Your Board hereby present their 56th Annual Report and the Audited Accountsfor the year ended 31st March 2017.
The Companys financial performance under review is summarised below:
| || ||(Rs in Lakhs) |
| || |
For the year Ended
|Particulars ||2016 - 2017 ||2015 - 2016 |
|Sales ||4683.17 ||2235.54 |
|(Net of Excise Duty and VAT / Sales Tax) || || |
|Profit / (Loss) before || || |
|Finance Cost || || |
| ||709.30 ||(390.06) |
|Depreciation and Tax || || |
|Less: || || |
|1. Finance Cost ||530.59 ||547.86 |
|2. Depreciation ||132.01 ||122.23 |
| ||662.60 ||670.09 |
|Profit / (Loss) Before Tax ||46.70 ||(1060.15) |
|Less: || || |
|Provision for Taxation || || |
|Deferred Tax ||12.77 ||(403.85) |
|Reversal of MAT Credit ||- ||31.68 |
|Entitlement || || |
|NET PROFIT / (LOSS) ||33.93 ||(687.98) |
During the year the companys turnover was Rs. 4683.17 Lakhs as compared to theTurnover of Rs. 2235.54 Lakhs during the previous year. Flow of orders from the defencedepartment enabled the company to plan ahead and achieve this turnover.
In the absence of distributable profits no dividend is recommended.
PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES
The company achieved a turnover of Rs . 4086.12 Lakhs during the year as against Rs.1961.83 Lakhs during the previous year. The increase in turnover is due to receipt ofmajor Navy orders during the year. Clearance for production by DRDO Laboratory fordevelopment orders also contributed to the enhancement in turnover
NICKEL CADMIUM BATTERIES
The company achieved the turnover of Rs.412.57 Lakhs against Rs.183.01 Lakhs during theprevious year. Receipt of orders from Airforce and despatches of Industrial batteriesresulted in higher turnover.
LEAD ACID BATTERIES (LAB)
During the year the turnover of LAB division was Rs. 184.48 Lakhs as against Rs.90.70Lakhs. The production achieved during the year was due to receipt of orders from thePrivate Labellers. Delay in collection of the receivables in the aftermarket segmentcontinued to hamper flow of materials and consequently production. Production was kept onhold due to unremunerative prices even for private labeling.
Despite all efforts to secure orders from overseas the company could achieve aturnover of Rs.80.40 Lakhs only towards export to our regular customers. Quite a number ofproposals were submitted to our prospective customers and are in the advanced stage offinalisation.
CURRENT YEAR - 2017-18
The company has sizeable orders in hand for silver zinc division and it is expected toreceive further orders during the course of the year. The company hopes to achievesubstantial turnover in the current year and expects to report reasonable profit. Thecompany is also concentrating on cost reduction measures to achieve better results.
Poor liquidity position continued to affect the day to day operations. The bankers areconsidering our proposal of cash credit and they are in the advanced stage offinalization.
The company continues to be certified both under ISO 9001:2008 and ISO 14001:2004(Revised) Systems.
RESEARCH AND DEVELOPMENT
The company has successfully completed the development of 330kW silver zinc battery forheavy weight torpedo application pertaining to Indian Navy future program. The companyhopes to receive further orders in the near future. In the field of Missile batteries thecompany has completed number of development programmes and production is being taken upfor supply of the batteries.
Compliance with the provisions of Corporate Governance is not mandatory to the Companyas your companys 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 Corporate Governancein all its activities. A report on Corporate Governance is annexed herewith marked asAnnexure - 1 to this Report. Section 134(3) of the Companies Act 2013 requires theBoards Report to include several additional contents and disclosures. The applicablecontents and disclosures have accordingly been made in the Corporate Governance Report atthe 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 inAnnexure - 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 profit 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 make investment covered under Section 186 of theCompanies Act 2013 during the year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
Since the company does not meet any of the criteria / thereshold limit as specifiedunder Section 188(1) read with Rule 15 of Companies (Meeting of Board and its Power)Rules 2014 the reporting requirements thereunder are not applicable.
MATERIAL CHANGES AND COMMITMENTS
There is no change in the nature of business of the company during the year.
There are no material changes and commitments in the business operations of the companysince the close of the financial year as on 31st March 2017 to the date of thisreport.
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 -3
CORPORATE 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 thereunder are 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 inAnnexure -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.
In accordance with Article 106 of the Articles of Association of the Company Mr RVaidyanathan Director retires by rotation and being eligible offers himself forreappointment at the ensuing Annual General Meeting.
The Current term of Dr G A Pathanjali as Managing Director expired on 31.03.2017. TheBoard of Directors at their meeting held on 25th March2017 have reappointed DrG A Pathanjali as Managing Director of the Company for a further period of three yearsfrom 1st April 2017 to 31st March 2020. Necessary resolution isplaced before the Members for their approval.
Life Insurance Corporation of India (LIC) has withdrawn the Nomination of Mr Raj Kumaras Nominee Director from the Board and subsequently Mr Raj Kumar has resigned from theBoard with effect from 17.03.2017. The Board in its meeting held on 25.03.2017 acceptedthe withdrawal / resignation of Mr Raj Kumar.
Your Directors place on record the valuable services rendered by Mr.Rajkumar during histenure as Director of the company.
Consequent to the above Life Insurance Corporation of India (LIC) vide its letterdated 25.03.2017 nominated Mr Rajeev Chaturvedi Executive Director (RTI) as NomineeDirector on the Board of HEB in place of Mr Raj Kumar. As per Section 161(3) of theComapines Act2013 and in accordance with Article 105(b) of the Articles of Association ofthe Company the Board in its meeting held on 29.05.2017 inducted Mr Rajeev Chaturvedi asNominee Director of LIC not liable to retire by rotation. All the Independent Directorshave given the declaration that they comply with the criteria on independence as laiddown under Section 149(6) of the Companies Act 2013. The performance evaluation ofindependent directors has been done by the entire Board of Directors excluding thedirector being evaluated at its meeting held on 25th March 2017. The Board onthe basis of such performance evaluation determined to continue the term of appointment ofall the Independent Directors who have been appointed by the Company at its 53rdAGM for a fixed term of 5 years upto 31st March 2019.
M/s. R Subramanian & Company LLP Chartered Accountants Chennai (FirmRegistration No.004137S) shall cease to hold the office at the conclusion of this 56thAnnual General Meeting having regard to the provisions of Section 139(2) of the CompaniesAct 2013.
Your Board of Directors on the recommendation of Audit Committee has proposed theappointment of M/s. Maharaj N R Suresh and Company (Firm Reg. No. 001931S) as StatutoryAuditors for a period of five years from the conclusion of this Annual General Meetingtill the conclusion of the 61st Annual General Meeting. Necessary resolution is placedbefore the Members for their approval. Particulars of Statutory Auditors Internalauditors and the Secretarial Auditor are given in the Corporate Governance Report thatforms an integral part of this Report. Secretarial Audit Report as required by Section204(1) of the Companies Act 2013 is attached Annexure - 5
Your Directors wish to express their sincere thanks to (i) the Defence Services DRDOLaboratories ISRO and Ministry of Defence for the whole-hearted support and encouragementprovided by them for indigenisation efforts on sophisticated high energy batteries; (ii)the Overseas customers who have reposed utmost faith and confidence in our products;(iii) the Lead Acid Battery Customers Dealers Distributors and Institutional Indentorslike Postal and Railways. (iv) the Bankers for extending timely financial support for thecontinued successful performance of the Company (v) the Employees at all levels of thecompany for their commendable performance and (vi) to all suppliers and shareholders fortheir continued support.
(For the Board of Directors)
| ||N. GOPALARATNAM |
| ||Chairman |
|Chennai 600 034 || |
|May 29 2017 || |