For the financial year ended March 31, 2023
Your Directors are pleased to present the Annual Report, together with
the Audited Financial Statements of your Company for the financial year ended March 31,
2023.
FINANCIAL RESULTS
The Financial Results of the Company are summarized below:
Rs. Crores
| Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
1,320.17 |
1,196.46 |
| Other Income from Operations |
7.56 |
10.29 |
| Total Revenue from Operations |
1,327.73 |
1,206.75 |
| Total Expenditure adjusted for increase/ |
1,217.64 |
1,086.47 |
| decrease of stocks |
|
|
| Profit from Operations before Other |
110.09 |
120.28 |
| Income, Depreciation, Finance Costs |
|
|
| and Tax |
|
|
| Other Income |
1.10 |
4.69 |
| Profit from Operations before |
111.19 |
124.97 |
| Depreciation, Finance Costs and Tax |
|
|
| Depreciation |
27.39 |
27.47 |
| Interest and Exchange Fluctuation |
56.64 |
48.03 |
| Profit before Exceptional items and Tax |
27.16 |
49.47 |
| Exceptional items |
- |
- |
| Profit before Tax |
27.16 |
49.47 |
| Provision for Tax |
7.03 |
1.99 |
| Profit after Tax |
20.13 |
47.48 |
| Balance carried forward to Balance |
(10.51) |
(31.98) |
| Sheet |
|
|
Revenue from Operations for the year was higher by 10% over the
previous financial year. Profit from Operations before Depreciation, Interest and Taxation
(OPBDIT) excluding Other Income was lower by 8.5% at Rs. 110.09 Crores (previous year- Rs.
120.28 Crores). With Depreciation of Rs. 27.39 Crores (previous year- Rs. 27.47 Crores),
interest / exchange fluctuation charge of
Rs. 56.64 Crores (previous year- Rs. 48.03 Crores), Profit after
Taxation stood at
Rs. 20.13 Crores for the year as against a Profit of Rs. 47.48 Crores
in the previous year. Net accumulated losses stood at Rs. 10.51 Crores.
DIVIDEND
Your Directors do not recommend any dividend for the year under review
due to unavailability of profits.
TRANSFER TO RESERVES
There was no transfer to General Reserves during the year under review.
OPERATIONAL REVIEW & STATE OF THE COMPANYS AFFAIRS Batteries
& Flashlights
The dry cell battery industry witnessed a marginal volume decline
during the year, as post pandemic, the operation of battery-powered devices witnessed a
commensurate normalisation, resulting in a correction in the usage of batteries.
In continuance of the trend of premiumisation, the battery industry
evidenced a slight saliency towards alkaline batteries. The building inflation in the
system continues to weigh down on restoration of consumption trends. While this had a
marginal impact on the demand for carbon zinc batteries, the overall demand remained
muted. However, your Company could beat trends and grew both in volume and value terms. As
a result, your Company gained market share in the batteries business segment. As has been
the trend, the product mix continued to witness shift between various types of batteries,
although tending towards higher realisation.
The market share position of the major players remained largely
unaltered during the year under review, with your Companys share being estimated
around 53.4%, representative of 50 bps improvement The flashlight market continues to
record growth on the back of demand for rechargeable flashlights. During the year however,
the domestic market remained disturbed as the unorganised players persisted with cheap
imports of rechargeable flashlights of poor quality. Furthermore, demand was muted due to
high inflation and deficient monsoon in some of the key flashlight selling geographies,
which resulted in lower volumes in comparison to the previous year.
Your Companys share of the battery operated flashlight market was
maintained at ~55%. It has made an impactful entry into the rechargeable flashlights
segment towards the later part of the financial year, effect of which will be seen more
fully in the forthcoming period.
There was a healthy 13.1% revenue growth in the battery segment while
the flashlight segment revenue remained somewhat flat. The battery and flashlight segments
had EBIDTA of Rs. 97.09 Crores and Rs. 22.20 Crores respectively which was lower than that
of the previous year. Despite the healthy turnover growth in the battery segment, cost of
key materials still remained higher in comparison to the previous year. The adverse impact
of a depreciating Rupee also impacted margins. Investment on consumer communication
through various modes of advertising was undertaken to improve brand salience. While this
had a temporary impact on current years profitability, these investments shall form
the base for growth for the Company.
The manufacturing operations in these product categories continued to
focus on total quality management, safety, energy conservation and cost control. This
helped your Company in achieving efficiency in the manufacturing function.
Lighting & Electrical Products
Your Company has been present in electrical & lighting products
business for quite some time now. These products offer a natural extension of its brands
– Eveready and PowerCell, which are synonymous with portable energy and lighting.
There are ready synergies within the existing distribution network of your Company for the
range of products that this business segment offers. At the inception of this business
segment, the Company used to market products under Compact Fluorescent Lamps (CFL) and
General Lighting Service (GLS) technologies. However, over the years, the business saw a
complete shift towards Light Emitting Diode (LED) bulbs, in line with the trends within
the industry. LEDs bring with them a significant technology edge in comparison to the
traditional CFL and GLS bulbs and also offer vast energy savings, which adds to their
selling credibility.
Your Company is an instrumental part of this industry-wide shift and
has introduced a standout portfolio of SKUs, significantly enhancing its product basket in
the process. After ensuring reasonable success with LED bulbs, the Company is driving
growth with LED based Luminaires – both in the consumer and professional lighting
space. While your Companys distribution in general trade and modern retail provides
a good platform to this category, initiatives are underway to tap into the exclusive
electrical trade in the larger towns and cities. Net revenue from this business segment
for the current year stood at
Rs. 298.11 Crores accompanied by a marginal EBIDTA loss. It is expected
that this category will provide significant turnover growth in the years to come, as
portfolio and distribution, both improve.
Prospects
In the medium to long term, it is expected that battery demand will
revert to normalcy as the economy continues to grow. Strategy on marketing and
distribution would be augmented to service such demand. This, along with expectation of a
near-normal monsoon in the forthcoming season should add fillip to growth. The Company is
confident that it will be able to realise growth in this market, riding on its obvious
strengths of premium quality offering, branding and distribution. In respect of
flashlights, the Company is pursuing with its effort to bring this category under the
purview of BIS standards to arrest the adverse impacts of cheap imports. Efforts are on to
scale up presence in rechargeable flashlight offerings at attractive price points. Initial
response to such new product offerings have been encouraging. The Company has initiated
efforts to communicate with the consumer to maintain brand salience and would continue to
do so. While the situation arising out of the steep inflation may cause short term
disruptions in demand, the overall picture is likely to remain strong. The
Governments initiatives to make India self-reliant would also augur well for the
domestic industry. As a consequence, both batteries and flashlights should show reasonable
growth in FY 2023-24. The outlook on battery and flashlight categories thus remains
positive. Prospects are promising in the Lighting & Electrical products category as
well. This business has become a key focus area and an avenue for growth. LED bulbs and
LED based Luminaires with higher margins now constitute almost 90% of the category
turnover and these will be the growth drivers for the category and the overall business of
the Company. Your Companys range of new generation lights have been very well
accepted by the market and will enhance the Companys efforts towards a fruitful
diversification. The outlook is thus upbeat - with potential for both growth and
profitability.
FINANCE
Tight control was kept over the finances of your Company through
judicious working capital management and operational efficiencies. Your Company remains
focused to reduce its borrowings, which stood at Rs. 373.67 Crores at the end of the year.
Your Company met its financial commitments in servicing debt and repayment thereof in a
timely manner. Capital expenditure program was fully met.
MATERIAL CHANGES AND COMMITMENTS
There has been no material change and commitment, affecting the
financial performance of the Company which occurred between the end of the financial year
of the Company to which the financial statements relate and the date of this Report.
SUBSIDIARIES, ASSOCIATES & CONSOLIDATED FINANCIAL STATEMENTS
Your Companys subsidiary at Hong Kong, Everspark Hong Kong
Private Limited registered a turnover of Rs. 5.49 Crores during the current year (Rs. 5.10
Crores during FY 2021-22). It registered no profit during the year.
Another subsidiary, Greendale India Limited did not register any
revenue from turnover during the current year (Nil during FY 2021-22). It registered no
profit during the year.
Preferred Consumer Products Private Limited, ceased to be an associate
of the Company with effect from March 20, 2023 and therefore no share of profit/ (loss)
has been considered in the financial statements.
A Statement in Form AOC-1 containing the salient features of the said
Companies is attached to the Financial Statements in a separate section and forms part of
this Report. The separate audited accounts of the said Companies are available on the
website of the Company. The Annual Report includes the audited Consolidated Financial
Statements, prepared in compliance with the Companies Act, 2013 and the applicable
Accounting Standards, of the subsidiaries. The Consolidated Financial Statements shall be
laid before the ensuing 88th Annual General Meeting of the Company along with
the laying of the Standalone Financial Statements of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo, as stipulated under Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms part
of this Report as Annexure 1.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy formulated by your Company is available on the website
of the Company (https://www.evereadyindia.com/wp-content/uploads/2022/03/
csr-policy-14.pdf). The Annual Report on CSR Activities to be included in the Report,
containing a brief outline of the CSR Policy, the composition of the CSR Committee and
requisite particulars, inclusive of the initiatives taken, as well as the expenditure on
CSR activities, forms a part of this Report as Annexure 2.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 of the Companies Act,
2013, the Directors state that: 1. in the preparation of the annual accounts for the
financial year ended March 31, 2023, the applicable accounting standards had been followed
with no material departures; 2. the Directors had 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 of the Company for that period; 3. the Directors had
taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities; 4. the
Directors had prepared the annual accounts on a going concern basis;
5. the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively; and 6. the Directors had devised proper systems to ensure
compliance with the provisions of all applicable laws and that such systems were adequate
and operating effectively.
DIRECTORS
Dr. Anand Chand Burman, Mr. Mohit Burman and Mr. Arjun Lamba, were
appointed as Additional Director(s) in the capacity of Non-Executive Director(s) of the
Company effective July 12, 2022, to hold office up to the date of the next Annual General
Meeting of the Company or up to a time period of three months from July 12, 2022,
whichever was earlier, subject to the approval of the shareholders of the Company. Mr.
Sunil Kumar Alagh was appointed as an Additional Director of the Company in the capacity
of Independent Director, effective July 12, 2022, to hold office up to the date of the
next Annual General Meeting of the Company or up to a time period of three months from
July 12, 2022, whichever was earlier, and also as an Independent Director of the Company,
not liable to retire by rotation, for a period of 5 (five) consecutive years effective
July 12, 2022, subject to the approval of the shareholders of the Company.
Necessary declaration from Mr. Alagh that he meets with the criteria of
independence as prescribed has been received. In the opinion of the Board, Mr. Alagh,
appointed during the year as an Independent Director of the Company, has the requisite
integrity, expertise, experience and proficiencies. The individual appointments of Dr.
Anand Chand Burman, Mr. Mohit Burman and Mr. Arjun Lamba, Non-Executive Director(s) of the
Company, liable to retire by rotation, effective July 12, 2022 and the appointment of Mr.
Sunil Kumar Alagh as an Independent Director of the Company, not liable to retire by
rotation, to hold office for a period of 5 (five) consecutive years, effective July 12,
2022 were approved by the shareholders of the Company through Postal Ballot by means of
voting through electronic means (Remote e-Voting process), within a period of 3 months
from the said date of appointment, in terms of the requirements of the Listing
Regulations.
Mr. Girish Mehta will retire by rotation at the forthcoming Annual
General Meeting and is eligible for re-appointment.
On a Reference Application made by the Central Government to the
Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order
dated December 20, 2004 directed the Central Government to appoint three Directors on the
Companys Board for three years. As the CLBs order suffers from various legal
infirmities, the Company, based on legal advice, has challenged this order of the CLB
before the Honble High Court at Calcutta, which has, by an interim order, stayed the
operation of the CLBs order. The stay is continuing.
DECLARATIONS BY INDEPENDENT DIRECTORS
Necessary declarations from all the Independent Directors of the
Company, confirming that they meet the criteria of independence as prescribed, have been
received.
CHANGE IN KEY MANAGERIAL PERSONNEL OF THE COMPANY
During the year under review, Mr. Bibek Agarwala was appointed as the
Chief Financial Officer of the Company, effective February 6, 2023 in place of Mr. Bibhu
Ranjan Saha and Mr. Indranil Roy Chowdhury, who were earlier designated as Joint Chief
Financial Officers of the Company. As at March 31, 2023, the Key Managerial Personnel of
the Company comprise of Mr. Suvamoy Saha, Managing Director, Mr. Bibek Agarwala CFO and
Mrs. Tehnaz Punwani, Company Secretary, in terms of Section 203 of the Act.
REMUNERATION POLICY
The Remuneration Policy is available on the website of the Company
(https:// www.evereadyindia.com/wp-content/themes/eveready/pdf/remuneration-policy.pdf).
This policy for selection and appointment of Directors, Senior Management and their
remuneration, includes the criteria for determining qualifications, positive attributes,
independence of a Director and other matters as required.
BOARD EVALUATION
The Nomination & Remuneration Committee of the Board of Directors
had laid down the criteria for evaluation of the performance of the Board as a whole, the
Directors individually as well as the evaluation of the working of the Audit, Nomination
& Remuneration, Stakeholders Relationship and Corporate Social Responsibility and Risk
Management Committees of the Board. Annual Performance Evaluations as required have been
carried out. The statement indicating the manner in which formal annual evaluation of the
Directors (including Independent Directors), the Board and Board level Committees is given
in the Corporate Governance Report, which forms a part of this Annual Report.
MEETINGS
The Board meets regularly to discuss and decide on various matters as
required. Due to business exigencies, certain decisions are taken by the Board through
circulation from time to time. During the year, Six (6) Board Meetings were convened and
held. Additionally, several committee meetings as well as Independent Directors
meeting(s) were also held. The details of the Meetings are given in the Corporate
Governance Report which forms a part of this Report. The intervening gap between the
Meetings was within the period prescribed under the Companies Act, 2013.
COMMITTEES OF THE BOARD
The details with respect to the compositions, powers, roles and terms
of reference etc. of relevant Committees of the Board of Directors are also given in the
Corporate Governance Report which forms a part of this Annual Report. All recommendations
made by the Audit Committee during the year were accepted by the Board.
EMPLOYEE RELATIONS
One of your Companys key strengths is its people. Relations with
employees remained cordial and satisfactory. Your Board would like to place on record its
appreciation of employees for their contributions to the business. Your Company believes
in a system of Human Resource Management which rewards merit based performance and playing
an active role in improving employee skills. Actions during the year under review were
supportive of this policy. The details of the ratio of the remuneration of each Director
to the median employees remuneration and other particulars and details of employees
in terms of Section 197(12) read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, forms a part of this Report as Annexure
3. The details of the employees remuneration as required under the said section and
Rule 5(2) & 5(3) of the said Rules forms a part of this Report and are available at
the Registered Office of the Company during working hours before the Annual General
Meeting and shall be made available to any Member on request. Such details are also
available on your Companys website. None of the employees listed in the said
Annexure is related to any Director of the Company, in terms of the definition of
Relatives as provided in the Act.
STATUTORY AUDITORS
M/s. Singhi & Co., Chartered Accountants, (Firms Registration
No. 302049E) have been appointed to hold office as Auditors of the Company, for a period
of 5 continuous years from the conclusion of the 84th Annual General Meeting
till the conclusion of the 89th Annual General Meeting of the Company.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 (the Act) read with
the Companies (Cost Records and Audit) Amendment Rules, 2014, your Directors, have
appointed M/s. Mani & Co., Cost Accountants, Registration No. 00004, Ashoka, 111
Southern Avenue, Kolkata 700 029, (being eligible for the appointment), to audit the cost
accounts of the Company for the financial year ending March 31, 2024. The remuneration
payable to the Cost Auditors for the said year is being placed for ratification by the
Members at the forthcoming Annual General Meeting. The Company maintains necessary cost
records as specified under Section 148(1) of the Act in respect of the specified products.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit
of the Company for the financial year 2022-23 was conducted by M/s MKB & Associates, a
firm of Company Secretaries in Practice. There are no Audit
Qualifications/Reservations/Adverse Remarks in the Secretarial Audit Report as annexed
elsewhere in this Annual Report. The Secretarial Audit Report forms a part of this Report
as Annexure 4.
AUDITORS REPORT
There are no Audit Qualifications/Reservations/Adverse Remarks in the
Statutory Auditors Report and in the Secretarial Audit Report as annexed elsewhere in this
Annual Report. However, the Auditors have drawn attention of the Members on the penalty
imposed by Competition Commission of India (CCI), the matter of which is covered elsewhere
in the Report and also in the Notes on accounts.
INTERNAL FINANCIAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The internal financial controls are adequate and
are operating effectively so as to ensure orderly and efficient conduct of the business
operations. The Statutory Auditors have also given an unmodified opinion on the internal
financial controls on financial reporting in their Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
No Loans, Guarantees and Investments covered under the provisions of
Section 186 of the Companies Act, 2013 were given/made during the year under the review.
PARTICULARS OF CONTRACTS/ARRANGEMENTS/ TRANSACTIONS WITH RELATED
PARTIES
Related party transactions entered into, during the year under review
were on arms length basis, in the ordinary course of business, for the operational
and administrative benefits of the Company. There were no contracts/
arrangements/transactions with related parties which could be considered as material and
which may have a potential conflict with the interest of the Company at large.
Accordingly, no contracts/arrangements/transactions are being reported in Form AOC-2.
Details on related party disclosures are further given in the Corporate Governance Report,
which forms a part of this Report.
RISK MANAGEMENT
Your Directors have approved various Risk Management Policies. All
material risks faced by the Company are identified and assessed by the Risk Management
Steering Committee and periodically overseen by the Risk Management Committee of the
Board. For each of the risks identified, corresponding controls are assessed and policies
and procedures are put in place for monitoring, mitigating and reporting the risks on a
periodic basis.
VIGIL MECHANISM
Your Directors have adopted a Vigil Mechanism/Whistle Blower Policy.
The Policy has been posted on the website of the Company. None of the Companys
personnel have been denied access to the Audit Committee.
ANNUAL RETURN
The Annual Return in the prescribed format, in accordance with the
Companies Act, 2013, forms a part of this Report and is available on the website of the
Company (https://www.evereadyindia.com/wp-content/themes/eveready/ pdf/annual-return.pdf).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The Competition Commission of India ("CCI") issued an Order
dated April 19, 2019, imposing penalty on certain zinc carbon dry cell battery
manufacturers, concerning contravention of the Competition Act, 2002 (The Act). The
penalty imposed on your Company was Rs. 171.55 Crores. Your Company filed an appeal and
stay application before the National Company Law Appellate Tribunal, New Delhi, (NCLAT)
against the CCIs said Order. The NCLAT vide its order dated May 09, 2019, has stayed
the penalty with the direction of depositing 10% of the penalty amount within 15 days with
the Registrar of the NCLAT which has been duly deposited by your Company. Based on legal
advice received by your Company, it is believed that, given the factual background and the
judicial precedents, there are reasonable grounds on the basis of which the NCLAT will
allow the appeal and accordingly, the Company is hopeful on adjudication upon the quantum
of penalty imposed or remand to the CCI for de novo consideration. However, at this stage
it is not possible for your Company to quantify or make a reliable estimate of the quantum
of penalty that may be finally imposed on your Company. It may be noted that a certain
amount of penalty will be levied on the Company as it had also earlier filed an
application under the Lesser Penalty Regulations under the Act. In terms of the aforesaid
legal advice, your Company has been advised that the matter should be recognized as a
contingent liability as defined under Ind-AS 37 and there should be no adjustment required
in the financial statements of the Company in accordance with Ind-AS 10. Accordingly,
pending the final disposal of the appeal, the amount has been disclosed as contingent
liability in the accounts for the year under review.
Other than the aforesaid, there have been no significant and material
orders passed by the Regulators, Courts or Tribunals which impact the going concern status
and Companys operations in future.
OTHER DISCLOSURES
During the year under review: a. There were Nil cases filed pursuant to
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013. The Internal Complaints Committee constituted in terms of the said Act, continues to
be in place. b. Your Company has not accepted any deposit from the public falling within
the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014. c. There was no change in the share capital or the nature of
business of the Company. d. There is no application or proceeding pending under the
Insolvency & Bankruptcy Code, 2016 against the Company.
e. The Company is in compliance with the applicable Secretarial
Standards issued by the Institute of Company Secretaries of India.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT ON CORPORATE
GOVERNANCE
A Management Discussion and Analysis Report and a Report on Corporate
Governance are presented in separate sections, forming a part of the Annual Report.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT & DIVIDEND
DISTRIBUTION POLICY
In terms of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended, the Business Responsibility & Sustainability Report is
presented in a separate section, forming a part of the Annual Report. The Dividend
Distribution Policy is available on the website of the Company
(https://www.evereadyindia.com/wp-content/themes/eveready/
pdf/dividend-distribution-policy.pdf).
For and on behalf of the Board of Directors
|
S. Saha |
M. Burman |
| Kolkata |
Managing Director |
Director |
| May 09, 2023 |
(DIN: 00112375) |
(DIN: 00021963) |
+91-9892691696
