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High Energy Batteries (India) Ltd.

BSE: 504176 Sector: Engineering
NSE: N.A. ISIN Code: INE783E01015
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NSE 05:30 | 01 Jan High Energy Batteries (India) Ltd
OPEN 275.00
PREVIOUS CLOSE 275.00
VOLUME 633
52-Week high 376.00
52-Week low 141.70
P/E 8.87
Mkt Cap.(Rs cr) 49
Buy Price 273.60
Buy Qty 18.00
Sell Price 275.00
Sell Qty 95.00
OPEN 275.00
CLOSE 275.00
VOLUME 633
52-Week high 376.00
52-Week low 141.70
P/E 8.87
Mkt Cap.(Rs cr) 49
Buy Price 273.60
Buy Qty 18.00
Sell Price 275.00
Sell Qty 95.00

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

Company director report

Your Board hereby present their 57lhAnnual Report and the Audited Accounts for the yearended 31th March 2018.

OPERATING RESULTS

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

(Rs in Lakhs)

For the year Ended

(As per IND AS)

(As per IGAAP)

Particulars 2017 2018 2016 - 2017 2016 - 2017
Sales 5937.11 4718.99 4683.17
(Net of Excise Duty and VAT/Sales Tax)
Other Income 13.62 15.09 51.70
Total Income 5950.93 4734.88 4734.87
Profit/(Loss) before Finance Cost Depreciation and Tax 1082.57 663.69 709.30
Less:
1. Finance Cost 490.90 417.40 530.59
2. Depreciation 128.64 619.54 132.01 649.41 132.01 662.60
Profit / (Loss) Before Tax Less: 463.03 114.28 46.70
Provision for Taxation: MAT 16.13 -
Deferred Tax net MAT Credit 101.12 200.32 12.77
Income Tax relating to Previous year 17.32 - -
Net Profit / (Loss) 326.46 (86.05) 33.93
Other Comprehensive Income 12.69 52.90 *
Total Comprehensive income 341.16 (33.15) -

During the year the company's turnover was 7 5937.11 Lakhs as compared to the Turnoverof Rs 4718.99 Lakhs during the previous year. Regular receipt of orders from our customershelped us to achieve higher turnover.

DIVIDEND

In the absence of distributable profits no dividend is recommended.

PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES

The company achieved a turnover of Rs 4824.16 Lakhs during the year as against rs4100.24 Lakhs during the previous year. This year major orders were received from Navy fortorpedoes propulsion batteries. Many of the development cum supply orders pertaining toMissile batteries from DRDL RCI and BrahMos contributed to achieve higher turnover.

NICKEL CADMIUM BATTERIES

The company achieved a turnover of Rs.226.45 Lakhs against Rs 412.58 Lakhs during theprevious year. Orders for batteries are regularly received from Airforce for SU30 Aircraftand Battery for other fighter Aircraft.

Due to low margin orders for Pocket Plate type Industrial Battery were not entertainedresulting in reduction of turnover.

LEAD ACID BATTERIES (LAB)

During the year the turnover of LAB division was Rs 886.50 Lakhs as against Rs 206.17Lakhs. Production and sales were achieved during the year through supplies to Privatelabelers(PL) consisting mainly of VRLA Battery for UPS back-up. The company is lookingfor diversification of market in the current year to achieve breakeven.

EXPORTS

The company could achieve a turnover of Rs 30.02 Lakhs towards export to our regularcustomers. Our effort to secure sizeable export orders is continuing persistently andprocessing of orders by a couple of customers abroad is in the final stage and isexpected to materialize during the current year.

Your Company participated in DEFEXPO at Chennai during 11th April 2018 to 14th April2018 and exhibited Company's products. The stall was visited by Defence MinisterScientific Advisor and other respected dignitaries. Also got good response from foreigncustomers.

CURRENT YEAR - 2018 - 19

With sizeable orders on hand and also orders in the pipeline the company hopes toachieve better turnover in the Silver Zinc division with a higher level of margin. Ourefforts to have orders in Nicad for both Aircraft battery & Industrial battery andExport are also expected to yield good results in terms of order book and performance.

For the Lead Acid Battery division the Company is focusing on PL Business especiallyof VRLA battery and Battery for e-rickshaw (EV) through established firms and all effortsare on to achieve higher turnover with breakeven performance.

FINANCE

Delay in realisation of payments from Government Departments affected the liquidityposition of the company tor the year under review However due to the increase inTurnover Bank operations have slightly eased up. Company envisages a better liquidity cumfinancial position in the current year with support of our Banks and clearance of ourproposal for Working capital limits.

ISO SYSTEMS

The Company Quality Management Systems (QMS) ISO 9001:2015 and Environmental ManagementSystems (EMS) ISO 14001:2015. continue to be accredited for Aerospace &. Naval Batterydivision. For the Lead Acid Battery division the company continues to have QMSaccreditation and will progress with EMS certification during the current year.

RESEARCH AND DEVELOPMENT

The Company is engaged in the development of new batteries for Missiles such asBrahMos ASL. ANSP and is presently in the advanced stages of Qualification for Airversionof BrahMos Missiles.

Silver Oxide Zinc Pile type battery development is in progress initiated through DRDOLaboratory for a strategic high power high energy underwater propulsion requirement.

The Company expects to get regular production orders for the batteries successfullydeveloped and delivered.

Development of Lead Acid Batteries of medium range VRLA types and Battery fore-rickshaw (EV) is in progress. Also testing at external Laboratories for third partycertification is in progress.

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 prescribed underRegulation 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 here with marked asAnnexure - 1 to this Report.

Section 134(3) of the Companies Act 2013 requires the Board's Report to includeseveral additional contents and disclosures. The applicable contents and disclosures haveaccordingly been made in the Corporate Governance Report at the appropriate places whichform an integral part of this Report.

EXTRACT OF ANNUAL RETURN

Details farming part of the extract of the Annual Return in Form MGT-9 are given inAnnexure - 2.

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 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;and

(t) 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 156 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 138(1) of the Companies Act2013 read with Rule 15 of Companies (Meeting of Board and its Powers) Rules 2014 thereporting 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 31th March 2018 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 2013 readwith Rule Sot the Companies (Accounts) Rules 2014 is given in Annexure - 3

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act 2013 mandates every company having minimum thresholdlimit of net worth turnover or net profit as prescribed to constitute a Corporate SocialResponsibility Committee and also to formulate corporate social responsibility policythat shall indicate the activities to be undertaken by the company. Since the company doesnot meet the criteria for constituting Corporate Social Responsibility Committee itremains outside the purview of Section 135 of the Companies Act 2013 and consequently thereporting 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 auditorslor 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.

ADOPTION OF THE INDIAN ACCOUNTING STANDARDS (ind AS)

The Company hitherto was following IGAAP notified under the Companies (AccountingStandards) Rules 2006. It has now adopted the Indian Accounting Standards (Ind AS) fromFY 2017 -18 as mandated and restated the financial statements for FY 2016-17 forpresenting comparative information. Accordingly the financial statements for current yearincluding comparative figures of previous year are based on ind AS and in accordance withthe recognition and measurement principles stated therein. The impact of the applicationof ind AS is disclosed in the notes to Financial Statements.

DIRECTORS

The Board regrets to inform the demise of our director RAdm S Mohapatra on 10.02.2018.He held eminent positions in Indian Navy DR DO laboratory and BrahMos Ltd and took parteffectively in all our Board proceedings. The Board wishes to place on record his valuablecontributions to the company as Director- 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 22nd March 2013. The Board on the basis of such pedormance evaluationdetermined to continue the term of appointment of all the Independent

Directors who have been appointed by the Company at its 53th AGM for a fixed term upto31st March 2019.

AUDITORS

M/s.Maharaj N R Suresh and Co Chartered Accountants Chennai (Firm RegistrationNo.001931S) were appointed as Statutory Auditors by the shareholders in the 56th AnnualGeneral Meeting for a period of five years till the conclusion ol the 61st Annual GeneralMeeting of the Company on such remuneration to be fixed by the Board of Directors on therecommendation of Audit Committee from time to time. This was subject to ratification bymembers at every AGM in accordance with the first Proviso to Section 139(1) of theCompanies Act 2013 as may be amended from time to time. This requirement for annualratification at AGM has been dispensed with by the Companies (Amendment) Act 2017effective 7th May 2018- Accordingly no ratification is required henceforth and theStatutory Auditors would continue in the normal course till the conclusion of 61st AGM

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 2013attached as Annexure - 5.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to :

(i) all the valued customers viz Defence Services. VSSC ISRO DRDO Laboratories andMinistry of Defence for the whofe-hearted support and encouragement provided by them forindigenisation efforts on sophisticated high energy batteries for strategic applications;

(ii) the Overseas customers who have reposed utmost faith and confidence in ourproducts;

(iri) the Lead Acid Battery Customers Dealers Distributors and InstitutionalIndentors like Postal and Railways;

(iv) the Bankers for extending timely financial support for the continued successfulperformance of the Company;

(v) the Employees at all levels of the company for their commendable performance and

(vi) to aall suppliers and Share holders for their continued support.

(For the Board of Directors)
N. GOPALARATNAM
Chairman
Chennai
May 26 2018