High Energy Batteries (India) Ltd Directors Report

Your Board hereby presents the 63^rd Annual Report and the Audited Accounts for the year ended 31^st March 2024.

1. OPERATING RESULTS

The Companys financial performance under review is summarized below:

( in lakhs)

	For the year ended
Particulars
	2023 – 24	2022 – 23
Sales (Net of GST)	7,722.51	9,253.80
Other Operating Income	91.26	29.10
	7,813.77	9,282.90
Other Income	349.41	73.12
Total Income	8,163.18	9,356.02
Profit / (Loss) before Finance Cost,
	2,604.71	3,182.14
Depreciation and Tax
Less:
Finance Cost	196.41	314.76
Depreciation	97.26	118.62
	293.67	433.38
Profit/ Loss before	2,311.04	2,748.76
Less:
Provision for Taxation:
Current Tax	579.24	769.67
Deferred Tax	15.93	(70.42)
	595.17	699.25
Net Profit / (Loss)	1,715.87	2,049.51
Other Comprehensive Income	20.55	(1.70)
Total Comprehensive Income	1,736.42	2,047.81

The Company recorded a turnover of 7813.77 lakhs in the year FY 2023 – 24, as compared to

9,282.90 lakhs, during the previous Financial Year 2022 – 23.

2. DEPOSITORY SYSTEM

The total number of shareholders as on March 31, 2024 was 18,442 comprising 89,63,840 shares (Face value of 2/- each) and out of those, 18,319 shareholders comprising 88,47,915 shares are held in Demat form representing 98.71% of the total Equity Share Capital compared to 98.61% as on FY 2022 – 23.

3. DIVIDEND

Your Directors recommend a dividend of 150% ( 3/- (Rupees Three only)) per equity share of

2/- each for the financial year ended 31^st March 2024, absorbing a sum of 268.92 lakhs, subject to the approval of shareholders at the ensuing 63^rd Annual General Meeting.

4. PERFORMANCE REVIEW a. SILVER ZINC BATTERIES

The Company achieved a turnover of

7160.85 lakhs through Silver Zinc Battery supplies during the FY 2023-24, as against

8844.40 lakhs, during the FY 2022-23. b. NICKEL CADMIUM BATTERIES

During the year, the turnover of Nickel Cadmium Division was 561.66 lakhs, as against 409.40 lakhs during the previous year. Placement of orders by Air (HQ) for Nickel Cadmium Batteries is based on annual consumption versus stock position and hence the ordering cycle and order quantity, keeps varying.

The modernization goal of Railways including induction of long – haul, high speed trains, calls for development cum supply of both sintered plate type (high rate) and pocket plate type (medium rate) Nickel Cadmium (NICAD) batteries. Discussions are in progress with reputed companies abroad, to establish local manufacturing base, during FY 2024 – 25. 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 favorable results so far. d. EXPORTS

During the year, the export turnover was

40.14 lakhs and the export turnover was NIL in the last year. On account of the on-going global conflicts and situation in the Middle

East, many of the governments have cut short their procurement budget. 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, which continues till date. f. FINANCE

The financial position of the Company was comfortable during the year, owing to our improved operations, supplemented by the support of our bankers, including reduction in interest rates. Though the Company is categorized as MSME, payment from Defence Departments gets delayed and bunched up due to issues pertaining to allocation of internal funds by Ministry of Defence (MOD) / Govt of India (GOI). On such occasions, the needed financial support was duly cognized and 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 "(QMS) ISO 9001:2015", "Environmental Management Systems" (EMS) ISO 14001:2015 and OHSMS 45001: 2018 "Occupational Health and Safety Management Systems (OHSMS), continue to be accredited for both "Aerospace, Naval Battery" and "Lead Acid Battery" Divisions.

5. R & D – CURRENT YEAR (2024 – 25) i. Underwater propulsion Battery

(a) DRDO Program – During the previous year, our R & D received orders from DRDO for the development cum supply of two different types of batteries involving

Silver Zinc system of 270 kW power for Heavy Weight Torpedo (HWT) as well as Silver Chloride Magnesium Sea Water Activated Battery for Light Weight Torpedo (LWT) applications. The design of the Silver Zinc cells also had distinct constructional features that will enable handling of cells to the minimum possible during battery preparation. On similar lines, the Sea Water Battery is of a much higher power levels of 100 kW that can be catered to for a typical LWT requirement. Both the programs were completed satisfactorily within the stipulated period of less than a year. Supply of batteries is already effected, which will undergo sea firing user trials, leading to clearance for regular production, during the FY 2024 – 25.

(b) OneShotBattery –Duringtheyear,ahigh-power one-shot primary reserve battery using magnesium Cuprous Chloride (Mg - Cucl) system was integrated at HEB with all the needed interface cum system requirements. The static discharge test of the battery was carried out during November 2023. Performance of the battery was found to be satisfactory and all the needed technical parameters were generated during the test, in co-ordination with Indian Navy (IN) Personnel. Expect IN to initiate a development cum supply program for this battery, during the FY 2024 – 25. ii. Long Life Sea Water Battery – Activities pertaining to the design, development cum evaluation of long endurance Sea Water battery was initiated last year through DRDO funded contract. It is progressing satisfactorily from the proto stage to the level of making full size battery, to provide power for underwater monitoring instruments for over a year continuously. This battery type is expected to get into production mode during FY 2024 – 25. iii. Energy related Centre for High Technology (CHT) Programs

(a) A development program pertaining to Hydrogen economy, was initiated last year funded by both Centre for High Technology (CHT) & ONGC Energy

Centre Trust (OECT) and with our participation. Based on the satisfactory performance of the proto units, scaling up of the Hydrogen unit is in progress and this project will get completed by FY 2024-25.

(b) On similar lines CHT had initiated another program, with IOCL and GAIL as funding agencies and with our participation. The target of this two-year program is to come up with a low power Fuel Cell (FC) stack, for Power Generation using Hydrogen and Air. On this, optimization of membrane, the catalysts, catalyst loading and small size 1kW proto type stack evaluation are in progress. The Process flow and control parameters for proto development is established and this program will be completed including the testing cum evaluation of a scaled up 2.5 kW plus level unit, during the FY 2024 – 25. iv. Vanadium based flow battery (VRFB)-

Energy Storage

Based on the satisfactory demonstration cum completion of the development program with OECT on 1 kW / 10kWh module carried out in co-ordination with IIT Chennai, OECT preferred to initiate the next level of funded program with our participation. Main scope of the program involves scaling up of the system to 10 kW / 100 kWh rating and further evaluation, on stand-alone storage mode using Solar PV based energy harness. Activities pertaining to this contract had started from March 2024 and the proposed work will be pursued during the period FY 2024 – 25 & FY 2025 – 26.

v. Lithium-Ion Battery (LIB)

The facility for cell screening, making battery pack assembly and testing as pack or battery on a low volume level using second life LIB packs, is now fully established. We have made a number of standalone Solar PV based street lights which are regularly monitored and evaluated at different locations at Mathur village. During FY 2024 – 25 this will be taken up on a regular production mode and also work on Lithium-Ion Battery (LIB) for other applications including low power off-grid UPS systems is planned, towards in-house development, testing and supply.

6. 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.

7. CORPORATE GOVERNANCE

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

Report together with the certificate Companys auditors confirmingthe 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.

8. 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 2023 – 24 will be placed on the website of the company www.highenergy.co.in after conclusion of the 63^rd AGM.

9. D I R E C T O R S R E S P O N S I B I L I T Y 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 and there are no material departures from the same.

(b) the Directors had 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

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 "going concern" basis. (e) the Directors have laid down internal financial controls to be followed by the Company and that such 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 that such systems are adequate and operating effectively.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

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

12. MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year. There is no material change or commitment affecting the business operations and the financial position of the company since the close of the Financial Year as on 31^st March 2024, to the date of this Report.

13. 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 that forms part of this report.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The company is covered under the mandate of Section 135 of the Companies Act, 2013 for FY 2023 – 24. The CSR report in the prescribed form is given in Annexure – 4 that forms part of this report.

15. PARTICULARS OF EMPLOYEES

The Statement of Disclosure of Remuneration under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure – 5 that forms part of this report.

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

The Company comes under MSME classification, ^st July 2020 as "Small" Enterprises (UDYAM-TN-02-0000445). The said category was changed as "Medium" Enterprises from Small from 16^th May, 2021. The Company complies with all the requirements of MSME and further, avails / utilizes the benefits, arising out of this reclassification including GOI / MOD contracts and Bank operations.

17. 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 review.

(ii) Internal Auditors discuss the Internal Audit Reports at the Audit Committee meetings and present periodical compliances and observations, made by them and present.

(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, are available in ERP system.

18. INDIAN ACCOUNTING STANDARDS (Ind AS)

The Financial Statements of the current year are prepared as per Ind AS, which was adopted since Financial Year 2017–18.

19. 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.

20. 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 of safety and health mandated by the Government.

21. 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. N Gopalaratnam (DIN: 00001945), Chairman of the Company, retires by rotation at the ensuing 63^rd AGM and being eligible offers himself for re-appointment through

Special Resolution.

Necessary resolution is placed before the members for their approval.

(b) Pursuant to Section 149, 152 and other applicable provisions of the Companies Act, 2013 and Regulation 17 (1C) of SEBI LODR, Dr. Vijayamohanan K Pillai (DIN:07308120) was reappointed as Independent Director of the Company for a second term of five years from 01^st April, 2024 to 31^st March, 2029 and appointed Cmde Saroj Kumar Patel (DIN:10474393) and Dr. R Subrahmaniya Sivam (DIN:02393209) as Independent

Directors of the Company for a fixed term of five years from 01^st April, 2024 to

31^st March, 2029 by Special Resolution passed through Postal Ballot by the shareholders on 20^th March, 2024.

22. AUDITORS

(i) 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.

(ii) On the basis of recommendation of Audit Committee, the Board at its meeting held on 28^th January, 2023 appointed M/s R Subramanian & Company LLP, Chartered Accountants as Internal Auditor of the Company for a period of two (2) years, FY 2023 – 24 & FY 2024 – 25.

(iii) The Board at its Board meeting held on 18^th March, 2023 appointed M/s. V Suresh Associates, Practicing Company Secretaries as Secretarial Auditor for a period of two (2) years, FY 2023 – 24 & FY 2024 – 25.

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.

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

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), Skyroot, BEL, HAL, ADE, ADA, L&T, Mahindra Defence, Agnikul 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 Nirbhar.

(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 Electrolyzer based Green Energy using Hydrogen, Research Institutions like CECRI, for involving in our Indigenization 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 sustain the 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
04th May, 2024	Chairman
	(DIN: 00001945)