You are here » Home » Companies » Company Overview » High Energy Batteries (India) Ltd

High Energy Batteries (India) Ltd.

BSE: 504176 Sector: Engineering
NSE: N.A. ISIN Code: INE783E01015
BSE LIVE 15:20 | 23 Aug 309.25 -16.25
(-4.99%)
OPEN

325.00

HIGH

340.00

LOW

309.25

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 325.00
PREVIOUS CLOSE 325.50
VOLUME 503
52-Week high 415.20
52-Week low 171.00
P/E 162.76
Mkt Cap.(Rs cr) 55
Buy Price 309.25
Buy Qty 78.00
Sell Price 334.90
Sell Qty 3.00
OPEN 325.00
CLOSE 325.50
VOLUME 503
52-Week high 415.20
52-Week low 171.00
P/E 162.76
Mkt Cap.(Rs cr) 55
Buy Price 309.25
Buy Qty 78.00
Sell Price 334.90
Sell Qty 3.00

High Energy Batteries (India) Ltd. (HIGHENERGYBAT) - Director Report

Company director report

Annual Report and the Audited Accounts our Board hereby present their 55th forthe year ended 31st March 2016.

OPERATING RESULTS

The Company’s financial performance under review is summarised below:

(Rs. in Lakhs)

For the year Ended
Particulars 2015 - 2016 2014 - 2015
Sales 2235.54 3228.30
(Net of Excise Duty and VAT /Sales Tax)
Profit / (Loss) before Finance Cost (390.06) 341.33
Depreciation and Tax
Less:
1. Finance Cost 547.86 616.91
2.Depreciation 122.23 153.69
670.09 770.60
PROFIT / (LOSS) (1060.15) (429.27)
BEFORE TAX
Less:
Provision for Taxation
Deferred Tax (403.85) (148.13)
Reversal of MAT Credit 31.68 -
Entitlement
NETPROFIT /(LOSS) (687.98) (281.14)

During the year the Company’s turnover was Rs.2235.54 lakhs compared to theturnover of Rs.3228.30 lakhs achieved during the previous year. As reported in the lastyear’s Report the Company did not receive indigenous orders from the Government forAerospace Naval and Power System Battery Division during the first half of the financialyear under review. The Company could get substantial orders from October / November 2015onwards. The losses in Silver Zinc Division coupled with losses in Lead Acid BatteriesDivision (LAB) and delayed collection of dues from LAB customers resulted in difficultliquidity position for the Company. Renewal / sanction of additional limits by the Banksto meet the difficult ways and means position is also getting delayed. This led to delayedpayment to suppliers / sub-contractors which in turn affected timely supply of materialsand sustained production.

Further import of critical raw material was withheld by customs in the exportingcountry resulting in delayed despatches of Batteries to Navy. While this led to drop inturnover of Silver Zinc Division the Company was not in a position to meet the challengesof price reduction and increased credit period in LAB Division that forced the Company toscale down the operation in LAB Division. A cumulative effect of the above led to lowerthe turnover. With revamping measures taken by the Company and receipt of substantialorders from Defence establishments the Company is confident of achieving reasonable levelof production and report a reasonable turnover during the current financial year. With oneof the Group Companies agreeing to support the Company financially a renewal proposal hasbeen submitted to the Bankers which is expected to be approved soon.

DIVIDEND

In the absence of distributable profits no dividend is recommended.

TRANSFER FROM GENEARL RESERVE

The Company has transferred Rs.648 lakhs from General Reserve to Profit and LossAccount to bring down the accumulated losses.

PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES

The Company recorded a turnover of Rs.1961.83 lakhs during the year as againstRs.2213.84 lakhs achieved during the previous year. The reduction in turnover was due tolate receipt of major Defence orders non-receipt of critical materials due to delayedpayment to creditors and non-clearance of development items for production by DRDOLaboratories.

NICKEL CADMIUM BATTERIES

During the year the Company could make a turnover of Rs.183.01 lakhs only due topaucity of orders as against Rs.414.08 lakhs achieved during the previous year.

LEAD ACID BATTERIES (LAB)

During the year the turnover in LAB Division was only Rs.90.70 lakhs as against theturnover of Rs. 600.38 lakhs achieved during the previous year. The production was kepton-hold due to severe price competition from established players market demand forincreased credit limit as well as extended credit period and inordinate delay incollection of receivables in the ‘aftermarket’ segment. Efforts are on to changethe marketing strategy to focus on ‘private labeling’. The Company isnegotiating with few parties which are in an advanced stage. The Company is confident ofincreasing the production to reasonable levels by middle of the current financial year.

EXPORT

With recession in the global economy and cut in Defence expenditure by developingcountries the Export Turnover was only Rs.61.91 lakhs as compared to Rs.817.86 lakhsachieved in the previous year.

CURRENT YEAR - 2016-17

Presently the Company has substantial orders for Silver Zinc Division which will helpthe Company achieve reasonable turnover and posting positive results for the currentfinancial year. However as stated earlier Lead Acid Batteries Division will operate toreasonable levels of production from the third / fourth quarter of the current financialyear.

FINANCE

As mentioned in the last year’s Report the poor liquidity position severelyaffected the Company’s operations. However the infusion of funds by one of the GroupCompanies and sale of shares held in Ponni Sugars (Erode) Limited helped the Company inimproving its financial position and submit a bankable proposal to the Bankers.

ISO SYSTEMS

The company continues to be certified both under ISO 9001:2008 and ISO 14001:2004(Revised) Systems.

RESEARCH AND DEVELOPMENT

The Company has taken up the development cum supply of 330 kW Silver Zinc Batteries toNSTL Vizag. The development qualifications of new Batteries to Missile System Division ofDRDO are in progress.

SEBI ( LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015

With a view to consolidate and streamline the provisions of Listing Agreement fordifferent segments of the capital market SEBI has notified (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) on 2ndSeptember 2015. The Listing Regulations have been structured to provide ease of referenceby consolidating into one single document across various types of securities listed on theStock Exchanges. Your Company has executed an agreement with BSE for continuing thelisting of securities on the Exchange.

CORPORATE GOVERNANCE

Compliance with the provisions of Corporate Governance is not mandatory to the Companyas your company’s paid-up capital and net worth is less than the limit prescribedunder Regulation 15(2) of the SEBI ( Listing Obligations and Disclosure Requirements)

Regulations 2015. However utmost importance has been given to good CorporateGovernance in all its activities. A report on Corporate Governance is annexed herewithmarked as Annexure - 1 to this Report. Section 134(3) of the Companies Act 2013requires the Board’s Report to include several additional contents and disclosures.The applicable contents and disclosures have accordingly been made in the CorporateGovernance Report at the appropriate places which forms an integral part of this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is given in

Annexure - 2.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 with respect to theDirectors’ Responsibility Statement your Board confirms that:

(a) in the preparation of the annual accounts the applicable Accounting standards havebeen followed.

(b) the directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.

(d) the directors have prepared the annual accounts on a going concern basis.

(e) the directors have laid down internal financial controls to be followed by thecompany and that said internal financial controls are adequate and were operatingeffectively.

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The company did not give any Loan or Guarantee or provided any security or makeinvestment covered under Section 186 of the Companies Act 2013 during the year.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

Since the company remains outside the purview of Section 188(1) read with Rule 15 ofCompanies (Meeting of Board and its Power) Rules 2014 the reporting requirementsthereunder are not applicable.

MATERIAL CHANGES AND COMMITMENTS

There is no change in the nature of business of the company during the year. There areno material changes and commitments in the business operations of the company since theclose of the financial year as on 31st March 2016 to the date of this report.

CONSERVATION OF ENERGY ETC.

Information relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure -3CORPORATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act 2013 has imposed CSR mandate on companies havingminimum threshold limit of net worth turnover or net profit as prescribed. Since thecompany does not meet any of these criterion it remains outside the purview of Section135 and consequently the reporting requirements thereunderare not applicable.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnished in

Annexure-4.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

1) The company has laid down adequate systems and well drawn procedures for ensuringinternal financial controls. It has appointed an external audit firm as internal auditorsfor periodically checking and monitoring the internal control measures.

2) Internal auditors are present at the Audit Committee meetings where internal auditreports are discussed alongside of management comments and the final observation of theinternal auditor.

3) The Board of Directors have put in place budgetary control and monitoring measuresfor ensuring the orderly and efficient conduct of the business of the company thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company Mr NGopalaratnam Director retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting.

Mr T R Sivaraman Director has resigned from the post of Director (Finance) witheffect from 13th August 2015.

Mrs. T V Rajalakshmi Independent Woman Director has resigned with effect from19thMarch 2016 due to other pre-occupations. All the Independent Directors have given thedeclaration that they comply with the criteria on independence as laid down under Section149(6) of the Companies Act 2013. The performance evaluation of independent directors hasbeen done by the entire Board of Directors excluding the director being evaluated at itsmeeting held on 19th March 2016. The Board on the basis of such performanceevaluation determined to continue the term of appointment of all the Independent Directorswho have been appointed by the Company at its 53rd AGM for a fixed term upto31st March 2019.

Woman Director

Pursuant to the Provision of Section 149 152 of the Companies Act 2013 and read withRule 3 of the Companies (Appointment and Qualification of Directors) Rules 2014 everylisted Company shall appoint atleast one Woman Director.

The Board of Directors on the recommendation of the Nomination-cum-RemunerationCommittee Meeting held on 28th May 2016 appointed Mrs Lalitha Lakshmanan as anAdditional Director of the Company with effect from 28th May 2016 to holdoffice upto the date of AGM of the Company.

The Board recommends the Resolution to be placed in the AGM in relation toappointment of Mrs Lalitha Lakshmanan as an Independent Director not liable to retire byrotation under section 149 of the Companies Act 2013 for a fixed term from 30thJuly 2016 to 31st March 2021.

ADDITIONAL CHIEF FINANCIAL OFFICER

According to Section 203(1)(iii) of the Companies Act 2013 Mr R Swaminathan wasappointed as Additional Chief Financial Officer of the Company from 28th May 2016. Mr RSwaminathan holds a Masters in Commerce Degree and has 29 years experience in variousindustries in the fields of Costing Budgeting Pay Roll Stores Accounting and purchaseaccounting. He joined the Company as Senior Manager (Accounts) in 2013 and is in-charge ofAccounts.

AUDITORS

M/s. R. Subramanian & Co. Chartered Accountants Chennai have been appointed asStatutory Auditors of the Company till the conclusion of 56th Annual GeneralMeeting requisite resolution for ratifying their appointment is proposed in the mannerstated in theNotice for the 55th AGM. Particulars of Statutory Auditors CostAuditor Internal auditor and the Secretarial Auditor are given in the CorporateGovernance Report that forms an integral part of this Report. Secretarial Audit Report asrequired by Section 204(1) of the Companies Act 2013 is attached

Annexure - 5. ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to (i) the Defence Services DRDO

Laboratories ISRO and Ministry of Defence for the whole-hearted support andencouragement provided by them for indigenisation efforts on sophisticated high energybatteries; (ii) the Overseas customers who have reposed utmost faith and confidence inour products; (iii) the Lead Acid Battery Customers Dealers Distributors andInstitutional Indentors like Postal and Railways.

(iv) the Bankers for extending timely financial support for the continued successfulperformance of the Company and (v) to all suppliers and Shareholders for their continuedsupport.

(For the Board of Directors)

N. GOPALARATNAM

Chairman Chennai 600 034

May 28 2016