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Exide Industries Ltd Directors Report

565.65
(1.79%)
Jul 19, 2024|09:44:59 AM

Exide Industries Ltd Share Price directors Report

Dear Shareholders,

We are pleased to present the 1st Integrated Annual Report of your Company together with the Audited Financial Statements for the year ended 31st March 2024. A summary of the Companys standalone performance is given below:

Standalone Financial Results

(In Rs Crore)

Financial Results FY 2023-24 FY 2022-23
Revenue from operations 16,029.19 14,591.93
Earnings before depreciation, finance cost, tax expenses & exceptional item 1,871.38 1,568.01
Add: Other income 84.54 132.39
Less: Depreciation and amortisation expenses 497.45 455.78
Less: Finance cost 48.59 29.53
Profit Before Tax 1,409.88 1,215.09
Less: Tax expenses 356.92 311.46
Profit After Tax 1,052.96 903.63
Other Comprehensive Income 1,044.53 (291.98)
Total Comprehensive Income for the year 2,097.49 611.65
Balance brought forward 11,124.75 10,513.10
Making a total of 13,222.24 11,124.75
Out of this, appropriations are:
Final Dividend for FY 2022-23 (200%) 170.00 -
And leaving a balance of (which is carried forward to next year) 13,052.24 11,124.75

Highlights of performance

Your Company recorded net sales of H 16,029 crore in FY 2023-24, against H 14,592 crore in the previous year, registering a 9.8 per cent year-on-year growth. Sales growth was driven by an uptick in volumes in the automotive and industrial divisions. Along with volume growth, judicious pricing strategies across end-consumer markets also helped in driving sales growth. Your Company has delivered a robust growth in profits. Earnings before interest, depreciation and tax expenses (EBITDA) grew to H 1,871 crore from H 1,568 crore, and EBITDA margin increased to 11.7 per cent in FY 2023-24 from 10.7 per cent in FY 2022-23. The profit before tax for the year was H 1,410 crore compared with H 1,215 crore in the previous year, which is a 16.0 percent year-on-year increase. The cost optimization initiatives yielded results and fixed costs as a percentage to sales declined, thereby supporting profits. Furthermore, logistics costs and supply chain disruptions, which impacted performance in the previous year, were under control in the current year.

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 CFS 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.

Subsidiaries and Associates

The Company had six direct subsidiaries and three associate companies as of 31st March 2024. In line with the provisions of Section 129(3) of the Companies Act, 2013 (Act), a statement containing the salient features of the financial statements of the Companys subsidiaries and associates in Form AOC-1 is attached to the financial statements of the Company. This form highlights the financial performance of each subsidiary and associate Company and their contribution to the Companys overall performance as required by Rule 8(1) of the Companies (Accounts) Rules, 2014. The report is not repeated here for the sake of brevity.

In accordance with provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company, along with relevant documents and separate audited accounts in respect of the subsidiaries and associates, are available on the website of the Company at: https://www. exideindustries.com/investors/annual-reports.aspx

The Company will provide the annual accounts of the subsidiaries and the related detailed information to the shareholders of the Company on specific requests made to it in this regard by the shareholders.

The details of the major subsidiaries are given below:

Chloride Metals Limited

Chloride Metals Limited (CML) is a wholly owned material subsidiary of Exide and is engaged in the business of a secondary smelting and refining Company. It plays a strategic role in backward integration, meets the Companys lead and lead alloy requirements, and is in line with the concept of circular economy.

CML has a national presence, with manufacturing units in Karnataka, Maharashtra, and West Bengal, equipped with the latest machinery and technology to boost eco-friendly lead production. Its production capabilities are backed by an immaculate design engineering cell and tested at the quality control department to conform to Exides exacting material standards. The total installed refinery capacity of CML is 3,45,600 tonne a year.

During the year, CML set up another factory in a new MIDC location in Maharashtra called SUPA. The new plant, with a refinery capacity of 10,780 tonnes a month, began commercial production in August 2023.

CML has started importing scrap batteries and remelted lead to meet your Companys increasing demand for lead and reduce its dependency on the domestic market. CML has also started recycling plastic scrap generated from batteries and began supplying polypropylene granules to your Company from December 2023.

During the year, your Company invested H 120 crore in CMLs equity share capital to meet its working capital and long-term capital requirements for expansion. CML has a positive outlook for the forthcoming financial year. With the new import procurement channel in place, it is expected to run at full capacity. Also, with new cost-saving projects, profitability is expected to increase in the coming years.

Exide Energy Solutions Limited

Exide Energy Solutions Limited (EESL) was incorporated on 24th March 2022 as a wholly owned subsidiary of Exide Industries Limited. The main objective of EESL is to manufacture advanced chemistry battery cells for Indias EV market and grid-based applications. It will also manufacture, assemble, and sell battery modules and packs for its customers. EESL is setting up the

12 GW cell manufacturing plant in two phases of 6 GW. During the financial year 2023-24, your Company has invested H 1,285 crore as equity in EESL.

EESL represents a significant step in strengthening Exides position in the emerging lithium-ion battery market. Its greenfield plant will operate from an 80-acre plot at the Hi-Tech Defense & Aerospace Park Phase 2, Bengaluru, Karnataka. EESL has entered into a multi-year technical collaboration agreement with SVOLT Energy Technology Co. Ltd (SVOLT), a global technology Company that manufactures and develops lithium-ion batteries and battery systems for EVs and energy storage applications.

The construction of the greenfield gigafactory of EESL is on schedule. Work is underway for the main cell building, administration block, and other structures. EESL is onboarding multiple customers across market segments, and the team is working closely with large automobile OEMs and companies in the stationary storage sector to onboard them as customers. In this process, EESL signed a non-binding memorandum of understanding (MOU) with Hyundai Motor Company ("Hyundai Motors") and Kia Corporation ("Kia") for strategic co-operation in Indias EV market.

TheEESLpackandmoduleplantatPrantij,Gujarat,isoperational and has performed well in the financial year under review.

Amalgamation of Exide Energy Private Limited with Exide Energy Solutions Limited

During the year, the Honble National Company Law Tribunal (NCLT), Kolkata Bench vide Order, dated 6th March 2024 sanctioned the Scheme of Amalgamation between Exide Energy Private Limited ("EEPL"/Transferor Company) and Exide Energy Solutions Limited ("EESL"/Transferee Company), both wholly-owned subsidiaries of Exide Industries Limited. Upon filing of the certified copy of the Order, the merger is complete and Scheme is effective on 28th March 2024 with the ‘Appointed Date of 1st April 2023.

Consequent to the above Amalgamation, on 29th March 2024, EESL has issued & allotted the following equity shares to the holding Company, Exide Industries Ltd.:

11,48,37,048 fully paid-up equity shares of H 10/- each against 14,35,46,310 fully paid-up equity shares of H 10/- each held by Exide Industries Limited in EEPL.

2,00,00,000 fully paid-up equity shares of H 10/- each against 2,50,00,000 fully paid-up 0.01 per cent Compulsory Convertible Preference Shares of H 10/- each held by Exide Industries Limited in EEPL.

Exide Energy Private Limited, popularly known as the "Nexcharge" brand, has now been dissolved and merged with EESL.

Subsidiary Monitoring Framework

All the subsidiary companies of Exide 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 Board of Directors of Exide;

b) Copies of the minutes of the meetings of the Board of Directors of the Companys 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 Companys subsidiaries is circulated to the Exide Board on a quarterly basis;

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

Exide has one material subsidiary, Chloride Metals Limited, whose income is more than 10 per cent of the Companys consolidated income during the previous financial year. A policy for determining material subsidiaries has been formulated and posted on the Companys website: https://www.exideindustries. com/investors/governance-policies.aspx

Dividend

The Board of Directors of the Company approved a Dividend Distribution Policy on 25th January 2017, following the Securities

& Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy was recently amended and is available on the Companys website: https:// www.exideindustries.com/investors/governance-policies.aspx

In line with the said Policy, the Board of Directors has recommended a final dividend of 200 per cent, i.e. H 2.00 per equity share of face value of H 1/- each of the Company, for the year ended 31st March 2024, subject to the approval of the Members at the ensuing Annual General Meeting. This dividend payout ratio works out to 16 per cent of the net profit after tax for the year ended 31st March 2024. The total outflow for equity dividends will be H 170 crore, vis ? vis H 170 crore in FY 2022-23.

Management Discussion and Analysis

A detailed Management Discussion and Analysis forms an integral part of this Integrated Annual Report and gives an update, inter alia, on the following matters:

Industry Structure and Developments

Division-wise overview of business performance, outlook, opportunities, threats and risk

Research & Development

Information Technology & Digital Initiatives

Financial Overview

Internal Control Systems (including IT controls & cybersecurity)

Human Resources

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 2024.

Share Capital

The paid-up equity share capital on 31st March 2024 was H 85 crore divided into 85,00,00,000 equity shares with a 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 its employees or directors. The Company does not have a scheme for purchasing its shares by employees or trustees for the benefit of employees.

Change in the nature of the business, if any

During the year, the nature of the Companys business did not change, and the nature of the business carried on by its subsidiaries did not significantly change.

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 under Section 186 of the Act except the additional corporate guarantee of H 1,000 crore to its wholly owned subsidiary, Exide Energy Solutions Limited and H 100 crore loan to its wholly owned subsidiary, Chloride Metals Limited. The details of loans, investments and guarantees made by the Company during the year under review have been disclosed in the financial statements under Note nos.13 and 39.

Material changes and commitments

No material changes occurred after the close of the Companys financial year to which the financial statements relate and before the date of this report.

Driving a sustainable business

At Exide, we have embraced Environmental, Social, and Governance (ESG) processes at the core of the Company, ensuring responsible business practices to create sustained value for all stakeholders. The inherent processes and initiatives undertaken across the Company through multiple projects reflect the entrenched thought of sustainability within our fundamental strategy.

Aligned with our overall sustainability vision, we strive to run our operations in an environmentally responsible manner, ensuring a harmonious balance between social equity and economic viability, leading to a thriving and resilient community.

Exide is committed to achieving the targets set under each ESG focus area, staying conscious of the evolving and dynamic ecosystem while continuously adapting and collaborating to foster positive and meaningful impact.

We are proud to bring you our third annual chapter of ESG disclosures through our Integrated Annual Report, comprising the financial performance and the non-financial performance aligned with the Global Reporting Initiative (GRI) framework for the period from 1st April 2023 to 31st March 2024. The sustainability performance is also mapped to the United Nations Sustainable Development Goals (UN SDGs).The ESG disclosures are compliant with the National Guidelines on Responsible Business Conduct (NGRBC), fulfilling the requirements of the Business Responsibility and Sustainability Report (BRSR) in line with SEBIs directive.

Corporate Social Responsibility

Exides commitment to social development and creating shared value is deeply embedded in its core value of responsible corporate citizenship. We believe in leading responsibly and are committed to being a socially responsible corporate citizen. We are committed to nurturing sustainable initiatives aligned with national and global developmental goals to empower marginalised communities.

Exides CSR initiatives are governed by a board-driven policy aligned with Section 135 of the Companies Act. The CSR policy of the Company provides guidelines for the selection, implementation and monitoring of activities as well as for CSR planning, budgeting, impact assessment of CSR interventions, treatment of unspent CSR funds (if any), and role of the implementing agency. The Companys CSR policy is available on its website: https://www.exideindustries.com/sustainability/. The CSR plan for the year 2023-24 is available on the Companys website: https://docs.exideindustries.com/pdf/approved-csr-project-23-24.pdf. Our dedicated CSR department is responsible for administering and executing the policy.

In compliance with Section 135 of the Companies Act and Exides CSR policy, the Company has constituted a CSR committee comprising four members. During the year, the Committee met four times to deliberate, recommend, and monitor the progress of CSR interventions. Details of the CSR committee are available on the Companys website: https:// www.exideindustries.com/about/board-committees.aspx. As mandated under Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, the disclosures are placed in Annexure I.

The executive summary of the Impact Assessment report on the Companys CSR intervention is included in Annexure I. The detailed report on the Companys CSR activities is available on the Companys website: https://www.exideindustries.com/ sustainability/.

The Company spent H 2,190.87 lakh towards its CSR activities against the obligation of H 2,181.07 lakh during the financial year 2023-24. We implemented several CSR interventions aligned to the identified themes of: -

Promoting Education (through Exide Akshar),

Promoting Better Health Outcomes (through Exide Aarogya),

Promoting Employability (through Exide Kaushal),

Empowering Communities (through Exide Saksham) and

Protecting the Environment (through Exide Paryavaran).

During the year under review, the Companys CSR activities have positively impacted more than 3.25 lakh people. More than 80 per cent of our beneficiaries are from less endowed and vulnerable sections of society. Our CSR activities are aligned to 13 Sustainable Development Goals (SDGs). Exide employees have contributed more than 12,000 man-hours towards volunteering activities. Exides leadership team has committed to volunteering one day every quarter for CSR activities. The leadership teams commitment towards CSR enables the fostering of a responsible culture across the organisations hierarchy as we continue to witness greater and greater participation of our employees in CSR activities.

During the year, Exide was awarded the ‘Best Corporate in Medium Corporate Category at the prestigious 8th ICSI CSR Excellence Awards 2023. Your Company was also conferred a Special Jury award at the 2nd Social Leadership Awards 2023, organised by The Bengal Chamber of Commerce and Industry.

Exide remains committed to contributing proactively and positively to an equitable and developed future.

Business Excellence

Your Company is committed to maturing the TQM practice ahead of the industry by integrating present and future business needs. It has taken focused measures to scale up stakeholders involvement and engagement in TQM initiatives. Over 4,500 Kaizen improvements have been implemented during the year.

Manufacturing capability is centered around the capability of a direct workforce; their involvement in the manufacturing excellence journey is key to success. The Quality Circle initiative has been taken to all factories representing majority of functions in the Company.

Exide practices TPM as a manufacturing excellence approach. There is an enhanced focus on the lean approach, coupled with Six Sigma tools for resolving complex issues. Functional practices aligned with the pillars of TPM are part of Exides DNA. The increased focus on impactful projects has contributed to improving your Companys bottom line.

Certifications

Your Company has implemented International Standards across the organisation. With new customer requirements coming up, Exide has implemented the four-pillar requirements of the SMETA audit: Labour, Health and Safety, Environment, and Ethics. Two factories—Haldia and Hosur—have completed the SMETA audit. These factories are now members of Sedex, which is a requirement for supplies to key customers globally.

Manufacturing centre of excellence (MCoEx)

Your Company has implemented a structured capability development programme for workmen and management personnel. Five pillars have been identified which are vital for the capability of the manufacturing team, namely:

1. Business excellence

2. EHS

3. Product and Process

4. Engineering, and

5. Digital

Your Company has created a proper MCoEx structure to organise the best knowledge across these five pillars. Subject matter experts (SME) have been identified and designated to play the role of SMEs. They contribute to the review of content and ensure that emerging areas are well covered. Thirty modules have been identified and developed during this financial year, and more than 2,00,000 hours of training have been imparted under MCoEx. The modules have also been translated into regional languages for easy absorption of the content. Over 200 trainers have been identified across factories covering all the pillars. A series of ‘Train the Trainer programmes have been launched to scale up the competency of the trainers. To ensure the effectiveness of training, ‘Technical Training Centre facilities are reviewed and upgraded; among the recently activated facilities are the Bawal and Ahmednagar Technical Training Facilities (Gurukul).

Awards & Accolades

Best-in-class approaches, processes, and technology are a way of life at Exide. For external benchmarking on capability, the Company significantly accelerated the magnitude, pace, and focus by participating in various awards and recognition programmes during the year under review. This has resulted in winning more awards during the year than in previous years. For more details on awards, please refer to page no. 95.

Occupational Health, Safety and Environment

To reinforce our commitment to safety, Exide has embarked on a journey to develop and implement 10 Golden EHS Rules. These rules serve as proactive measures to address potential hazards and risks, safeguarding the well-being of our employees and the integrity of our operations. They result from meticulously analysing past accident trends, near misses, EHS audits, inspections, customer feedback, and ISO standards.

Your Company has allocated substantial resources to enhance safety infrastructure and systems. It has also leveraged cutting-edge technologies to bolster the safety initiatives. This includes integrating advanced monitoring systems, predictive analytics, and digital platforms to pre-empt potential hazards and optimise safety protocols.

Encouraging a culture of reporting incidents, near misses, and potential hazards is crucial. Our robust incident reporting system allows for the timely identification of risks and appropriate corrective actions. Thorough investigations are conducted to determine root causes, and lessons learned are shared throughout the organisation to prevent future occurrences.

We have an effective contractor safety management system that helps us ensure compliance with safety and occupational health requirements. It includes assessments, contractor training, clear communication of safety expectations, and regular monitoring of contractor performance.

Risk Management

Exide recognise the importance of identifying and managing risks effectively to ensure its businesss resilience and sustainable growth. Regular assessments of the risks inherent in our operations enable us to invest in initiatives to minimise their impact proactively.

Risk management is a cornerstone of your Companys strategy, underpinning the pursuit of long-term goals. Recognising the significance of identifying and leveraging business opportunities and market trends, we have established a comprehensive risk management framework. Exides risk management framework has matured over the years. This framework prioritises proactively assessing risks and opportunities, enabling informed decision-making and fostering sustainable growth.

Our comprehensive risk management framework adopts a balanced approach, integrating bottom-up and top-down perspectives. In response to the ever-evolving landscape of risks, risk identification and prioritisation are accomplished through continuous monitoring of the external business environment and internal risk factors, including emerging risk areas.

The oversight of risk management is conducted through a four-level governance structure comprising:

The Board of Directors,

The Risk Management Committee (RMC),

The Executive Committee (Ex-Comm), and

Heads of functions and process owners.

Our enterprise risk management framework is developed by incorporating the best practices based on COSO and ISO 31000 and then tailored to suit our unique business requirements. Key highlights of fiscal year 2024 include:

During the year, we have broadened the adoption of our integrated Enterprise Risk Management (ERM) framework throughout the organisation, reinforcing our risk management program and cultivating a more robust risk-aware culture. We have conducted risk awareness training for various key functions across the Company and its subsidiary and have validated risk management practices in alignment with ISO 31000 by a reputable agency.

Your Companys risk management policy was reviewed during the year, and necessary changes based on benchmarking of best practices were incorporated into the policy. The Risk Management Policy of Exide is available on the Companys website at the link: https://www. exideindustries.com/investors/governance-policies.aspx

The Company monitors various risks to its business, as outlined in the Managements Discussion and Analysis section of this Integrated Annual Report. For more details on our risk management framework, the key and emerging risks, and the Companys mitigation strategies, please refer to page 48.

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 2024-25 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 77th Annual General Meeting of the Company.

Secretarial Auditors & their report

Under 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 2023-24. The Secretarial Audit Report is given as Annexure II.

Secretarial audit of material unlisted subsidiary Company

M/s Anjan Kumar Roy & Co., Practising Company Secretaries, had undertaken a Secretarial audit of the Companys material subsidiary, Chloride Metals Limited, for the financial year 2023-24. 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 IIA.

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 2023-24, 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. The Annual Secretarial Compliance Report will be submitted to stock exchanges within 60 days of the end of the financial year 2023-24.

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

No instances of fraud were reported by auditors under Section 143(12) of the Act during the year.

Business Responsibility & Sustainability Report

Exide 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 and ensuring environmental well-being from a long-term perspective.

Under Regulation 34(2)(f) of SEBI Listing Regulations, the Business Responsibility & Sustainability Report (BRSR) for the FY 2023-24 is given in Annexure III.

The current financial year marks the first year of the Companys transition towards Integrated Reporting (IR), focusing on the ‘capital approach of value creation. The first Integrated Annual Report includes the Companys performance as per the IR framework for the period 1st April 2023 to 31st March 2024. The Company has also provided the requisite mapping of principles of the National Guidelines on Responsible Business Conduct to fulfil the requirements of the BRSR as per SEBIs directive, as well as guidelines for integrated reporting and the Global Reporting Initiative (GRI). The Report, which forms a part of the Integrated Annual Report, can, along with all the related policies, also be viewed on the Companys website: https:// www.exideindustries.com/investors/annual-reports.aspx.

Corporate Governance

Transparency is the cornerstone of Exides philosophy, and your Company adheres to all corporate governance requirements in letter and spirit. All the Committees of the Board of Directors meet regularly as required in terms of SEBI Listing Regulations. The Board of Directors has taken the necessary steps to ensure compliance with statutory requirements. The Companys Directors, Key Management Personnel, and Senior Management Personnel have complied with the approved ‘Code of Conduct for Board of Directors and Senior Management Personnel. According to schedule V of the SEBI Listing Regulations, a declaration to this effect, 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-IV. The Auditors Certificate on compliance with corporate governance norms is also attached to this Report. Furthermore, as required under regulation 17(8) of the SEBI Listing Regulations, a certificate from the Managing Director & CEO and Director-Finance & CFO is annexed to this Report.

Internal Financial Controls

The Company has designed and implemented a comprehensive Internal Financial Control system over financial reporting to ensure that all transactions are authorised, recorded, and reported correctly and promptly.

Your Companys Financial Statements are prepared based on Significant Accounting Policies carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP S/4 Hana, an ERP System, to maintain its Books of Account. The transactional controls built into the ERP System ensure appropriate segregation of duties, an appropriate level of approval mechanisms, and maintenance of supporting records. Your Company has detailed work instructions, Standard Operating Procedures, Policies, Processes, and Manuals that list roles, responsibilities, and required actions, which are periodically reviewed by Management.

The adequacy of internal control systems is assessed through reviews conducted by the Internal audit, statutory auditor, and management. The Audit Committee collaborates with these entities to identify weaknesses or deficiencies and recommends improvements to the management, ensuring effective implementation.

The internal financial controls have been assessed during the year under review, considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were observed. After checking the effectiveness of these controls, statutory auditors have issued an unqualified report.

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 Companys internal control systems are commensurate with its size and scale of operations and that they are designed to provide reasonable assurance that the Companys 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 review and strengthen them independently.

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 Companys Code of Conduct by 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.

It provides direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. To ensure that the policy is adhered to and to assure that the concern will be acted upon seriously, the Company:

ensures that the Whistle Blower and/or the Whistle Officer is not victimized for doing so.

treats victimisation as a serious matter, including initiating appropriate action on such persons.

ensures complete confidentiality.

takes appropriate action, if anyone destroys or conceals evidence of the Protected Disclosure made / to be made.

provides an opportunity of being heard to the person involved, especially to the Subject.

Your Company investigates any incident that is reported and takes suitable action in line with the whistle-blower policy. It is affirmed that no Company personnel were denied access to the Audit Committee, which oversees the vigil mechanism.

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

Prevention of sexual harassment in the workplace

Exide has zero tolerance for sexual harassment in the workplace and has adopted a policy on prevention, prohibition, and redressal 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 regardless of 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 regularly for updates and awareness-building measures regarding the policy and provisions of the Act.

The Company has formulated and circulated to all employees the Policy on preventing sexual harassment at the workplace, which provides for a proper mechanism for redressal of sexual harassment complaints. Workshops were organised 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 they are fully aware of the aspects of sexual harassment and the redressal mechanism. All employees across the organisation have access to online e-learning modules on the prevention, prohibition, and redressal of sexual harassment in the workplace.

During the financial year 2023-24, one complaint was reported, which was properly investigated and appropriate action was taken. At the end of FY 2023-24, no complaint was pending.

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 Companys website at the link: https://www.exideindustries. com/investors/annual-reports.aspx.

Directors and Key Managerial Personnel

Under the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr Asish Kumar Mukherjee (DIN 00131626) retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The proposal regarding his re-appointment is placed for approval by the Shareholders.

Mr Subir Chakraborty, (DIN: 00130864), after a long and illustrious association of over 27 years, superannuated from the services of the Company upon completion of his tenure on 30th April 2024 as a Whole-Time Director, designated as Managing Director & CEO. Consequently, he has also stepped down from the Board as a Director w.e.f close of the business hours of 30th April 2024. The Directors placed on record their deep appreciation of the invaluable contribution he made to the growth and success of the Company during his tenure on the Board.

The Board of Directors of the Company, on the recommendation of the Nomination and Remuneration Committee, at its meeting held on 30th April 2024 has appointed Mr Avik Kumar Roy, Whole-Time Director (DIN: 08456036) as the Managing Director & CEO of the Company for a period of three years w.e.f. 1st May 2024. Mr Roy joined the services of the Company on 2nd January 2019 as "President- Industrial". Later on, the Board of Directors, at its meeting held on 29th April 2021, appointed him as the Whole-Time Director of the Company, designated as Director-Industrial, with effect from 1st May 2021. A resolution proposing his appointment as Managing Director & CEO with effect from 1st May 2024 will be placed at the ensuing Annual General Meeting for the approval of the Shareholders.

The term of office of Mr. Arun Mittal as "Director-Automotive" expired on 30th April 2024. Consequently, he has also stepped down from the Board as a Director w.e.f. close of business hours of 30th April 2024.

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

None of your Companys directors 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 Asish Kumar Mukherjee, Whole-Time Director (Director-Finance & CFO)

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

Mr Avik Kumar 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 Companies Act 2013.

Board evaluation

Under the provisions of the Act and SEBI Listing Regulations, the Independent Directors evaluated the performance of the Board as a whole, as well as the Chairman and the Non-Independent Directors. This exercise was carried out following the Companys Nomination and Remuneration Policy 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 Boards evaluation is to achieve consistent improvements in the Companys governance 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 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 using the Boards time, and increased effectiveness as a governing body.

While evaluating the performance and effectiveness of the Board, various aspects of the Boards functioning, such as adequacy of the composition and quality of the Board, time devoted by the Board to the Companys 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 shareholders value, ability to guide the Company in key matters, attendance at meetings, etc.

Considering the Companys success in most spheres and the value delivered to all its stakeholders, the Directors have been diligent, sincere, and consistent in performing 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 include:

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;

Aligning the remuneration of Directors, KMPs and SMP with the Companys financial position, remuneration paid by its industry peers, etc.;

Performance evaluation of the Board, its committees and Directors, including independent directors;

Ensuring Board diversity;

Identifying persons who are qualified to become Directors and who may be appointed to senior management in line with the criteria laid down; and

Directors induction and continued training.

The policy was amended on 30th April 2024 to make it more comprehensive, addressing all aspects of the scope and workings of the Nomination and remuneration committee. The changes majorly covered guidelines on succession planning, clawback provisions, remuneration metrics, board diversity, Directors & Officers Liability Insurance, etc., as they will contribute to greater corporate effectiveness and governance.

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

Meetings

The Board meets regularly to discuss and decide on Company/ business policy and strategy apart from other business items. 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 ensure meaningful participation in 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 Corporate Governance report details the constitution of the Board and its Committees.

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.

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 2023-24 to the BSE, NSE, and CSE.

Particulars of contracts or arrangements with related parties

All related-party transactions (RPT) entered during the financial year were conducted in the ordinary course of business and on an arms-length basis. The Company, during the year, has not entered into any materially significant related-party transactions with promoters, Directors, key managerial personnel, or other persons that may have had a potential conflict with the Companys interests.

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 repetitive related-party transactions that can be foreseen. The required disclosures are accordingly made to the Audit Committee every quarter regarding their omnibus approval.

Under 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 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 most Company transactions are with its subsidiaries, omnibus approval of the Audit Committee is obtained for such transactions and is 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 arms length basis, which do not require shareholders 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 Companys operations in the future

No significant material orders passed by the regulators/courts/ tribunals would impact the Companys ‘going-concern status and future operations. However, 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 under 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.

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 cosec@exide.co.in.

Further, we confirm that no employee employed throughout the financial year or part thereof received remuneration in the financial year that, 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 per cent 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.

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:

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;

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;

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;

That the Directors have prepared the annual accounts on a going-concern basis;

That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively, and

That systems to ensure compliance with the provisions of all applicable laws were in place, 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 due to 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 with the financial statements and notes included herein.

Acknowledgement

Your Directors would like to record their appreciation for the enormous personal efforts and collective contribution of all employees to the Companys performance. They would also like to thank the Companys customers, employee unions, shareholders, dealers, suppliers, bankers, government agencies, and all stakeholders for their cooperation and support, and their confidence in the management.

On behalf of the Board of Directors
Sd/- Sd/-
Bharat D Shah Subir Chakraborty
Place : Mumbai Chairman Managing Director & CEO
Date : 30th April 2024 DIN: 00136969 DIN: 00130864

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