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Notes to Accounts of Exide Industries Ltd.

Mar 31, 2017

a. Investments in equity shares / units

Under Indian GAAP, all investments in equity shares / units were measured at cost. As explained in accounting policy in 1(d) below, under Ind-AS, investments in shares / units (other than investments in subsidiaries) are accounted for at fair value. These estimates are based on conditions existing on the respective Balance Sheet dates.

b. Dividend

Under Indian GAAP, proposed final dividends including Dividend Distribution Taxes (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are approved. Under Ind AS, such dividend is recognised as a liability when approved by shareholders.

c. Deferral of Revenue (Customers incentive scheme)

Under Indian GAAP, provision towards customer incentive was recognised at cost. As explained in accounting policy 1(k) below, under Ind-AS, incentive payable is accounted for at fair value. These estimates are based on conditions existing on the respective Balance Sheet dates.

d. Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

Further, the various transitional adjustments arising on adoption of Ind-AS also create temporary differences, deferred tax adjustments whereon are also recognised and recorded in Retained Earnings, Statement of Profit and Loss or OCI along with the corresponding item of adjustment.

e. Goodwill amortization

Under Indian GAAP, the acquired goodwill was amortised over the period of 5 years. However, under IND AS, acquired goodwill is not amortised, but tested for impairment. Accordingly, amortisation of goodwill has been reversed.

f. Re-classifications and other miscellaneous items

The Company has done the following reclassifications as per the requirements of Ind-AS:

i) Re-Measurement gain/loss on defined benefit plans are re-classified from Statement of Profit and Loss to OCI

ii) Assets / liabilities which do not meet the definition of financial asset / financial liability have been reclassified to other Assets / liabilities.

iii) Allowance for doubtful debts accounted for based on trend of historical default rates as per Ind-AS 109 - Financial Instruments.

iv) Warranty cost, earlier being netted off with cost of raw material consumed, has been re-classified to other expenses. Similarily, excise duty on warranty, earlier netted off with Sales, has now been reclassified to other expenses.

v) The Company has re-classified Unpaid dividend balance from cash and cash equivalents to other bank balances.

vi) Excise duty on sales of goods earlier netted off with sales has been disclosed as a separate item in expenses

vii) The Company has made Provision for site restoration liabilities and provided Interest thereon as per Ind-AS 37 - Provisions, Contingent Liabilities and Contingent Assets.

g. Other comprehensive income

Ind-AS requires preparation of Statement of Other Comprehensive Income in addtion to Statement of Profit and Loss.

h. Ind-AS 101 Exemptions applied

The Company has adopted following exemptions from retrospective application of certain requirements under Ind-AS, as allowed by Ind-AS 101 - First-time Adoption of Indian Accounting Standards

(i) The Company has opted not to apply Ind-AS 103-Business Combinations, to acquisitions occurred before April 1, 2015.

(ii) The Company has elected to continue with carrying value as recognised in its Indian GAAP Financial Statements of following items as deemed cost at the transition date, viz., April 1, 2015 in accordance with Ind-AS 101- First-time Adoption of Indian Accounting Standards.

A. Property Plant and Equipments

B. Intangible Assets

C. Investment in subsidiaries

(iii) The Company has designated investment in equity instruments (other than investment in subsidairies and investment in mutual funds) held at April 1, 2015 as FVTOCI investments and investment in mutual funds as FVTPL instruments.

Corporate Information

Exide Industries Limited (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 2013. Its shares are listed on three recognised stock exchanges in India. The registered office of the company is located at Exide House, 59E Chowringhee Road, Kolkata, 700020. The Company is primarily engaged in the manufacturing of Storage Batteries and allied products in India.

These separate financial statements were authorised for issue in accordance with a resolution of the Directors on May 4, 2017.

Basis of preparation

For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

These financial statements for the year ended March 31, 2017 have been prepared in accordance with Indian Accounting Standards (“Ind-AS”) consequent to the notification of The Companies (Indian Accounting Standards) Rules, 2015 (the Rules) issued by the MCA. These are the first Ind-AS financial statements of the Company, wherein the Company has restated its Balance Sheet as at April 1, 2015 and financial statements for the year ended and as at March 31, 2016 also as per Ind-AS.

The financial statements have been prepared on a historical cost basis, except for certain investments measured at fair value (refer accounting policy on investments).

1.1 Allocation of Goodwill to cash-generating units

The carrying value of goodwill pertained to Home UPS business which was acquired by the Company in 2011-12. The management impaired the goodwill amounting to Rs. 3.89 crs since the Home UPS business is very volatile and highly competitive. No other write down of the assets of Home UPS business is considered necessary.

1.2 For Intangible assets exisiting as on April 1, 2015, i.e. date of transition to Ind AS, the company has used Indian GAAP carrying value as deemed cost as permitted by Ind-AS 101 - First Time Adoption. Accordingly, the net WDV as per Indian GAAP as on April 1, 2015 has been considered as Gross Block under Ind-AS. The accumulated amortisation so netted off as on April 1, 2015, is as below -

2 Current Provisions

(a) There are other tax disputes / litigations amounting to Rs. 6.22 crs (March 31, 2016: Rs. 4.26 crs, April 1, 2015: Rs. 3.32 crs) against which the Company has also deposited money under protest and made provision there - against. Such deposits and provisions have been netted off in these financial statements.

(b) There are also provisions against Income Tax claims amounting to Rs. 12.80 crs (March 31, 2016: Rs. 10.52 crs, April 1, 2015: Rs. 8.37 crs) which is included in Note 7 i (b), against which the Company has also created deferred tax assets as disclosed in Note 21.

3 Revenue from operations

(i) Sales are net of price adjustments settled during the year by the Company and discounts, trade incentives, VAT, Sales Tax etc.

(ii) Sale of goods includes excise duty collected from customers of Rs. 970.27 crs (PY: Rs. 879.93 crs).

4 Other expenses

i) The Company has a full-fledged Research and Development Center and it has thereby been able to improve manufacturing efficiency and product quality. During the year, a sum of Rs. 22.67 crs. (PY Rs. 16.73 crs), including capital expenditure Rs. 4.23 crs. (PY Rs. 2.09 crs), was spent on Research and Development work.

ii) Rent and Hire charges include Rs. 25.53 crs (PY Rs. 23.35 crs) towards lease of residential apartments, office premises and godowns. These are cancellable leases, renewable by mutual agreement. The lease term is for various numbers of years and renewable for further periods, as per the lease agreements, at the option of the company. In lease agreements, escalation clauses are present ; however there are no restrictions imposed by the lease arrangements . There are no sub-leases.

5 Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions, as described below, that affect the reported amounts and the disclosures. The Company based its assumptions and estimates on parameters available when the financial statements were prepared and reviewed at each Balance Sheet date. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the reported amounts and disclosures.

(a) Employee benefit plans

The cost of the employment benefit plans and their present value are determined using actuarial valuations which involves making various assumptions that may differ from actual developments in the future. For further details refer to Note 37.

(b) Fair value measurement of investments

The fair value of unquoted investments are determined using valuation methods which involves making various assumptions that may differ from actual developments in the future. For further details refer Note 42.

(c) Deferral of Revenue (customer’s incentive scheme)

The Company estimates the fair value of points awarded to its sales agents under incentives schemes, based on past trends of similar incentive schemes and by applying a budgeted incentive payout rate. Inputs include assumptions about expected redemption rates, the mix of products that will be available for redemption in the future and customer preferences. As at March 31, 2017, the estimated liability towards unredeemed points amounted to approximately Rs. 54.97 crs (March 31, 2016: Rs. 95.73 crs, April 1, 2015: Rs. 40.16 crs)

(d) Warranty

The Company estimates the provision for warranty based on past trend of actual issues of batteries under warranty. As at March 31, 2017, the estimated liability towards warranty amounted to approximately Rs. 178.13 crs (March 31, 2016: Rs. 163.39 crs, April 1, 2015: Rs. 155.92 crs)

The provision towards warranty is not discounted as the management, based on past trend, expects to use the provision within twelve months after the Balance Sheet date.

6 Gratuity and Other Post employment Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto March 31, 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto March 31, 2003, for employees as on that date is in the nature of a defined benefit plan. From April 1, 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/ separation. This is an unfunded plan.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the Post - retirement benefit plans .

Notes : (1) Final dividend amounting to Rs. 31.28 crs was paid for the year 2015-16 (Rs. 27.37 crs for the year 2014-15) and Rs. 62.55 crs towards Interim Dividend for 2016-17 (Rs. 62.55 crs for Interim Dividend 2015-16) to Chloride Eastern Limited, UK.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2016: Nil, April 1, 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

7 Segment Reporting

The Company has identified two operating segments viz, Automotive and Industrial. As per Ind AS - 108, due to similar nature of products, production process, customer types, etc., the two operating segments have been aggregated as single operating segment of “storage batteries and allied products” during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.

8 Financial Risk Management Objectives and policies

The Company’s financial liabilities comprise short-term borrowings, capital creditors and trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s financial assets include trade and other receivables, cash and cash equivalents, investment in subsidiaries and deposits. The Company also holds investments.

The Company has a Risk Management Committee that ensures that risks are identified, measured and managed in accordance with Risk Management Policy of the Company. The Board of Directors also review these risks and related risk management policy.

The market risks and credit risks are further explained below:

I) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include FVTOCI investments, trade payables, trade receivables, etc.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities. Such foreign currency exposures are not hedged by the Company. The Company has a treasury department which monitors the foreign exchange fluctuations on the continuous basis and advises the management of any material adverse effect on the Company.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

ii) Commodity price risks

The Company is affected by the price volatility of certain commodities. Its operating activity is manufacturing of batteries and therefore requires supply of lead. Due to significant volatility in the lead price, the Company enters into purchase contract with vendors wherein the prices are linked to the quoted London Metal Exchange rates. Similarly, the Company’s selling price of batteries to OEM customers is linked to such rates. As the Company’s significant revenue is linked to cost of lead, the impact of change in lead prices on Company’s profit is not expected to be significant.

iii) Equity price risks

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments / mutual funds. Reports on the investment portfolio are submitted to the Company’s management on a regular basis. The Company’s Board of Directors reviews and approves all investment decisions.

II) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade receivables

A significant part of the Company’s sales are under the ‘cash and carry’ model which entails no credit risk. For others, an impairment analysis is performed at each reporting date on an individual basis for all the customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data of credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 5 and 10 as the Company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are from several industries.

9 Capital Management

The Company’s objective when managing capital (defined as net debt and equity) is to safeguard the Company’s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the Balance Sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company.

10 List of subsidiaries of the Company

The Company has following subsidiaries for which the Company prepares Consolidated Financial Statements as per Ind AS 110 “Consolidated Financial Statements”. These subsidiaries have been accounted at cost in these separate financial statements of the Company.


Mar 31, 2015

1. SHARE CAPITAL

c) Terms / rights attached to equity shares

The company has only one class of Equity Shares having a Par Value of Re 1 per share. Each Holder of Equity Shares is entitled to one Vote per share. The company declares and pays dividends in Indian Rupee. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

During the year ended March 31, 2015, the amount of per share Dividend recognised as distributions to equity shareholders was Rs. 2.20 (PY Rs. 1.80 per share)

2. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto March 31, 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto March 31, 2003, for employees as on that date is in the nature of a defined benefit plan. From April 1, 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Post - retirement benefit plans.

3 GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

IX The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

X Contribution to Provident and Other Funds includes Rs. 18.82 Crores (Rs. 16.85 Crores) paid towards Defined Contribution Plans

4. SEGMENT REPORTING

As the Company's business activity falls within a single primary business segment, viz "Storage Batteries and allied products", no separate segment information is disclosed. Secondary information is reported geographically.

5. RELATED PARTY DISCLOSURE: i) Particulars of related parties :

1. Subsidiaries

Chloride Batteries S.E. Asia Pte. Limited, Singapore. (CBSEA) Chloride International Limited (CIL)

Chloride Power Systems & Solutions Limited (CPSSL)

Espex Batteries Limited, UK (ESPEX)

Associated Battery Manufacturers (Ceylon) Ltd, Sri Lanka (ABML) Chloride Metals Limited (CML)

Chloride Alloys India Limited (CAIL)

Exide Life Insurance Company Limited (ELI)

2. Enterprise / Individuals having a direct or indirect control over the Company

Chloride Eastern Limited, UK. (CEL)

Chloride Eastern Industries Pte Limited, Singapore (CEIL) LIEC Holdings SA, Switzerland Mr. S B Raheja

3. Key Management Personnel (As on March 31, 2015)

Mr. P K. Kataky, Whole Time Director Mr. G. Chatterjee, Whole Time Director Mr. A. K. Mukherjee, Whole Time Director Mr. Nadeem Kazim, Whole Time Director Mr. Subir Chakraborty, Whole Time Director Mr. Supriya Coomer, Company Secretary

4. Name of the Companies / firms / in which Directors / Key Management Personnel have significant influence with whom transactions have happened during the year.

Shalini Construction Company Private Limited

Peninsula Estates Private Limited

Raheja QBE General Insurance Company Limited

6. Previous year figures have been regrouped / rearranged where necessary.


Mar 31, 2014

1. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto 31 March 2003, for employee as on that date is in the nature of a defined benefit plan. From 1 April 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Post - retirement benefit plans.

VIII Healthcare cost trend rates have no effect on the amounts recognised in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change.

IX. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

X. Contribution to Provident and Other Funds includes Rs. 16.85 crs (Rs. 16.48 crs) paid towards Defined Contribution Plans.

2. SEGMENT REPORTING

As the Company''s business activity falls within a single primary business segment, viz "Storage Batteries and allied products", no separate segment information is disclosed. Secondary information is reported geographically.

Geographical Segments

The Company primarily operates in India and therefore the analysis of geographical segment is demarcated into its Indian and Overseas operations as under:

As at As at 31st March, 2014 31st March, 2013

3 CONTINGENT LIABILITIES

Outstanding Bank Guarantees / Indemnity Bonds 17.97 18.24

Sales Tax demands 24.37 15.14

Excise Duty demands 34.12* 34.32

Service Tax demands

Income Tax demands 6.82 4.46

Other claims being disputed by the Company 0.44 0.44

Claim from a landlord, an appeal whereby is pending in Hon''ble Bombay High Court Not Not Ascertainable Ascertainable 83.72 72.60

4 ACTUARIAL METHOD AND ASSUMPTIONS FOR THE LIFE INSURANCE BUSINESS

Liability for policies in force (''the Liability'') is determined by the Appointed Actuary in accordance with generally accepted actuarial practice as well as the requirements of the Insurance Act, 1938 and the regulations notified bylRDA and relevant actuarial practice standards issued by Institute of Actuaries of India.

(a) Traditional Individual Business

The Liability on a policy is calculated based using the ''Gross Premium Method'', representing the present value of expected future outgo including benefits (including future bonuses for participating policies) and future expenses less present value of expected future premium. Further, a reserve for death claims that may have been Incurred but are Not yet Reported to the Company (IBNR) is also maintained. The reserves for the Best Years Retirement Plan, ING New Best Year Retirement Plan and ING Assured Return have been set up as the sum of the policy fund balances as at 31 March 2014 plus additional reserves for excess of expenses over policy charges. The assumptions used for calculating the liability are provided below: i. Mortality & Morbidity:

Mortality is considered according to the Indian Assured Lives Mortality Table (2006-08) - Modified Ultimate and varies between 99% and 217.5% of the table (last year 90% and 135% of Indian Assured Lives Mortality Table (1994-96)). Morbidity assumption is based on the CIBT 93 Table. For term products, mortality assumption varies between 51%-145% of the Indian Assured Lives Mortality Table (2006-08) - Modified Ultimate (Last Year mortality assumptions for term products were 35%-90% of the Indian Assured Lives Mortality Table (1994-96)) ii. Expenses:

Appropriate allowance for maintenance expenses increasing with inflation has been made. Provision for initial and renewal commission has been made at actual rates payable. iii. Valuation discount rate:

Between 5.5% to 6.75% p.a. for all products (Last Year between 5.5% to 6.5% p.a. for all products). Assumptions on future bonus rates for participating business have been set to be consistent with valuation interest rate assumptions. iv. Lapses:

Future policy lapses have been assumed based on the type of policy and the duration for which the policy has been in force. The lapse rates are based on current experience of the company.

Margins for Adverse Deviation

The assumptions allow for suitable Margins for Adverse Deviation in the mortality, morbidity, expenses, lapses and valuation discount rate assumption! as required under regulations and actuarial practice standards issued by The Institute of Actuaries of India

(b) Linked Individual Business

The reserves held under the unit-linked products are the fund balances (unit reserve) as at 31 March 2014 plus non- unit reserves. Additional adjustments have also been made to allow for the following :

a. Unearned Premium Reserve in respect of mortality charge/rider charge deducted from the policyholder''s account every month.

b. IBNR reserve for death claims incurred but not reported to company as on the valuation date.

c. Reserve to meet the guarantees for unit linked products.

d. Non Unit reserves are calculated by discounting future non unit cash flow, determined based on assumptions given below:

i. Mortality & Morbidity:

Mortality is considered according to the Indian Assured Lives Mortality Table (2006-08) - Modified Ultimate and varies between 99% and 145% (varies by age), (last year 90% of Indian Assured Lives Mortality Table (1994-96) of the table). ii. Expenses:

Appropriate allowance for maintenance expenses increasing with inflation has been made. Provision for initial and renewal commission has also been made at actual rates payable. iii. Valuation discount rate (for setting up of Non unit reserve): 4.5% p.a. (last year 4.5% p.a.) iv. Unit growth rate: 4% to 10% (last year 4% to 10%) depending on the type of fund. Margins for Adverse Deviation

The assumptions allow for suitable Margins for Adverse Deviation in the mortality, morbidity, expenses, lapses and valuation discount rate assumptions as required under regulations

(c) Group Business:

Unearned Premium method for reserving is adopted for the Group yearly renewable term product. The Group Single Premium Mortgage/Credit products have been valued using the Gross Premium Method with allowance for future expected expenses. Provision for IBNR reserve has also been made as appropriate.

(d) Linked group business:

The reserves held under the unit-linked products are the fund balances as at 31 March 2014.

(e) Reinsurance Credit

The reinsurance credit is calculated on unearned premium basis, based on the expected reinsurance premium outgo.

5 INVESTMENTS OF LIFE INSURANCE BUSINESS

The Company is maintaining separate funds for Shareholders and Policyholders as per Section 11 (1B) of the Insurance Act, 1938. Investments and related incomes are segregated between Participating, Non Participating, Unit Linked, Annuity and Pension funds. In respect of policyholder funds, the allocation of cash / securities to policyholder is done on a daily basis.

Investments under Section 7 of the Insurance Act, 1938 are in "8.20% GSEC 12-02-2024 OIL BOND (Face Value Rs 12.11 crs)" having Book Value of Rs 11.90 crs and Market Value Rs 11.35 crs.

As on 31 March 2014, none of the investments of the Company have been classified as non-performing as per the income recognition norms issued by the IRDA.

As on 31 March 2014, none of the investments of the Company have been classified / categorised in the definition of Loans & Advances as per circular no 32/2/F&A/Circular/l 69/Jan/2006-07. In view of this, the company has not made any provisions.

6 In the current year IVL has exceeded the limits for expenses of management as per Section 40B of the Insurance Act, 1938 read with Rule 17D of the Insurance Rules, 1939. The company has articulated its expense position vis-d-vis business plans, constraints and also submitted that it would not be able to meet the requirements in the financial year 2013- 14. Subsequently the company has been granted one year extension to comply with requirement by the IRDA i.e. up to the Financial Year ending 2014-15.

7 IVL became a Subsidiary of EIL on 22nd March , 2013 and hence Statement of Consolidated Profit and Loss for FY 12-13 included line by line consolidation of Profit and Loss of IVL only for 10 days from 22nd of March 2013 to 31 st of March 2013, as against full year numbers of IVL in current year .Consequently, the figure of CY are not comparable with the figures of previous year to that extent.

8 Previous year figures have been regrouped / rearranged where necessary.


Mar 31, 2013

1. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto 31 March 2003 is in the nature of a defined benefit plan. From 1 April 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Post - retirement benefit plans.

2. SEGMENT REPORTING

As the Company''s business activity falls within a single primary business segment, viz " Storage Batteries and allied products", no separate segment information is disclosed. Secondary information is reported geographically. Geographical Segments

The Company primarily operates in India and therefore the analysis of geographical segment is demarcated into its Indian and Overseas operations as under:

3 ACQUISITION OF ADDITIONAL STAKE IN ING VYSYA LIFE INSURANCE COMPANY LIMITED

During the year, the Company acquired the remaining 50% shares of ING Vysya Life Insurance Company Limited (IVL) from the other shareholders, after obtaining necessary approvals from Competition Commission of India (CCI) and Insurance Regulatory and Development Authority (IRDA), at a consideration of Rs 549.33 Crores. Consequent to such acquisition of shares, IVL has now become a wholly owned subsidiary of the Company

4 CONTINGENT LIABILITIES

Outstanding Bank Guarantees/Indemnity Bonds 18.24 15.93

Sales Tax demands 15.14 1.53

Excise Duty demands 34.32* 33.77

Service Tax demands - 0.77

Income Tax demands 4.46 6.50

Other claims being disputed by the Company 0.44 0.45

Claim from a landlord , an appeal whereby is pending in Hon''ble Bombay High Court Not Not Ascertainable Ascertainable

72.60 58.95

* Includes a Demand of Rs 32.60 crs plus penalties, as applicable, for the period June 2006-May 2009 on the grounds that Excise Duty was payable on the MRP of batteries.The Company has contested applicability of The Standards of Weights & Measures Act,1976 and Rules thereunder, the applicability of which is still to be adjudicated by the Hon''ble Supreme Court.

5 PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED / REARRANGED WHERE NECESSARY.


Mar 31, 2012

A) Terms / rights attached to equity shares

The company has only one class of Equity Shares having a Par Value of Re 1 per share. Each Holder of Equity Shares is entitled to one Vote per share. The company declares and pays dividends in Indian Rupee. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

During the year ended 31st March 2012, the amount of per share Dividend recognized as distributions to equity shareholders was Rs 1.50 (PY Rs 1.50 per share)

i) The Company has a full-fledged Research and Development Center and it has thereby been able to considerably further its efficiency. During the year, a sum of Rs. 12.05 crs. (Rs. 9.76 crs), including capital expenditure Rs. 0.94 crs. (Rs. 1.09 crs), was spent on Research and Development work.

ii) Stores and Spares consumed is exclusive of Rs. 0.46 crs (Rs 0.45 crs) being the amounts allocated to other heads of expenses.

iii) Rent and Hire charges include Rs 0.54 crs (Rs. 0.62 crs) towards lease of residential apartments. These are cancellable leases, renewable by mutual agreement. Generally, there is no escalation clause and no other restrictions imposed by the lease arrangements. There are no sub-leases.

1. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto 31 March 2003 is in the nature of a defined benefit plan. From 1 April 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan. The following tables summarise the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

I. In 2012-13 the Company expects to contribute Rs. 5.00 crs (Rs 5.00 crs) to gratuity and Rs 0.50 crs (Rs 1.00 crs) to Pension.

II. Healthcare cost trend rates have no effect on the amounts recognized in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change

III. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

IV. Contribution to Provident and Other Funds includes Rs 14.94 crs (Rs 13.60 crs) paid towards Defined Contribution Plans

2.SEGMENT REPORTING

As the Company's business activity falls within a single significant primary business segment, viz "Storage Batteries and allied products', no separate segment information is disclosed. Secondary information is reported geographically.

3. UTILISATION OF MONEY RAISED THROUGH PRIVATE PLACEMENT

During the financial year 2009-10, the Company had raised Rs 529.91 crores (net) by issuing shares to Qualified Institutional Buyers to generate funds for its capital expenditure, acquisitions and for general corporate purposes. Entire amount of Rs 529.91 crs (Rs 295.88 crores) has been used for the stated purpose and unutilized balance as at 31st March, 2012 is Rs Nil (Rs 234.03 crs).

* Includes a Demand of Rs 32.60 crs plus penalties, as applicable, for the period June 2006-May 2009 on the grounds that Excise Duty was payable on the MRP of batteries. The Company has contested this demand largely on grounds of non-applicability of The Standards of Weights & Measures Act, 1976 and Rules there under, the applicability of which is still to be adjudicated by the Hon'ble Supreme Court. Pending the adjudication, the demand has been treated as Contingent Liability in these Financial Statements.

The above information exclude particulars in respect of certain non-resident shareholders for whom dividend warrants were sent to the shareholders' banks in India in Indian Rupees, with prior approval of the Reserve Bank of India.


Mar 31, 2011

OTHERS

a. Sales are net of price adjustments for earlier years, settled during the year by the Company and discounts, trade incentives etc.

b. Excise duty includes Rs. 18.82 crs. (Rs. 8.83 crs) paid on batteries issued towards warranty claims.

c. The Company has a full-fledged Research and Development Center and it has thereby been able to considerably further its efficiency. During the year, a sum of Rs. 9.76 crs. (Rs. 11.55 crs), including capital expenditure Rs. 1.09 crs. (Rs. 2.73 crs), was spent on Research and Development work.

d. Stores and Spares consumed is exclusive of Rs. 0.45 crs (Rs. 0.37 crs) being the amounts allocated to other heads of expenses.

e. The amounts due to Micro and Small enterprises are as follows:-

1. Principal Amount Rs. 5.29 crs (Rs. 5.44 crs) Interest due on above Rs. 0.01 crs (Rs. 0.02 crs)

2. Amount of interest paid in terms of Sec. 16 of the Micro, Small and Medium Enterprise Development Act 2006 Rs. nil (Rs. nil)

3. Amount of interest due and payable for the period of delay Rs. 0.01 crs (Rs. 0.02 crs)

4. Amount of interest accrued and remaining unpaid as at 31st March 2011 Rs. 0.03 crs (Rs. 0.02 crs)

5. Amount of further interest remaining due and payable in the succeeding year Rs. nil (Rs. nil)

f. Diminution, based on the net worth as per the latest audited accounts of the relevant Company or market value, in the value of certain long term unquoted/quoted investments as on the Balance Sheet date, being temporary in nature, has not been provided.

i. Materials consumed (Schedule 16) includes warranty costs Rs. 77.27 crs (Rs. 28.81 crs) and is net of exchange fluctuation Gain Rs. 15.48 crs. (Rs. 18.52 crs.), export incentives Rs. 6.63 crs. (Rs. 5.10 crs.), and purchase tax set-off Rs. Nil. (Rs. 0.64 crs).

l. During the last year, the Company had raised Rs. 529.91 crores (net) by issuing shares to Qualified Institutional Buyers to generate funds for its capital expenditure, acquisitions and for general corporate purposes. Out of above Rs. 295.88 crores have been used for the stated purpose and balance of Rs. 234.03 crores remain temporarily invested in mutual funds as at 31st March, 2011.

n. BUSINESS SEGMENT

As the Companys business activity falls within a single primary business segment, viz. Lead Acid Storage Batteries, the disclosure requirements of Accounting Standard-17 "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

q. The Company has paid Rs. 0.62 crs (Rs. 0.49 crs) towards lease of residential apartments. These are cancellable leases, renewable by mutual agreement. Generally, there is no escalation clause and no other restrictions imposed by the lease arrangements. There are no sub-leases.

r. Gratuity, compensated absences and other post-employment benefit plans The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain Post-Retirement Medical Benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto 31 March 2003 is in the nature of a defined benefit plan. From 1 April 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

V. In 2011-12 the Company expects to contribute Rs. 5.00 crs to gratuity and Rs. 1.00 crs to Pension.

VII. Actuarial Assumptions

1. Discount Rate 8.00% p.a (7.50%)

2. Expected rate of return on plan assets 9.00% p.a (8.00%)

3. Mortality pre retirement Standard Table LIC (1994-96) Ultimate

4. Mortality Post retirement Mortality for annuitants LIC (1996-98) Ultimate

5. Employee Turnover Rate 10.00% (10.00%)

VIII. Healthcare cost trend rates have no effect on the amounts recognised in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change

IX. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

X. Contribution to Provident and Other Funds includes Rs. 13.60 crs (Rs. 12.51 crs) paid towards Defined Contribution Plans

s. Related Party Disclosure:

i) Particulars of related parties :

1. Subsidiaries : Chloride Batteries S.E. Asia Pte. Limited, Singapore (CBSEA) Chloride International Limited (CIL) Caldyne Automatics Limited (Caldyne) Espex Batteries Limited, UK (Espex) Associated Battery Manufacturers (Ceylon) Ltd., Sri Lanka (ABML) Chloride Metals Limited (CML-Formerly Tandon Metals Limited) Leadage Alloys India Limited Exide Batteries (Pvt) Limited (Subsidiary of CBSEA)

2. Associate Companies : ING VYSYA Life Insurance Company Limited (IVL)

3. Enterprise/Individuals having a direct : Chloride Eastern Limited, UK. (CEL) or indirect controls over the company Chloride Eastern Industries Pte Limited, Singapore (CEIL) LIEC Holdings SA, Switzerland Mr. S B Raheja

4. Key Management Personnel : Mr. T V Ramanathan (As on 31st March, 2011) Mr. G Chatterjee Mr. P K Kataky Dr. S K Mittal (upto 30 April, 2010) Mr. A K Mukherjee Mr. Nadeem Kazim Mr. Supriya Coomer

5. Name of the Companies /firms/ : Nil in which Directors/Key Management Personnel have significant influence with whom transactions have happened during the year.

v. Exceptional item of Rs. 46.93 crores represents gain on transfer of land which was no longer in use.

w. Other income in Schedule 14 includes Rs. 20.65 crores being gain arising on account of premature payment of deferred sales tax loan in terms of Net Present Value (NPV) Scheme of the Government of Tamilnadu. The Company has been granted the above in terms of order no. 743/2011/A8 dated 29th March, 2011 issued by Joint Commissioner (CT), Chennai (East) Division.


Mar 31, 2010

I. CONTINGENCIES

Contingent liabilities not provided for in respect of

- Outstanding Bank Guarentees/lndemnity Bonds 10.09 10.24

- Sales Tax demands 1.03 0.11

- Excise Duty demands 0.77 0.62

- Other claims being disputed by the Company 0.50 0.54

- Claim from a landlord, an appeal whereby is pending in Honble

Bombay High Court Not ascertainable Not ascertainable

II. OTHERS

a. Sales are net of price adjustments for earlier years, settled during the year by the Company and discounts, trade incentives etc (after adjustment of excess provision written back amounting to Rs. 9.93 crs.).

b. Excise duty includes Rs. 8.83 crs. (Rs. 11.96 crs) paid on batteries issued towards warranty claims.

c. The Company has a full-fledged Research and Development Center and its has thereby been able to considerably further its efficiency. During the year, a sum of Rs. 11.55 crs. (Rs. 9.38 crs), including capital expenditure Rs. 2.73 crs. (Rs. 1.80 crs), was spent on Research and Development work.

d. Stores and Spares consumed is exclusive of Rs. 0.37 crs (Rs. 0.29 crs) being the amounts allocated to other heads of expenses.

f. Diminution, based on the net worth as per the latest audited accounts of the relevant Company or market value, in the value of certain long term unquoted/quoted investments as on the Balance Sheet date, being temporary in nature, has not been provided.

g. Details of amount payable (when due) to Investor Education & Protection Fund are as follows (Schedule -11)

i. Materials consumed (Schedule 16) includes warranty costs Rs. 28.81 crs (Rs. 37.59 crs) and is net of exchange fluctuation Gain Rs. 18.18 crs. (Includes Exchange Loss Rs. 40.64 crs.), export incentives Rs. 5.10 crs. (Rs. 4.64 crs.), and purchase tax set-off Rs.0.64 crs. (Rs. nil).

I. During the year, the Company has issued 5 crores shares of Re 1 each to Qualified Institutional Buyers (QIBs) at a premium of Rs. 106.90 to generate funds for its capital expenditure, acquisitions and for general corporate purposes. The total sum received aggregated to Rs.539.50 crores (including Rs.534.50 crores towards Securities premium). Pending utilization of the money for the purposes mentioned above, the Company has temporarily invested the funds in mutual funds after adjusting share issue expenses of Rs 9.59 crores (including Auditors remuneration of Rs. 0.27 crores).

n. BUSINESS SEGMENT

As the Companys business activity falls within a single primary business segment, viz. lead Acid Storage Batteries, the disclosure requirements of Accounting Standard-17 "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

q. The Company has paid Rs. 0.49 crs (Rs. 0.52 crs) towards lease of residential apartments. These are cancellable leases, renewable by mutual agreement. Generally, there is no escalation clause and no other restrictions imposed by the lease arrangements. There are no sub-leases.

r. Gratuity, compensated absences and other post-employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The Company provides certain Post-Retirement Medical Benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded.

The Company has a Pension plan, a part of the liability whereof upto 31 March 2003 is in the nature of a defined benefit plan. From 1 April 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan.

V. In 2010-11 the Company expects to contribute Rs. 5.00 crs to gratuity and Rs. 1.00 crs to Pension.

VIII. Healthcare cost trend rates have no effect on the amounts recognised in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change.

IX. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

X. Contribution to Provident and Other Funds includes Rs. 12.51 crs (Rs. 10.26 crs) paid towards Defined Contribution Plans.

s. The Ministry of Corporate Affairs, Government of India vide its letter no. 47/68/2010-CL-lll dated 19th March, 2010, has exempted the Company from attaching the Annual Reports and other particulars of its subsidiary companies along with the Annual Report of the Company required u/s 212 of the Companies Act, 1956.

v. Related Party Disclosure:

i) Particulars of related parties :

1. Subsidiaries

Chloride Batteries S.E. Asia Pte. Limited, Singapore (CBSEA)

Chloride International Limited (CIL)

Caldyne Automatics Limited (Caldyne)

Espex Batteries Limited, UK (Espex)

Associated Battery Manufacturers (Ceylon) Ltd., Sri Lanka (ABML)

Chloride Metals Limited (CML-Formerly Tandon Metals Limited)

Leadage Alloys India Limited

Exide Batteries (Pvt) Limited (Subsidiary of CBSEA)

2. Associate Companies :

INGVYSYA Life Insurance Company Limited (I VL)

CEIL Motive Power Pty Limited, Australia (Upto 24th August, 2009)

3. Enterprise/Individuals having a direct :

Chloride Eastern Limited, UK. (CEL) or indirect controls over the company Chloride Eastern Industries Pte Limited, Singapore (CEIL) LIEC Holdings SA, Switzerland Mr. S B Raheja

4. Key Management Personnel : Mr. T V Ramanathan

Mr. G Chatterjee

Mr. P K Kataky

Dr. S K Mittal

Mr. A K Mukherjee

Mr. Nadeem Kazim

Mr. Supriya Coomer

5. Name of the Companies/firms/ : Nil in which Directors/Key Management Personnel have significant influence with whom transactions have happened during the year

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