to long term looks promising. A new Government would be assuming office shortly and it is expected that major policy reforms would be undertaken with all seriousness.

Lowering of interest rates would give a fillip to the automobile industry. 123 road projects worth Rs. 248 billion were commissioned during 2013-14 and several other projects are on the verge of being commissioned. Similarly railway infrastructural projects worth Rs. 73 billion were commissioned during 2013- 14. All these projects are expected to lead to large scale activity in the infrastructural sector in the near term. Similarly, several power projects have been commissioned or are expected to be commissioned shortly once the infrastructural bottlenecks are smoothened out. This would inevitably lead to better prospects, mainly for your Company''s industrial battery business.

Opportunities and Threats

Your Company has the advantage of having a product range covering a broad spectrum of applications, viz. Automotive, Infrastructure, Powerjelecom, Information Technology, Agriculture, Defense, etc. Technologically superior products coupled with a wide distribution and after-sales service network are the strengths of your Company. Apart from a strong presence in the existing segments, your Company had made forays into new areas such as batteries for electric and hybrid cars and two-wheelers and in the development of environment friendly storage power alternatives. With green and renewable energy being in focus, your Company has also geared itself to offer products catering to this segment and the initial response has been highly encouraging.

Your Company continues to invest in up- gradation and expansion of its manufacturing capacities. The in-house R&D Division has been consistently developing quality products and is also striving for achieving cost efficiencies. Your Company receives strong support from its Foreign Technical Collaborators not only in the form of sharing of new technology but also by receiving assistance in upgrading manufacturing and other processes which results in technologically superior products with sustainable quality.

Competition in the domestic battery industry is on the increase with not only the existing players being more aggressive to increase their market share but also with several new companies, including leading international players, making forays in this business. Though competition leads to better quality and service, it may also result in over capacity and predatory pricing thereby creating pressure on margins.

Risks and Concern

Lead is the major constituent of your Company''s product and the volatility in its price continues to be a cause for concern. This not only has a major impact on costs but also leads to uncertainty in procurement. However, your Company seeks to mitigate this risk through continuous monitoring and prudent business practices.Further, due to the sustained efforts to increase the production and supplies from the captive smelters the dependence on imported lead is gradually being reduced.

Cheap imports especially from China have been another area of concern mainly in the industrial battery segment. Unfortunately, the present anti-dumping laws do not provide adequate protection against such imports. However, your Company has been able to counteract this threat to a considerable extent through consistency in quality of its products and efficient after sales service in order to retain its existing customers as well as to attract new customers.

Subsidiaries

Your Company has five Indian subsidiaries viz, Chloride Metals Limited, Chloride Alloys India Limited, Chloride Power Systems & Solutions Limited, Chloride International Limited, Exide Life Insurance Company Limited, and three foreign subsidiaries, viz. Chloride Batteries S.E Asia Pte. Ltd., Singapore, Espex Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

Exide Life Insurance Company Limited, which is a 100% subsidiary of your Company, is engaged in the business of life insurance and providing financial investment products. The total premium collected by the said Company during the year ended 31 st March, 2014 was Rs.1824.47 crores. The said Company recorded a profit of Rs. 53.03 crores against a profit of Rs. 23.07 crores in the previous year.

Chloride Metals Limited, which is a 100% subsidiary of your Company, is engaged in lead smelting and refining operations and has its plant at Markal, Pune. The said Company achieved a net sale of Rs. 453.05 crores which was 12% lower than the previous year and incurred a loss before tax of Rs. 3.13 crores.

Chloride Power Systems & Solutions Limited, a 100% subsidiary of your Company having its factory at Sector V, Salt Lake City, Kolkata, is engaged in manufacture and sale of chargers, D.C Power Systems and associated equipment. During the year 2013-14, the said Company achieved a turnover of Rs.85.62 crores and a profit before tax of Rs.8.21 crores representing an increase of 13% and 33% respectively over the previous year.

Chloride Alloys India Limited, a 100% subsidiary of your Company has its plant at Kolar District, Kamataka, and is engaged in lead smelting and refining activities. During the year 2013-14 the said Company has achieved a turnover of Rs.733.78 crores as compared to Rs.702.38 crores in the previous year and a profit before tax of Rs.l.96 crores.

Chloride International Limited is presently not engaged in any trading or manufacturing activity and has income from rent and interest on securities. The income of Chloride International Limited during 2013-14 amounted to Rs.0.65 crores with a profit before tax of Rs.0.47 crores.

Your Company also holds 100% of the share capital in Chloride Batteries S.E Asia Pte. Ltd., Singapore. The said Company is engaged in the business of lead acid batteries and caters to the South East Asian and Australian markets. During the year 2013-14 the said Company achieved a turnover of SGD 32.94 million and profit before tax of SGD 0.1 million.

Espex Batteries Limited, UK, a 100% subsidiary of your Company is engaged in marketing and selling of lead acid batteries for industrial applications. During the 2013-14 the Company achieved a turnover of GBP 4.72 million and made a profit before tax of GBP 80,711.

Your Company also holds 61.5% shares in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. The said Company is engaged in the business of manufacturing and marketing of lead acid batteries. During the year 2013-14 the said Company achieved a turnover of SLR 1813 million and made a profit before tax of SLR 110.9 million.

The profit and loss accounts, balance sheet, auditors'' report and directors'' report of the subsidiaries are not attached to the annual accounts of your Company pursuant to general exemption granted vide general circular number 2/2011 dated 08.02.2011 issued by the Government of India, Ministry of Corporate Affairs in terms of section 212(8) of the Companies Act, 1956. However, the necessary details about the subsidiaries are given in the consolidated financial statements attached to the annual accounts. Further any shareholder of the Company or the subsidiary companies may obtain copies of these documents by writing to the Company Secretary at the registered office of your Company. Copies of the annual account of the subsidiaries would also be available for inspection by any such person at the registered office of your Company on any working day.

Human Resources

Your Company recognizes that nurturing and development of Human Capital is of key importance and the HR policies are geared to attain these objectives. The processes for attracting, retaining and rewarding talent are well laid down and the systems are transparent to identify and reward performance. Training interventions are made on a regular basis at all levels and exercises such as Skill Gap Analysis are carried out. Succession planning and talent management continues to receive priority.

Industrial relations at all units remained cordial. During the year under review long term agreements were signed with the Trade Unions at Bawal and Hosur plants.

As on 31st March 2014, your Company had 5001 number of employees.

Directors

Mr. Winston Wong, Director retires by rotation at the ensuing Annual General Meeting but has expressed his unwillingness to be re- appointed as a director of the Company. The Board wishes to place on record its appreciation for the services rendered by Mr. Wong during his long association with the Company. Mr. R B Raheja, Director retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

The Companies Act, 2013, prescribes that every listed Public company shall have at least one third of the total number of directors as Independent directors, as specified in the said Act. Such Independent directors shall hold office for a term of upto five consecutive years on the Board of a Company but shall be eligible for re-appointment on passing of a special resolution by the shareholders. Mr. R G Kapadia, Chairman, Mr. Vijay Aggarwal, Director, Ms. Mono N Desai, Director and Mr. Sudhir Chand, Director have been appointed by the Members at earlier General Meetings as Directors liable to retire by rotation. Since pursuant to the Companies Act, 2013, the Independent Directors are not liable to retire by rotation and are required to be appointed by the Company in General Meeting for a period of five consecutive years, Mr. R G Kapadia, Mr, Vijay Aggarwal, Ms. Mono N Desai and Mr. Sudhir Chand have opted to seek reappointment as Independent

Directors for a period of five consecutive years at the ensuing Annual General Meeting. Notices have also been received in writing from members alongwith deposit of the requisite amount under Section 160 of the Companies Act, 2013, proposing the candidatures of each of Mr. R G Kapadia, Mr. Vijay Aggarwal, Ms. Mono N Desai and Mr. Sudhir Chand for the office of Directors of the Company at the ensuing Annual General Meeting. Confirmation has been received from the said Directors that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and in the opinion of your Board they are each persons of integrity and possess relevant expertise and experience for being appointed as Independent Directors.

Auditors

Messrs SRBC & Co. LLP, Chartered Accountants, the Auditors retire at the conclusion of the ensuing Annual General Meeting and have expressed their unwillingness to be reappointed for a further term. A Notice has been received from a shareholder pursuant to Section 140, read with Section 115 of the Companies Act, 2013 proposing a resolution for appointment of Messrs S R Batliboi & Co LLP,Chartered Accountants, as the Auditors of the Company. Messrs S R Batliboi & Co LLP, Chartered Accountants, is a network firm of SRBC & Co LLP. The subject Resolution is appearing as item no. 4 of the Notice convening the Annual General Meeting which forms part of this Annual Report. Messrs S R Batliboi & Co LLP have also given their consent to act as Auditors, if appointed, and confirmed that the appointment, if made, would be in compliance of Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Information Pursuant to Section 217 of the Companies Act,! 956

a. Conservation of Energy and Technology Absorption

Information pursuant to Clause (e) of Sub- Section (1) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988 and forming part of the Directors'' Report for the financial year ended 31st March, 2014, are attached hereto.

b. Particulars of Employees

In accordance with the provisions of Section 217 of the Companies Act, 1956 and the Rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors'' Report. In terms of the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the shareholders of the Company, excluding such annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

c. Responsibility Statement

Statement under the amended Section 217(2AA) of the Companies Act,l956, on the responsibility of the Directors is a part of the Report.

Director''s Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act,1956, the Board of Directors state:

I. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

II. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

III. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities: and

IV. That the Directors have prepared the annual accounts on a going concern basis.

Forward-Looking Statements

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, perfor- mance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Applicability of the Companies Act, 1956

As clarified by the Government of India, Ministry of Corporate Affairs, vide its General Circular No.08/2014 dated 4th April, 2014, the information given and contents of this Report are governed by the relevant provisions/ Schedules/Rules of the Companies Act, 1956.

Acknowledgement

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the Board of Directors

Place : Mumbai R G Kapadia

Date : 9th May, 2014 Chairman


Mar 31, 2013

The Board of Directors are pleased to present the 66th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2013.

Financial Results

2012-2013 2011-2012

Profit before depreciation, exceptional Item & tax expenses 855.76 745.85

Depreciation and amortisation expenses 113.48 100.68

Exceptional Item - -

Profit before tax 742.28 645.17

Tax expenses 219.50 184.00

Profit after tax 522.78 461.17

Balance brought forward 1208.75 967.36

Making a total of 1731.53 1428.53

Out of this appropriations are :

General Reserve 55.00 50.00

Contingency Reserve - 25.00

Leaving a balance of 1676.53 1353.53

Interim Dividend (100%) 85.00 76.50 (Previous year-90%)

Tax on Interim Dividend 13.79 9.25

Proposed Final Dividend (60%) 51.00 51.00 (Previous year-60%)

Tax on Final Dividend 5.75 8.03 [Aggregate Dividend amounts to 160% (Previous year -150%)]

And leaving a balance of 1520.99 1208.75 (which is carried forward to next year)

Consolidated Financial Statements

In accordance with Accounting Standard 21 - Consolidated Financial Statements form part of the Annual Report & Accounts. These statements have been prepared on the basis of audited financial statements received from the subsidiaries and associate companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 100% i.e. @ Rs. 1.00 per equity share of Rs. 1 each (Previous Year 90%) on the equity shares to the shareholders, whose names appeared on the Register of Members on 1st November, 2012. Your Directors are now pleased to recommend a final dividend at the rate of 60% i.e. Rs. 0.60 per equity share of Rs. 1 each (Previous Year 60%) for the year ended 31st March, 2013, subject to your approval at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2013, including the interim dividend paid during the year, amounts to 160% i.e. Rs. 1.60 per equity share of Rs. 1/- each (Previous Year 150%).

Corporate Governance

As has been mentioned in the earlier Directors'' Reports, transparency is the cornerstone of your Company''s philosophy and all requirements of Corporate Governance are adhered to, both in letter and spirit. The Audit Committee of the Board meets at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors has taken necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key management personnel of your Company have complied with the Code of Conduct which was put in place by the Board of Directors.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed to this Report. The Auditors'' Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further, as required under Clause 49 (V) of the Listing Agreement a certificate from the CEO and CFO is being annexed with this Report.

Business Responsibility Report

The Ministry of Corporate Affairs, Government of India has issued the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business''. These Guidelines contain certain Principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these Principles through a structured reporting format, viz. Business Responsibility Report, has been specified. SEBI has made it mandatory for the top 100 listed Companies, based on market capitalization at Bombay Stock Exchange and National Stock Exchange as on 31.3.2012, to include a Business Responsibility Report as part of the Annual Report of such Companies. Your Company being one of the top 100 listed Companies based on its market capitalization as on 31.3.2012 has accordingly included a Business Responsibility Report as a part of this Annual Report

Business Operational Excellence

In line with your Company''s vision of providing credible value addition to stakeholders and achieving operational excellence, a comprehensive Total Quality Management (TQM) system has been established throughout the organization. During the excellence journey spanning more than a decade, the TQM system has been improved and upgraded to meet the strategic challenges of the business. International Quality, Environment, Occupational Health & Safety Standards, the latest techniques of Total Productive Maintenance (TPM), Lean Manufacturing and 6-Sigma form the backbone of your Company''s endeavour towards Business Excellence.

Your Company''s factories, which are of exacting standards, comparable to the world''s best, manufacture and deliver a wide range of products of highest quality that continually meet the demanding requirements of diverse customers. Quality is built into the products throughout the value chain. Starting from the conceptual design stage at R&D throughout the product realisation process to the after sales service sophisticated techniques like Advanced Product Quality Planning (APQP), Failure Mode & Effect Analysis (FMEA), Statistical Process Control (SPC), Measurement System Analysis (MSA), Process Capability Studies, Poka Yoke (mistake-proofing) and cut-open analysis are used ensuring adherence to specifications, continual monitoring and improvement, minimal scrap and rework resulting in maximizing customer satisfaction.

TQM being a strategic initiative, as expected, your Company has passed through several milestones in the never-ending journey of

Business Excellence. The efforts have been widely acknowledged and recognized by stakeholders.

Regarding the Quality Management System (QMS), the Automotive SBU is certified to ISO/TS-16949:2009 and the Industrial SBU and Submarine SBU to ISO 9001:2008. The certifications awarded after rigorous auditing by the renowned Certification Body TUV- Nord (headquartered in Germany) include all business processes of Corporate, R&D, Manufacturing, Marketing, Sales and After- Sales-Service.

In support of its the core value of striving for Excellence, your Company has been progressively implementing the best international Excellence Model as defined by the European Foundation for Quality Management (EFQM). The Hosur plant has already crossed the Significant Achievement Award level in 2009. Your other plants are also practicing these models and striving towards achieving similar honours.

In the recent past, your Company has won several prestigious awards and accolades in quality, Safety-Health-Environment, 5-S, Energy Conservation, Productivity and Quality Circles that include Asia Manufacturing Excellence Award from Frost & Sullivan, 5-S award from ABK-AOTS, and TQM Role Model Awards from CII. Carrying the tradition forward, the Haldia factory has won the Productivity Award from CII in 2012. Your Company also has won several awards and accolades from valued customers like Toyota, Tata Motors, Bajaj. In 2012, the Hosur plant won the Zero PPM Award from Caterpillar and Taloja plant won the Best Vendor Award from Mahindra & Mahindra (Tractor Division). The Quality Circle teams, run by workmen, contribute towards problem solving and continuous improvement and have presented case-studies at different forums. They have been regularly winning awards and accolades at state and national levels from Quality Circle Forum of India and CII.

Excellence includes improvements in efficiency and effective untilisation of plant and equipment. Towards this important objective, your Company has implemented Total Productive Maintenance (TPM) in the factories. The best methodology as defined by the Japanese Institute of Plant Maintenance (JIPM) is being followed. As a mark of acknowledgement of efforts in TPM, the JIPM has conferred the "Award of TPM Excellence" to Haldia plant in 2008, to Hosur and Chinchwad plants in 2010 and to Taloja plant in 2011. Efforts are on-going to reach higher levels of achievement.

Environment and Safety

In line with our vision of being recognized as a responsible Corporate citizen, an effective Environment Management System (EMS) has been implemented in your Company. The Shamnagar, Haldia, Hosur, Taloja, Chinchwad and Bawal plants are certified to ISO 14001:2004. Rigorous surveillance audits by TUV-Nord have proved that your Company not only fulfills all the statutory and regulatory environmental norms but has also continually improved its environmental performance over the years.

To further raise the bar, the Environmental Policy has been revised in December, 2012 to make it more stringent and forward looking towards sustainability. Optimal utilization of resources, minimization of waste, prevention of pollution and minimizing the adverse impact of our activities, products and services continue to be fundamentals of our Environmental Policy, while new dimensions have been added like, reducing carbon footprint, promotion of energy efficiency and introduction of environment friendly technologies.

To achieve our policy objectives, the products and processes are designed and operated optimally. As part of the QMS and EMS, various improvement projects are undertaken to improve quality, reduce cost, conserve energy and reduce any adverse environmental impacts. The efforts have been rewarding. Apart from internal benefits, your Company had in earlier years been awarded the prestigious TERI Corporate Environment Award and also the Best Innovation Award for Leadership and Excellence in Environment-Health-Safety from CII.

Occupational Health & Safety of employees continue to be a focus area in your Company. This commitment is demonstrated through the implementation of the OHSAS 18001:2007 international standard in the factories. The Hosur and Taloja plants have been certified, and other plants are expected to be so in the near future.

Corporate Social Responsibility

After more than sixty five years of existence your Company''s role and contribution today extends far beyond manufacturing cutting- edge power storage products only. Wherever your Company operates, it is seen by its local stakeholders as not just a large manufacturing unit but as an integral part of the society, whose existence provides social benefits and enhances the social infrastructure of the nearby areas.

Your Company strives to discharge this trust that the local community reposes in it with utmost sincerity, responsibility and commitment. Your Company is not just a job provider in the localities where it operates but has a much wider responsibility of creating or enhancing the social infrastructure like educational and healthcare facilities, amongst others.

Most of the large manufacturing facilities of your Company have structured CSR programmes that run round the year and are tailored to the local needs of the community.

While different factories provided micro-level support to the local communities in their immediate vicinity, on a pan-India basis your Company''s partnership programme with UNICEF for their Child Environment Programme continued for the year under review. This initiative not only endeavours to positively impact the lives of children and women in the rural areas but is also linked to battery recycling - an environmentally desirable activity. During the year under review the factories concentrated on providing help to the local communities in the areas of education and primary health care facilities for disadvantaged children. Students from the local schools were given active support in the form of donation of books, computers and other teaching materials. Other than education, help was also extended to the local health care units for treating the poor and underprivileged communities.

Exide''s association with the noted NGO - CINI-Asha continued throughout the year. Under the project "Lighting Young Lives - Improving Child Health Outcomes Through Community Participation" more than one hundred and fifty deprived children in the age group of 2-6 years in a large urban slum near Kolkata are provided education and basic health care facilities.

Internal Controls

Your Company has proper and adequate system of internal controls. The Internal Audit team conducts both systems and financial audit which are carried out in two phases at each Factory, Branch, Regional and Corporate offices. The audit findings are reviewed by the Audit Committee of Directors and corrective action, as deemed necessary, is taken. Your Company also has laid down procedures and authority levels with suitable checks and balances encompassing the entire operations of the Company.

Your Company has identified various business risks and has laid down the procedure for mitigation of the same. The Risk Management & Mitigation Systems are reviewed periodically by the management.

Outlook

With the rate of inflation showing a downward trend it is expected that the Reserve Bank of India would reduce the interest rates further in the near term. Further, major policy decisions are also expected to be announced by the Government to encourage savings and increase investments. The opening up of the aviation and retail sectors and the anticipated relaxation of ceiling limits on foreign investments in insurance sector is expected to result in significant foreign exchange inflows. Large amount of funds have already started flowing into the capital markets from FIIs during the current financial year. The softening of prices of crude and fall in the imports of gold would also result in a positive balance of payments situation. On the international front, the economy of USA is already showing signs of recovery. All these should lead to a positive impact on the various sectors of the Indian economy and result in buoyancy in the market.

The automobile industry is also expected to witness a surge and inspite of the current dismal performance the medium to long term prospects of the automobile industry are encouraging. As per earlier forecasts the total automotive market was expected to grow by double digits annually during this decade and though there has been an aberration in 2012-13 the situation is likely to improve henceforth. India, as stated in our earlier Directors'' Reports, is emerging as a small car hub in the Asia-Pacific region. Almost all major international automobile car manufacturers have their manufacturing base in India. These manufacturing units would not only cater to the domestic consumers but also to the export markets. The demand for high-end and premium cars is also growing at a rapid pace. All these factors should lead to better prospects for your Company in the automotive sector.

With the thrust towards clean and renewable energy like solar and wind power the requirement for batteries would also increase manifold. Further, in the traction battery segment new opportunities are arising in the material handling applications in the food, pharmaceutical and textile industries where clean environment is essential in the manufacturing facilities. Massive investments are also planned on infrastructure, especially in road, ports, power, coal etc., which were kept on hold and are now expected to be accelerated both by the Government directly as well on a private/public partnership basis. The large shortfall in the demand and generating capacity of power in the country is likely to widen further which would result in robust demand for the Home UPS/Inverter batteries. Modernisation of Railways and commissioning of the Nuclear Power Plants should also result in the industrial battery business having better growth prospects.

As per industry estimates the unorganized sector caters to nearly half of the demand of batteries in India. However, the demands for technologically superior products by the growing middle class with higher disposable incomes would lead to increase in demand for your Company''s products. The demand is also shifting towards products with higher Ah and longer warranty periods which can only be offered by the organized sector. The demand for VRLA and tubular batteries from the traditional flat plate batteries are also growing and the unorganized sector will find it increasingly difficult to cope up with these technological advancements. The stricter pollution control norms, which would entail high investments, would definitely act as a deterrent for the unorganized sector to compete with the established players.

Opportunities and Threats

Technology continues to be a prime focus area of your Company and with both the strong in-house R&D activities and assistance from the technical collaborators your Company would be in a position to continuously introduce technologically superior products with sustainable quality at competitive prices. Your Company also continues to invest heavily in capacity expansion as well as in upgrading its manufacturing processes. The robust distribution set up and aftersales service are strong pillars of your Company. Presently, your Company is operating from over 200 locations which have enabled your Company to market as well as provide after sales services to customers in Tier II & III cities. The Project Kisan initiative has also enabled your Company to reach its products to nearly all remote locations. Through various marketing initiatives and by further strengthening the distribution network your Company would be able to reap more dividends from the vastly untapped semi urban and rural markets.

As you are aware, your Company has already made a foray into new generation products like batteries for electric and hybrid vehicles and development of environmental friendly storage power alternatives. Various innovative products like the Intelligent batteries and batteries with Tubular Gel technology etc. are continuously being added to strengthen your Company''s product portfolio.

Following the buoyancy in the automobile industry for the past few years apart from local players several international battery manufacturing companies are setting up their manufacturing facilities in India. This would lead to competition, which though beneficial to the consumers at times, may also result in unfair trade practices and predatory pricing which may ultimately lead to pressure on the margins.

Risks and Concerns

The price of lead, which is a major constituent of your Company''s products, is extremely volatile and therefore has a major impact on the costs. The gradual weakening of the Rupee is also a serious cause of concern since it severely affects the margins as your Company has a large dependence on imported lead and other raw materials. Your Company therefore monitors the situation on a continual basis and through prudent business practices seeks to mitigate the risks. As you are aware, to reduce its dependence on imported lead your Company had acquired two smelting units a few years earlier. The acquisition of these two smelting units for captive consumption has resulted in substantial reduction in import of lead over the years.

Since the economy in the industrialized nations in the West continues to de-grow or stagnate, cheap imported batteries are available in the market in large quantities. Unfortunately, the ineffective and long term process under the anti-dumping laws may not provide adequate protection against such menace. However, majority of the customers continue to repose faith in your Company''s products due to its better quality and prompt aftersales service.

Subsidiaries

At the beginning of the year, your Company had four Indian subsidiaries viz. Chloride Metals Limited, Chloride Alloys India Limited, Chloride PowerSystems & Solutions Limited, Chloride International Limited and three foreign subsidiaries, viz. Chloride Batteries S.E. Asia Pte. Ltd., Singapore, Espex Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

During the year your Company, which previously held 50% of the equity shares of ING Vysya Life Insurance Company Limited (IVL), acquired the remaining 50% of the equity capital of the said Company from the other shareholders. Consequently, IVL has become a 100% subsidiary of your Company. IVL headquartered at Bangalore is engaged in the business of life insurance and providing financial investment products. The total premium collected by the said Company during the year ended 31st March, 2013 was Rs. 1736.72 crores which was around 4% higher than the previous year. The said Company recorded a profit of Rs. 23.07 crores against a loss of Rs. 31.15 crores in the previous year.

Chloride Metals Limited, which is a 100% subsidiary of your Company is engaged in lead smelting and refining operations and has its Plant at Markal, Pune. The said Company achieved a net sale of Rs. 516.59 crores which was 17% higher than the previous year and a profit before tax of Rs. 17.56 crores which was 27% higher than the previous year.

Chloride PowerSystems & Solutions Limited, a 100% subsidiary of your Company, having its factory at Sector V, Salt Lake City, Kolkata is engaged in manufacture and sale of Chargers, DC Power Systems and associated equipment. During the year 2012-13, the said Company achieved a turnover of Rs. 75.73 crores and a Profit Before Tax of Rs. 6.16 crores representing an increase of 4% and 29% respectively over the previous year.

Chloride Alloys India Limited, a 100% subsidiary of your Company, has its Plant at Kolar District, Karnataka and is engaged in lead smelting and refining activities. During the year 2012-13 the said company has achieved a turnover of Rs. 702.38 crores as compared to Rs. 850.08 crores of the previous year and a Profit Before Tax of Rs. 18.43 crores representing a 49% increase over Rs. 12.35 crores in the previous year.

With the re-organisation of business activities since 1st May, 2011, Chloride International Limited is presently not engaged in any trading or manufacturing activity and has income from rent and interest on securities. The income of Chloride International Limited during 2012-13 amounted to Rs. 0.49 crores with a Profit Before Tax of Rs. 0.34 crores.

Your Company also holds 100% of the share capital in Chloride Batteries S. E. Asia Pte. Ltd., Singapore. The said company is engaged in the business of lead acid batteries and caters to the South East Asian and Australian markets. During the year 2012- 13 the said Company achieved a turnover of SGD 35.14 million and Profit Before Tax of SGD 1.63 million representing a growth of 1% and 12% respectively over the previous year.

Due to a buy-back of shares by Espex Batteries Limited, UK, during the year under review, the shares held by your Company in the said Company increased from 51% to 100%. This Company is engaged in marketing and selling of lead acid batteries for industrial applications. During the year 2012-13 the Company achieved a turnover of GBP 5.04 million and made a Profit Before Tax of GBP 18,267.

Your Company also holds 61.5% in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. The said company is engaged in the business of manufacturing and marketing of Lead Acid batteries. During the year 2012- 13 the said company achieved a turnover of SLR 2099 million and Profit Before Tax of SLR 150.1 million.

The Profit and Loss Accounts, Balance Sheet, Auditors Report and Directors Report of the Subsidiaries are not attached to the Annual Accounts of your Company pursuant to general exemption granted vide General Circular no. 2/2011 dated 8.2.2011 issued by the Government of India, Ministry of Corporate Affairs. However, the necessary details about the Subsidiaries are given in the Consolidated Financial Statements attached to the Annual Accounts. Further, any shareholder of the Company or the Subsidiary Companies may obtain copies of these documents by writing to the Company Secretary at the Registered Office of your Company. Copies of the Annual Accounts of the Subsidiaries would also be available for inspection by any such person at the Registered Office of your Company on any working day.

Human Resources

Your Company continues to remain true to its conviction that its employees are the most valuable asset, the key differentiating factor in your Company''s success as an organization. Accordingly, there is a constant endeavour to drive human capital development and employee engagement, with the ultimate objective of unleashing people potential and capability. The policies and interventions for attracting, retaining and rewarding talent are objective and transparent to identify, nurture & reward performers. Robust processes for capability building, talent assessment and talent management are geared towards taking the organization to the next level. Succession Planning continues to be a priority in the journey towards building a sustainable leadership bench-strength for the future.

Long term agreements at factories continue to be settled amicably and industrial relations remain cordial.

As on the date of this Report, your Company has 4898 employees on its payroll.

Directors

Mr Bhasker Mitter, resigned from the Board of Directors with effect from 1st August, 2012 Mr Mitter was associated with your Company as a Director since October, 1966. Your Directors wish to place on record its deep appreciation for the valuable services rendered by Mr Bhaskar Mitter during his long association as a Director of your Company.

The Board of Directors at its meeting held on 19th October, 2012 appointed Mr Sudhir Chand as an additional Director to hold office till the ensuing Annual General Meeting of the Company. A Notice has been received from a Member under Section 257 of the Companies Act, 1956 proposing the appointment of Mr Sudhir Chand as a Director of the Company at the ensuing Annual General Meeting.

Mr T V Ramanathan, Managing Director and Chief Executive Officer will be retiring from the services of the Company with effect from the close of business on 30th April, 2013. Mr Ramanathan joined the services of the Company in 1995 and was appointed the Managing Director & Chief Operating Officer in April 2000 and took over the responsibilities as Managing Director & Chief Executive Officer since May 2007. Your Board of Directors wishes to record its sincere appreciation for the services rendered by Mr T V Ramanathan during his long association with the Company.

Your Board of Directors at its meeting held on 29th April, 2013 appointed MrPK Kataky as the Managing Director and Chief Executive Officer with effect from 1st May, 2013. Mr Kataky has been heading the automotive business of the Company as Director-Automotive since March 2005. At the said Meeting, your Board of Directors also appointed MrGautam Chatterjee, presently Director-Industrial, as Joint Managing Director with effect from 1 st May, 2013. Mr Chatterjee, will be heading the automotive and submarine batteries business of your Company. At the said Meeting, Mr Subir Chakraborty was also appointed as additional and whole time Director to be designated as Director - Industrial, with effect from 1st May, 2013. Mr Subir Chakraborty will hold office upto the ensuing Annual General Meeting of the Company. A Notice has been received from a Member under Section 257 of the Companies Act, 1956 proposing the appointment of Mr Subir Chakraborty as a Director at the ensuing Annual General Meeting.

MrS B Raheja and Ms Mona N Desai, Directors will be retiring by rotation and being eligible seek re-appointment at the ensuing Annual General Meeting.

Necessary information pursuant to Clause 49 of the Listing Agreement in respect of the Directors proposed to be appointed / reappointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting scheduled to be held on 16th July, 2013.

None of the Directors of your Company are disqualified for being appointed as Directors, as specified in Section 274(1)(g) of the Companies Act, 1956.

Auditors

M/s S R B C& Co., the Auditors has been converted to a Limited Liability Partnership with the new name S R B C & Co. LLP with effect from 1st April, 2013. The Auditors, SRBC & Co. LLP retire at the conclusion of the ensuing Annual General Meeting and have expressed their willingness to be re-appointed for a further term.

M/s Mani & Co., Cost Accountants have been reappointed as the Cost Auditors of the Company for audit of the cost records maintained by the Company for the year ended 31st March, 2013.

The due date for filing the Cost Audit Report for the financial year 2012-2013 is 30th September, 2013.

Information pursuant to Section 217 of the Companies Act, 1956

a. Conservation of Energy and Technology Absorption

Information pursuant to Clause (e) of Sub-Section (1) of Section 217 of the Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 and forming part of the Directors'' Report for the financial year ended 31st March, 2013, are attached hereto.

b. Particulars of Employees

In accordance with the provisions of Section 217 of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors'' Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the shareholders of the Company, excluding such annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

c. Responsibility Statement

Statement under the amended Section 217(2AA) of the Companies Act, 1956, on the responsibility of the Directors is a part of the Report.

Directors'' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors state:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

(iv) That the Directors have prepared the annual accounts on a going concern basis.

Forward-Looking Statements

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 othersimilarexpressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the

Board of Directors

Place : Mumbai R G Kapadia

Date : 29th April, 2013 Chairman


Mar 31, 2012

The Board of Directors are pleased to present the 65th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2012.

Financial Results In Rs Crores 2011-2012 2010-2011

Profit before depreciation, exceptional Item & tax expenses 745.85 976.69

Depreciation and amortisation expenses 100.68 83.46

Exceptional Item - 46.93

Profit before tax 645.17 940.16

Tax expenses 184.00 273.80

Profit after tax 461.17 666.36

Balance brought forward 967.37 516.44

Making a total of 1428.54 1182.80

Out of this appropriations are:

General Reserves 50.00 75.00

Contingency Reserve 25.00 -

Leaving a balance of 1353.54 1107.80

Interim Dividend (90%) 76.50 76.50

Tax on Interim Dividend 9.25 12.58 Proposed Final Dividend (60%)

(Previous Year - 60%) 51.00 51.00

Tax on Final Dividend 8.03 0.35

[Aggregate Dividend amounts to 150%

(Previous year - 150)]

And leaving a balance of (which is

carried forward to next year) 1208.76 967.37

Consolidated Financial Statements

In accordance with Accounting Standard 21 - Consolidated Financial Statements form part of the Annual Report & Accounts. These statements have been prepared on the basis of audited financial statements received from the subsidiaries and associate companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 90% Rs 0.90 per equity share of Rs 1 each) on the equity shares to the shareholders, whose names appeared on the Register of Members on 3rd November, 2011. Your Directors are now pleased to recommend a final dividend at the rate of 60% Rs 0.60 per equity share of Rs 1 each) for the year ended 31st March, 2012, subject to your approval at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2012, including the interim dividend paid during the year, amounts to 150% Rs 1.50 per equity share of Rs 1 each).

Corporate Governance

As has been mentioned in the earlier Directors' Reports, transparency is the cornerstone of your

Company's philosophy and all requirements of Corporate Governance are adhered to, both in letter and spirit. The Audit Committee of the Board meets at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors has taken necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key management personnel of your Company have complied with the Code of Conduct which was put in place by the Board of Directors.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed to this Report. The Auditors' Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further, as required under Clause 49 (V) of the Listing Agreement a certificate from the CEO and CFO is being annexed with this Report.

Business Operational Excellence

To move towards your Company's vision of providing credible value addition to stakeholders and being recognized as a responsible Corporate Citizen, an elaborate Total Quality Management (TQM) system has been set up. Having gathered momentum, it has been improved and upgraded to meet the strategic challenges of the business. Apart from the international quality, environment, occupational health & safety standards, your Company has been methodically implementing the latest techniques of Total Productive Maintenance (TPM), Lean Manufacturing and 6-Sigma aimed towards achieving Business Excellence.

Your Company's factories, having modern machinery and equipments, manufacture and deliver products of high quality that meet the demanding requirements of a wide range of customers. Quality is built into the products right from the conceptual design stage by using sophisticated techniques like Advanced Product Quality Planning (APQP), Failure Mode & Effect Analysis (FMEA), Statistical Process Control (SPC) and Measurement System Analysis (MSA). To ensure adherence to specifications, continuous monitoring of Process Capability index is done with on-line mistake-proofing (Poka-Yoke) devices, resulting in minimal scrap and rework.

TQM being a strategic initiative, it is only natural that your Company has crossed several milestones in its unending journey towards

Business Excellence that has been widely applauded and recognized.

With respect to the Quality Management System (QMS), the Industrial SBU is certified to ISO 9001:2008, while the Automotive SBU is certified to ISO/ TS-16949:2009 latest international standards. These certifications include all the business processes of R&D, Manufacturing, Marketing, Sales, After-Sales Support and Corporate functions. The Submarine SBU is also certified to ISO-9001:2008. Your Company's certification body is the renowned TUV-Nord head- quartered in Germany.

Suppliers are our partners in progress. In order to fulfill our responsibility towards meeting common objectives and continuous improvement, the TQM initiatives employed in your Company have been extended to cover key suppliers also. An effective system of quality control, periodic audits, "Vendor Rating" and training has been established and strengthened. Some of the key suppliers have achieved IS/ TS-16949:2009 certification. Striving for Excellence, being one of the Core Values, your Company has been progressively implementing the European Foundation for Quality Management (EFQM) Excellence Model and have won coveted awards for its efforts.

In the last few years your Company has won several awards and accolades in Quality, Safety- Health-Environment, 5-S, Energy Conservation, Productivity and Quality Circles. In 2009, the Hosur Plant won the prestigious Asia Manufacturing Excellence Award - Gold Category in Auto Ancillary from Frost & Sullivan as well as the ABK-AOTS 5S-Award 1st prize in large Manufacturing category. In the recent past, the Haldia and Shamnagar Plants have won TQM Role Model Quality Award from CII (ER). Your Company has also won awards and recognitions from its valued customers like Toyota, Tata Motors and Bajaj Auto. The Quality Circle teams, run by workmen have been regularly winning awards and accolades in the State and National levels from Quality Circle Forum of India and the CII.

As improving the efficiency and maximizing the utilization of plant and equipment is an important objective of your Company, Total Productive Maintenance (TPM) has been implemented in the factories. The best methodology as given by the Japanese Institute of Plant Maintenance (JIPM) is being followed.

For its sustained efforts and commendable results in TPM the JIPM has, through a system of rigorous audits, conferred the "Award for TPM Excellence" to Haldia plant for 2008, to Hosur and Chinchwad plants for 2010 and to Taloja plant in 2011. Efforts to reach still higher levels are ongoing.

To give more thrust to our R&D efforts, training and quality management systems have been intensified. A pool of internal quality auditors as per the requirements of ISO 19011:2011 have been created through a process of workshops, case studies and examinations.

Environment and Safety

In support of the core value of being a responsible Corporate Citizen, an effective Environmental Management System (EMS) has been established in your Company. The Shamnagar, Haldia, Hosur, Taloja and Chinchwad plants had been certified several years back to ISO-14001:2004. In February 2012, the Bawal plant has been certified to ISO-14001:2004. Surveillance Audits by TUV- Nord has confirmed that your Company not only continues to meet all the statutory and regulatory environmental norms but has also improved its environmental performance through the years.

Minimization of waste and preservation of natural resources is part of your Company's policy. In this direction, the processes are designed and operated optimally. Every year, various improvement projects are undertaken to reduce any adverse environmental impacts. The efforts have been recognized and rewarded. Your Company had received the prestigious TERI Corporate Environment Award in 2007 and Best Innovation Award for Leadership and Excellence in Environment-Health-Safety from CII (Southern Region) in 2008.

Safety and Occupational Health of employees are continuous focus areas of your Company. This commitment is shown in the implementation of the OHSAS 18001:2007 standard in the factories. The Hosur plant is a ZERO effluent discharge plant and other factories are expected to be similarly upgraded in the near future.

As part of your Company's Corporate Social Responsibility and efforts towards cost reduction, energy conservation continues to be a focus area. Several initiatives have been taken in this direction at all plants for energy conservation, recovery and recycling of water in line with our policy of conservation of natural resources.

Corporate Social Responsibility

Overview of CSR Activities Carried Out During 2011-12

Exide's commitment to corporate social responsibility has a two pronged approach - marketing centric and production centric. Whilst on the one hand your Company tries to involve its customers in its efforts to create a better world for the weaker sections of the society, on the other hand it also ensures that the production facilities and other important offices from where it operates also contribute meaningfully to the overall up lift mint of the society.

Marketing Centric CSR

For the last three years your Company has been actively involved with UNICEF in creating better health and hygiene for economically disadvantaged children in rural India. However, instead of making a straight forward cash donation to the global organization your Company linked its financial commitment to the project to the support it gets from its customers for battery recycling. The customer feels encouraged to get his old battery recycled through an environmentally desirable activity - and at the same time help in a socially important cause.

The pre-committed money that UNICEF gets through this unique scheme is used for bringing clean water to villages in parts of India, making affordable toilets and create "Nirmal Villages" (where all the houses in a particular village has its own toilet) and educating rural children on health and hygiene issues. The programmer is being actively implemented through reputed NGOs like Ramkrishna Mission, regional government bodies and local gram panchayats.

Production Centric CSR

The factories of your Company across the country are important centers of economic activity in the regions that they are located in. The local community, particularly the weaker sections look up to the factory management for various social and economic supports. Your Company discharges this obligation to the immediate surrounding society sensitively and on a need based manner. While routine planting of saplings in and around the plants is now an institutionalized activity within all the factories, other activities like running health camps, round the year ambulances, helping local women in skill development or upgrading infrastructure of local schools and health units is done on a case by case basis by each manufacturing unit. During natural disasters your Company runs relief camps in the affected areas which are mainly manned by your Company's employees.

Your Company also runs a programmed through a reputed NGO CINI-Asha that directly benefits children in a slum in eastern Kolkata. These pre- nursery children would otherwise be mostly left to themselves in those difficult surroundings while their parents go out in search of work during a better part of the day. But through your Company's support these children are now taken care of during the day and taught basic skills so that they are fit to go to school when they are of the right age.

Internal Controls

Your Company has proper and adequate system of internal controls. The Internal Audit team conducts both Systems and Financial Audit which are carried out in two phases at each factory, Branch, Regional and Corporate offices. The audit findings are reviewed by the Audit Committee of Directors and corrective action, as deemed necessary is taken. The Company also has laid down procedures and authority levels with suitable checks and balances encompassing the entire operations of the Company.

Your Company has identified various business risks and has laid down the procedure for mitigation of the same. The Risk Management & Mitigation Systems are reviewed periodically by the management.

Outlook

With inflation showing a declining trend and with expected further reduction in the interest rates there should be an overall buoyancy and, as far as the battery industry is concerned, the future growth prospects should be positive. The high growth rates achieved by the Automotive Industry in March 2012 are expected to continue, at least with some moderations. As stated earlier, the automotive industry is estimated on an average to have a double digit growth annually for the next five years. Several infrastructure sectors like power, coal, etc., are on an upward swing and with the massive investments on infrastructure planned by the Government, including modernization of railways and commissioning of nuclear power plants, etc., the Industrial battery business should also continue to have better prospects. The burgeoning middle class with higher disposable incomes and an appetite for asp rational life styles would lead to

higher demand, where technologically superior products would be more sought after than cheaper alternatives. Due to strict pollution control norms being introduced with each passing month, the incremental battery demand will gravitate towards the players in the organized sector. Though Europe is exhibiting signs of a recession, the economy in the USA appears to be on the mend and this would ultimately lead to a positive overall sentiment in particular in emerging capital markets and also in the various sectors of Indian economy.

Opportunities and Threats

Technology and after sales service are major strengths of your Company. Your Company continues to invest in acquiring new technology both for products as well as processes. Your Company has also invested heavily both in capacity expansion as well as up-gradation of its manufacturing facilities. With a strong in-house R&D and active support from the Technical Collaborators, who are international leaders in their field, your Company would always be in a position to introduce technologically superior products with sustainable quality. Through various marketing initiatives and increasing the distribution network your Company would also be able to expand its reach especially in the vastly untapped semi-urban and rural markets. Amongst the new generation products, your Company has already made a foray into areas like electric and hybrid batteries and development of environmental friendly storage power alternatives.

Due to the buoyant automobile industry in India, new players are entering the battery business. Though competition is always beneficial for both the customer as well as the seller but at times it may lead to unfair trade practices and predatory pricing which may create severe pressure on margins.

Risks and Concerns

Lead is the major constituent of your Company's products and its volatile prices are always a cause of concern. Such volatility has a serious impact on the cost of the products and also leads to uncertainties in procurement. In addition rupee depreciation vis-à-vis US Dollar is also a risk and challenge for your Company. Your Company however, constantly monitors the situation and through prudent business practices this risk is sought to be mitigated. With the view to reduce dependence on imported lead your Company had acquired two smelting units, which are wholly owned subsidiaries of your Company. These Companies can to some extent mitigate the risks outlined above.

Further, due to recession or stagnation in the industrialized nations the Indian market is being flooded with cheap imports especially from neighboring low cost economies. As mentioned in our earlier Report the anti-dumping laws of our country do not have enough teeth to stop these unfair practices. However, due to the better quality and an enhanced focus on after sales service offered by your Company, the majority of the customers continue to repose their faith in your Company's products.

Subsidiaries

Your Company has four Indian subsidiaries viz. Chloride Metals Limited, Chloride Power Systems & Solutions Limited, Chloride Alloys India Limited and Chloride International Limited and three foreign subsidiaries, viz. Chloride Batteries S.E. Asia Pvt. Ltd., Singapore, Espies Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

Chloride Metals Limited which is a 100% subsidiary of your Company is engaged in lead smelting and refining operations and has its Plant at Markal, Pune. The said Company achieved a net sale of Rs 440.03 crores which was 15% higher than the previous year and a profit before tax of Rs 12.74 crores which was 35% lower than the previous year.

Chloride Power Systems & Solutions Limited (formerly known as Cal dyne Automatics Limited) is a 100% subsidiary of your Company having its factory at Sector V, Salt Lake City, Kolkata and is engaged in manufacture and sale of Chargers, DC Power Systems and associated equipment. During the year 2011-12, the said company achieved a turnover of Rs 72.77 crores and a profit before tax of Rs 4.77crores representing an increase of 64% and 105% respectively over the previous year.

Chloride Alloys India Limited (formerly known as Lead age Alloys India Limited), a 100% subsidiary of your Company, has its Plant at Kolar District, Karnataka and is engaged in lead smelting and refining activities. During the year 2011-12 the said company has achieved a turnover of Rs 850.13 crores representing an increase of over 14% and profit before tax of Rs 12.36 crores as compared to Rs 32.57 crores in the previous year.

Chloride International Limited a 100% subsidiary of your Company was engaged in the marketing and sale of Non-conventional Energy Systems like Solar Home Lighting and Heating System Panels, and Home UPS / Inverters etc. However, following a reorganization of business activities since 1st May, 2011 these businesses are

being handled by Chloride Power Systems & Solutions Limited. The net sales of Chloride International Limited during 2011-12 amounted to Rs 3.12 crores with a Profit Before Tax of Rs 0.11 crores.

Your Company also holds 100% of the share capital in Chloride Batteries S E Asia Pvt. Ltd., Singapore. The said company is engaged in manufacture and sale of lead acid batteries and caters to the South East Asian and Australian markets. During the year 2011-12 the said company achieved a turnover of SGD 34.81 million and Profit before Tax of SGD 1.46 million representing a growth of 14% and 11% respectively over the previous year.

Espex Batteries Limited, UK, in which your Company holds 51% of the share capital, is engaged in marketing and selling of lead acid batteries for industrial applications. During the year 2011-12 the said company achieved a turnover of GBP 5.72 million and made a Profit Before Tax of GBP 284,559.

Your Company also holds 61.5% in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. The said company is engaged in the business of manufacturing and marketing of Lead Acid batteries. During the year 2011-12 the said company achieved a turnover of SLR 1852 million and Profit Before Tax of SLR 190.5 million.

The statement of Holding Company's interest in Subsidiaries as specified in sub section (3) of section 212 of the Companies Act, 1956 is attached to the Report and Accounts of your Company. The Profit and Loss Accounts, Balance Sheet, Auditors Report and Directors Report of the Subsidiaries are not attached to the Annual Accounts of your Company pursuant to general exemption granted vide General Circular no. 2/2011 dated 8.2.2011 issued by the Government of India, Ministry of Corporate Affairs. However, the necessary details about the Subsidiaries are given in the Consolidated Financial Statements attached to the Annual Accounts. Further, any shareholder of the Company or the Subsidiary Companies may obtain copies of these documents by writing to the Company Secretary at the Registered Office of your Company. Copies of the Annual Accounts of the Subsidiaries would also be available for inspection by any shareholder at the Registered Office of your Company and the offices of the Subsidiary Companies on any working day.

Human Resources

Nurturing and development of Human Capital is of key importance and the HR policies and procedures of your Company are geared towards this objective. The processes for attracting, retaining and rewarding talent are well laid down and the systems are transparent to identify and reward performers. Several initiatives are taken both at the corporate level as also in the shop floor to inculcate team work and camaraderie. Skill Gap Analysis is carried out on regular basis and necessary training interventions are made based on the results. Succession Planning and Talent Management, continues to receive priority.

Industrial relation at all factories continued to remain cordial.

As on the date of this Report your Company has 4532 employees on its payroll.

Directors

Mr. Bhasker Mitter, Mr. Vijay Aggarwal and Mr. R G Kapadia, Directors retire by rotation and being eligible offer themselves for re- appointment at the ensuing Annual General Meeting. Mr. H M Kothari, Director also retires by rotation at the ensuing Annual General Meeting but due to personal reasons does not wish to offer himself for re-appointment. Your Board wishes to place on record its deep appreciation for the services rendered by Mr. H M Kothari during his long association with the Company.

The term of Mr. T V Ramanathan, Managing Director and Chief Executive Officer, is due to expire on the close of business hours of 30th April, 2012. The Board of Directors at its meeting held on 30th April, 2012 re-appointed Mr. T V Ramanathan as the Managing Director and Chief Executive Officer for a further period of one year with effect from 1st May, 2012, subject to the approval of the shareholders. A resolution proposing the re-appointment of Mr. T V Ramanathan as the Managing Director and Chief Executive Officer with effect from 1st May, 2012 will be placed before the shareholders for approval at the ensuing Annual General Meeting.

Necessary information pursuant to Clause 49 of the Listing Agreement in respect of the Directors proposed to be reappointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the Annual General Meeting scheduled to be held on 17th July, 2012.

None of the Directors of your Company are dis-qualified for being appointed as Directors, as specified in Section 274(1) (g) of the Companies Act, 1956.

Auditors

Messrs S R Batliboi & Co., Chartered Accountants, the Auditors retire at the conclusion of the ensuing

Annual General Meeting and have expressed their unwillingness to be reappointed for a further term. A Notice has been received from a shareholder pursuant to Section 225, read with Section 190, of the Companies Act, 1956 proposing a resolution for approval of the shareholders at the ensuing Annual General Meeting for appointment of Messrs S R B C & Co., Chartered Accountants, a network firm of Messrs S R Batliboi & Co., as the Auditors of the Company. The subject Resolution is appearing as item no. 6 of the Notice convening the Annual General Meeting which forms part of this Annual Report. Messrs S R B C & Co. have also given their consent to act as Auditors, if appointed, and confirmed that the appointment, if made, would be in compliance of Section 224 (1B) of the Companies Act, 1956.

Information pursuant to Section 217 of the Companies Act, 1956

a. Conservation of Energy and Technology Absorption

Information pursuant to Clause (e) of Sub- Section (1) of Section 217 of the Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 and forming part of the Directors' Report for the financial year ended 31st March, 2012, are attached hereto.

b. Particulars of Employees

In accordance with the provisions of Section 217 of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are set out in the annexure to the Directors' Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors' Report is being sent to all the shareholders of the Company, excluding such annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

c. Responsibility Statement

Statement under the amended Section 217(2AA) of the Companies Act, 1956, on the responsibility of the Directors is a part of the Report.

Directors' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors state:

(i) That in the preparation of the annual accounts, the applicable accounting standards

have been followed along with proper explanation relating to material departures, if any.

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) That the Directors have prepared the annual accounts on a going concern basis.

Forward-Looking Statements

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the

Board of Directors

Place: Mumbai R G Kapadia

Date: 30th April, 2012 Chairman


Mar 31, 2011

The Board of Directors have pleasure in presenting the 64th Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2011.

Financial Results

InRs. Crores

2010-2011 2009-2010

Profit before depreciation & taxation 1023.81 891.24

Depreciation / Amortisation 83.45 80.65

Profit before tax 940.36 810.59

Taxation 274.00 273.50

Profit after tax 666.36 537.09

Balance brought forward 516.44 324.59

Making a total of 1182.80 861.68

Out of this appropritions are:

General Reserves 75.00 250.00

Leaving a balance of 1107.80 611.68

Interim Dividend (Rs. 0.90)

[Previous YearRs. 0.60]* 76.50 48.00

Tax on Interim Dividend 12.58 8.16

Proposed Final Dividend (Rs.0.60)

(Previous YearRs. 0.40]* 51.00 34.00

Tax on Final Dividend 0.35 5.08

And leaving a balance of (which is

carried forward to next year) 967.37 516.44

*On equity share ofRs. 1.00 each

[Aggregate Dividend amounts to 150% (Previous year 100%)]

Consolidated Financial Statements

In accordance with Accounting Standard 21 - Consolidated Financial Statements form part of the Report & Accounts. These Accounts have been prepared on the basis of audited financial statements received from the subsidiaries and associate companies as approved by its respective Board of Directors.

Dividend

Your Company has paid an interim dividend at the rate of 90% (Rs.0.90 per equity share ofRs.1.00 each) on the equity shares to the shareholders,

whose names appeared on the Register of Members on 22nd October, 2010. Your Directors are now pleased to recommend a final dividend at the rate of 60% (Rs. 0.60 per equity share of Rs. 1.00 each) for the year ended 31st March,2011, subject to your approval at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2011, including the interim dividend paid during the year, amounts to 150% (Rs. 1.50 per equity share ofRs. 1.00 each).

Corporate Governance

Transparency is the cornerstone of your Companys philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. The Audit Committee of the Board meets at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors has taken all necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key management personnel of your Company have complied with the Code of Conduct which was put in place by the Board of Directors. Apart from being in compliance with all requirements of Clause 49 of the Listing Agreement your Company has voluntarily adopted certain governance principles. Setting up of the Remuneration Committee of Directors and introduction of a Model Code for Insider Trading are some of the initiatives taken by your Company towards this end.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed to this Report. The Auditors Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further, as required under Clause 49 (V) of the Listing Agreement a certificate from the CEO and CFO is being annexed with this Report.

Business / Operational Excellence

Providing credible value addition to stakeholders and being recognized as a responsible corporate citizen is the vision of your Company. Aiming towards this, your Company has implemented an exhaustive Total Quality Management System (TQM). Over the years it has been improved upon and fine-tuned to become more effective in meeting the strategic challenges of the business. The latest techniques of Total Productive Maintenance (TPM), 6 Sigma and Lean Manufacturing now form an integral part of the TQM system - leading to Business Excellence.

Your Companys state-of-the-art factories manufacture products of the highest quality that enhance customer satisfaction. Quality is designed and built into products by using techniques like Advanced Product Quality Planning (APQP), Failure Mode and Effect Analysis (FMEA), Statistical Process Control (SPC) and Measurement System Analysis (MSA).

Process Capability Index monitoring is done to ensure that products are well within the specification limits, leading to minimal rework and scrap.

With the support of TQM as a strategic initiative, your company has crossed several milestones in its unending journey towards Business Excellence. In regard to the Quality Management System (QMS), the Industrial SBU has been certified to ISO-9001:2008, while the Automotive SBU has been certified to ISO/TS-16949:2009 international standards. These certifications include all the business processes of R&D, Manufacturing, Marketing, Sales and after sales support, and Corporate functions. The Submarine SBU is also certified to ISO-9001:2008. The certification body is the renowned TUV-Nord, headquartered in Germany.

Recognising the responsibility of your Company towards its partners in progress, TQM initiatives have also been extended to cover the key suppliers. An effective system of quality control, periodic audits, supplier rating and training has been established, with an objective of continuous improvement and for mutual benefit.

In support of the core value of Striving for Excellence, your Company is progressively implementing the European Foundation for Quality Management (EFQM) Business Excellence Model and have won several awards in this respect.

In addition to these, in the last few years, your Company has won several awards and accolades in Quality, Safety-Health-Environment, 5-S, Energy Conservation, Productivity and Quality Circles. In 2009 the Hosur plant won the prestigious Asia Manufacturing Excellence Award-Gold Category in Auto Ancilliary from Frost & Sullivan as well as the ABK-AOTS 5-S Award 1st Prize in Large Manufacturing category. For the same year the Shamnagar plant has won the TQM Role Model Quality Award from CII (ER). Your Company has also won awards and recognitions from its valued customers like Toyota, Tata Motors and Bajaj Auto. Quality Circles run by workmen have been winning awards and accolades in state and national levels from Quality Circle Forum of India and the CII for the past several years.

With the aim of improving efficiency and maximizing the utilization of plant and equipment, your Company has implemented Total Productive Maintenance (TPM) in the factories. The best methodology as given by the Japanese Institute of Plant Maintenance (JIPM) is being followed.

For outstanding efforts and results in TPM, the JIPM has conferred the "Award for TPM Excellence" to your Haldia plant for 2008 which

has now been awarded also to the Hosur and Chinchwad plants in 2010. Other factories are also making efforts to win this coveted award in the near future.

Environment & Safety

Keeping in line with the core values of being a responsible corporate citizen, an effective Environmental Management System (EMS) has been established by your Company. The Chinchwad, Haldia, Hosur, Shamnagar and Taloja factories are certified to ISO-14001:2004 by TUV-Nord. Going much beyond mere statutory compliance, your Company aims at continuous improvement of its environmental performance. Minimisation of waste and preservation of natural resources, being a part of policy, are put into effect by designing and running optimum processes and implementation of several environmental improvement projects. This has resulted in your Company receiving the prestigious TERI Corporate Environment Award in 2007 and Best Innovation Award for Leadership and Excellence in Environment-Health-Safety from CII (SR) in 2008.

Occupational Health and Safety issues are continuous focus points for your Company. This commitment has prompted your Company to implement OHSAS 18001:2007 standard in the factories. The Hosur factory has already been certified and the other factories are expected to be certified in due course.

Energy conservation also continues to be an active focus area for your Company since it is not only a major cost in the manufacturing process but, more importantly, a significant part of your Companys corporate social responsibilities. Your Company has taken several initiatives at each plant level in order to conserve energy which is in line with our policy of conservation of natural resources.

Corporate Social Responsibility

Your Company recognises the fact that, beyond the day to day conduct of its business, as a responsible corporate citizen it has to discharge its duties towards the larger society in which it operates. The core areas identified by your Company to improve the society are Health Care, Basic Education, Womens Empowerment and the Environment.

The partnership of your Company with UNICEF in the area of Child Environment Programme, that started in 2009 continued during 2010-11. The programme aims to reach out to the poorer and marginalised sections of the society in the remote rural areas of India to create a greener and healthier world where children have better access to basic health and hygiene facilities. The uniqueness of the programme lies in linking this social objective to another environmental objective

of recycling lead whereby customers are encouraged to return used lead acid storage batteries through your Companys dealer network. There is not just a monetary incentive for the customer to do this but also a certain contribution is committed to UNICEF for every single used battery returned thereby making the customer a part of the larger CSR movement.

While the UNICEF association has a pan-India appeal and reach, in Kolkata the Company continued to successfully partner with the reputed NGO, CINI-Asha, to provide basic education and for development of some of the slum children.

At the factory level all factories carried out various activities that are tailored to the unique needs of the villages and communities in their respective vicinities. Shamnagar factory contributed towards providing regular safe drinking water facilities and lighting up the streets around the households in the vicinity. In Hosur, the factory management worked with the local Primary Health Center to organise various health camps throughout the year. Further, in Hosur the factory management also converted temporary village roads into permanent pucca motorable roads, erected bus shelters for villagers and undertook various other locally meaningful and relevant developmental activities that impact the day to day lives of the neighbouring villagers. Haldia factory contributed to your Companys overall social responsibility programme by boring tube wells, organising health camps in the deeper pockets of the villages and also by contributing to various natural disaster relief activities. The other factories also contributed to their local community development programmes in a similar way commensurate with their scale of operations. All factories participated in the environmental improvement programmes by undertaking various initiatives like planting saplings, creating green belts and organising environmental awareness camps to educate local villagers on the need to safeguard the environment.

As part of its corporate philosophy, your Company also encourages its subsidiaries to effectively discharge its societal obligations. Towards this end, Leadage Alloys India Limited, a wholly owned subsidiary, distributed uniforms and study materials to students of an Anganwadi school, contributed library books to a local college, constructed a bus shelter and conducted medical camps in Malur, Karnataka. Several programmes were also initiated for creating awareness about the environment amongst the local villagers including celebration of ‘Environment Day and also ‘World Chemical Disaster Day in collaboration with the Karanataka State Pollution Control Board. Similarly, Chloride Metals Limited, another wholly owned subsidiary, donated

furniture and has taken up a project for construction of new class rooms in the Zilla Parishad Primary School in Markal, Pune. The said Company has also taken several initiatives for creating awareness about the environment amongst the local villagers including planting of trees.

Internal Controls

Your Company has proper and adequate system of internal controls. The Internal Audit team conducts both Systems and Financial Audits which are carried out in two phases at each factory, Branch, Regional and Corporate offices. The audit findings are reviewed by the Audit Committee of Directors and corrective action, as deemed necessary, is taken. Your Company also has laid down procedures and authority levels with suitable checks and balances encompassing the entire operations of the Company.

Your Company has identified various business risks and periodic reviews are conducted by the Management regarding the adequacy of mitigation procedures for the same.

Outlook

Due to the overall buoyancy the future outlook, as far as the Battery Industry is concerned, appears to be promising. The high growth rate in both auto and auto ancillary industries are expected to continue for the medium term. The huge expenditure proposed in the infrastructure sectors, including setting-up of power plants and modernization of Railways, would also result in better prospects for your Companys business.

Increase in disposable income and the growing middle class would lead to higher demand for quality and technologically superior products as compared to the cheaper substitutes. Stringent pollution control norms would act as a deterrent to small scale battery manufacturers in the unorganized sector thereby yielding more market share to the organized sector. The international markets are also showing signs of recovery which augurs well for the export of your Companys products.

Opportunities and Threats

Your Company has the advantage of having a product range covering a broad spectrum of applications, viz. Automotive, Infrastructure, Power, Telecom, Information Technology, Agriculture, Defence, etc. Technologically superior products coupled with a wide distribution and after sales network are the strengths of your Company. Apart from a strong presence in the existing segments, your Company is making forays into new areas such as electric and hybrid batteries for cars and two-wheelers and in the development of environment friendly storage power alternatives.

Your Company continues to invest in upgradation and expansion of its manufacturing capacities. The in-house R&D Department has been consistently developing quality products and is also striving for achieving cost efficiencies. Your Company receives strong support from its Foreign Technical Collaborators not only in the form of sharing of new technology but also by receiving assistance in upgrading manufacturing and other processes which results in technologically superior products with sustainable quality.

Competition in the domestic battery industry is on the increase with not only the existing players being more aggressive to increase their market share but also with several new companies making forays in this business. Though competition leads to better quality and service, it may also result in predatory pricing thereby creating pressure on margins.

Risks & Concerns

Lead is the major constituent of your Companys product and the volatility in its price continues to be a cause for concern. This not only has a major impact on costs but also leads to uncertainty in procurement. However, your Company seeks to mitigate this risk through continuous monitoring and prudent business practices. Further, due to the sustained efforts to increase the production and supplies from the captive smelters the dependence on imported Lead is gradually being reduced.

Cheap imports especially from China have been another area of concern. Unfortunately, the present anti-dumping laws do not provide protection against such imports. However, your Company has been able to counteract this threat to a considerable extent through consistency in quality of its products and efficient after sales service in order to retain its existing and also to attract new customers.

Subsidiary Companies

Your Company has four wholly owned Indian subsidiaries, viz. Chloride Metals Limited, Caldyne Automatics Limited, Leadage Alloys India Limited and Chloride International Limited and three foreign subsidiaries, viz. Chloride Batteries S.E. Asia Pte. Ltd., Singapore, Espex Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

Chloride Metals Limited which is a 100% subsidiary of your Company is engaged in lead smelting and refining operations and has its plant at Markal, Pune. The said Company achieved a net sale of Rs. 381.27 crores representing a growth of 59% over the previous year and a profit before tax of Rs. 19.79 crores which is 31% higher than the previous year.

Caldyne Automatics Limited is a 100% subsidiary of your Company having its factory at Sector V, Salt Lake City, Kolkata and is engaged in manufacture and sale of Chargers, DC Power Systems and associated equipment. During the year 2010-11, the said company achieved a turnover ofRs. 44.11 crores and a profit before tax ofRs. 2.33 crores representing an increase of 19% and 52% respectively over the previous year.

Leadage Alloys India Limited, which became a 100% subsidiary during the year under review, has its plant at Kolar District, Karnataka and is engaged in lead smelting and refining activities. During the year 2010-11 the said company has achieved a turnover of Rs. 744.79 crores representing an increase of over 36% over the previous year and profit before tax of Rs. 32.57 crores as compared to Rs. 53.74 crores in the previous year.

Chloride International Limited, a 100% subsidiary of your Company, is engaged in the marketing and sale of Non-conventional Energy Systems like Solar Home Lighting and Heating System Panels, and Home UPS / Inverters etc. The net sales of the said company during 2010-11 amounted to Rs. 20.39 crores which was 70% higher than that of the previous year. The Profit Before Tax also increased from Rs. 0.37 crores to Rs. 0.46 crores.

Your Company holds 100% of the share capital in Chloride Batteries S E Asia Pte. Ltd., Singapore. The said company is engaged in manufacture and sale of lead acid batteries and caters to the South East Asian and Australian markets. During the year 2010-11 the company achieved a turnover of SGD 30.62 million and Profit before Tax of SGD 1.32 million representing a degrowth of 17% and 7% respectively over the previous year.

Espex Batteries Limited, UK, in which your Company holds 51% of the share capital, is engaged in marketing and selling of lead acid batteries for industrial applications. During the year 2010-11 the company achieved a turnover of GBP 6.23 million and made a Profit Before Tax of GBP 0.2 million which were 56% and 324% higher than the previous year.

Your Company also holds 61.5% in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. The said company is engaged in the business of manufacturing and marketing of Lead Acid batteries. During the year 2010-11 the said company achieved a turnover of SLR 1958 million which was higher by 26% over the previous

year and Profit before Tax of SLR 208.6 million representing a growth of 38% over the previous year.

The statement of Holding Companys interest in Subsidiaries as specified in sub section (3) of section 212 of the Companies Act, 1956 is attached to the Report and Accounts of your Company. The Profit and Loss Accounts, Balance Sheet, Auditors Report and Directors Report of the Subsidiaries are not attached to the Annual Accounts of your Company pursuant to general exemption granted vide General Circular no. 2/2011 dated 8.2.2011 issued by the Government of India, Ministry of Corporate Affairs. However, the necessary details about the Subsidiaries are given in the Consolidated Financial Statements attached to the Annual Accounts. Further, any shareholder of the Company or the Subsidiary Companies may obtain copies of these documents by writing to the Company Secretary at the Registered Office of your Company. Copies of the Annual Accounts of the Subsidiaries would also be available for inspection by any such person at the Registered Office of your Company on any working day.

Human Resources

The HR policies and procedures of your Company are geared towards nurturing and development of Human Capital. Your Company has transparent processes for rewarding performance and retaining talent. Skill Gap Analysis and other systems are also in place to identify the training interventions required. Priority is given to succession planning and talent management.

Industrial relation at all factories continued to remain cordial.

As on 31st March, 2011 your Company has 5151 employees.

Directors

At its meeting held on 27th April, 2011, your Board appointed Mr Nadeem Kazim, Executive Vice President - HR & Personnel as an Additional Director of the Company to hold office till the ensuing Annual General Meeting. Your Board also appointed Mr Nadeem Kazim as a Wholetime Director for a period of five years with effect from 1st May, 2011 subject to your approval in the General Meeting. A notice has been received from a Member under Section 257 of the Companies Act, 1956 proposing the name of Mr Nadeem Kazim for appointment as a Director at the ensuing Annual General Meeting.

Mr R B Raheja and Mr Winston Wong, Directors, retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

Mr S N Mookherjee, Director, also retires by rotation at the ensuing Annual General Meeting but due to personal reasons does not wish to offer himself for re-appointment. Your Board places on record its deep appreciation for the services rendered by Mr Mookherjee during his long association with your Company.

None of the Directors of your Company are disqualified for being appointed as Directors, as specified in Section 274(1) (g) of the Companies Act, 1956.

Auditors

The Auditors, M/s S R Batliboi & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and being eligible under Section 224(1B) of the Companies Act, 1956, offer themselves for re-appointment.

Information pursuant to Section 217 of the Companies Act, 1956

a. Conservation of Energy and Technology Absorption

Information pursuant to Clause (e) of Sub- Section (1) of Section 217 of the Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of Board of Directors] Rules, 1988 and forming a part of the Directors Report for the financial year ended 31st March, 2011, are attached hereto.

b. Particulars of Employees

In accordance with the provisions of Section 217 of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders of the Company, excluding such annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

c. Responsibility Statement

Statement under the amended Section 217(2AA) of the Companies Act, 1956, on the responsibility of the Directors is a part of the Report.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors state:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for that period.

(iii) That the Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) That the Directors have prepared the annual accounts on a going concern basis.

Forward-Looking Statements

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 other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the Board of Directors

Place: Mumbai R G Kapadia

Dated: 27th April, 2011 Chairman


Mar 31, 2010

The Board of Directors have pleasure in presenting the 63rd Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2010.

Financial Results

(In Rs. Crores)

2009-2010 2008-2009

Profit before depreciation & taxation 891.24 503.33

Depreciation / Amortisation 80.65 67.94

Profit before tax 810.59 435.39

Taxation 273.50 151.00

Profit after tax 537.09 284.39

Balance brought forward 324.59 281.30

Making a total of 861.68 565.69 Out of this appropritions are:

General Reserves 250.00 185.00

Leaving a balance of 611.68 380.69

Interim Dividend 60% (Previous Year40%) 48.00 32.00

Tax on Interim Dividend 8.16 5.44

Proposed Final Dividend 40%

(Previous Year 20%) 34.00 16.00

Tax on Final Dividend 5.08 2.66

[Aggregate Dividend amounts to 100% (Previous year 60%)]

And leaving a balance of (which is carried forward to next year) 516.44 324.59

Consolidated Financial Statements

In accordance with Accounting Standard 21-Consolidated Financial Statements form part of the Report & Accounts. These Accounts have been prepared on the basis of audited financial statements received from the subsidiaries and associate companies as approved by its respective Board of Directors.

Dividend

Your Company paid an interim dividend on 5th November 2009, at the rate of 60% on the equity shares to the shareholders whose names appeared on the Register of Members on 28th October, 2009. Your Directors are now pleased to recommend a final dividend at the rate of 40% on the equity shares of the Company for the year ended 31st March, 2010, subject to your approval at the ensuing Annual General Meeting. Consequently, the total dividend for the year ended 31st March, 2010, including the interim dividend paid during the year, amounts to 100% (Re.1/- per equity share of Re.1/- each).

Corporate Governance

Transparency is the cornerstone of your Companys philosophy and all requirements of Corporate Governance are adhered to both in letter and spirit. The Audit Committee of the Board meets at regular intervals as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors have taken all necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key management personnel of your Company have complied with the Code of Conduct which was put in place by the Board of Directors. Apart from being in compliance with all requirements of Clause 49 of the Listing Agreement your Company has voluntarily adopted certain governance principles. Setting up of the Remuneration Committee of Directors and introduction of a Model Code for Insider Trading are some of the initiatives taken by your Company towards this end.

The Report on Corporate Governance as required under the Listing Agreement forms part of and is annexed to this Report. The Auditors Certificate on compliance with Corporate Governance requirements is also attached to this Report. Further, as required under Clause 49 (V) of the Listing Agreement a certificate from the CEO and CFO is being annexed with this Report.

Business / Operational Excellence

In keeping with its vision to provide credible value addition to our stakeholders and being recognized as a responsible corporate citizen your Company has implemented an exhaustive Total Quality Management System (TQM) throughout the organization. The TQM system involves the latest techniques of Total Productive Maintenance (TPM), 6 Sigma and Lean Manufacturing - leading towards business excellence.

Products manufactured at your Companys state-of- the-art manufacturing facilities symbolise quality and customer satisfaction. Quality is designed into products through use of techniques like - Advanced Product Quality Planning (APQP), Failure Mode & Effect Analysis (FMEA), Statistical Process Control (SPC) and Measurement System Analysis (MSA). Process capability monitoring ensures that products are well within specification with minimal rework and scrap.

TQM is a strategic initiative and your Company has progressed considerably in its journey towards Business Excellence. For its Quality Management System (QMS), the Industrial SBU part of Haldia, Hosur and Shamnagar factories have been certified for ISO-9001. For the Automotive SBU - Bawal, Chinchwad, Haldia, Hosur, Shamnagar and Taloja factories have been certified for ISO/ TS-16949. The Submarine SBU is certified for ISO-9001. These certifications, by the renowned TUV-NORD, headquartered in Germany, although issued in the names of the different factories, however include all business processes of R&D, Manufacturing, Marketing, Sales, After Sales Support and Corporate functions.

In line with its core value of striving for Excellence, your Company is implementing the European Foundation for Quality Management (EFQM) Business Excellence Model. Your Company has won the Cll- EXIM Bank Award for" Strong Commitment to Excel" in 2006 and 2007. In 2008 your Company bettered its performance and has been amongst eight companies in India to get the coveted "Significant Achievement Award."

Apart from these, in the last few years , your Company has won several awards and accolades in Quality, Safety-Health-Environment, 5-S, Energy Conservation, Productivity and Quality Circles. In 2009 the Hosur plant won the prestigious Asia Manufacturing Excellence Award-Gold Category in Auto Ancilliary from Frost & Sullivan as well as the ABK-AOTS 5-S Award 1st Prize in Large Manufacturing category . For the same year the Shamnagar plant has won the TQM Role Model Quality Award from CM (ER). As a proof of customer satisfaction, your Company has also won awards and recognitions from Toyota, Tata Motors and Bajaj Auto.

To improve efficiency and utilization of machines your Company has implemented Total Productive Maintenance (TPM) in the factories, following the methodology given by the Japanese Institute of Plant Maintenance (JIPM). For its efforts in TPM, the JIPM has conferred the "Award for TPM Excellence - 2008" to your Haldia plant. Other factories are also gearing up to the challenge to win this award in the near future.

Environment & Safety

For the Environmental Management System (EMS) the Chinchwad, Haldia, Hosur, Shamnagar and Taloja factories are certified to ISO 14001. Your Company is committed to preserve the environment and prevent pollution by going much beyond statutory compliance and ISO 14001 certification. Your Company has implemented several environmental projects and receiving the Teh Corporate Environment Award in 2007 and Best Innovation Award in Leadership and Excellence in Environment-Health-Safety from Cll (SR) in 2008 has further encouraged your Company to continuously improve its environmental performance, minimize waste and preserve natural resources.

The concern for Occupational Health and Safety issues has prompted your Company to implement OHSAS 18001 standard in its factories. The Hosur plant has already been certified and the other factories are expected to receive the certification in due course.

Energy conservation continues to be an area of focus for your Company not only as a part of its social obligations but also since this is a major cost in the manufacturing process. Your Company has taken several initiatives at each plant level in order to conserve energy. Necessary information relating to steps taken for conservation of energy is given in the annexure to this report.

Corporate Social Responsibility

Your Company believes that apart from ethical conduct of business, as a responsible corporate citizen it has various societal obligations. Fulfillment of such obligations is part of the Companies long term vision through engagement of all stake holders and the society at large. Towards this end, your Company has identified five core areas of Health Care, Education, Women Empowerment, Environment and Philanthropic activities.

Your Company continues to partner UNICEF in their Child Environment Programme in India that aims to create a greener and healthier world and to ensure equitable and sustainable access to basic health and hygiene facilities, particularly for the unreached and marginalized rural communities. This initiative has been linked to raising consumer consciousness and creating awareness for return of used batteries which contain lead and thereby inducing the vehicle owners to participate in the cause, in Kolkata, your Company has partnered with CINIASHA for providing education and development of societal skills amongst slum and street children.

As reported earlier a village near Hosur Plant has been adopted for converting it to a Model Village and extensive work has been undertaken for infrastructure and community development for the same. The new school building in the village has recently been inaugurated. Apart from the same, support was extended for educational needs for students in rural areas, health camps organized for migrant labourers and sewing machines provided to village women.

In Haldia Sewing and Zari machines were distributed through the Cooperative System and vocational training was organized for the rural women folk. Your other plants also continued with their CSR activities which included organizing health camps, distribution of free medicines and conducting pathological tests, development of community gardens, providing drinking water facilities and participation in various health awareness camps including the pulse polio programme. Tree planting activities and other initiatives for creating awareness about the preservation of the environment were also organized.

Subsidiary Companies

Your Company has four Indian subsidiaries viz. Chloride Metals Limited, Caldyne Automatics Limited, Leadage Alloys India Limited and Chloride International Limited, and three foreign subsidiaries, viz. Chloride Batteries S.E. Asia Pte. Ltd., Singapore, Espex Batteries Limited, UK and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.

Chloride Metals Limited which is a 100% subsidiary of your Company is engaged in lead smelting and refining operations and has its plant at Markal, Pune. The said Company achieved a turnover of Rs 264 crores representing a growth of 52% over the previous year and a profit before tax of Rs 15 crores which is 106% higher than the previous year.

Caldyne Automatics Limited is a 100% subsidiary of your Company having its factory at Sector V, Salt Lake City, Kolkata and is engaged in manufacture and sale of Chargers, DC Power Systems and associated equipment. During the year 2009-10, the said company achieved a turnover of Rs 37 crores and a profit before tax of Rs. 1.54 crores representing an increase of 18% and 304% respectively over the previous year.

Leadage Alloys India Limited, a 51% subsidiary of your Company, has its plant at Kolar District, Karnataka and is engaged in lead smelting and refining activities. During the year 2009-10 the said company has achieved a turnover of Rs 546 crores representing an increase of over 23% over the previous year and profit before tax of Rs 54 crores representing a growth of 621% over the previous year.

Chloride International Limited a 100% subsidiary of your Company, is engaged in the marketing and sale of Non-conventional Energy Systems like Solar Home Lighting and Heating System Panels, and Home UPS/ Inverters etc. The sales of the said company during 2009-10 amounted to Rs 12 crores which was 224% higher than that of the previous year. The Profit Before Tax also increased from Rs 0.01 crores to Rs 0.37 crores.

Your Company holds 100% of the share capital in Chloride Batteries S E Asia Pte. Ltd., Singapore. The said company is engaged in manufacture and sale of lead acid batteries and caters to the South East Asian and Australian markets. During the year 2009-10 the company achieved a turnover of SGD 36.916 million (Rs. 122.67 crores) and Profit before Tax of SGD 1.422 million (Rs. 4.73 crores).

Espex Batteries Limited, UK, in which your Company holds 51 % of the share capital, is engaged in marketing and selling of lead acid batteries for industrial applications. During the year 2009-10 the company achieved a turnover of GBP 40,01,095 (Rs 30.21 crores) and made a Profit Before Tax of GBP 47,915 (Rs. 0.36 crores).

Your Company also holds 61.5% in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. The said company is engaged in the business of manufacturing and marketing of Lead Acid batteries. During the year 2009-10 the said company achieved a turnover of SLR 1560 million (Rs. 63.96 crores) which was higher by 9% over the previous year and Profit before tax of SLR 151.1 million (Rs. 6.20 crores) representing a growth of 81% over the previous year.

During the year your Company divested its 26% shareholding in Ceil Motive Power Pty.Ltd., Australia (as Associate Company). This investment was made in July 2007 with a view to expand the Companys export market in Australia through an existing local company having manufacturing and marketing facilities. However, as a result of the economic downturn and cheap imports from China and Taiwan flooding the market, this Company was incurring heavy losses. Instead of investing additional amounts involving foreign exchange outflow, your Company decided to sell its shares to the other shareholders of the Joint Venture Company, after a valuation of shares by a Chartered Accountant. Your Company had provided in full for a possible diminution in the value of the investment in the Accounts for the year ended 31st March, 2009. Hence, there has been no charge to the profit and loss account in the current year and instead a small income as consideration for the divestment was earned.

The dividends received from and proposed by the Subsidiaries during 2009-10 aggregates to Rs 4.98 crores as compared to Rs 1.33 crores in the previous year.

The statement of the Holding Companys interest in Subsidiaries as specified in sub section (3) of section 212 of the Companies Act, 1956 along the Accounts, Directors Reports and Auditors Report of the subsidiaries are attached to the Report and Accounts of your Company.

Directors

Dr S K Mittal, Director - R&D will be retiring from the services of the Company with effect from 30th April, 2010. Dr Mittal has worked in the Company for 36 years and was in overall charge of the Research, Development and Quality Control of the Company. Your Board places on record its sincere appreciation for the services rendered by Dr Mittal during his long association with the Company.

Mr A H Parpia, who was a Director of your Company since 1993, resigned from the Board of Directors with effect from 28th April, 2010 for health reasons. Your Board records its deep appreciation for the services rendered by Mr Parpia as a Director of the Company.

At its meeting held on 28th April, 2010, your Board appointed Ms Mona N Desai as an Additional Director to hold Office till the ensuing Annual General Meeting of the Company. A notice has been received from a Member under Section 257 of the Companies Act, 1956 proposing the appointment of Ms Mona N Desai as a Director at the ensuing Annual General Meeting.

The term of appointment of Mr T V Ramanathan as Managing Director & Chief Executive Officer expires on 30th April, 2010. Your Board has, subject to your approval, reappointed Mr T V Ramanathan, as Managing Director & Chief Executive Officer for a further period of two years with effect from 1st May, 2010. A resolution to this effect is being placed for your approval at the ensuing Annual General Meeting to be held on 14th July, 2010.

Mr. R G Kapadia, Mr. S B Raheja and Mr. H M Kothari, Directors retire by rotation and being eligible offer themselves for re-appointment.

None of the Directors of your Company are disqualified for being appointed as Directors, as specified in Section 274(1 )(g) of the Companies Act, 1956.

Auditors

The Auditors, M/s S R Batliboi & Co., Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and being eligible under Section 224(1 B) of the Companies Act, 1956, offer themselves for re-appointment.

Information pursuant to Section 217 of the Companies Act, 1956

a. Conservation of Energy and Technology Absorption

Information pursuant to Clause (e) of Sub-Section (1) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the financial year ended 31st March, 2009, are attached hereto.

b. Particulars of Employees

In accordance with the provisions of Section 217 of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders of the Company excluding such annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

c. Responsibility Statement

Statement under the amended Section 217 (2AA) of the Companies Act, 1956, on the responsibility of the Directors is a part of the Report.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors state:

(i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for that period;

(iii) That the Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv)That the Directors have prepared the annual accounts on a going concern basis.

Acknowledgement

Your Directors would like to record its appreciation for the co-operation and support received from its employees, shareholders, Government agencies and all stakeholders.

On behalf of the Board of Directors

Place : Mumbai R G Kapadia

Date: 28th April, 2010 Chairman

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