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Directors Report of High Energy Batteries (India) Ltd.

Mar 31, 2023

Your Board hereby presents the 62^nd Annual Report and the Audited Accounts for the year ended 31^st March, 2023.

1. OPERATING RESULTS

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

				('' in lakhs)
Particulars	For the year ended
Particulars	2022	- 23	2021	- 22
Sales (Net of GST)	9,253.80		7,925.74
Other Operating Income	29.10	9,282.90	29.52	7,955.26
Other Income		73.12		17.90
Total Income		9,356.02		7,973.16
Profit / (Loss) before Finance Cost, Depreciation and Tax		3,182.14		2,965.44
Less:
Finance Cost	314.76		378.09
Depreciation	118.62	433.38	113.45	491.54
Profit / Loss before Tax		2,748.76		2,473.90
Less:
Provision for Taxation :
Current Tax	769.67		694.39
Deferred Tax	(70.42)	699.25	(15.47)	678.92
Net Profit / (Loss)		2,049.51		1,794.98
Other Comprehensive Income		(170)		(150.44)
Total Comprehensive Income		2,047.81		1,644.54

The Company recorded a turnover of '' 9,282.90 lakhs in the year FY 2022 - 23, as compared to '' 7,955.26 lakhs, during the previous Financial Year 2021 - 22.

2. SUB DIVISION OF SHARES

The Company obtained the approval of Shareholders at the 61^st AGM held on 29^th June, 2022 for Sub-Division of existing Equity Shares with face value of '' 10/- (Ten) each fully paid up into five Equity Shares of face value of '' 2/- (Two) each fully paid up.

Accordingly, the sub-division exercise was completed on 10^th August, 2022 (Record Date) and the Company obtained New ISIN INE783E01023 replacing the previous ISIN INE783E01015.

3. DEPOSITORY SYSTEM

As on March 31, 2023, Shares of 12,524 Shareholders out of 12,669 shareholders are held in Demat form and 8839125 shares were Dematerialised, representing 98.61% of the total Equity Share Capital compared to 97.95% as on FY 2021 - 22.

4. DIVIDEND

Your Directors recommend a dividend of 175% ('' 3.50 /- (Three Rupees Fifty Paise only)) per equity share of '' 2/- each for the financial year ended 31^st March, 2023, absorbing a sum of '' 313.74 lakhs, subject to the approval of shareholders at the ensuing 62^nd Annual General Meeting.

5. TRANSFER TO GENERAL RESERVES

Your Board has proposed to transfer Rs.15 Crores to General Reserve.

6. PERFORMANCE REVIEWa. SILVER ZINC BATTERIES

The Company achieved a turnover of '' 8,844.40 lakhs through Silver Zinc Battery supplies during the FY 2022 - 23, as against '' 7,429.43 lakhs, during the FY 2021 - 22.

This was made possible by the regular and on-time placement of Orders by Defence establishments, DRDO and Indian Navy. Availability of orders on hand had made possible uninterrupted production and completion of inspection cum testing without undue delays. Performance could have been better, had the expected orders from Defence, materialized early and impact of COVID causing delays in receipt of imported materials had not been there.

b. NICKEL CADMIUM BATTERIES

During the year, the turnover of Nickel Cadmium Division was '' 409.40 lakhs, as against '' 496.51 lakhs during the previous year. Placement of orders by Air (HQ) for Nickel Cadmium Batteries is based on military urgency versus stock position and hence the ordering cycle keeps varying.

c. LEAD ACID BATTERIES (LAB)

As reported earlier, Lead Acid Battery division operations remained suspended since April, 2019 due to severe competition in the market resulting in non-remunerative prices. Our efforts for revival of the Plant keeping in mind the sustainability of the operations, has not yielded favourable results, so far.

d. EXPORTS

During the year, the export turnover was Nil as compared to '' 185.69 lakhs last year. All efforts are being made to secure export orders during the Current Year.

e. COVID - 19 IMPACT

Owing to Covid pandemic and the consequent impact, the Company had to face disruptions in supply chain and delays in receipt of imported materials, continue till date.

f. FINANCE

The Company''s financial position was comfortable for most part, owing to our improved operations, supplemented by the support of our bankers, in terms of working capital enhancement and reduction in interest rates. Though the Company is categorized as MSME, payment from Defence Departments gets delayed and bunched up due to internal funds allocation issues of the Ministry. On such occasions, the needed financial support was extended by our Bankers to ensure smooth and sustained operations of our plant.

g. ISO 9001 / ISO 14001, OHSAS 45001 CERTIFICATION ACCREDITATION

Our Quality Management Systems â(QMS) ISO 9001:2015â, âEnvironmental Management

Systemsâ (EMS) ISO 14001:2015 and OHSAS 45001 : 2018 âOccupational Health and Safety Management Systems (OHSAS), continue to be accredited for Aerospace, Naval Battery Division and Lead Acid Battery Divisions.

h. RESEARCH AND DEVELOPMENT

i. Underwater propulsion Battery

During FY 2021 - 22, our R & D received orders from DOI (Navy) on a two year contract, for the development cum supply of two distinct types of high power, high energy Silver Zinc Battery for Underwater propulsion. The programs involving design, development and Qualification of Cells, were challenging in terms of specific technical performance, and we had completed both the programmes satisfactorily, on time, Supply of batteries, for Sea Trials is in progress.

ii. CHT Program

A development program with OECT as the nodal agency, funded by both CHT and with our participation, was signed during FY 2022-23. It is a new and challenging area that we are pursuing pertaining to the broad field of Hydrogen economy, as we possess the needed resources and technical knowledge.

iii. Vanadium based flow battery

Based on the satisfactory completion of 1 kW/ 10kWh program in co-ordination with IIT Chennai, proposal submitted towards next phase of work, to pursue 10 kW / 50kWh system.

iv. Lithium Ion Battery (LIB)

Lithium Battery pack assembly work established on a Laboratory scale, is continuing on a low volume level and at a slow pace. Our in house evaluation of street lights using

2^nd life LIB packs, put on charging during daytime through solar panels, is going on.

7. CURRENT YEAR (2023- 24)

With the orders on hand and the orders in pipeline which are at an advanced stage of finalization / release, the Company expects to put in good performance during the current year.

(a) Development activities pertaining to a long endurance battery, taken up as a two year program through DRDO funded contract, is in progress which will get completed by next year and thereafter expected to get into production mode.

(b) Centre for High Technology (CHT) with IOCL and GAIL as Participating agencies had initiated a program with funding from all and with our participation. The two year program pertains to the broad area of in-situ Power Generation and Hydrogen Economy.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

9. 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 the compliance of conditions on Corporate Governance is given in Annexure - 2. The Corporate Governance Report also includes contents and disclosures required under Section 134(3) of the Companies Act, 2013 at relevant places that forms an integral part of this report.

10. EXTRACT OF ANNUAL RETURN

Pursuant to provisions of Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, a copy of annual return for FY 2022 - 23 will be placed on the website of the company www.highenergv.co.in after conclusion of the 62^nd AGM.

11. DIRECTORS'' RESPONSIBILITYSTATEMENT

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 have been followed,

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, at the end of the financial year and of the profit of the Company for that period;

(c) the Directors have taken proper and sufficient care towards the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) the Directors have prepared the annual accounts on a âgoing concernâ basis.

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate to operate effectively.

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

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year, the Company did not give any loan or provided any Security or Guarantee or make investment, which are covered under Section 186 of the Companies Act, 2013.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

Since the Company remains outside the purview of Section 188(1) read with Rule 15 of Companies (Meeting of Board and its Powers) Rules, 2014, the reporting requirements thereunder are not applicable.

14. MATERIAL CHANGES ANDCOMMITMENTS

There was 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 Company since the close of the Financial Year as on 31^st March 2023, to the date of this Report.

15. CONSERVATION OF ENERGY

Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is given in Annexure - 3.

16. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is covered under the mandate of Section 135 of the Companies Act, 2013 for FY 2022 - 23. The CSR report in the prescribed form is given in Annexure - 4 that forms part of this report. Against CSR obligation of '' 21.10 Lakhs, we had spent '' 22.20 Lakhs, for the FY 2022 - 23.

17. 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 - 5.

18. CLASSIFICATION OF MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

The Company comes under MSME classification, since 1^st July, 2020 as âSmallâ Enterprises (UDYAM-TN-02-0000445). The said category was changed as âMediumâ Enterprises from Small from 26^th June, 2022. Further the Company avails/utilises the benefits, arising out of this reclassification including GOI / MOD contracts and Bank operations.

19. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

(i) The Company has laid down adequate systems and well-drawn procedures for ensuring internal 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 audit reports are discussed. Periodical compliance report, on the observation points considered or implemented, is issued by the Internal Auditors.

(iii) The Board of Directors have put in place budgetary control and monitoring measures for ensuring the orderly and efficient conduct of the business of the Company, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

(iv) Audit Trail requirements as per New Standards, was introduced in ERP system and validated.

20. INDIAN ACCOUNTING STANDARDS (IndAS)

The Financial Statements of the current year are prepared under IndAS which was adopted since Financial Year 2017-18.

21. CASH FLOW STATEMENT

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

22. INDUSTRIAL RELATIONS

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

23. DIRECTORS

(a) Pursuant to Section 152 (6) of the Companies Act, 2013 and in accordance with Article 89 of the Articles of Association of the Company, Mr. M Ignatius (DIN: 08463140), Whole Time Director designated as Director (Operations), retires by rotation at this meeting and being eligible offers himself for reappointment.

Necessary resolution is placed before the members for their approval.

(b) On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 18^thMarch, 2023, reappointed Dr. G. A. Pathanjali (DIN: 05297665) of the Company for a further term of three years from 1^st April, 2023 to 31^st March, 2026, not liable to retire by rotation.

Necessary resolution is placed before the members for their approval.

(c) On 29.10.2022, the Board in its meeting accepted the resignation of Mr. H Nanda (DIN: 09595835) Nominee Director, LIC, from the Board of the Company. The Board places on record its appreciation of his involved participation in the deliberations at the Board meetings, during his tenure.

(d) Life Insurance Corporation of India (LIC) nominated Mr. N P Sinha (DIN: 07980838) as Nominee Director of LIC on the Board of the Company in place of Mr. H Nanda. Pursuant to Regulation 17 (1C) of SEBI LODR, the Company obtained the approval of the shareholders through Postal Ballot Remote voting. The period of remote voting commenced from 10^th February, 2023 and ended on 11^th March, 2023. The result was declared on 13^th March, 2023 and his nomination was approved by the Shareholders with requisite majority.

24. AUDITORS

(a) The Company obtained the approval of Shareholders at the 61^st AGM held on 29^th June, 2022 for the appointment of M/s. Maharaj N R Suresh and Co LLP, Chartered Accountants as Statutory Auditors of the Company for a Second term of Five years to hold office from the conclusion of

61^st Annual General Meeting till the conclusion of the 66^th Annual General Meeting of the Company.

(b) Particulars of Statutory Auditor, Internal auditor and the Secretarial Auditor are given in the Corporate Governance Report that forms an integral part of this Report.

(c) M/s. R Subramanian & Company LLP was appointed as Internal Auditor of the Company for a period of two (2) years, FY 2023 - 24 & FY 2024 - 25.

(d) M/s. B.K. Sundaram & Associates, Company Secretaries was appointed as Secretarial Auditor of the Company for the FY 2022 - 23. The Board hereby acknowledge the support rendered by M/s. B.K. Sundaram & Associates for all these years.

(e) Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached as Annexure - 6.

(f) The Board appointed M/s. V Suresh Associates, Company Secretaries as âSecretarial Auditorâ for two (2) years, FY 2023 - 24 & FY 2024 - 25.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to:

(i) all the valued customers viz., Defence Services, VSSC, ISRO, RCI, ASL, DRDO Laboratories and Ministry of Defence (MOD), NSTL, NPOL, NMRL, BDL, BrahMos (BAPL), BEL,HAL, ADE, ADA and other defence based organizations such as DGONA, DAPI, CVRDE, MGO, Air(HQ), HQMC for the wholehearted support and encouragement, towards indigenous sourcing of Batteries for strategic applications, fulfilling Atma Nirbharta.

(ii) all our valued Govt Statutory Bodies like IOF, PCB, Inspection cum Certifying agencies such as CEMILAC, DGAQA, DGNAI, MSQAA, SSQAG, R&QA for their timely and meticulous adherence of Quality Assurance / Product acceptance procedures.

(iii) Educational Institutions viz., NIT(T), IIT Chennai for their co-operation and technical support to our R & D progress. OECT, part of ONGC for initiating a program on Vanadium Redox Flow Battery (VRFB), Centre for High Technology (CHT) in partnership with OECT, IOCL and GAIL for initiating development activities pertaining to Fuel Cells and Electrolyser based Green Energy using Hydrogen. Research Institutions like CECRI, for involving in our Indigenisation efforts.

(iv) the Overseas customers, who have reposed utmost faith and confidence in our products;

(v) the Consortium of Bankers viz., UCO Bank Limited (UCO) and Punjab National Bank (PNB) for extending timely financial support for the continued positive performance of the Company;

(vi) the Employees at all levels of the company for their co-operation, harmonious working and the sincere efforts put in to achieve 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

29^th April, 2023 Chairman

Mar 31, 2018

BOARD S REPORT

The Board hereby present their 57^thAnnual Report and the Audited Accounts for the year ended 31stMarch, 2018.

OPERATING RESULTS

The Companyâs financial performance under review is summarised below:

(Rs, 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 Duly and
VAT/Sales Tax)
Other Income		13,80		15.09		51.70
Total Income		5950,93		4734,38		4734.87
Profit / (Loss) before
Finance Cost. Depreciation and Tax		1062.57		663.69		709.30
Less;
1. Finance Cost	490.90		417.40		530.59
2. Depreciation	120.64	619.54	132.01	549.41	132.01	062.00
Profit / (Loss) Before Tax		463.03		114.23		46.70
Less:
Provision for Taxation:
MAT		10.13		-		-
Deleted Tax net of MAT Credit		101,12		200.32		12.77
Income Tax relating to Previous year		17.32		-		-
Hat Profit &( ass)		328.46		(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 Rs, 5937.11 Lakhs as compared to the Turnover of Rs, 4718.99 Lakhs during the previous year. Regular receipt of orders from our customers helped 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, 4B24.16 Lakhs during the year as against Rs, 4100.24 Lakhs during the previous year, This year major orders were received from Navy for torpedoes propulsion batteries. Many of the development cum supply orders pertaining to Missile batteries from DRDL, RCI and contributed to achieve higher turnover.

NICKEL CADMIUM BATTERIES

The company achieved a turnover of Rs.226.45 Lakhs against f 412.58 Lakhs during the previous year. Orders f or batteries are regularly received from Aircraft for SU30 Aircraft and Battery for other fighter Aircraft.

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

LEAD ACID BATTERIES (LAB)

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

EXPORTS

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

Your Company participated in DEFEXPO at Chennai during 11 April 2018 to 14thApril 2013 and exhibited Companyâs products. The stall was visited by Defence Minister, Scientific Advisor and other respected dignitaries. Also got good response from foreign customers.

CURRENT YEAR - 2018 - 19

With sizeable orders on hand and also orders in the pipeline, the company hopes (o achieve better turnover in the Silver Zinc division with a higher level of margin. Our efforts to have orders in Nicad for both Aircraft battery & Industrial battery and Export 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 especially of VRLA battery and Battery for e-rickshaw (EV) through established firms and all efforts are on to achieve higher turnover with breakeven performance.

FINANCE

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

ISO SYSTEMS

The Company Quality Management Systems (QMS) ISO 9001:2015 and Environmental Management Systems (EMS) ISO 14001:2 015. continue to be accredited for Aerospace &. Naval Battery division. For the Lead Acid Battery division, the company continues to have QMS accreditation end will progress with EMS certification during the current year.

RESEARCH AND DEVELOPMENT

The Company is engaged in the development ol new batteries for Missiles such as BrahMos, ASL. ANSP and is presently in the advanced stages of Qualification for Airversion of BrahMos Missiles.

Silver Oxide Zinc Pile type battery development is in progress, initiated through DRDQ Laboratory for a strategic high power, high energy underwater propulsion requirement. The Company expects to get regular production orders for the batteries successfully developed and delivered.

Development of Lead Acid Batteries of medium range VRLA types and Battery for e-rickshaw {EV} is in progress. Also, testing at external Laboratories for third party certification is in progress.

CORPORATE GOVE FINANCE

Compliance with the provisions of Corporate Governance is not mandatory to the Company, as your company''s paid-up capital and net worth is less than the limit prescribed under Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However, utmost importance has been given to good Corporate Governance in all its activities. A report on Corporate Governance is annexed herewith, marked as Annexure - 1 to this Report.

Section 134(3) of the Companies Act, 2013 requires the Board''s Report to include several additional contents and disclosures. The applicable contents and disclosures have accordingly been made in the Corporate Governance Report at the appropriate places which form an integral part of this Report,

EXTRACT OF ANNUAL RETURN

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

DIRECTORSâ 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 have been followed:

{b) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company a I the end of the financial year and of the profit of the company for I hat period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that said internal financial controls are adequate and were operating effectively; and

(f) the directors have devised proper systems to ensure compliance with the provisions of 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 106 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 Act, 2013 read with Rule 15 of Companies (Meeting of Board and its Powers) 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 company since the dose of the financial year as on 31⁵¹ March 201B to the date of this report.

CONSERVATION OF ENERGY ETC.

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m} of the Companies Act, 2013 read with Rule Sot the Companies (Accounts) Rules, 2014 is given in Annexure

CORPOHATE SOCIAL RESPONSIBILITY (CSR)

Section 135 of the Companies Act, 2013 mandates every company having minimum threshold limit of net worth, turnover or net profit, as prescribed to constitute a Corporate Social Responsibility Committee, and also to for late corporate social responsibility policy that shall indicate the activities to be undertaken by the company. Since the company does not meet the criteria for constituting Corporate Social Responsibility Committee, it remains outside the purview of Section 135 of the Companies Act, 2013 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 in Annexure - 4.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

1) The company has laid down adequate systems and well-drawn procedures for ensuring internal financial controls, it has appointed an external audit firm as internal auditors for periodically checking and monitoring the internal control measures.

2) Internal auditors are present at the Audit Committee meetings where internal audit reports are discussed alongside of management comments and the final observation of the internal auditor.

3) The Board of Directors have put in place budgetary control and monitoring measures for ensuring the orderly and efficient conduct of the business of the company, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

ADOPTION OF THE INDIAN ACCOUNTING STANDARDS (Ind AS)

The Company hitherto was following IGAAP notified under the Companies (Accounting Standards) Rules, 2006. It has now adopted the Indian Accounting Standards (Ind AS) from FY 2017 -18 as mandated and restated the financial statements for FY 2016-17 for presenting comparative information. Accordingly, the financial statements for current year including comparative figures of previous year are based on ind AS and in accordance with the recognition and measurement principles stated therein. The impact of the application of 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 part effectively in all our Board proceedings. The Board wishes to place on record his valuable contributions to the company as Director.

All the Independent Directors have given the declaration that they comply with the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated at its meeting held on 22"* March 2013. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent

Directors who have been appointed by the Company at its 53"¹ AGM for a fixed term up to 31^st March 2019.

AUDITORS

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

Particulars of Statutory Auditors, internal auditor and the Secretarial Auditor are given 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, attached 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 and Ministry of Defence for the whose-hearted support and encouragement provided by them for indigenisation efforts on sophisticated high energy batteries for strategic applications;

(ii) the Overseas customers, who have reposed utmost faith and confidence in our products;

(iii) the Lead Acid Battery Customers, Dealers, Distributors and Institutional Indenters, like Postal and Railways;

(iv) the Bankers, for extending timely financial support for the continued successful performance of the Company;

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

(vi) to all suppliers and S h are holders for their continued support.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai

May 26, 2018

Mar 31, 2017

The Board hereby present their 56^th Annual Report and the Audited Accounts for the year ended 31^st March, 2017.

OPERATING RESULTS

The Companyâs financial performance under review is summarized below:

(Rs. in Lakhs)

Particulars	For the year Ended
Particulars	2016	- 2017	2015	- 2016
Sales (Net of Excise Duty and VAT / Sales Tax) Profit / (Loss) before Finance Cost, Depreciation and Tax Less: 1. Finance Cost 2. Depreciation	530.59 132.01	4683.17 709.30 662.60	547.86 122.23	2235.54 (390.06) 670.09
Profit / (Loss) Before Tax Less:		46.70		(1060.15)
Provision for Taxation
Deferred Tax		12.77		(403.85)
Reversal of MAT Credit Entitlement		-		31.68
NET PROFIT / (LOSS)		33.93		(687.98)

During the year, the companyâs turnover was Rs. 4683.17 Lakhs as compared to the Turnover of Rs. 2235.54 Lakhs during the previous year. Flow of orders from the defence department enabled the company to plan ahead and achieve this turnover.

DIVIDEND

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 of major Navy orders during the year. Clearance for production by DRDO Laboratory for development 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 the previous year. Receipt of orders from Airforce and dispatches of Industrial batteries resulted in higher turnover.

LEAD ACID BATTERIES (LAB)

During the year, the turnover of LAB division was Rs. 184.48 Lakhs as against Rs.90.70 Lakhs. The production achieved during the year was due to receipt of orders from the Private Labellers. Delay in collection of the receivables in the aftermarket segment continued to hamper flow of materials and consequently production. Production was kept on hold due to unremunerative prices even for private labeling.

EXPORT

Despite all efforts to secure orders from overseas, the company could achieve a turnover of Rs.80.40 Lakhs only towards export to our regular customers. Quite a number of proposals were submitted to our prospective customers and are in the advanced stage of finalization.

CURRENT YEAR - 2017-18

The company has sizeable orders in hand for silver zinc division and it is expected to receive further orders during the course of the year. The company hopes to achieve substantial turnover in the current year and expects to report reasonable profit. The company is also concentrating on cost reduction measures to achieve better results.

FINANCE

Poor liquidity position continued to affect the day to day operations. The bankers are considering our proposal of cash credit and they are in the advanced stage of finalization.

ISO SYSTEMS

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 for heavy weight torpedo application pertaining to Indian Navy future program. The company hopes to receive further orders in the near future. In the field of Missile batteries the company has completed number of development programmes and production is being taken up for supply of the batteries.

CORPORATE GOVERNANCE

Compliance with the provisions of Corporate Governance is not mandatory to the Company, as your companyâs paid-up capital and net worth is less than the limit prescribed under Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However, utmost importance has been given to good Corporate Governance in all its activities. A report on Corporate Governance is annexed herewith, marked as Annexure - 1 to this Report. Section 134(3) of the Companies Act, 2013 requires the Boardâs Report to include several additional contents and disclosures. The applicable contents and disclosures have accordingly been made in the Corporate Governance Report at the 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 in Annexure - 2.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013 with respect to the Directorsâ Responsibility Statement, your Board confirms that:

(a) in the preparation of the annual accounts, the applicable Accounting standards have been followed.

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period.

(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 company and that said internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of 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 the Companies Act, 2013 during the year.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

Since the company does not meet any of the criteria / theres hold limit as specified under Section 188(1) read with Rule 15 of Companies (Meeting of Board and its Power) Rules, 2014, the reporting requirements there under 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 company since the close of the financial year as on 31^st March 2017 to the date of this report.

CONSERVATION OF ENERGY ETC.

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read 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 having minimum threshold limit of net worth, turnover or net profit as prescribed. Since the company does not meet any of these criterion, it remains outside the purview of Section 135 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 in Annexure -4.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

1) The company has laid down adequate systems and well drawn procedures for ensuring internal financial controls. It has appointed an external audit firm as internal auditors for periodically checking and monitoring the internal control measures.

2) Internal auditors are present at the Audit Committee meetings where internal audit reports are discussed alongside of management comments and the final observation of the internal auditor.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Mr R Vaidyanathan, Director retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting.

The Current term of Dr G A Pathanjali as Managing Director expired on 31.03.2017. The Board of Directors at their meeting held on 25^th March,2017 have reappointed Dr G A Pathanjali as Managing Director of the Company for a further period of three years from 1^st April 2017 to 31^st March 2020.

Necessary resolution is placed before the Members for their approval.

Life Insurance Corporation of India (LIC) has withdrawn the Nomination of Mr Raj Kumar, as Nominee Director from the Board and subsequently Mr Raj Kumar has resigned from the Board with effect from 17.03.2017. The Board in its meeting held on 25.03.2017 accepted the withdrawal / resignation of Mr Raj Kumar.

Your Directors place on record the valuable services rendered by Mr.Rajkumar during his tenure as Director of the company.

Consequent to the above, Life Insurance Corporation of India (LIC) vide its letter dated 25.03.2017 nominated Mr Rajeev Chaturvedi, Executive Director (RTI) as Nominee Director on the Board of HEB in place of Mr Raj Kumar.

As per Section 161(3) of the Companies Act,2013 and in accordance with Article 105(b) of the Articles of Association of the Company, the Board in its meeting held on 29.05.2017 inducted Mr Rajeev Chaturvedi as Nominee Director of LIC, not liable to retire by rotation. All the Independent Directors have given the declaration that they comply with the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated at its meeting held on 25^th March 2017. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company at its 53^rd AGM for a fixed term of 5 years upto 31^st March 2019.

AUDITORS

M/s. R Subramanian & Company LLP, Chartered Accountants , Chennai (Firm Registration No.004137S) shall cease to hold the office at the conclusion of this 56^th Annual General Meeting having regard to the provisions of Section 139(2) of the Companies Act, 2013.

Your Board of Directors on the recommendation of Audit Committee has proposed the appointment of M/s. Maharaj N R Suresh and Company (Firm Reg. No. 001931S) as Statutory Auditors for a period of five years from the conclusion of this Annual General Meeting till the conclusion of the 61st Annual General Meeting. Necessary resolution is placed before the Members for their approval. Particulars of Statutory Auditors, Internal auditors and the Secretarial Auditor are given 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, is attached Annexure - 5

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

(i) the Defence Services, DRDO Laboratories, ISRO and Ministry of Defence for the whole-hearted support and encouragement provided by them for indigenization 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 Indentors, like Postal and Railways.

(iv) the Bankers, for extending timely financial support for the continued successful performance of the Company

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

(vi) to all suppliers and shareholders for their continued support.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai 600 034

May 29, 2017

Mar 31, 2016

The Board hereby present their 55^th Annual Report and the Audited Accounts for the year ended 31^st March, 2016.

OPERATING RESULTS

The Companyâs financial performance under review is summarized below:

	(recognized in Lakhs)
Particulars	For the year Ended
Particulars	2015	2016	2014	- 2015
Sales		2235.54		3228.30
(Net of Excise Duty and VAT /Sales Tax)
Profit / (Loss) before Finance Cost, Depreciation and Tax		(390.06)		341.33
Less:
1. Finance Cost	547.86		616.91
2. Depreciation	122.23	670.09	153.69	770.60
PROFIT / (LOSS) BEFORE TAX		(1000115)		(429.27)
Less:
Provision for Taxation
Deferred Tax		(403.85)		(148.13)
Reversal of MAT Credit		31.68		-
Entitlement
NET PROFIT /(LOSS)		(687.98)		(281.14)

During the year, the Companyâs turnover was Rs.2235.54 lakhs, compared to the turnover of Rs.3228.30 lakhs, achieved during the previous year. As reported in the last yearâs Report, the Company did not receive indigenous orders from the Government for Aerospace, Naval and Power System Battery Division during the first half of the financial year under review. The Company could get substantial orders from October / November 2015 onwards. The losses in Silver Zinc Division, coupled with losses in Lead Acid Batteries Division (LAB) and delayed collection of dues from LAB customers resulted in difficult liquidity position for the Company. Renewal / sanction of additional limits by the Banks to meet the difficult ways and means position is also getting delayed. This led to delayed payment to suppliers / sub-contractors which in turn affected timely supply of materials and sustained production.

Further, import of critical raw material was withheld by customs in the exporting country resulting in delayed dispatches of Batteries to Navy. While this led to drop in turnover of Silver Zinc Division, the Company was not in a position to meet the challenges of price reduction and increased credit period in LAB Division that forced the Company to scale down the operation in LAB Division. A cumulative effect of the above led to lower the turnover. With revamping measures taken by the Company and receipt of substantial orders from Defense establishments, the Company is confident of achieving reasonable level of production and report a reasonable turnover during the current financial year.

With one of the Group Companies agreeing to support the Company financially, a renewal proposal has been submitted to the Bankers which is expected to be approved soon.

DIVIDEND

In the absence of distributable profits, no dividend is recommended.

TRANSFER FROM GENEARL RESERVE

The Company has transferred Rs.648 lakhs from General Reserve to Profit and Loss Account to bring down the accumulated losses.

PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES

The Company recorded a turnover of Rs.1961.83 lakhs during the year, as against Rs.2213.84 lakhs achieved during the previous year. The reduction in turnover was due to late receipt of major Defense orders, non-receipt of critical materials, due to delayed payment to creditors and non-clearance of development items for production by DRDO Laboratories.

NICKEL CADMIUM BATTERIES

During the year, the Company could make a turnover of Rs.183.01 lakhs only due to paucity of orders, as against Rs.414.08 lakhs achieved during the previous year.

LEAD ACID BATTERIES (LAB)

During the year, the turnover in LAB Division was only Rs.90.70 lakhs, as against the turnover of Rs. 600.38 lakhs achieved during the previous year. The production was kept on-hold due to severe price competition from established players, market demand for increased credit limit, as well as extended credit period and inordinate delay in collection of receivables in the âaftermarketâ segment. Efforts are on to change the marketing strategy to focus on âprivate labelingâ. The Company is negotiating with few parties which are in an advanced stage. The Company is confident of increasing the production to reasonable levels by middle of the current financial year.

EXPORT

With recession in the global economy and cut in Defense expenditure by developing countries, the Export Turnover was only Rs.61.91 lakhs, as compared to Rs.817.86 lakhs achieved in the previous year.

CURRENT YEAR - 2016-17

Presently, the Company has substantial orders for Silver Zinc Division which will help the Company achieve reasonable turnover and posting positive results for the current financial year. However, as stated earlier, Lead Acid Batteries Division will operate to reasonable levels of production from the third / fourth quarter of the current financial year.

FINANCE

As mentioned in the last yearâs Report, the poor liquidity position severely affected the Companyâs operations. However, the infusion of funds by one of the Group Companies and sale of shares held in Ponni Sugars (Erode) Limited, helped the Company in improving its financial position and submit a bankable proposal to the Bankers.

ISO SYSTEMS

The company continues to be certified both under ISO 9001:2008 and ISO 14001:2004 (Revised) Systems.

RESEARCH AND DEVELOPMENT

The Company has taken up the development cum supply of 330 kW Silver Zinc Batteries to NSTL, Vizag. The development qualifications of new Batteries to Missile System Division of DRDO are in progress.

SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)

REGULATIONS, 2015

With a view to consolidate and streamline the provisions of Listing Agreement for different segments of the capital market, SEBI has notified (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) on 2^nd September 2015. The Listing Regulations have been structured to provide ease of reference by consolidating into one single document across various types of securities listed on the Stock Exchanges. Your Company has executed an agreement with BSE for continuing the listing of securities on the Exchange.

CORPORATE GOVERNANCE

Regulations, 2015. However, utmost importance has been given to good Corporate Governance in all its activities. A report on Corporate Governance is annexed herewith, marked as Annexure - 1 to this Report.

Section 134(3) of the Companies Act, 2013 requires the Boardâs Report to include several additional contents and disclosures. The applicable contents and disclosures have accordingly been made in the Corporate Governance Report at the 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 in Annexure - 2.

DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013 with respect to the Directorsâ Responsibility Statement, your Board confirms that:

(a) in the preparation of the annual accounts, the applicable Accounting standards have been followed.

(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 company and that said internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of 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 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 of Companies (Meeting of Board and its Power) Rules, 2014, the reporting requirements there under 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 company since the close of the financial year as on 31^st March 2016 to the date of this report.

CONSERVATION OF ENERGY ETC.

2014 is given in Annexure -3

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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 -4.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

2) Internal auditors are present at the Audit Committee meetings where internal audit reports are discussed alongside of management comments and the final observation of the internal auditor.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Mr N Gopalaratnam, Director retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Mr T R Sivaraman, Director, has resigned from the post of Director (Finance) with effect from 13^th August 2015.

Mrs. T V Rajalakshmi, Independent Woman Director has resigned with effect from19^th March 2016, due to other pre-occupations.

All the Independent Directors have given the declaration that they comply with the criteria on independence, as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated at its meeting held on 19^th March 201 6. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company at its 53^rd AGM for a fixed term up to 31st March 2019.

Woman Director

Pursuant to the Provision of Section 149, 152 of the Companies Act, 2013 and read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, every listed Company shall appoint at least one Woman Director.

The Board of Directors, on the recommendation of the Nomination-cum-Remuneration Committee Meeting held on 28^th May 2016, appointed Mrs Lalitha Lakshmanan as an Additional Director of the Company with effect from 28^th May 2016, to hold office up to the date of AGM of the Company.

The Board recommends the Resolution, to be placed in the AGM, in relation to appointment of Mrs Lalitha Lakshmanan, as an Independent Director, not liable to retire by rotation, under section 149 of the Companies Act, 2013, for a fixed term from 30^th July 2016 to 31^st March 2021.

ADDITIONAL CHIEF FINANCIAL OFFICER

According to Section 203(1 )(iii) of the Companies Act, 2013, Mr R Swaminathan was appointed as Additional Chief Financial Officer of the Company from 28th May 2016.

Mr R Swaminathan holds a Masters in Commerce Degree and has 29 years experience in various industries in the fields of Costing, Budgeting, Pay Roll, Stores Accounting and purchase accounting. He joined the Company as Senior Manager (Accounts) in 2013 and is in-charge of Accounts.

AUDITORS

M/s. R. Subramanian & Co., Chartered Accountants, Chennai, have been appointed as Statutory Auditors of the Company till the conclusion of 56^th Annual General Meeting, requisite resolution for ratifying their appointment is proposed in the manner stated in the Notice for the 55^th AGM.

Particulars of Statutory Auditors, Cost Auditor, Internal auditor and the Secretarial Auditor are given 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, is attached Annexure - 5.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

(i) the Defense Services, DRDO Laboratories, ISRO and Ministry of Defense for the whole-hearted support and encouragement provided by them for indigenization 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 Indenters, like Postal and Railways.

(iv) the Bankers, for extending timely financial support for the continued successful performance of the Company and

(v) to all suppliers and Shareholders for their continued support.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai 600 034

May 28, 2016

Mar 31, 2015

Dear Members,

The Board hereby present their 54th Annual Report and the Audited Accounts for the year ended 31st March, 2015.

OPERATING RESULTS

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

(Rs in Lakhs) Particulars For the year Ended

2014 2015 2013 2014

Sales 3228.30 3054.27 (Net of Excise Duty and VAT /Sales Tax)

Profit / (Loss) before Finance Cost' 341.33 (244.90) Depreciation and Tax

Less:

1. Finance Cost 616.91 582.38

2. Depreciation 153.69 770.60 150.49 732.87

PROF|T / (LOSS) BEFORE TAX (429.27) (977.77)

Less: Provision for Taxation Current Tax - -

Deferred Tax (148.13) (355.23)

(148.13) (355.23)

NET PROFIT /(LOSS) (281.14) (622.54)

The Company has achieved a turnover of Rs.3228.30 Lakhs against last year's turnover of Rs.3054.27 Lakhs.

The Impasse of non receipt of Export orders and delayed receipt of indigenous orders for the Aerospace, Naval and Power System Battery division continued during the year under review. This coupled with lower orders and delayed collections in the Lead Acid Battery Division led to lower turnover and losses.

The efforts made by the Company to sell a portion of the surplus land materialized only during the end of year. Thus, the company ended the year with a loss before tax of Rs.429.27 Lakhs as against Rs.977.77 Lakhs in the previous year. The loss after tax works out to Rs.281.14 Lakhs as against Rs.622.54 Lakhs in the previous year.

DIVIDEND

As the Company has incurred loss, the Directors regret their inability to recommend any Dividend for the year under review.

PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES

The Company has achieved a turnover of Rs 2213.84 Lakhs during the year as against Rs 2171.93 Lakhs achieved during the previous year. The inordinate delay in receipt of orders from the Government Departments despite completion of negotiation meetings in the first half of the year led to lower turnover. The orders from DRDO Laboratories also could not be supplied as planned due to various delays / procedural formalities in the testing during development phase. Export orders from various countries did not materialize for various reasons including non release of budget allocations. Lower turnover and consequent losses impacted the cash flow and resulted in lower production and despatch.

NICKEL CADMIUM BATTERIES

As the company got some major orders for Aircraft Batteries in this division during the year, the turnover achieved stood at Rs.414.08 Lakhs as against Rs.130.94 Lakhs during the previous year.

LEAD ACID BATTERIES

The company could achieve a turnover of only Rs.600.38 Lakhs against the turnover of Rs.751.40 Lakhs during the previous year. Absence of major Private Label customers, intense competition from established players, poor collections and debtors led to lower turnover and consequently substantial losses in the Lead Acid Battery Division.

However, the company has developed and type tested batteries for Solar, Inverter, UPS applications. This will contribute to higher turnover in future.

EXPORT

The company could achieve a turnover of Rs.817.86 Lakhs as compared to Rs.120.85 Lakhs achieved during the last year. Due to slow down of the global economy, the company's efforts to obtain orders from various countries did not bear fruits.The repeat order from OEM, the receipt of which was anticipated in the year under review also did not materialize on account of non completion of trials of the original equipment.

CURRENT YEAR - 2015-16

The Company is having reasonable orders from DRDO Laboratories. The type approvals of number of batteries for DRDO have already been completed and expected to be despatched during the current year. The Company has also taken further efforts to get the finalized orders from other customers. These regular orders along with the orders on hand will help the company to achieve a higher turnover as compared to the earlier year.

The Company continues to identify new markets and customers from overseas buyers to get both repeat and new orders in the current year.

The market for Lead Acid Batteries has become highly competitive and with aggressive marketing strategies of existing major players, the company continues to suffer with low volume of production and sales and consequent losses. The Company is exploring avenues to identify major Private Label customers to augment the volume of production and sales to curtail losses.

FINANCE

The lower turnover coupled with continuous losses severely impacted the cash flow of the company. This has resulted in adhoc / additional borrowings from banks to manage the working capital. Further, the delay in collection of debtors from the Lead Acid Battery Division added to the cash flow constraints.

Realising the above situation and in order to

infuse funds to the operations, the Company contemplated to sell a portion of the surplus land. However, this got completed only during the end of the year.

During the current year, the company will be getting advances from the customers for new orders and will be able to manage the cash flow without further borrowings.

ISO SYSTEMS

The company continues to be certified both under ISO 9001:2008 and ISO 14001:2004 (Revised) Systems.

RESEARCH AND DEVELOPMENT

The Company is now concentrating on various Silver Zinc Batteries for Missile applications and development of advanced batteries with enhanced life and performance are in progress. For Naval applications, the company is working on development cum supply orders involving Sea Water Activated Batteries both for Lightweight and Heavyweight Torpedoes. Development and Qualification of Battery for Air Force version of BrahMos Missile is in progress.

CORPORATE GOVERNANCE

Though the compliance with the provisions of Corporate Governance is not mandatory to the company, utmost importance has been given to good Corporate Governance in all its activities. A report on Corporate Governance is provided in Annexure 1 to this report. Section 134(3) of the Companies Act, 2013 requires the Board's report to include several additional contents and disclosures compared to the earlier law. The applicable contents and disclosure have accordingly been made in the Corporate Governance report at the 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 in Annexure 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 have been followed.

(b) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that said internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of 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 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 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 company since the close of the financial year as on 31st March 2015 to the date of this report.

CONSERVATION OF ENERGY ETC.

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read 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 having minimum threshold limit of net worth, turnover or net profit as prescribed. Since the company does not meet any of these criterion, it remains outside the purview of Section 135 and consequently the reporting requirements thereunder are not applicable. However, as a responsible Corporate Citizen, the Company is organising tree plantation and associate itself with free medical camp organised by recognised hospitals.

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 -4.

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

1) The company has laid down adequate systems and well drawn procedures for ensuring internal financial controls. It has appointed an external audit firm as

internal auditors for periodically checking and monitoring the internal control measures.

2) Internal auditors are present at the Audit Committee meetings where internal audit reports are discussed alongside of management comments and the final observation of the internal auditor.

3) The Board of Directors have put in place budgetary control and monitoring measures for ensuring the orderly and efficient conduct of the business of the company, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Mr. R. Vaidyanathan, Director retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Pursuant to Section 149 of the Companies Act, 2013 read with Rules made thereunder Mr. M. Natarajan, RAdm. S Mohapatra and Mrs. T. V. Rajalakshmi were appointed as Independent Directors through Postal Ballot process for a fixed term of five years from 30th September 2014 and not liable to retire by rotation.

All the independent directors have given the declaration that they met the criteria on independence as laid down under Section 149(6) of the Companies Act, 2013. The performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated at its 26th March 2015 meeting. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the independent directors who have been appointed by the company at its 53rd AGM and who have been appointed through Postal Ballot process for a fixed tenure of five years.

AUDITORS

M/s. R. Subramanian & Co., Chartered Accountants, Chennai, have been appointed as Statutory Auditors of the Company till the conclusion of 56th Annual General Meeting subject to ratification by members at every AGM. Accordingly requisite resolution for ratifying their appointment is proposed in the manner stated in the Notice for the 54th AGM. Particulars of statutory auditors, cost auditor, internal auditors and the secretarial auditor have been given 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 is attached (Annexure 5).

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

i) the Defence Services, DRDO Laboratories, ISRO and Ministry of Defence for the whole-hearted support and encouragement received from 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 Indentors like Postal, Railways;

iv) the Bankers for extending timely financial support for the continued successful performance of the company and

v) to all the shareholders for their continued support.

(For the Board of Directors)

N. GOPALARATNAM Chairman

Chennai 600 034 May 30, 2015

Mar 31, 2013

The Directors hereby present their 52nd Annual Report together with the Balance Sheet and the Statement of Profit and Loss for the year ended 31st March, 2013.

OPERATING RESULTS

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

(Rs. in lakhs) For the year Ended

2012 - 2013 2011 - 2012

Sales 6650.96 5532.27

(Net of Excise Duty and VAT / Sales Tax)

PROFIT before Finance Costs, depreciation and 653.33 708.70 tax

Less:

1. Finance Costs 441.24 489.05

2. Depreciation 160.98 165.02 602.22 654.07

PROFIT BEFORE TAX

51.11 54.63

Less:

Provision for Taxation

Current Tax

Deferred Tax 14.51 15.52 14.51 15.52

NET PROFIT 36.60 39.11

The company achieved an overall sales (Net of Excise Duty, VAT and Sales Tax) of Rs. 6650.96 lakhs as compared to Rs. 5532.27 lakhs on year-on-year basis.

However, low capacity utilisation in the Lead Acid Battery Division coupled with unremunerative prices had impacted the profitability of the company resulting in the Profit Before Tax coming down to Rs. 51.11 lakhs.

DIVIDEND

Your Directors recommend a Dividend of 10%, absorbing a sum of Rs. 20.98 lakhs (including Corporate Dividend Tax).(or)

PERFORMANCE HIGHLIGHTS

SILVER ZINC BATTERIES

The Company registered a record sales of Rs. 5223.20 lakhs during this year as against Rs. 4543.92 lakhs during the previous year, registering an increase of 15% .

NICKEL CADMIUM BATTERIES

Owing to inadequate margin prevalent throughtout the year, sales had to be restricted to Rs. 20.60 lakhs only as compared to Rs. 31.38 lakhs last year.

LEAD ACID BATTERIES

Though the sales were higher at Rs. 1407.16 lakhs as compared to Rs. 956.97 lakhs last year, low capacity utilisation, steep increase in costs (both materials and labour) and unremunerative prices resulted in substantial loss in this division.

The Company is taking all out efforts for improving the overall performance of this division by improving quality, reducing costs and through better market penetration.

EXPORT

During the year the company achieved a sales of Rs.3124.70 lakhs compared to Rs. 2766.05 lakhs in the last year registering an increase of 13%. The Company is in dialogue with Original Equipment Manufacturers (OEMs) for securing further orders. During the year, the company has received Certificate of Recognition as Export House from Ministry of Commerce and Industry, Government of India. This is valid for a period of 5 years, up to March 2017.

OUT LOOK - 2013-14

With the Orders on hand at Rs. 3700 Lakhs for the Aerospace, Naval and Power System Batteries Segment, and the efforts taken for securing further orders during the current year both in the Domestic and Overseas markets, the company expects to better its sales during the current year as well. The company is working closely with Original Equipment Manufacturers (OEMs) for improving its overall financial and operational performance.

With a view to contain the losses, steps have been initiated for maximizing capacity utilisation of the Lead Acid Battery Plant and for augmenting the quality standards. Also it is proposed to introduce higher range products for Commercial Vehicles (CVs) applications and newer varieties for catering to Electric Vehicles (EVs), solar and other upcoming segments for enhancing our presence in the market place.

FINANCE

During the year, the company received timely advances from the customers. However, due to delay in collection of the dues from the customers of the Lead Acid Battery Division, cash flow constraints continued and the company had to resort to further borrowings. With the reduction in interest rate and effective control of costs, the company hopes to tide over cash crunch during the current year.

ISO SYSTEMS

The copany continues to be certified both under ISO 9001:2008 and ISO 14001:2004 (Revised) Systems, Certification of LAB segment is under way.

RESEARCH AND DEVELOPMENT

Development of battery for heavy weight torpedo for NSTL was completed. The sea trials are yet to take place and further orders are expected by next year. The company also received new developmental orders for missile programmes of DRDO which will enter into production phase in coming years. Your company has completed the Qualification of Batteries for Brahmos missile and commenced regular supplies.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors in terms of Section 217(2AA) of the Companies Act, 1956 confirm that:

(i) all applicable accounting standards have been followed in the preparation of the annual accounts.

(ii) the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March 2013 and of the profit of the Company for year ended that date.

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the latest provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) the annual accounts have been prepared on a "going concernÂ basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information regarding Conservation of Energy and Technology Absorption as required under Section 217(1)(e) of the Companies Act,

1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given in Annexure 1 and forms part of this Report.

EMPLOYEES

No employee of the Company was in receipt of remuneration in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, during the financial year 2012-13.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Sri R Vaidyanathan and Sri A. L. Somayaji, Directors retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Though the code of Corporate Governance is not applicable to the Company, utmost importance has been given to good Corporate Governance in all its activities.

A separate note on Corporate Governance is provided in Annexure II

AUDITORS

M/s. R Subramanian & Co., Chartered Accountants, Chennai, Auditors of the company retire at the conclusion of the ensuing 52nd Annual General Meeting of the Company and are eligible for re-appointment.

Necessary Resolution for their appointment under Section 224 of the Companies Act, 1956 is being placed at the ensuing 52nd Annual General Meeting for this purpose.

COST AUDIT

Cost Audit Report for the year would be filed with the Central Government in due course. Mr. S Hariharan, Cost Accountant, was reappointed as Cost Auditor for the Financial year 2013-14.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

i) the Defence Services, DRDO Laboratories, ISRO and Ministry of Defence for the whole-hearted support and encouragement received from 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 Bankers for extending timely financial support for the continued successful performance of the Company and

iv) to all the shareholders who have reposed faith in us.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai 600 034

May 30, 2013

Mar 31, 2012

The Directors hereby present their 51st Annual Report together with the Balance Sheet and the Profit and Loss Account for the year ended 31st March, 2012.

OPERATING RESULTS

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

(Rs.in lakhs)

For the year Ended

2011 - 2012 2010 - 2011

Sales 5532.27 3415.55

(Net of Excise Duty and ;

VAT / Sales Tax)

PROFIT before Interest, 610.38 343.41

depreciation and tax

Less:

1. Interest 390.73 316.71

2. Depreciation 165.02 555.75 169.86 486.57 PROFIT/(LOSS) BEFORE TAX 54.63 (143.16) Less:

Provision for Taxation

Current Tax _ -

Deferred Tax (15.52) 51.86

Excess provision for tax - - written back (15.52) 98.97

NET PROFIT /(LOSS) 39.11 (44.19)

The company achieved an overall sales (Net of Excise Duty, VAT and Sales Tax) of Rs 5532.27 lakhs as compared to Rs 3415.55 lakhs on year-on-year basis.

Profit before interest, depreciation and tax moved up almost in tandem with Sales.

However additional borrowings for meeting the enhanced production level of Lead Acid Batteries and the need for procurement of Silver at exorbitant prices for production of increased number of Silver Zinc Batteries contributed to the increase in the Financing Cost.

Depreciation was slightly lower at Rs 165.02 lakhs

DIVIDEND

In view of inadequacy of profit, the Directors regret their inability to recommend any Dividend for the year under review.

PERFORMANCE HIGHLIGHTS SILVER ZINC BATTERIES

The Company recorded a turnover of Rs 4543.92 lakhs during this year as against Rs 3098.74 lakhs during the previous year, registering an increase of 46.63% contributing better margin to the company.

NICKEL CADMIUM BATTERIES

The turnover was Rs 31.38 lakhs compared to Rs 78.85 lakhs during the last year. The reduction in turnover is due to stiff and unhealthy competition.

LEAD ACID BATTERIES

The turnover was Rs 956.97 lakhs (includes export of Rs 11.69 lakhs) compared to Rs 237.95 lakhs last year. The Company has established depots in Chennai, Bangalore, Cochin and Hyderabad and is in the process of setting up depots in Jaipur and Kanpur. As mentioned in the earlier report, the Company has also added DIN Series Batteries and two types of VRLA batteries to the product range, which started contributing to the turnover. The company has identified both domestic and international suppliers for outsourcing and expects to achieve higher turnover during the current year.

All efforts are taken to increase the production and sales. This requires balancing of machines, streamlining of process like curing and charging, identifying required storage space, sourcing the materials and realization of Debtors on time. While the above steps were already taken, more improvements will be made to achieve the desired results during the current year.

EXPORT

During the year the company has achieved a turnover of Rs 2766.05 lakhs compared to Rs 1947.73 lakhs in the last year registering an increase of 42%. This increase is due to commencement of supply of batteries to OEM after successful development. The company is also expecting further orders from OEM Company. Efforts are also being taken to get orders from other avenues in the export market. It is to be noted that Lead Acid Battery Division has also contributed to export turnover to the tune of Rs 11.69 lakhs for export to Middle East Countries.

CURRENT YEAR - 2012-13

With the Orders on hand and the orders expected during the current year both in domestic and export market, the company expects to achieve better turnover in Silver Zinc Division. The company is also putting in special efforts to secure orders for Nickel Cadmium Division for achieving a reasonable turnover. The company is taking necessary steps to open sales depots in various places for widening the customer access to Lead Acid Batteries. Few manufacturers have been identified to outsource batteries to provide complete range of batteries as desired in the market to increase the turnover in Lead Acid Battery Division.

The company is also gearing itself to control cost of materials and other avenues to maximize profits from the operations.

FINANCE

Despite timely receipt of advances and dues from customers both from domestic and export orders the cash flow continued to remain tight. However, Inter Corporate Deposit of Rs 50 lakhs availed from the group companies was repaid.

ISO SYSTEMS

The company continues to be certified both under ISO 9001:2008 and ISO 14001:2004 (Revised) Systems.

RESEARCH AND DEVELOPMENT

The company is glad to report that it has supplied batteries for the flight test of the 'Agni Missile' which has been successful and has also received 'an Appreciation Letter' from the Advanced Systems Lab. Development of battery for heavy weight torpedo developed by NSTL is under progress and the prototype being type tested. The company is also glad to report that trials on BrahMos battery was successful.

All missile batteries developed are being productionised.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors in terms of Section 217(2AA) of the Companies Act, 1956 confirm that:

(i) all applicable accounting standards have been followed in the preparation of the annual accounts.

(ii) the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March 2012 and of the profit of the Company for year ended that date.

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the latest provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) the annual accounts have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information regarding Conservation of

Energy and Technology Absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given in Annexure 1 and forms part of this Report.

EMPLOYEES

No employee of the Company was in receipt of remuneration in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, during the financial year 2011-12.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial.

DIRECTORS

Dr. G.A. Pathanjali, Vice President (Operations) was co-opted as an Additional Director and was appointed as Whole-time Director and designated as Executive Director of the Company from 30th May 2012. Necessary Resolution is placed before the Members for their approval.

In accordance with Article 106 of the Articles of Association of the Company, Sri N. Gopalaratnam and Code. R. P. Premkumar Directors retire by rotation and being eligible, offer themselves for re- appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Though the code of Corporate Governance is not applicable to the Company, utmost importance has been given to good Corporate Governance in all its activities.

A separate note on Corporate Governance is provided in Annexure II

AUDITORS

M/s. R Subramanian & Co., Chartered Accountants, Chennai, Auditors of the company retire at the conclusion of the ensuing 51st Annual General Meeting of the Company and are eligible for re-appointment.

Necessary Resolution for their appointment under Section 224 of the Companies Act, 1956 is being placed at the ensuing 51st Annual General Meeting for this purpose.

COST AUDIT

Pursuant to Section 233-B of the Companies Act, 1956, and Cost Audit Circular F.No.52/ 26/CAB-2010 dated 24th January 2012 that the company shall get its cost accounting records audited by a Cost Auditor from the financial year commencing on or after 1st April 2012. Mr. S Hariharan, Cost Accountant, Trichy was appointed as Cost Auditor for the Financial year 2012-13. The Cost Audit Report will be submitted to the Central Government before the due date.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

i) The Defiance Services, DRDO Laboratories, ISRO and Ministry of Defiance for the whole-hearted support and encouragement received from them for indigenization efforts on sophisticated high energy batteries;

ii) the Overseas customers, who have reposed utmost faith and confidence in our products;

iii) the Bankers for extending timely financial support for the continued successful performance of the Company and

iv) to all the shareholders who have reposed faith in us.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai 600 034

May 30, 2012

Mar 31, 2011

The Directors hereby present their 50th Annual Report together with the Balance Sheet and the Profit and Loss Account for the year ended 31st March, 2011.

OPERATING RESULTS

The Companys financial performance under review is summarised below:

(Rs. in lakhs)

For the year Ended 2010 - 2011 2009 - 2010

Sales 3415.55 2744.04

(Net of Excise Duty and VAT/Sales Tax)

PROFIT before Interest, 343.41 169.66

depreciation and tax

Less:

1. Interest 316.71 304.12

2. Depreciation 169.86 486.57 139.95 444.07

LOSS BEF0RE TAX (143.16) (274.41)

Less:

Provision for Taxation Current (including Wealth Tax & Fringe Benefit Tax) - 0.36

Deferred Tax (51.86) (93.97) Excess provision for tax written back 47.11 (98.97) (93.61)

NET LOSS (44.19) (180.80)

The company achieved an overall sales (Net of Excise Duty, VAT and Sales Tax) of Rs. 3415.55 lakhs as compared to Rs. 2744.04 lakhs on year-on-year basis.

Profit Before Interest Depreciation and Tax has not however moved up in tandem with the growth in sales on account of spiralling cost of Silver and increase in bank guarantee commission and processing charges attributable to the increase in the bank borrowings. Increase in interest charges on account of additional borrowings for meeting the working capital requirements and full year depreciation on Lead Acid Battery plant as compared to nine months depreciation during the last year have contributed to the increase in interest and depreciation charges.

Nonetheless it is gratifying to note that the Loss Before Tax stood substantially reduced at Rs.143.16 lakhs as compared to Rs.274.41 lakhs and the Loss After Tax at Rs.44.19 lakhs as against Rs.180.80 lakhs on account of write back of excess provision of tax in the earlier years.

DIVIDEND

As the Company has incurred a loss, the Directors regret their inability to recommend any Dividend for the year under review.

PERFORMANCE HIGHLIGHTS

SILVER ZINC BATTERIES

The Company recorded a turnover of Rs.3098.74 lakhs during this year as against Rs.2274.15 lakhs during the previous year, registering an increase of 36.26%. As mentioned earlier, the sudden spurt in Silver price and unprecedented rise in the cost of other materials and expenses during the year under review have reduced the margins.

NICKEL CADMIUM BATTERIES

The turnover was Rs.78.85 lakhs compared to Rs.435.58 lakhs during the last year. Non- availability of main imported raw materials, delay in type approval of aircraft batteries, stiff competition faced in securing orders and major break-down in one of the machines resulted in lower turnover.

LEAD ACID BATTERIES

The turnover was Rs.237.95 lakhs compared

to Rs.31.12 lakhs last year. The company has spread its wings across South India by establishing Depots at Chennai, Cochin, Bangalore and Hyderabad during later half of the year, which contributed to the increase in sales. As the distributors requested for wider range of batteries, the company added DIN series of batteries by outsourcing the same for the time being. While the companys focus had been mainly on the after market in South India it is proposed to have it extended to Delhi and Maharashtra progressively during the current year. The company developed two types of VRLA Batteries and carried out trial production which are proposed to be introduced in the market during the current year. The company expects to achieve a sizable turnover in the current year.

EXPORT

During the year the company has more than doubled its sales at Rs.1947.73 lakhs as compared to Rs. 966.15 lakhs in the last year. The Company also received Development cum Supply of sea water activated batteries from an OEM Company. The Company expects to receive sizeable orders in the current year for various Silver Zinc Batteries.

CURRENT YEAR - 2011-12

Taking into account, the orders on hand and the problems experienced by the Company in the year under review, the company is in the process of consolidating the production and marketing set up for achieving better turnover with reduced cost, thereby returning to profitable operations.

While adequate orders are available in the Silver Zinc division, efforts are made to secure orders in the Lead Acid Battery division for bettering the performance during the current year. The company is also taking all steps to control the cost of materials by insisting on provision of Silver by customers themselves and / or by incorporating price variation clause in all major orders.

FINANCE

Finance of the Company continued to be tenuous in the backdrop of cash loss suffered by the Company in the last year. During the year under review the Company availed additional term loan of Rs.100 lakhs sanctioned by the banks in the earlier year. In view of the delay in receiving advances from customers and for meeting the requirement of additional funds for purchase of Silver at high prices, the Company also availed an inter corporate deposit of Rs.50 lakhs from their group companies. The Company repaid the short term working capital loan of Rs. 200 lakhs and the term loan of Rs.131.25 lakhs.

ISO SYSTEMS

The company continues to be certified under both ISO 9001:2008 and ISO 14001:2004 (revised) systems.

RESEARCH AND DEVELOPMENT

Your R&D has contributed for development of various types of batteries for missile application. The batteries have been updated, improved or modified based on Customer feed back. Your Company has received development order for special types of sea water batteries through DRDO Laboratories.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors in terms of Section 217(2AA) of the Companies Act, 1956 confirm that:

(i) all applicable accounting standards have been followed in the preparation of the annual accounts;

(ii) the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March 2011 and of the Loss of the Company for year ended that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the latest provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

(iv) the annual accounts have been prepared on a "going concern" basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information regarding Conservation of Energy and Technology Absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given in Annexure I and forms part of this Report.

EMPLOYEES

No employee of the Company was in receipt of remuneration in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, during the financial year 2010 -11.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Sri. R. Vaidyanathan and Sri. A. L. Somayaji Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Though the code of Corporate Governance is not applicable to the Company, utmost importance has been given to good Corporate Governance in all its activities.

A separate note on Corporate Governance is provided in Annexure II

AUDITORS

M/s. R Subramanian & Co., Chartered Accountants, Chennai, Auditors of the company retire at the conclusion of the ensuing 50th Annual General Meeting of the Company and are eligible for re-appointment.

Necessary Resolution for their appointment under Section 224 of the Companies Act, 1956 is being placed at the ensuing 50th Annual General Meeting for this purpose.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

i) the Defence Services, DRDO Laboratories, ISRO and Ministry of Defence for the whole-hearted support and encouragement received from them for indigenisation efforts on sophisticated high energy batteries;

ii) the Overseas customers, who have reposed utmost faith and confidence in our products and

iii) the Bankers for extending timely financial support for the continued successful performance of the Company.

(For the Board of Directors) N. GOPALARATNAM Chairman

Chennai 600 034 May 28, 2011

Mar 31, 2010

The Directors have pleasure in presen- ting the 49th Annual Report together with the Balance Sheet and the Profit and Loss Account for the year ended 31s1 March, 2010.

OPERATING RESULTS

The Companys financial performance under review is summarised below:

(Rs. in lakhs)

For the year Ended

2009 - 2010 2008 - 2009

Sales 2744.04 2416.80

(Net of Excise Duty and VAT/Sales Tax)

PROFIT before Interest 169.66 364.71

depreciation and tax

Less:

1. Interest 304.12 148.16

2. Depreciation 139.95 444.07 57.59 205.75

PROFIT/(LOSS) BEFORE TAX (274.41) 158.96

Less:

Provision for Taxation Current (including Wealth Tax & Fringe Benefit Tax) 0.36 8.32

Deferred Tax (93.97) (93.61) 53.40 61.72

NET PROFIT/ (LOSS) (180.80) 97.24

Despite an increase in the overall sales at Rs.2744.04 lakhs (net of Excise Duty and VAT and Sales Tax) compared to Rs.2416.80 lakhs on year-on-year basis, profit before interest, depreciation and tax has more than halved to Rs.169.66 lakhs for the year under review.

Spiralling costs of almost all the inputs used in the manufacture of Silver Zinc / NiCd products coupled with extremely competitive prices of your Companys products had resulted in deep erosion of margins and profitability.

The Company also had to bear the burden of higher interest and financing charges (Rs.155.96 lakhs) and higher provision for depreciation (Rs. 82.36 lakhs) arising out of commissioning of Lead Acid Battery (LAB) plant during the year.

DIVIDEND

As the Company has incurred a loss, the Directors regret their inability to recommend any Dividend for the year under review.

PERFORMANCE HIGHLIGHTS

SILVER ZINC BATTERIES

The Company recorded a turnover of Rs. 2274.15 Lakhs during this year as against Rs. 2169.00 Lakhs during the previous year, registering an increase of 4.85%. However, as stated earlier, margins were under deep stress.

NICKEL CADMIUM BATTERIES

The turnover was Rs.435.58 Lakhs compared to Rs.132.00 Lakhs during the last year. In the back drop of stiff competition experienced in securing orders from local sources, export orders for supply of Aircraft Batteries significantly contributed to the increase in turnover compared to last year. However, due to steep increase in the cost of imported materials, margins were again under stress.

LEAD ACID BATTERIES

Lead Acid Batteries for all ranges of Passenger cum Light Commercial Vehicle (LCV) sectors ranging from 32 Ah to 80 Ah were manufactured and Customer Feedback /Field Evaluation Reports are quite encouraging.

However due to intense competition from well established players in this field, sales is yet to show appreciable volume. The turnover for

the year has therefore been low at Rs. 31.12 lakhs.

VRLA (Valve Regulated Lead Acid) Batteries, 26 Ah & 65 Ah types have been developed for mid-range online UPS (Uninterrupted Power Supply). Based on the satisfactory customer evaluation reports, the business for VRLA types is expected to be in place by end of September 2010.

Fuel Cell

Continued production of stacks for Fuel Cells has been kept in abeyance on account of modification needed in the process and requirement of additional machinery for undertaking manufacture of large size electrodes.

CURRENT YEAR - 2010-11

Alive to the problems of operating in a highly competitive and challenging market environment, the company is in the process of strengthening its marketing and distribution set up for improving the off take of LAB products. With this initiative, the company hopes to report better results in the coming year.

Simultaneously efforts have also been undertaken to secure orders for the Silver Zinc and NiCd products with better margins.

Considering the orders on hand and orders expected to be received both from domestic and overseas markets, the company hopes to achieve better performance, both in terms of turnover and profits.

FINANCE

During the year under review, the company secured sanction for a short term loan of Rs. 150 lakhs for meeting the working capital requirements. Repayment of Inter Corporate Deposit of Rs. 100 lakhs was made during this year. The company also availed the entire term loan of Rs 1000 lakhs sanctioned by the bankers for LAB project. The bankers, at the request of the company, rescheduled the repayment terms of the term loan.

ISO SYSTEMS

The company has upgraded to ISO 9001:2008 certification and continues to be certified under ISO 14001:2004.

RIGHTS ISSUE

The issue was over subscribed. The allotment of shares was completed and the shares have also been listed on the Bombay Stock Exchange (BSE).

RESEARCH AND DEVELOPMENT

Development of new types of Silver Zinc batteries for advanced missile applications was taken up and the same was demonstrated successfully, to the satisfaction of the customer.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors in terms of Section 217(2AA) of the Companies Act, 1956 confirm that:

(i) all applicable accounting standards have been followed in the preparation of the annual accounts;

(ii) the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of 31st March 2010 and of the Loss of the Company for year ended that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the latest provisions of the Act for

safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

(iv) the annual accounts have been prepared on a "going concern" basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information regarding Conservation of Energy and Technology Absorption as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given in Annexure I and forms part of this Report.

EMPLOYEES

No employee of the Company was in receipt of remuneration in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, during the financial year 2009-10.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial.

DIRECTORS

In accordance with Article 106 of the Articles of Association of the Company, Sri. N.Gopalaratnam and Smt. D. Vijayalakshmi Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Though the code of Corporate Governance is not applicable to the Company, utmost importance has been given to good Corporate Governance in all its activities.

A separate note on Corporate Governance is provided in Annexure II.

AUDITORS

M/s. R Subramanian and Company, Chartered Accountants, Chennai, Auditors of the company retire at the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment.

Necessary Resolution for their appointment under Section 224 of the Companies Act, 1956 is being placed at the ensuing Annual General Meeting for this purpose.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere thanks to

i) the Defence Services, DRDO Laboratories, ISRO and Ministry of Defence for the whole-hearted support and encouragement received from 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 Bankers for their understanding, guidance and assistance and

iv) to all the shareholders who have reposed faith in us, in our diversification efforts into Lead Acid Battery project.

(For the Board of Directors)

N. GOPALARATNAM

Chairman

Chennai 600 034

May 29, 2010

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