Your Board hereby presents the 59th Annual Report and theAudited Accounts for the year ended 31st March 2020.
The Company has adopted the Indian Accounting Standards (IndAS) fromFinancial Year 2017-18 as mandated. Accordingly the financial statements for currentyear including comparative figures of previous year are based on IndAS and in accordancewith the recognition and measurement principles stated therein as well as otheraccounting principles generally accepted in India. While this has no major impact for theStatement of Profit and Loss there is and would be periodical impact for "OtherComprehensive Income" in measuring and restating investments at fair value.
(Rs in lakhs)
|Particulars || |
For the year ended
| ||2019-20 ||2018-19 |
|Sales || || |
|(Net of GST) ||6116.51 ||4585.42 |
|Other Operating Income ||32.71 ||76.27 |
| ||6149.22 ||4661.69 |
|Other Income ||16.80 ||13.34 |
|Total Income ||6166.02 ||4675.03 |
|Profit / (Loss) before Finance Cost Depreciation and Tax ||1563.42 ||732.77 |
|Less: || || |
|Finance Cost ||566.35 ||552.58 |
|Depreciation ||115.98 ||123.63 |
| ||682.33 ||676.21 |
|Profit / Loss before Tax ||881.09 ||56.56 |
|Less: || || |
|Provision for Taxation : || || |
|Current Tax ||- ||- |
|Deferred Tax ||320.90 ||12.93 |
|Net Profit / (Loss) ||560.19 ||43.63 |
|Other Comprehensive Income ||(46.49) ||(7.04) |
|Total Comprehensive Income ||513.70 ||36.59 |
The Company adopted the new corporate tax under Section 115BAA ofIncome Tax Act 1961 from the FY 2019 - 2020.
The Company recorded a turnover of ' 6116.51 lakhs in the year ascompared to ' 4585.42 lakhs (an increase of 33.39%) during the previous year. With goodorder position the Company could improve the turnover substantially and record a NetProfit of ' 560.19 lakhs compared to ' 43.63 lakhs in the previous year.
The Company's efforts to achieve even a higher level of turnover forFinancial Year 2019-20 itself was thwarted by unexpected lockdown imposed by theGovernment during the last week of March 2020 to contain spread of Covid-19 pandemic. Thisimpacted Battery assembly Customer testing and evaluation as well as dispatch ofbatteries.
In the absence of distributable profits under Section 123 of theCompanies Act 2013 no dividend is proposed for the year ended 31st March2020.
COMPANY'S PERFORMANCE SILVER ZINC BATTERIES
The Company achieved a turnover of ' 6032.18 lakhs through Silver ZincBattery supplies during the year as against ' 4071.91 lakhs during the previous year.
Achieving this higher turnover was made possible by regular inflow ofOrders from Defence establishments uninterrupted production and completion of inspectionand testing without undue delays.
NICKEL CADMIUM BATTERIES
During the year the turnover of Nickel Cadmium Division was ' 81.35lakhs as against ' 405.60 lakhs during the previous year. For
procurement of Aircraft Batteries Government is now opting for ratecontract and hence the ordering cycle is getting skewed depending upon requirement cumBudget allocation.
LEAD ACID BATTERIES (LAB)
Lead Acid Battery division operations were temporarily suspended sinceApril 2019 due to competitive market conditions and nonremunerative prices. However arevival plan is being drawn to effectively utilise the Plant capacity.
During the year the export turnover was only ' 24 lakhs. Exportpotential for our range of products is dwindling since some of the earlier vintagesystems are now becoming obsolete both in India and abroad. The newly developed batterysystems are mostly for Indian Defence and are in our regular production. However theCompany is having a good scope for development of new products. All efforts are being madeto secure orders for regular as well as for development of new products.
COVID -19 - IMPACT
Consequent to Covid-19 pandemic the Central Government proclaimed anationwide lockdown since 24th March 2020 and the State Government alsofollowed suit. Hence the Company had to suspend its operations and resumed normaloperations from 20th May 2020 upon partial relaxation of lock down norms.
Besides the loss in production suffered during lockdown the Companyhad to withhold despatch and billing of finished goods as Government accredited Labs thatremained closed could not do the inspection. This in turn affected the turnover and profitleading to Working Capital constraints.
While so the Government has suo moto extended delivery schedule forall defence suppliers and on the supply side most of the key vendors have confirmedsupplies as per schedule. Therefore in the opinion of the management no provisiontowards contractual obligations or impairment losses is considered necessary at present.
However the Company would be reviewing the impact on a continuousbasis as the pandemic is yet to be brought under control.
Working Capital availability has improved and all the Banks haverenewed their sanctioned limits for this year. Canara Bank has imposed a margin of 25% forNon Fund Based limits against NIL margin so far that resulted in lock up of funds for along duration. This resulted in strain on our working capital. Payments from most of thecustomers were received on time. The Company effected payments to suppliers and serviceproviders almost on time thereby bringing down the level of outstanding.
ISO 9001 / ISO 14001 ACCREDITATION
Our Quality Management Systems (QMS) ISO 9001:2015 and EnvironmentalManagement Systems (EMS) ISO 14001:2015 continue to be accredited for Aerospace and NavalBattery Division. For the Lead Acid Battery Division QMS accreditation and EMScertification were completed.
OHSAS 45001 CERTIFICATION
Over the last two years our Company implemented the required systemsand procedures to improve the overall Health and Safety aspects. During this year theCompany secured ISO 45001:2018 certification pertaining to Occupational Health and Safety(OH&S) Management System.
RESEARCH AND DEVELOPMENT
Development activities including Design cum Proto evaluation of a highpower high energy underwater propulsion Battery were completed during the year. As acontinuation performance that can be achieved as a full size Battery needs to bedemonstrated through electrical load testing in the presence of Customer / Inspectionrepresentatives. During FY 2020-21 this Battery type will clear the R&D phase andwill become one of the major products for manufacture and supply in future.
The Hon'ble Finance Minister had announced that all contracts will beextended by six months due to Covid-19 lock down.Hence the Company will complete theexisting development contract within this extended period.
As on March 31 2020 Shares of 2612 Shareholders are held in Dematform and 1741075 shares have been dematerialised representing 97.12% of the total EquityShare Capital.
CURRENT YEAR (2020-21)
With the orders on hand and expected orders the Company as statedearlier is confident of achieving higher turnover and profitability in the current yeardespite Covid-19 lock down restrictions and its consequent effects. The pending orderposition of Silver Zinc Division is comfortable this year. Negotiations are in progressfor securing orders from NSTL and Navy as well as for supplies to Missile programs. Withall these positive developments the Company will catch up with a better and forwardlooking performance during the current year.
Compliance with the provisions of Corporate Governance is not mandatoryto the Company. The Company voluntarily takes steps to comply with the provisions ofCorporate Governance and the Report on the above is enclosed as Annexure - 1.
Section 134(3) of the Companies Act 2013 requires the Board's Reportto include several additional contents and disclosures. The applicable contents anddisclosures have accordingly been made in the Corporate Governance Report at theappropriate places which forms an integral part of this Report.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in Form MGT-9is given in Annexure - 2.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 with respectto the Directors' Responsibility Statement your Board confirms that:
(a) in the preparation of the annual accounts the applicableAccounting Standards have been followed;
(b) the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
(c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act
2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a 'goingconcern' basis.
(e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate andoperating effectively.
(f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company did not give any Loan or Guarantee or provided any securityor make investment 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) readwith Rule 15 of Companies (Meeting of Board and its Power) Rules 2014 the reportingrequirements thereunder are not applicable.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of business of the Company during theyear.
There are no material changes and commitments in the businessoperations of the Company since the close of the financial year as on 31stMarch 2020 to the date of this Report.
CONSERVATION OF ENERGY
Information relating to Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is givenin Annexure - 3.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Section 135 of the Companies Act 2013 has imposed CSR mandate oncompanies having minimum threshold limit of net worth turnover or net profit asprescribed. Since the company does not fall under any of these criteria it remainsoutside the purview of Section 135 and consequently the reporting requirements thereunderare not applicable.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isfurnished in Annexure - 4.
CLASSIFICATION OF MICRO SMALL AND MEDIUM ENTERPRISES (MSME)
On 13th May 2020 the Honbl'e Finance Minister Mrs.NirmalaSitharaman announced the revised MSME classification.
The definition of MSME has been revised based on Investment and AnnualTurnover.
Further the Ministry of Micro Small and Medium Enterprises vide itsNotification dated 1st June 2020 notified the criteria for classification ofMSME.
Based on this the Company has come under the MSME classification from01.07.2020.
ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIALSTATEMENTS
(i) The Company has laid down adequate systems and well drawnprocedures for ensuring internal financial controls. It has appointed an external auditfirm as Internal Auditors for periodically checking and monitoring the internal controlmeasures.
(ii) Internal Auditors are present at the Audit Committee meetingswhere internal audit reports are discussed alongside of management comments and the finalobservations of the Internal Auditor.
(iii) The Board of Directors have put in place budgetary control andmonitoring measures for ensuring the orderly and efficient conduct of the business of theCompany the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.
INDIAN ACCOUNTING STANDARDS (IndAS)
The Financial Statements of the current year are prepared under IndASwhich was adopted since FY 2018-19.
CASH FLOW STATEMENT
As required under Regulation 53 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Cash Flow Statement is attached to theBalance Sheet.
Relations between the Management and Employees were cordial throughoutthe year under review.
In accordance with Article 106 of the Articles of Association of theCompany Mr M Ignatius whole time director designated as Director (Operations) retiresby rotation at this meeting and being eligible offers himself for reappointment.
Necessary resolution is placed before the members for their approval.
The current term of Dr G A Pathanjali as Managing Director expired on31st March 2020. The Board of directors at their meeting held on 28thMarch 2020 reappointed Dr G A Pathanjali as Managing Director of the company for afurther period of three years from 1st April 2020 to 31st March2023 based on the recommendation of the Nomination and Remuneration Committee.
Necessary resolution for reappointment of Dr G A Pathanjali as ManagingDirector is placed before the members for their approval.
M/s. Maharaj N R Suresh and Co Chartered Accountants Chennai (FirmRegistration No.001931S) was appointed as Statutory Auditors by the shareholders in the 56thAnnual General Meeting for a period of five years till the conclusion of the 61stAnnual General Meeting of the Company on such remuneration to be fixed by the Board ofDirectors on the recommendation of Audit Committee from time to time. The requirement forannual ratification at AGM had been dispensed with by the Companies (Amendment) Act 2017.Accordingly no ratification is required henceforth and the Statutory Auditors wouldcontinue in the normal course till the conclusion of 61st AGM.
Particulars of Statutory Auditor Internal Auditor and the SecretarialAuditor are given in the Corporate Governance Report that forms an integral part of thisReport. SecretarialAudit Report as required by Section 204(1) of the Companies Act 2013is attached as
Annexure - 5.
Your Directors wish to express their sincere thanks to:
(i) all the valued customers viz. Defence Services VSSC NSTL DRDOLaboratories and Ministry of Defence (MOD) BDL BAPL HAL ADE ADA and other defencebased organisations for the whole-hearted support and encouragement towards indigenoussourcing of Batteries for strategic applications;
(ii) the Overseas customers who have reposed utmost faith andconfidence in our products;
(iii) the Consortium of Bankers viz. UCO Bank Indian Bank and CanaraBank for extending timely financial support for the continued positive performance of theCompany;
(iv) the Employees at all levels of the company for their co-operationand improved performance ;
(v) to all suppliers service providers and Shareholders for theircontinued trust and support.
| ||(For Board of Directors) |
|Chennai ||N GOPALARATNAM |
|June 27 2020 ||Chairman |