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High Energy Batteries (India) Ltd.

BSE: 504176 Sector: Engineering
NSE: N.A. ISIN Code: INE783E01015
BSE 00:00 | 13 Apr 779.10 1.30
(0.17%)
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777.80

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NSE 05:30 | 01 Jan High Energy Batteries (India) Ltd
OPEN 777.80
PREVIOUS CLOSE 777.80
VOLUME 852
52-Week high 1039.35
52-Week low 180.20
P/E 10.74
Mkt Cap.(Rs cr) 139
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 777.80
CLOSE 777.80
VOLUME 852
52-Week high 1039.35
52-Week low 180.20
P/E 10.74
Mkt Cap.(Rs cr) 139
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company auditors report

TO THE MEMBERS OF M/s. HIGH ENERGY BATTERIES (INDIA) LIMITED

Report on the audit of Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of High EnergyBatteries (India) Limited ("the Company") which comprise the Balance Sheet asat March 31 2020 and the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and Notes to the Financial Statements including a summary of the SignificantAccounting Policies and other explanatory information hereinafter referred to as FinancialStatements.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under Section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 the Profit (Including OtherComprehensive Income) the changes in Equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143 (10) of the Act. Our responsibilities underthose Standards are further described in the Auditors' Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Emphasis of Matter

a) Attention is invited to note no 44 of the financial statements which is extractedbelow :

Consequent to Covid-19 pandemic the Central Government proclaimed a nationwidelockdown since 24th March 2020 and the State Government also followed suit. Hence thecompany had to suspend its operations and resumed normal operations from 20th May 2020upon partial relaxation of Lock down norms.

Besides the loss in production suffered during lockdown the company had to withholddespatch and billing of finished goods as Government accredited Labs that remained closedcould not do the inspection. This in turn affected the turnover and profit leading toWorking Capital Constraints.

While so the Government has suo moto extended delivery schedule for all defence and onthe supply side most of the key vendors have confirmed supplies as per schedule.Therefore in the opinion of the management no provision towards contractual obligationsor impairment losses is considered necessary at present. Further on evaluation of theimpact on the carrying amounts of Property Plant and equipment inventories receivablesand other current assets impairment loss of Rs 53.70 lakhs is recognized on LAB PlantInventories.

b) Due to Covid-19 related lockdown the management could not carry out physicalverification of inventory at the year end. However on partial relaxation of lockdownphysical verification was carried out and we were also present during the physicalverification. Consequently we have performed alternate procedures to audit the existenceand condition of inventory as per the guidelines provided in SA 501 "Audit evidence -Specific consideration for stipulated items' and have obtained sufficient appropriateaudit evidence."

Our opinion on the Financial Statements is not modified in respect of the abovematters.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sl.No. Key Audit Matters Response to Key Audit Matters & Conclusion
1 Testing for impairment provision Lead Acid Battery Plant (LAB) The management appointed Independent Chartered Engineers firm (approved Valuer) to ascertain the realizable value of LAB plant since the Value in Use determination by cash flow method is not reflective of the realizable value as the plant is underutilized.
The independent valuer has valued the LAB plant assets at '1146 Lakhs.
We have compared the values with the carrying value as per books and Fixed asset Register and found that the realizable value is more than the carrying value and the management judgment that no impairment loss is required to be recognized is reasonable.
2 Inventories
As on 31st March2020 the carrying value inventories is Rs 2851.64 lakhs and is valued at lower of cost and net realisable value. We have verified and tested the design and operating effectiveness of controls with regard to receipt issues and valuation of inventories. Due to Covid-19 related lockdown the management could not carry out physical verification of inventory
We considered the value of inventories as key audit matter considering the relative size of it in the financial statements. at the year end. However on partial relaxation of lockdown physical verification was carried out and we were also present during the physical verification. Consequently we have performed alternate procedures to audit the existence and condition of inventory as per the guidelines provided in SA 501 "Audit evidence - Specific consideration for stipulated items' and have obtained sufficient appropriate audit evidence."
We have also verified the valuation sheets for the quantities and the rates adopted and also the workings for the impairment provision of the Inventories of Lead Acid Battery Division.
Based on our audit procedures we find that the value of inventories is properly stated in the financial statements.

Information Other Than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information in the AnnualReport comprising of the Director's report and its annexures but does not include thestandalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that if there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the Financial Position Financial Performance (includingOther Comprehensive Income) Changes in Equity and Cash Flows of the Company in accordancewith other accounting principles generally accepted in Indiaincluding the AccountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Financial Statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the Financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process. Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate Internal Financial Controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Financial Statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in Internal Control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccountingStandards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the Directors as on 31stMarch 2020 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2020 from being appointed as a Director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the Internal Financial Controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

g) With respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the company.

For M/s. MAHARAJ N R SURESH AND CO.
Chartered Accountants
Firm Regn. No. 0019315
N R Suresh
Partner
Place : Chennai Membership No. 021661
Date : June 27 2020 UDIN:20021661AAAABH3885

ANNEXURE "A" TOTHE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF HIGH ENERGY BATTERIES (INDIA) LIMITED.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act").

We have audited the Internal Financial Controls over Financial Reporting of HIGH ENERGYBATTERIES (INDIA) LIMITED ("the Company") as ofMarch 31 2020 in conjunctionwith our audit of the Standalone IndAS Financial Statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining InternalFinancial Controls based on the Internal Control over Financial Reporting criteriaestablished by the Company considering the essential components of Internal Controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's Internal FinancialControls over Financial Reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of Internal Financial Controls both applicable to an audit ofInternal Financial Controls and both issued by ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate Internal Financial Controls over FinancialReporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls System over Financial Reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over Financial Reporting includedobtaining an understanding of Internal Financial Controls over Financial Reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditors'judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's Internal Financial Controls Systemover Financial Reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's Internal Financial Control over Financial Reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's Internal Financial Control over FinancialReporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of Management and Directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of Internal Financial Controls over FinancialReporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the Internal Financial Controls over FinancialReporting to future periods are subject to the risk that the Internal Financial Controlover Financial Reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate InternalFinancial Controls System over Financial Reporting and such Internal Financial Controlsover Financial Reporting were operating effectively as at March 312020 based on theInternal Control over Financial Reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by ICAI.

For M/s. MAHARAJ N R SURESH AND CO.
Chartered Accountants
Firm Regn. No. 001931S
N R Sureshs
Partner
Place : Chennai Membership No. 021661
Date : June 27 2020 UDIN:20021661AAAABH3885

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF HIGH ENERGY BATTERIES (INDIA) LIMITED.

The Annexure referred to in Paragraph 2 under the heading 'Report on Other Legal andRegulatory

Requirements' of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the Management at the year endand no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the Company.

(ii) The Management has conducted physical verification of inventory at reasonableintervals and no material discrepancies were noticed. Inventories with subcontractors atthe year end are not physically verified due to Lock down on account of COVID-19. Howeverconfirmations have been received from the parties.

(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the Register maintained undersection 189 of the Companies Act 2013.

(iv) The Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of loans investments provided by the Company. TheCompany has not provided any guarantee or security to any company covered under Section185.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records underSub-section (1) of Section 148 of the Companies Act 2013 and such accounts and recordshave been made and maintained.

(vii) According to the information and explanations given to us in respect of Statutorydues :

(a) There have been delays in depositing undisputed Statutory dues including ProvidentFund Employees' State Insurance Income Tax Duty of Customs Cess Goods and Service Taxand any other Statutory Dues to the appropriate authorities during the year. Howevertherewere no undisputed amounts payable which were in arrears as at 31st March 2020 for aperiod of more than six months from the date they became payable.

(b) There are no dues of Income Tax or Sales Tax or Service Tax or Duty of Customs orDuty of Excise or Value Added Tax Cess and Goods and Service Tax have not been depositedas on 31st March 2020 on account of disputes.

(viii) The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government.The Company has not issued any Debentures.

(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

(x) The Company has not noticed or reported during the year any fraud by the Company orany fraud on the Company by its Officers or employees.

(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompanies Act 2013.

(xii) The Company is not a Nidhi Company and hence complying with the provisions of theNidhi Rules 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177and 188 of the Companies Act 2013 where applicable and the details have been disclosedin the Financial Statements etc. as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.

(xv) The Company has not entered into any non-cash transactions with Directors orpersons connected with him.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For M/s. MAHARAJ N R SURESH AND CO.
Chartered Accountants
Firm Regn. No. 001931S
N R Suresh
Partner
Place : Chennai Membership No. 021661
Date : June 27 2020 UDIN:20021661AAAABH3885

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