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High Energy Batteries (India) Ltd.

BSE: 504176 Sector: Engineering
NSE: N.A. ISIN Code: INE783E01015
BSE 00:00 | 05 Jul 1343.65 -15.50
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NSE 05:30 | 01 Jan High Energy Batteries (India) Ltd
OPEN 1378.50
PREVIOUS CLOSE 1359.15
VOLUME 1174
52-Week high 2921.50
52-Week low 1210.00
P/E 13.41
Mkt Cap.(Rs cr) 241
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1378.50
CLOSE 1359.15
VOLUME 1174
52-Week high 2921.50
52-Week low 1210.00
P/E 13.41
Mkt Cap.(Rs cr) 241
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Your Board hereby presents the 61st Annual Report and the Audited Accounts for the yearended 31st March 2022.

OPERATING RESULTS

The Company's financial performance under review is summarized below:

(Rs in lakhs)
For the year ended
Particulars 2021 - 22 2020-21
Sales (Net of GST) 7925.74 7752.75
Other Operating Income 29.52 30.72
7955.26 7783.47
Other Income 17.90 11.94
Total Income 7973.16 7795.41
Profit / (Loss) before Finance Cost Depreciation 2965.44 3023.74
and Tax
Less:
Finance Cost 378.09 512.49
Depreciation 113.45 112.43
491.54 624.92
Profit / Loss before Tax 2473.90 2398.82
Less:
Provision for Taxation :
Current Tax 694.39 133.52
Deferred Tax (15.47) 432.37
678.92 565.89
Net Profit / (Loss) 1794.98 1832.93
Other Comprehensive Income (150.44) (14.99)
Total Comprehensive Income 1644.54 1817.94

The Company recorded a turnover of Rs 7925.74 lakhs in the year as compared to Rs7752.75 lakhs during the previous year.

DIVIDEND

Your Directors recommend a dividend of Rs 15/- (Rupees Fifteen only) per equity shareof Rs 10/- each for the financial year ended 31st March 2022 absorbing a sum of Rs 268.92lakhs subject to the approval of shareholders at the ensuing Annual General Meeting.

PERFORMANCE REVIEW: SILVER ZINC BATTERIES

The Company achieved a turnover of Rs 7429.23 lakhs through Silver Zinc Batterysupplies during the FY 2021-2022 as against Rs 7548.49 lakhs during the FY 2020-2021.

This was made possible by the regular and on-time placement of Orders by Defenceestablishments DRDO and Indian Navy. Availability of orders on hand had made possibleuninterrupted production and completion of inspection cum testing without undue delays.Performance could have been better but for the sporadic lock-down in many of the citiesduring Q1. of supply chain

NICKEL CADMIUM BATTERIES

During the year the turnover of Nickel Cadmium Division was Rs 496.51 lakhs asagainst Rs 204.26 lakhs during the previous year. Placement of orders by Air(HQ) forNickel Cadmium Batteries is based on military urgency versus stock position on hand.

LEAD ACID BATTERIES (LAB)

As reported earlier Lead Acid Battery division operations have been suspendedtemporarily since April 2019 due to extensive competition in the market resulting innon-remunerative prices. Efforts were put in for revival of the Plant keeping in mind thesustainability of the operations. None of the actions proceeded could materialise duringFY 2021-2022 due to demand for quantity off-take versus pricing which was notremunerative. However our efforts are continuing towards revival of Plant operations.

ExPORTS

During the year the export turnover was Rs 185.69 lakhs as compared to Rs 32.36 lakhslast year. Our efforts to clinch export orders were not successful as a result of Covidafter-effect situation prevailing all over the world. One of our Overseas Defencecustomers could only lift batteries of initial sample order for their evaluation at sea.Their user trials could not be carried out due to Covid Impact and consequently order forsupply in bulk did not materialise. All efforts are being made to secure export orders bystrengthening our export team and also reaching out to more newer territories abroad.

PERSISTANT COVID -19 – IMPACT

Owing to Covid pandemic and the consequent impact due to lock down during firstquarter the Companyhadtoface disruptions that prevailed both globally and within India.Inconsistent arrival of imported materials from overseas suppliers continues till dateresulting in loss of production or withholding of planned dispatches affecting theturnover as well as profit and further leading to Working Capital

Constraints.

On resumption of normalcy to a reasonable extent from the Second Quarter of FY2021-2022 the Company could accomplish the highest turnover so far.

FINANCE

Current Year the Company's Financial position is reasonably well placed at a comfortlevel owing to our improved operations supplemented by the support of our bankers interms of working capital enhancement and reduction in interest rates. The Company was alsoable to clear all inter corporate loans during the year. During Q4 Punjab National Bankwas inducted as part of our consortium in place of Indian Bank and Canara Bank.

ISO 9001 / ISO 14001 ACCREDITATION

Our Quality Management Systems (QMS) ISO 9001:2015 and Environmental Management Systems(EMS) ISO 14001:2015 continue to be accredited for both Aerospace Naval Battery Divisionand Lead Acid Battery Divisions.

OHSAS 45001 CERTIFICATION

During the year the Company secured re-certification of ISO 45001: 2018 certificationpertaining to Occupational Health and Safety (OHSAS) Management System for AerospaceNaval Battery Division and Lead Acid Battery Divisions.

RESEARCH AND DEVELOPMENT Underwater propulsion Battery

– During FY 2021-2022 our R & D received orders from DOI (Navy) for thedevelopment cum supply of two distinct types of high power high energy Silver ZincBattery for underwater propulsion. The contract is for a period of two years and is achallenging one in terms of application specific technical performance and we do possessthe needed resource to complete the programme satisfactorily on time.

Vanadium based flow battery

– The development of 1kW / 10kWh Vanadium based Flow Battery (VRFB) for OECTprogressed in co-ordination with IIT Chennai was demonstrated satisfactorily and theproject was completed during FY 2021-2022 meeting the technical cum contractualrequirements. Further discussions are in progress with OECT and other funding agenciesto go for scaling upto 5kW level.

Lithium Battery

– An R & D programme for Lithium Battery pack assembly is established atLaboratory scale with the needed equipment and test facility. In view of the safety andallied issues associated with Lithum Battery work on our 2nd life program is continuingat a slow pace.

SIDM Championship Award

Our Honbl'e Raksha Mantri Sri Rajnath Singh awarded the Society of Indian DefenceManufacturers (SIDM) Champion Award to our Company on 28.09.2021 at New Delhi for ourefforts on Import substitution Battery for BrahMos Missile.

DEPOSITORY SYSTEM

As on March 31 2022 Shares of 8045 Shareholders out of 8213 shareholders are held inDemat form and 1765392 shares were dematerialised representing 97.95% of the total EquityShare Capital.

CURRENT YEAR (2022- 23)

With the orders on hand and the orders in pipeline which are at an advanced stage ofrelease the Company expects to make good performance. During current year development oftwo major batteries for Indian Navy will be pursued which will get into production modein the next two year period.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed discussion on the industry structure as well as on the financial andoperational performance is contained in the ‘Management Discussion and AnalysisReport' that forms an integral part of this Report - Annexure-1.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Corporate Governance

Report together with the certificate from the Company's auditors confirming thecompliance of conditions on Corporate Governance is given in Annexure-2. TheCorporate Governance Report also includes contents and disclosures required under Section134(3) of the Companies Act 2013 at relevant places that forms an integral part of thisreport.

ExTRACT OF ANNUAL RETURN

Details forming part of the extract of the Annual Return in Form MGT-9 is given in Annexure- 3. A copy of annual return for FY 2021 - 2022 will be placed on the website of thecompany www.highenergy.co.in after conclusion of the 61st AGM.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 with respect to the Directors'

Responsibility Statement your Board confirms that: (a) in the preparation of theannual accounts the applicable Accounting Standards have been followed.

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments 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 of the profit of the Company for thatperiod; (c) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 the Companyand that such internal financial controls are adequate and operating effectively.

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

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company did not give any loan or provided any Security or Guarantee 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 was 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 2022 to the date of this Report.

CONSERVATION OF ENERGY

Information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is given in Annexure– 4.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is covered under the mandate of Section 135 of the Companies Act 2013 forFY 2021-2022. The CSR report in the prescribed form is given in Annexure – 5that forms part of this report.

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– 6.

CLASSIFICATION OF MICRO SMALL AND MEDIUM ENTERPRISES (MSME)

The Company comes under MSME classification since 1st July 2020 as Small Enterprises(UDYAM -TN-02-0000445). Further the Company avails/utilises the benefits arising out ofthis reclassification including GOI / MOD contracts and Bank operations.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

(i) The Company has laid down adequate systems and well-drawn procedures for ensuringinternal financial controls. It has appointed an external audit firm as Internal

Auditors for periodically checking and monitoring the internal control measures.

(ii) Internal Auditors are present at the Audit Committee meetings where internal auditreports are discussed alongside of management comments and the final observations of theInternalAuditor. Periodical compliance report on the observation points considered orimplemented is issued by the Internal Auditors.

(iii) The Board of Directors have put in place budgetary control and monitoringmeasures for ensuring the orderly and efficient conduct of the business of the

Company 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 IndAS which was adoptedsince Financial Year 2017–18.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year underreview. The Management ensured that all necessary steps were taken to follow theguidelines / norms mandated by the Government to prevent the spreading of Covid pandemic.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company Mr NGopalaratnam (DIN:00001945)NonExecutiveNonIndependent Director retires by rotation atthis meeting and being eligible offers himself for reappointment. Necessary resolution isplaced before the members for their approval.

On the recommendation of the Nomination and Remuneration Committee the Board ofDirectors at their meeting held on 26th March 2022 have reappointed Mr M Ignatius asDirector(Operations) of the Company for a further period of three years with effect from1st April 2022 to 31st March 2025 liable to retire by rotation.

Necessary resolution is placed before the members for their approval.

On 07.05.2022 the Board in its meeting accepted the resignation of Mrs Jayashree AjitShankar (DIN: 08397093) Nominee Director LIC from the Board of the Company. The Boardwishes to place on record its appreciation for her involved participation in thedeliberations at the Board meetings during her tenure.

Life Insurance Corporation of India (LIC) has nominated Mr H Nanda as Nominee Directorof LIC on the Board of the Company in place of Mrs Jayashree Ajit Shankar.

The Board in its meeting held on 07.05.2022 inducted Mr H Nanda (DIN: 09595835) asNominee Director LIC.

AUDITORS

The first term of five years for M/s Maharaj N R

Suresh and Co as Statutory Auditor ends on the conclusion of 61st AGM. Your Board ofDirectors on the recommendation of Audit Committee has proposed the appointment of M/sMaharaj N R Suresh and Co LLP (Firm Reg.No.001931S/ S000020) as Stautory Auditors of theCompany for a second term of five years to hold office from the conclusion of this AnnualGeneral Meeting till the conclusion of the 66th General Meeting of the Company.

Necessary resolution is placed before the Members for their approval.

Particulars of Statutory Auditors Internal auditor and the Secretarial Auditor aregiven in the Corporate Governance Report that forms an integral part of this Report.Secretarial Audit Report as required by Section 204(1) of the Companies Act 2013 isattached as Annexure - 7.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to: (i) all the valued customersviz. Defence Services VSSC NSTL RCI ASL DRDO Laboratories and Ministry of Defence(MOD)

BDL BrahMos (BAPL) BELHAL ADE ADA and other defence based organizations such asDGONA CVRDE MGO Air(HQ) HQMC for the whole-hearted support and encouragement towardsindigenous sourcing of Batteries for strategic applications.

(ii) all our valued Govt Statutory Bodies like IOF PCB inspection cum certifyingagencies such as CEMILAC DGAQA DGNAIMSQAASSQAGR&QA for their timely andmeticulous adherence of Quality Assurance / Product acceptance procedures. (iii)Educational Institutions viz. NIT(T) IIT etc for their co-operation to our R & Dprogress. OECT part of ONGC for initiating a program on Flow Battery (VRFB) through IITChennai. Research Institutions like CECRI for involving in our Indigenisation efforts.(iv) the Overseas customers who have reposed utmost faith and confidencein our products;

(v) the Consortium of Bankers viz. UCO Bank and Punjab National Bank ( as of now) andUCO Indian Bank and Canara Bank as consortium members in the past till Q3 for extendingfinancial support for the continued positive performance of the Company; (vi) theEmployees at all levels of the company for their co-operation and the sincere efforts putin towards improved performance. (vii) to all suppliers vendors service providers sub-contractors and Shareholders for their continued trust and support.

(For Board of Directors)
Chennai N GOPALARATNAM
7th May 2022 Chairman

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