powering mobility - electrovaya · ///december 2002 begins commercial shipments of its scribbler™...
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POWERING MOBILITY // / / / / / / / / / /
2 0 0 4 A N N U A L R E P O R T
FINANCIAL HIGHLIGHTS / / / / / / / / / / / / / / / / / / / / / / / / / / /Years ended September 30 (Expressed in thousands of U.S. dollars, except per share amounts)
2004 2003 2002 2001 2000
Revenue $ 6,369 $ 4,323 $ 2,967 $ 1,017 $ 152
R&D investment $ 2,843 $ 2,656 $ 1,845 $ 1,759 $ 1,029
Percentage of revenue $ 45% $ 61% $ 62% $ 173% $ 677%
Net loss $ (8,463) $ (9,876) $ (9,991) $ (7,169) $ (1,518)
Per share (0.12) (0.14) (0.14) (0.11) (0.03)
Cash, cash equivalent & short-term investments $ 13,612 $ 17,593 $ 20,618 $ 31,132 $ 19,337
Working capital $ 15,965 $ 20,346 $ 24,096 $ 32,990 $ 19,081
Capital assets $ 9,203 $ 12,024 $ 14,256 $ 15,501 $ 8,143
Total assets $ 26,682 $ 34,136 $ 39,614 $ 49,638 $ 30,895
Shareholders’ equity $ 25,168 $ 32,370 $ 38,352 $ 48,491 $ 29,063
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CORPORATE SNAPSHOT
MESSAGE TO SHAREHOLDERS
TECHNOLOGY
SALES AND MARKETING
MANAGEMENT’S DISCUSSION AND ANALYSIS
MANAGEMENT RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS
AUDITORS’ REPORT TO THE SHAREHOLDERS
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1
///November 2000 Completion of a C$50 million initial public offering and trading commenced on the
Toronto Stock Exchange under the symbol EFL.
///October 2002 PowerPad® line expanded to PowerPad® 160, 120 and 80.
///December 2002 Begins commercial shipments of its Scribbler™ Tablet PC.
///April 2003 Technology Partnership Canada approves funds of up to C$9.9 million for further development
of Electrovaya’s high rate batteries.
///May 2003 Electrovaya’s zero-emission vehicle “Maya-100” undergoes initial series of road tests.
///October 2003 Electrovaya awarded $3M prime contract by NASA to supply mission-critical astronaut
power supply (EMU) for operations outside of space shuttle/station.
///November 2003 Launch of the Scribbler™ SC 2000 Series, a thin laptop/Tablet PC with Intel® Centrino
and 70WhSuperPolymer® battery, ///
Electrovaya’s ZEV Maya-100 exhibited at 20th International Electric
Vehicle Symposium, Long Beach, CA.
///February 2004 Launch of SC2100 Tablet PC, with increased processor power, greater wireless connectivity
range and battery life.
///June 2004 Electrovaya receives the “Technology Award” and the “Battery Electric Vehicle Award” at the
2004 Tour de Sol. Lithium Ion SuperPolymer® battery technology cited by Technical Committee chairperson
as having the greatest potential to succeed in search for clean auto mobile technology.
///September 2004 Battery pack for NASA’s EMU system under goes testing for operation in high vacuum.
///August 2004 Launch of SC 2100 Tablet PC, includes dual microphone and optional outdoor screen
technology.
CORPORATE SNAPSHOT / / / / / / / / / / / / / / / / / / / / / / / / / / /
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2
MESSAGE TO SHAREHOLDERS / / / / / / / / / / / / / / / / / / / / /In fiscal year 2004 Electrovaya continued to position itself as a leader in Lithium Ion SuperPolymer® mobile
power solutions by introducing new products, entering new markets and expanding its revenue generating
capabilities. Our strategy for continued growth is:
///Create multiple products using the Lithium Ion SuperPolymer® battery as the competitive advantage;
///Enhance sales and marketing through increased distribution and leverage of strategic partnerships with
Independent Software Vendors and Value-Added Resellers; ///
Investment in research and technology development;///
Profitability through increased sales, production efficiencies and a lower cost base.
In fiscal year 2004, Electrovaya’s revenues grew by 47% from $4.32 million to $6.37 million with cumulative
two-year growth of about 100%. Capability to develop new products and new markets will be the key for
further sustained growth and profitability of the company.
KEY AREAS OF PROGRESS
During fiscal year 2004, Electrovaya reached a number of critical milestones in the areas of new applications,
new products, new marketing and sales initiatives and revenues. The Electrovaya brand is gaining more rec-
ognition, while the Scribbler™ brand for the mobile Tablet PC market is also gathering momentum. We have
been receiving some great reviews on our products and opening up new markets. Some of the key areas of our
operation are given below:
BATTERY / / / From mobile computing to aerospace to the electric vehicle, most products at Electrovaya are
based on our expertise and competitive position on battery technology. Focusing on industries where battery
performance is critical, Electrovaya is achieving market penetration in key areas. Specialty battery systems are
being developed for major customers in aerospace and other sectors.
Electrovaya is conducting research and development on next generation battery materials technology, which
should further enhance its competitive position. Designed for the mobile computing market, the PowerPad® line
is being upgraded to meet the new requirements of the mobile computing business. Recently the new Power-
Pad® 300 was launched. This product has 300Wh and nearly doubles the capacity of the PowerPad® 160. The
Sankar Das Gupta, PhD
Chairman, President and Chief Executive Officer
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 3
PowerPad® 300 is specifically designed for the healthcare industry, where in hospitals and clinics, portable power
is necessary to operate the mobile computer in a wireless connectivity environment.
PowerPad® products have received high praise from both the media and appreciative users who value battery
life and mobility. The Editor of CNET called the PowerPad® 160 the ideal battery for long distance mobile com-
puting, saying “pound for pound, it’s the best external battery tested in CNET labs…the longest-lasting external
battery we’ve tested.”
The New York Public Radio used Electrovaya PowerPads® on the day of the Blackout 2003 in order to keep
news, broadcast and data operations ongoing while relocating to their alternate site.
Research into batteries continues at Electrovaya with assistance from the C$9.9 million in funding received
from Technology Partnerships Canada. As part of this work, Electrovaya is pleased to report collaborative
research with the National Research Council
in a program to develop next-generation
battery materials.
AEROSPACE / / / Electrovaya is aggressively
pursuing the implementation of its prime
contract with NASA. The original contract has
been increased by approximately US$0.235M
comprised of 5 additional lithium ion bat-
teries and three charge adapters for the
EMU-EVA program. Electrovaya received
a “Recognition of Excellence” award from
NASA Johnson Space Centre (JSC) Extravehic-
ular Activity Office for the innovativeness and
expertise brought to the project. Electrovaya
was also awarded a new contract from NASA
to develop a complete power system for the
AERCam (Autonomous Extravehicular Robotic
Camera), a free flying vehicle capable of per-
forming inspection missions to view parts of
the ISS and Space Shuttle not visible in other
ways. This marks an important step towards
the expansion of Electrovaya’s aerospace divi-
sion as it builds credibility and added industry
exposure.
The company has also entered into a con-
tract with the Canadian Space Agency (CSA)
to create a dedicated facility for aerospace
products, especially batteries. The facility will
encompass all aspects necessary to make
aerospace quality products, including docu-
mentation, testing, and version control. We
expect the aerospace sector to be a growth
area for Electrovaya’s power solution.
MOBILE COMPUTING / / / Mobile Computing is a high growth and high margin sector in the general computing
arena. Market size is expected to increase beyond $100 billion, and mobile computers are becoming ubiquitous.
The fundamental problem is battery life, which restricts the mobility. Electrovaya, with a development partner-
ship with Microsoft along with a Far East ODM, developed the Scribbler™, which is light, thin and the most
“...the only real choice for users who
need to be away from an outlet for
hours at a time”.
- Mobile Tech Buyer’s Guide
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T4
mobile
Tablet PC,
powered by Elect-
rovaya’s Superpoly-
mer® battery and operating
with an Intel® Centrino processor.
New products launched in FY2004 in-
cluded the Scribbler™ 2010 and Scribbler®
2100. The focus is now on revenue generation.
In addition to the general channel, online and direct
sales, Electrovaya is turning towards strategic partnerships
in certain vertical markets such as healthcare. These include
more widespread distribution channels, as well as furthering our rela-
tionships with Independent Software Vendor (ISV’s), Value-added Reseller
(VARs), Solution Providers and Microsoft. As the Tablet PC industry continues to
grow, so too will Electrovaya’s commitment to mobile computing. The latest Scrib-
bler® SC2200 will aggressively compete in the Tablet PC industry. It is a very powerful slate
Tablet PC with its 1.4Ghz Intel® Centrino processor, 802.11a/b/g wireless card and 2Meg L2
cache memory.
ZERO EMISSION VEHICLE - MAYA 100 / / / 2004 continued to be an important year in Electrovaya’s electric
vehicle development. It was also a year that saw further demand for clean transportation driven by energy secu-
rity, the environment, the Kyoto Protocol, consumer expectations and demands, and the growing health burden
due to air quality.
In the summer of 2004 the MAYA -100 received top honors winning the “Best Technology Award” and “Bat-
tery Electric Vehicle Award” at the 2004 Tour de Sol, an alternative transportation rally. In September, Electro-
vaya increased exposure and important industry contacts at the EDTA (Electric Drive Transportation Association)
Conference and Exposition in Orlando, and also at the Better Transportation Expo in Toronto. Electrovaya contin-
ues to file patents and build its intellectual property in this area. We believe the demand for clean zero emission
vehicles is immense.
“Quite possibly the best thing to
happen to mobile professionals
since the notebook...The PowerPad
120 are indispensable for travelers
who want to work and play for
more than a couple of hours”.
- Mobile PC
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 5
LOOKING FORWARD
Revenue growth is crucial for Electrovaya as it strives for greater market share and profitability. The company’s
efforts will be focused on the following:
///Increase sales from the PowerPad® family of battery products, through sales channels, distributors and OEMs;
///Build the aerospace business through the present NASA contracts and expand into other clients. The power
necessary in aerospace applications keeps increasing with more complexity and functionality of demand;///
Greater penetration of the mobile computer business with the Scribbler™ line of Tablet PCs. The Tablet PC
portion of the mobile computer business is estimated to grow quickly into a multi-billion dollar industry.
Revenue growth will be driven by increased relationships with distributors, resellers and other channel
partners as well as development of new products;///
Increase visibility and commercial acceptance of Electrovaya’s zero emission vehicle, which continues to
undergo road tests and participate in electric vehicle exhibitions;///
Continue research and development in areas of battery technology, power electronics and new materials;///
Increase efforts in developing new products in mobile computing, aerospace and other markets.
THANKS TO STAKEHOLDERS
The key to Electrovaya’s success is the talent and vision of its team in all levels of the company. The expertise and
commitment of our people drives us forward and fuels our growth.
We would also like to express our appreciation to our customers and distributors for their ongoing trust and
support for our products and services.
Finally, we would like to thank you, our shareholders, for your confidence in the future and your patience as
we execute our strategy in our goal to be the leading mobile energy company.
“Fast enough to keep up
with your digital scribbles yet
light and thin enough to tuck
under your arm...you could
get in a good day’s work with
this Tablet”.
- LAPTOP Magazine
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T6
TECHNOLOGY / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /With amongst the highest energy density of any commercial rechargeable battery, Electrovaya’s patented
Lithium Ion SuperPolymer® battery continues to be the basis for new markets and products. Electrovaya contin-
ues to make significant investments in R&D to ensure that there is continued fundamental development of basic
technology, while capacity development in important fields like aerospace leads to new products and applica-
tions. The company’s technology is protected with a growing number of worldwide patents, currently at 159
issued and pending.
Electrovaya has entered an intensive research program with
the National Research Council and the University of Toronto to
develop new materials that may significantly increase the energy
density. The company is also conducting research into new
battery technology that would incorporate either lithium iron
phosphate or lithium cobalt oxide chemistry. Other areas of inves-
tigation include varying the shape and size of battery cells so that
they may form a part of the physical structure of a device. This innovation could significantly reduce the weight
of a system.
Electrovaya has signed a contract with NASA Johnson Space Center to supply the power system for the Pri-
mary Life Support System on the spacesuits worn by astronauts while conducting space walks outside the Space
Shuttle and International Space Station. With support from the Canadian Space Agency (CSA), Electrovaya has
undertaken developments to expand the company’s aerospace capacities and ensure the necessary facilities are
in place for building battery systems for space-grade technology. These batteries must meet rigorous standards
of reliability, safety and repeatability, while proving workable under extreme temperature and pressure environ-
ments. Electrovaya is putting in place the certification process and quality control systems necessary to achieve
those goals.
The company has the capacity to provide complete customer solutions through design engineering capabili-
ties that include a 14,000 square foot machine building division. This division has extensive experience in unique
process technology and manufacturing. With integrated engineering, R&D, manufacturing and quality control
James K. Jacobs, PhD
Chief Technology Officer
“Electrovaya’s machine building division
integrates manufacturing, engineering
and consulting departments, offering
customers a complete solution”.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 7
departments, the facility manufactures equipment for battery systems, aerospace, and various other industries.
The facility is capable of fast prototyping at highly competitive prices. Electrovaya is able to use its design engi-
neering capabilities to create products with tolerances and verification that meet the requirements for qualifying
parts as flight grade and is using this ability in building equipment for our NASA contract.
Electrovaya continues to undertake research in large battery systems and ultra-high efficiency DC/DC convert-
ers to ensure concurrent growth of its power electronics capacities. The company has brought DC/DC conversion
efficiency to over 98%. This technology breakthrough could produce smaller power electronics and improve
mobility of devices. Several patents have been filed related to this key technology.
R&D investment in energy density continues to fuel the evolution of our mobile computing product lines. The
thin and light SC2200, the newest member of the Scribbler™ Tablet PC family, contains a fast Intel® Centrino 1.4
GHz Dothan processor. We believe it to be the most powerful and mobile Tablet PC on the market. The Pow-
erPad® 300 has joined Electrovaya’s PowerPad® family of external batteries for the laptops and Tablet PC. This
newest product nearly doubles the run time of the former leader in the PowerPad® series.
Electrovaya continues development of new technologies for the Maya-100 zero-emission vehicle. This includes
a novel and proprietary design for surge power, such as acceleration and hill climbing, while maintaining good
thermal management and safety parameters. Other system patents cover control circuitry and effective handling
of high voltage cells in series, specifically as it relates to the problem of locating and adjusting for the failure of a
single cell in the battery pack. These developments are applicable to other electric drive markets such as fuel cell
and hybrid transportation applications.
“The critical search for the next generation of clean automobile is
accelerating. Amongst emerging technologies, which include
hydrogen fuel cell and hybrid electric gasoline cars, Electrovaya’s
Lithium Ion SuperPolymer® battery technology has the greatest
potential to succeed”.
- Chairperson of Technical Committee,
Tour de Sol 2004
Maya-100 zero-emission vehicle.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T8
SALES AND MARKETING / / / / / / / / / / / / / / / / / / / / / / / / / / /There has been a significant increase in the demand for mobile technologies and the power requirements for
mobile devices in the past few years. Electrovaya has targeted those industries where lightweight high energy
density solutions are required and responded by introducing new products, including the Scribbler™ 2000 series
and the PowerPad® 300.
Our multi-pronged sales and marketing strategy includes the following:
PARTNERSHIPS
Electrovaya is committed to developing our strategic partnerships. We firmly believe that these relationships,
with integral partners from the markets in which we compete, are the primary means of achieving great success
in this competitive market. New for this year, Electrovaya has launched an Independent Software Vendor (ISV)
Program. Electrovaya proudly collaborates with these software vendors, ultimately enabling our Scribbler™ Tab-
let PC to provide clients with a better solution.
CHANNEL STRATEGY
We currently work with North American distributors including Ingram
Micro, D and H Distributing Co., and others, as well as over 50 resellers.
Our relationships with a number of key resellers across North America are
growing significantly. Focused on the vertical markets where we are experi-
encing growth, these resellers provide both sales and increased exposure of
Electrovaya’s products.
Maintaining our multi-pronged sales approach, Electrovaya is confident
that the future holds significant promise for our outstanding product line.
Our major distributors and wide web of resellers continue to support our product line. In addition, our direct
team and online efforts provide additional support to our growing client base.
DIRECT SALES/WEB-BASED INITIATIVES
During the year we re-organized our sales team for greater effectiveness. Under the leadership of the Director
of Sales we believe this initiative will enhance our ability to generate revenue. In addition, we launched a new
website and continued to make improvements to it to drive sales.
OTHER
We continue to participate in the industry’s major trade shows, such as Consumer Electronics Show, as well as
targeted events that focus on the vertical markets that deploy Tablet PCs (healthcare, insurance, education etc.).
This vertical focus has also allowed us to develop concentrated advertising strategies – primarily print and online
activities. We are confident that this targeted approach provides greater return on our marketing expenditures.
Electrovaya recognizes that increasing our brand awareness is of the utmost importance. Greater recognition
ultimately grants Electrovaya greater access to the many markets where our products play a significant role.
PRODUCTS
Electrovaya’s commitment to deliver high quality products is reflected in our continuous new product develop-
ments. The evolving information technology market also necessitates continuous innovations in Electrovaya’s
sales and marketing strategies.
“With its full day runtime, I use the Scribbler
daily for all my work”.
- Dr. Steven Thorpe, Vice Dean, Faculty of Engineering
University of Toronto
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 9
As the Tablet PC market continues to evolve,
Electrovaya’s unique and powerful Scribbler™
Tablet PC has achieved significant market aware-
ness and industry applause. The demand for Tablet
PCs is growing and promises to become a $10 billion
dollar business in the next few years. Electrovaya’s Su-
perPolymer® Lithium Ion battery technology powers the
Scribbler™, enabling Electrovaya to play a significant role
in this challenging market, ultimately resulting in greater market
share for the Scribbler™ in the Tablet PC industry.
The Scribbler™ Tablet PC has an attractive, lightweight design and outstanding battery capabilities. In addi-
tion, the Scribbler™ is made up of the highest quality components. Together, these qualities make the Scrib-
bler™ a superior computing device. As discussed above, Electrovaya is poised with a strategic marketing strategy
that brings the Tablet PC to the key markets that demand such a mobile tool.
The Scribbler™ Tablet PC has experienced significant success in the healthcare, education, and field force au-
tomation markets. As a result, a significant portion of our marketing efforts have been dedicated to this market.
The PowerPad®, our successful external notebook battery, continues to forge new ground in the mobile arena.
Much like the Scribbler™ Tablet PC, the Powerpad® has enjoyed great success in the healthcare market. Our
product development continues to improve the efficiency of the PowerPad® and its compatibility with many
notebooks. Our clients look forward to new PowerPad® products that provide even greater battery capacity in
the near future.
Electrovaya has continued its penetration into the aerospace market. This has included an extended contract
with NASA for more batteries, and a separate contract to develop the power system for their AERCam free flying
vehicle. The successful partnership with NASA has opened the door for other opportunities in the aerospace sec-
tor for Electrovaya’s battery products. The Canadian Space Agency has partnered with us in funding a facility to
build aerospace-qualified products.
The Maya-100 Zero Emission Vehicle (ZEV) was showcased at the 2004 Tour de Sol where it won the “Battery
Electric Vehicle Award” as well as the “Technology Award”. The vehicle was also exhibited at the 2004 Better
Transportation Expo in Toronto, Canada. Those in attendance were greatly impressed at the increased driving
range of up to 230 miles (360 km) and by the prospects for ZEV’s to help solve environmental and health con-
cerns. There is a growing understanding that fuel cell technology will not be viable for many years and that its
success is much less certain.
Specialty battery demands have grown from a number of sectors including OEM’s, aerospace, defense, solar
cars and others. We believe this will continue to lead to new products and markets for Electrovaya.
“The Scribbler is a fine piece
of equipment. The ease of use and
maintainability were bar-none the
best enountered. The word is out in
our company and is spreading”.
- Dr. Richard Przybylski, Senior Systems
Engineer, Lockheed Martin
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T1 0
MANAGEMENT’S DISCUSSION & ANALYSIS / / / / / / / /The following management’s discussion and analysis (MD&A) of Electrovaya Inc.’s (“Electrovaya”; the “Com-
pany”) financial condition and results of operations for the fiscal years ended September 30, 2004 and 2003
includes comments that management believes are relevant to an assessment of and understanding of the
Company’s consolidated results of operations and financial condition. The financial information herein is pre-
sented in thousands of US dollars in accordance with Canadian generally accepted accounting principles and
should be read in conjunction with the Company’s financial statements and related notes. This MD&A is dated
as of December 9, 2004.
Additional information about the Company, including Electrovaya’s current annual information form, can be
found on the SEDAR website for Canadian regulatory filings at www.sedar.com.
FORWARD-LOOKING STATEMENTS This MD&A may contain forward-looking statements that involve a number of risks and uncertainties,
including statements regarding the outlook for the Company’s business and results of operations. By nature,
these risks and uncertainties could cause actual results to differ materially from those indicated. Such risks and
uncertainties include, without limitation, the various factors set forth in the Risks and Uncertainties section of
the MD&A provided below, and are also discussed in public disclosure documents filed with Canadian regula-
tory authorities. No assurance can be given that results, performance or achievement expressed in, or implied by,
forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from
them. Electrovaya disclaims any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
OVERVIEW OF THE BUSINESS Electrovaya is a leader in rechargeable lithium ion SuperPolymer® battery technology. It has developed and
acquired patents and patent applications with respect to the technology, and has manufacturing and research
and development facilities to produce and develop products for numerous industries. Electrovaya is a growing,
innovative group of interrelated businesses whose products include:
///The PowerPad® 80, 120 and 160 series of batteries, a source of power and longer run times for notebook
computers; ///
The Scribbler™ series of Tablet PCs, mobile computers with the longest run-times in the industry; ///
The Lithium laptop computer with Electrovaya’s patented lithium ion SuperPolymer® battery, making it one of
the most mobile computers in the industry; ///
Batteries for aerospace and defence, including NASA, and certain defence industries; ///
Precision machine building for third parties, including companies in the robotics, food and other industries; ///
A prototype electric car designed for emission-free low cost urban transportation.
The PowerPad® battery product line has continued to address the growing demand for mobility by providing
longer run-times for notebook computer users.
The Scribbler™ Tablet PC continues to receive numerous awards, with our newest version of the Scribbler™,
our SC2100, featuring Microsoft’s Tablet PC operating system, long battery life and excellent mobility. In Novem-
ber, 2004, the Company launched the Lithium laptop, equipped with Microsoft’s operating system and Electro-
vaya’s lithium ion Superpolymer® battery.
In October, 2003 the Company was awarded a US $2.95 million contract by NASA (National Aeronautics and
Space Administration - Johnson Space Center) to provide high-energy lithium ion SuperPolymer® power systems
as a power source for Extra-Vehicular Mobility Units (EMUs).
A key part of the company’s strategy is research and development. This important performance driver will fuel
new product development, improve existing products and enable the company to maintain its presence in
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1 1
MANAGEMENT’S DISCUSSION & ANALYSIS
existing markets and gain access to new markets. The Company is continuing to work on an emission-free pro-
totype electric vehicle and is aggressively exploring markets for this car.
STRATEGIC PLAN OBJECTIVES The Company’s business strategy involves the following key elements:
///Establish additional channels to market by creating new global relationships with OEM computer makers,
distributors and value-added resellers for our PowerPad® and mobile computing products; ///
Increase production in line with sales at the current manufacturing facility and investigate further expansion
opportunities and further automate production processes to lower product costs and increase quality; ///
Establish strategic relationships in order to broaden the market potential of Electrovaya products; ///
Continue our investment in research and development initiatives to be a leader in the industry; ///
Develop new products which use Electrovaya high energy density batteries to give a competitive advantage; ///
Achieve profitability through increased sales and production efficiencies.
(a)Potential long-term financial liabilities are described below (See Financial Condition - TPC Contribution Agreement)
The Company has not paid a dividend since inception.
Revenue has increased during the three year period due to the addition of new products (e.g.: December
2002 – Scribbler™ Tablet PC, October 2002-Powerpad® 80), increased service revenues in 2004 from NASA and
a gradual increase in machine building revenues.
Losses have declined as the Company added more profitable product lines (e.g.: Scribbler™) and increased
the amount of service revenue. Concurrently, control over manufacturing activities and increased utilization has
resulted in improved margins.
The Company has also carefully managed operating expenses for maximum efficiency and in a manner that
supports its business objectives.
USE OF ESTIMATES / / / In preparing the financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions that affect the reported amounts of sales returns,
bad debt reserves and warranty accruals at the date of the financial statements.
The Company’s existing policy allows for sales returns ranging from 15 days for direct sales to end users to
longer periods for sales to key distributors. Sales returns are estimated at the time of delivery based on past
experience and customer specific factors.
The Company reviews its outstanding accounts receivable on a regular basis. Bad debts are determined based
on the ageing of accounts receivable where such amounts are not insured and considered uncollectible.
Warranty accruals are based on the actual warranty experience rate for the past year for each product group
and sales during the most recent warranty period. These amounts are reviewed quarterly.
RESULTS OF OPERATIONS
($ thousands) 2004 2003 2002
Revenue $ 6,369 $ 4,323 $ 2,976
Revenue, Less Direct Manufacturing Costs 847 (1,008) (1,665)
Loss Before Interest Taxes and Amortization 5,415 6,891 8,062
Net Loss 8,463 9,876 9,991
Basic and Diluted Loss per Share 0.12 0.14 0.14
Cash & Cash Equivalents 13,612 17,593 20,618
Total Assets 26,682 34,136 39,897
Total Long Term Liabilities(a) - - -
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T1 2
MANAGEMENT’S DISCUSSION & ANALYSIS
REVENUE / / / Revenues are derived from the sale of PowerPad® and Scribbler™ Tablet PC products as well as
from machines built for third parties and from services provided for research and development activities. Rev-
enue increased by 47.3% to $6.4 million for the year ended September 30, 2004 from $4.3 million for the year
ended September 30, 2003. The year over year increase in revenue primarily resulted from work for NASA, as
well as growth in sales of the Scribbler™ Tablet PC.
Electrovaya recognizes revenue from: (i) its PowerPad® and Scribbler™ products at the time the units are
shipped to customers, net of a provision for expected returns; (ii) machines on a completed contract basis; and
(iii) providing services as each contractual milestone is achieved and accepted by the customer.
Quarterly revenue for the last three years is as follows:
Revenues were up $2.0 million or 47.3% in 2004 compared to 2003 predominantly due to an increase in
Scribbler and aerospace related revenues. Of the $2.0 million, $1.4 million was due to NASA, with the balance
comprised of increases in Scribbler™ and machine building sales.
Fourth quarter revenue of $1,636 was up 26.0% or $338 compared to $1,298 for the fourth quarter of
fiscal 2003. This was due to higher revenues from R&D services, primarily NASA, and an increase in Scribbler™
revenues.
EXPENSES / / / Direct Manufacturing Costs − Direct Manufacturing Costs is comprised of the material, labour
and manufacturing overhead, excluding amortization, associated with the production of SuperPolymer® batter-
ies and the Scribbler™ Tablet PC, machine building for third parties and research service revenues. For the year
ending September 30, 2004, direct manufacturing costs increased by 3.6% to $5.5 million from $5.3 million for
the year ending September 30, 2003.
Revenue less Direct Manufacturing Costs was $0.8 million for the year, or 13.3% of Revenue compared to
negative ($1.0 million) in fiscal 2003. This 184.0% improvement from the prior year was due to changes in the
product mix to increased volumes of Scribblers™ and increases in service revenue. This trend was especially evi-
dent during the fourth quarter of fiscal 2004, as a significant amount of work was completed for NASA.
Research and Development − Research and development expenses consist primarily of compensation and prem-
ises costs for research and development personnel, including independent contractors and consultants, direct
materials and allocated overhead.
Research and development expenses, net of investment tax credits, increased by approximately $0.2 million or
7.0% to $2.8 million for the year ended September 30, 2004 from $2.7 million in 2003. In fiscal 2003, the com-
pany received grants under Technology Partnerships Canada of $1.1 million for research work performed since
January, 2002 related to high rate batteries and the electric car. The Company received $0.7 million in grants for
work performed in fiscal 2004.
In the fourth quarter, research and development expenses increased by $0.5 million or 106.7% from the
fourth quarter of fiscal 2003 as the Company focused on R&D initiatives related to new technology, including
researching new materials for the next generation SuperPolmer® technology. To assist with these efforts, the
Company has formed strategic alliances with government laboratories, such as the National Research Council,
and universities to increase the energy density of its new generation products and has developed low tempera-
ture operational capability.
The Company is also active with the development of the Zero Emission Vehicle (Electric Car). Electrovaya is
working with NASA, developing high-energy systems which can work in zero gravity and high vacuum condi-
tions in the Space Shuttle and International Space Station.
($ thousands) Q4 Q3 Q2 Q1
2004 $ 1,636 1,559 $ 1,593 $ 1,581
2003 1,298 778 1,364 883
2002 661 640 1,160 515
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1 3
MANAGEMENT’S DISCUSSION & ANALYSIS
Sales and Marketing − Sales and marketing expenses are comprised of the salaries and benefits of sales and
marketing personnel, marketing activities, warranty provisions, advertising and other costs associated with the
sales of the PowerPad® and Scribbler product lines.
During the year, the Company added new sales personnel in the United States, but reduced its advertising
expenditures by focusing on initiatives with a higher return-on-investment and through more partnerships at key
trade shows. These expenses decreased to $1.6 million for fiscal 2004 from $2.4 million for fiscal 2003.
Sales and marketing expenses declined by $0.3 million or 57.7% in the fourth quarter of fiscal 2004 com-
pared to the same period in the prior year due primarily to a decrease in estimated warranty expenses as a
result of improved quality control and a reversal of warranty reserves related to software upgrades in previous
quarters.
General and Administrative − General and administrative expenses include salaries and benefits for corporate
personnel, insurance, professional fees, reserves for bad debts and facilities expenses. The Company’s corporate
administrative staff includes its executive officers and employees engaged in business development, financial
planning and control, legal affairs, human resources and information technology.
General and administrative expenses increased by $0.5 million to $2.4 million for the year ended Septem-
ber 30, 2004 from $1.9 million for the previous year. The increase primarily reflects an increase in salaries and
benefits to support the growing business, as well as increased provisions for bad debts and increased insurance
premiums.
Compared to the fourth quarter of fiscal 2003, general and administration expenses remained relatively un-
changed in the fourth quarter of fiscal 2004.
Net Income − Quarterly net losses for the last three years are as follows:
Quarterly net losses per share for the last three years are as follows:
Loss for fiscal 2004 has improved over fiscal 2003 by 14.0% from $9.8 million to $8.5 million. This is largely due
to increased service revenue and sales of scribblers, resulting in a positive gross profit of $0.8 million.
LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2004, the Company had $13.6 million in cash, cash equivalents and short-term invest-
ments.
Cash used in operating activities was $5.0 million for the year ended September 30, 2004 and $6.4 million
for the year ended September 30, 2003. Net cash used in operating activities for fiscal 2004 reflects the operat-
ing loss of $8.5 million offset by amortization of $3.1 million and an increase in non-cash operating working
capital of $0.4 million.
Cash provided by investing activities was $0.3 million for the year ended September 30, 2004 comprised of a
reduction in short-term investments of $0.5 million offset by capital expenditures of $0.2 million. Cash used in
investing activities in fiscal 2003 of $6.4 million reflected $0.2 million of spending on capital expenditures and
($ thousands) Q4 Q3 Q2 Q1
2004 $ 2,114 $ 2,085 $ 1,861 $ 2,402
2003 1,475 3,122 2,379 2,901
2002 2,406 3,925 2,251 1,367
($ thousands) Q4 Q3 Q2 Q1
2004 $ 0.03 $ 0.06 $ 0.03 $ 0.02
2003 0.02 0.04 0.03 0.04
2002 0.03 0.03 0.03 0.03
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T1 4
MANAGEMENT’S DISCUSSION & ANALYSIS
Liquidity and capital resources (continued)
$6.7 million of net reductions in short-term securities.
The Company intends to continue to focus on more profitable lines of business to improve gross profit and
reduce its cash burn.
The Company’s future minimum lease payments under operating leases for the years ending September 30
are as follows:
The Company is currently reviewing its requirements for additional capital resources and no commitments exist
at the present time.
The authorized and issued capital stock of the Company consists of an unlimited number of Common shares
as follows:
The following table reflects the number of options outstanding as at September 30, 2004:
TRANSACTIONS WITH RELATED PARTIES The Company leased its Hanna Avenue premises in Toronto, Ontario, from a company owned by its control-
ling shareholders for $209 per year plus GST and business tax. The lease was renewed from January 1, 2003 to
December 31, 2003. In June 2003, the Company secured an additional 11,800 square feet at $80 per year plus
GST and business tax until December, 2003, with one rent-free month. Beginning in January 2004, the Company
occupied these premises on a monthly basis. In April 2004, the premises were sold by the controlling sharehold-
ers to an independent third party for consideration that included a vendor-take back mortgage.
The Company is constantly exploring new materials for making its batteries and recognizes that some of these
technologies may be developed by other companies. Electrovaya has invested $0.1 million in a private company
unrelated to the Company’s controlling shareholders engaged in the business of producing and evaluating new
battery materials; in return for its investment, it has received 6% of the Class A and 21% of the Class B shares
of this private company. Additionally, Electrovaya has provided research and development services and received
30% of the outstanding non-voting, participating Class B shares as consideration for such services. The Class B
shares are convertible into Class A voting, participating shares in the event the company becomes registered on
a stock exchange. This investment has been valued at Nil as at the end of September 30, 2004.
2005 21
2006 7
2007 2
Total 30
NumberAmount
( US $ ‘000)
Balance, September 30, 2002 & 2003 69,539,109 63,729
Stock options exercised 36,333 16
Balance, September 30, 2004 69,575,442 63,745
Outstanding, September 30, 2003 1,594,933
Granted 475,000
Cancelled or expired (32,666)
Exercised (36,333)
Outstanding, September 30, 2004 2,000,934
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1 5
MANAGEMENT’S DISCUSSION & ANALYSIS
FINANCIAL CONDITIONCURRENT ASSETS / / / Cash and cash equivalents consist of investments with maturities of less than 90 days.
Short-term investments include banker acceptances, commercial paper and term deposits with maturities of up
to 90 days. Inventories include raw materials, semi-finished and finished goods.
Cash and short-term investments decreased by $4.0 million from September 30, 2003 to September 30,
2004 due to continued losses from operations
CAPITAL ASSETS / / / Approximately $0.2 million of patent and technology capital assets were acquired during
the year.
CURRENT LIABILITIES / / / Accounts payable and accrued liabilities were $1.5 million on September 30, 2004
and $1.8 million on September 30, 2003.
TPC CONTRIBUTION AGREEMENT / / / On March 31, 2003 the Company entered into an agreement with the
Technology Partnerships Canada (“TPC”) initiative of Industry Canada, whereby TPC agreed to fund up to 29.7%
of eligible costs related to the Company’s research and development efforts in fast batteries and electric vehicles,
up to a maximum amount of $6.7 million during the work period beginning in January, 2002 and ending by
September, 2007. Under the terms of the agreement, an amount up to a maximum of $31.1 million is to be
repaid by royalties charged on new revenue created from products developed commencing in 2007 through to
2013, with payment to be deferred or reduced if certain revenue thresholds are not achieved. During the quarter
ending September, 2003 the Company received $1.1 million related to eligible research and development ex-
penses for the period from January 1, 2002 to March 31, 2003. Additional claims for $0.7 million were received
in fiscal 2004.
PRESENT STATUS
Although Electrovaya has recorded a net loss in every year since its inception, Revenue less Direct Manufactur-
ing costs has improved by approximately $1.9 million during the year ending September 30, 2004. Electrovaya
intends to continue to focus on the most profitable areas of its business and is constantly reviewing the perfor-
mance for underperforming products. In the current and future quarters, the Company expects research and
development expenses to increase as it continues to develop its Scribbler™ Tablet PC and mobile computer bat-
tery product lines and explore other potential applications for its technology. Electrovaya also expects its sales
and marketing expenses to increase as it rolls out a marketing programme with an extensive advertising compo-
nent for the Tablet PC. It also expects to grow its research and development expenses as revenues from research
and development activities, such as the development of batteries for NASA, increase.
Although the Company believes that the cash on hand will be sufficient to meet its requirements, financing
needs in future periods will depend principally on its ability to generate sales from its products and services and
the extent and timing of future acquisitions and joint ventures.
RECENT ACCOUNTING PRONOUNCEMENTS Prior to October 1, 2003, the Company applied the fair value based method of accounting prescribed by CICA
Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments, only to employee stock
appreciation rights, and applied the settlement method of accounting to employee stock options. Under the
settlement method, any consideration paid by employees on the exercise of stock options or purchase of stock is
credited to share capital and no compensation expense was recognized.
Effective October 1, 2003, in accordance with one of the transitional options permitted under amended Sec-
tion 3870, the Company has prospectively applied the fair value based method to all employee stock options
granted on or after October 1, 2003. Under the fair value based method, compensation cost is measured at fair
value at the date of grant and is expensed over the award’s vesting period. During the year, due to the effect of
prospectively adopting the fair value based method, there was an increase in stock based compensation expense
of $43, with a negligible impact on loss per share.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T1 6
MANAGEMENT’S DISCUSSION & ANALYSIS
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT RISKS AND UNCERTAINTIESINTEREST RATE RISK / / / As of September 30, 2004, the Company had cash and short-term investments total-
ing $13.6 million. As a result of their short-term maturities, the Company does not believe these investments are
subject to significant interest rate risk.
FOREIGN CURRENCY EXCHANGE RATE RISK / / / In the year ended September 30, 2004, approximately 80%
of the Company’s revenue was derived from U.S. customers in U.S. dollars. The Company expects that the ma-
jority of its sales will, in the future, be made in U.S. dollars and that in the short term, the majority of its expens-
es will be denominated in Canadian dollars. As of September 30, 2004, $3.6 million of cash, cash equivalents
and short-term investments were denominated in U.S. dollars. Fluctuations in the exchange rate between the
Canadian dollar and the U.S. dollar may therefore have a material effect on results of operations. The Company
does not currently engage in currency hedging activities.
CREDIT RISK / / / The Company manages its credit risk with respect to accounts receivable by establishing and
implementing credit limits and approval policies, as well as dealing primarily with large creditworthy customers.
It has also insured a majority of its accounts receivable.
OTHER RISKS AND UNCERTAINTIES / / / Electrovaya is an early-stage commercial company facing correspond-
ing risks, expenses and difficulties that may affect its outlook and eventual results of its business and commer-
cialization plan.
Electrovaya may not be able to establish anticipated levels of high-volume production on a timely, cost-effec-
tive basis or at all. It has never manufactured batteries in substantially large quantities and it may not be able to
maintain future commercial production at planned levels. Additionally, if it is unable to maintain an adequate
supply of raw materials or components, its costs could increase or its production could be limited.
Electrovaya has taken a number of steps to offset these risks:
///Its manufacturing process is modular and flexible.
///Its high-volume facility utilizes machinery and equipment that is similar to the machinery and equipment that
it has already designed, built and used in its pilot production plant. Since the introduction of its PowerPad®
in 1999 it has successfully produced finished products in its pilot and commercial plants, resulting in increas-
ing levels of sales. ///
It has formalized supply arrangements with suppliers to ensure that raw materials required for high-volume
production are available at a reasonable cost and on a timely basis. ///
It has more than one supplier for critical raw materials and components.
Until the establishment of multiple plants, Electrovaya’s dependence upon the operation of a single manufactur-
ing facility and accidents or other operational problems at this facility, or at neighbouring facilities operated by
other businesses, could affect its ability to deliver product to its customers and therefore its ability to generate
revenues. In addition, it may be subject to environmental liabilities at its facilities, which could result in material
expense and adversely affect its ability to sell or finance its facilities.
Electrovaya has addressed these risks by designing and building its high-volume facility with worker safety in
mind. In addition, it has adopted a formal environmental policy that requires compliance with environmental
legislation and an ongoing program of monitoring its environmental compliance.
Electrovaya relies upon manufacturers in Taiwan to produce the Scribbler® Tablet PC and has no long-term
supply contracts with them.
There are numerous suppliers in Taiwan and throughout Asia capable of producing a Tablet PC and it is
possible to arrange alternative sources of manufacturing, if required.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1 7
MANAGEMENT’S DISCUSSION & ANALYSIS
Other risks and uncertainties (continued)
Electrovaya does not have a collaborative partner to assist it in the development of its batteries, which may limit
its ability to develop and commercialize its products on a timely basis. Furthermore, it will continue to incur
significant costs and invest considerable resources designing and testing batteries for use with, or incorporation
into, specific products. Significant revenue from these investments may not be achieved for a number of years, if
at all. Moreover, these batteries may never be profitable and even if they are profitable, operating margins may
be low.
The development by the Company of new applications for its rechargeable batteries is a complex and time-
consuming process. New battery designs and enhancements to existing battery models can require long devel-
opment and testing periods. Significant delays in new product releases or significant problems in creating new
products could negatively impact the Company’s revenues.
Electrovaya believes that the formation of strategic partnerships will be critical for the Company to meet its
business objectives. It will continue to seek arrangements with potential partners to mitigate development and
commercialization risks going forward, balanced by its objective to maximize market share and penetration by
not entering into exclusivity arrangements with a single partner. In addition, it is reviewing options to work with
multiple partners on OEM programs for internally designed applications, sales and distribution arrangements,
outsourcing parts of its manufacturing process, and for development of specialized applications in industry seg-
ments other than portable computers.
Electrovaya may not be able to compete effectively with other manufacturers of compact rechargeable batter-
ies. There is also the possibility its competitors may develop portable power technologies that match or outper-
form the SuperPolymer® technology, which may diminish the demand for the Company’s products. In addition,
innovations in the design of portable computers and other wireless devices may reduce the need for its batteries.
The market for rechargeable batteries is competitive and fragmented. Electrovaya believes it is well positioned
to compete in the market for compact rechargeable batteries, which is already very large and growing rapidly.
There are currently five to seven principal competitors, primarily well capitalized companies based in Japan and
Korea, which have in aggregate a dominant market position in the lithium ion and lithium ion polymer battery
sector. By continuing to leverage the Company’s technological advantage, move quickly to penetrate the market,
target the underserved aftermarket, and emphasize its higher energy density to create brand differentiation,
Electrovaya expects to increase revenue in the near term. Additionally, the Company believes that design innova-
tions in the wireless sector will either not materially extend the run time of existing battery technologies or will
be more than offset by the addition of new, enhanced, “power-hungry” features, which will increase the energy
requirements of these wireless devices. Finally, miniature fuel cells present potential future competition to batter-
ies in the portable and mobile power applications. However, they are expensive and still have technical hurdles
to overcome, thus mitigating the threat to Electrovaya’s products in the electronics markets that it targets.
Electrovaya will continue to invest in research and development to utilize latest generation advanced materi-
als and improve the process and design of its batteries to maintain or widen the technological gap between its
technology and that of its closest competitors. However, the Company has limited knowledge of its competitors’
activities in this area.
Electrovaya is exposed to certain risks as a result of being in an industry that manufactures devices or prod-
ucts containing energy. All lithium ion polymer batteries can become hazardous under some circumstances. In
the event of a short circuit or other physical, electrical or thermal damage to these batteries, chemical reactions
may occur that release excess heat or gases, which could create dangerous situations, including fire, explosions
and releases of toxic fumes. The Company’s batteries may emit smoke, catch fire or emit gas, any of which may
expose Electrovaya to product liability litigation. In addition, these batteries incorporate potentially hazardous
materials, which may require special handling, and safety problems may develop in the future. Product failure or
improper use of lithium ion polymer battery products, such as the improper management of the charging/dis-
charging system, may also result in dangerous situations. The raising of any health or safety issues could affect
the Company’s reputation and sales. Moreover, changes in environmental or other regulations affecting
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T1 8
MANAGEMENT’S DISCUSSION & ANALYSIS
Other risks and uncertainties (continued)
the manufacture, transportation or sale of Electrovaya’s products could adversely affect the Company’s ability
to manufacture or sell its products or result in increased costs or liability. Finally, Electrovaya may be required to
devote significant financial and management resources to processing and remedying warranty claims. If product
liability issues arise, the Company could incur significant expenses and suffer damage to its reputation and the
market acceptance of its products.
To mitigate these risks of product liability, Electrovaya undertakes extensive internal and external product and
safety testing. Unlike certain competing technologies, its products do not contain cadmium or lithium metal,
which are considered hazardous materials for purposes of disposal or transportation. The Company believes that
there are currently no regulations in North America that would prevent it from the manufacture or sale of its
batteries, and Electrovaya is fully committed to ensuring its products are environmentally friendly. In certain situ-
ations or applications, battery power may be a more attractive environmental solution than other energy sources
utilizing fossil fuels or creating emissions.
Electrovaya may not be able to successfully market its battery technology and products, and because its Su-
perPolymer® technology is relatively new, these batteries may not perform as well as anticipated. The Company
expects to continue to sell its products directly to corporate customers and through value-added resellers and
distributors. But if these parties do not purchase these products or purchase them in lower quantities or over
longer time periods than expected, Electrovaya’s revenue profile and cash flows may be severely affected. The
Company continues to rely upon a limited number of customers for a significant portion of its sales and the loss
of any customer could have a material adverse effect on its sales and operating results and make it more difficult
to attract and retain other customers.
If overall market demand for laptop computers and other portable electronic devices declines significantly,
and consumer and corporate spending for such products declines, Electrovaya’s revenue growth will be ad-
versely affected. Additionally, the Company’s revenues would be unfavorably impacted if customers reduce their
purchases of new products or upgrades to the Company’s existing product lineup if such new offerings are not
perceived to add significant new functionality or other value to prospective purchasers.
The PowerPad® 80, 120 and 160 products and our Scribbler™ Tablet series of products have undergone
extensive user testing and have now been sold commercially to well-established corporate users, distributors
and value added resellers with positive early results. Electrovaya has an aggressive marketing program in place,
including trade show participation and advertising campaigns. The Company has a dedicated sales team to ag-
gressively market and sell its products in the United States and Canada. Electrovaya has adopted a multi-channel
distribution strategy to reduce its reliance on a single customer or distributor. The Company is targeting different
types of users, applications and industries to mitigate the risk if its products do not achieve acceptance in a
single market and to ensure it minimizes reliance on any one customer.
If the Company fails to manage growth successfully, it could experience delays, cost overruns or other prob-
lems. Similarly, if it is unable to hire or retain qualified, key personnel, its business may be jeopardized.
Electrovaya will continue to monitor its staffing requirements for its manufacturing facility and its needs at
the senior management levels and for specialized personnel in various disciplines or areas of expertise.
If Electrovaya fails to protect its proprietary technology, it may lose any competitive advantage it provides.
Others may claim that the Company’s products infringe on their intellectual property rights, which could result
in significant expenses for litigation, developing new technology or licensing existing technologies from third
parties. If Electrovaya is unable to maintain registration of its trademarks, or if its trademarks or trade name are
found to violate the rights of others, the Company may have to change its trademarks or name and lose the
goodwill created in them.
Electrovaya will continue to file patent applications and register patents resulting from ongoing research and
development activity, acquire or license patents from third parties if appropriate and further develop the trade
secrets related to its manufacturing process and the design and operation of the equipment used to manufac-
ture its products.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 1 9
MANAGEMENT’S DISCUSSION & ANALYSIS
OUTLOOK The Company continues to identify markets in need of portable power, mobility and alternative energy solutions.
In so doing, it continues to identify the most profitable opportunities, enhancing its lithium ion SuperPolymer®
rechargeable battery technology as required to ensure a sustainable lead in the marketplace. The Company is
also pursuing new potential strategic partnerships globally that offer exciting opportunities for growth.
As the business grows, the Company continues to review all aspects of the business for opportunities to
improve profitability and cash-flow. The Company has the capacity to grow sales without adding further over-
heads, and looks forward to increasing revenues as it strives toward profitability and positive cash-flow in the
coming year.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2 0
MANAGEMENT RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS / / / / / / / / / /Management of Electrovaya Inc. is responsible for the integrity of the accompanying consolidated financial
statements and all other information in this Annual Report. The financial statements have been prepared by
management in accordance with accounting principles generally accepted in Canada. Their preparation neces-
sarily involves the use of estimates and careful judgment, particularly in those circumstances where transactions
affecting a current period are dependent upon future events. All financial information in the Annual Report is
consistent with the consolidated financial statements.
To discharge its responsibilities for financial reporting and safeguarding of assets, management believes that it
has established appropriate systems of internal accounting control which provides reasonable assurance that the
financial records are reliable and form a proper basis for the timely and accurate preparation of financial state-
ments. Consistent with the concept of reasonable assurance, the Company recognizes that the relative costs of
maintaining these controls should not exceed their expected benefits. Management further assures the quality of
the financial records through careful selection and training of personnel, and the adoption and communication
of financial and other relevant policies.
The Board of Directors discharges its responsibilities for the financial statements primarily through the activi-
ties of its Audit Committee, which is composed solely of directors who are neither officers nor employees of
the Company. This committee meets quarterly with management, and annually with the independent auditors,
to review performance and to discuss audit, internal control, accounting policy and financial reporting matters.
The consolidated financial statements were reviewed by the Audit Committee and approved by the Board of
Directors.
The financial statements have been audited by KPMG LLP. Their report is presented below.
Dr. Sankar Das Gupta, PhD P. L. Hart MBA, CA
Chairman, President, & Chief Executive Officer Chief Financial Officer
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 2 1
AUDITORS’ REPORT / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /We have audited the consolidated balance sheets of Electrovaya Inc. as at September 30, 2004 and 2003 and
the consolidated statements of operations and deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those stan-
dards require that we plan and perform an audit to obtain reasonable assurance whether the financial state-
ments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement pre-
sentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial po-
sition of Electrovaya Inc. as at September 30, 2004 and 2003 and the results of its operations and its cash flows
for the years then ended in accordance with Canadian generally accepted accounting principles.
KPMG LLP
Chartered Accountants
Toronto, Canada
November 12, 2004
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2 2
CONSOLIDATED BALANCE SHEETS / / / / / / / / / / / / / / / / /September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars)
2004 2003
ASSETS
Current assets
Cash and cash equivalents $ 2,715 $ 6,178
Short-term investments 10,897 11,415
Accounts receivable 698 1,047
Investment tax credits recoverable 165 427
Goods and Services Tax receivable 66 55
Inventories [2] 2,886 2,852
Prepaid expenses and other 52 138
17,479 22,112
Capital assets [3] 9,203 12,024
26,682 34,136
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 1,514 1,760
Income taxes payable - 6
1,514 $ 1,766
Shareholders’ equity
Share capital [4]
Contributed Surplus $ 63,745 $ 63,729
Cumulative translation adjustment 43 -
Deficit 2,156 954
(40,776) (32,313)
25,168 32,370
Commitments [7]
Contingencies [1(h)]
26,682 34,136 See accompanying notes to consolidated financial statements. On behalf of the Board:
SANKAR DAS GUPTA GEORGE PATERSONDirector Director
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 2 3
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
2004 2003
Revenue $ 6,369 $ 4,323
Direct manufacturing costs 5,522 5,331
847 (1,008)
Expenses 2,843 2,656
Research and development (666) (1,140)
Government assistance [1(h)] 1,640 2,439
Sales and marketing 2,445 1,928
General and administrative 6,262 5,883
Loss before the undernoted 5,415 6,891
Amortization 3,061 2,746
Loss from operations 8,476 9,637
Interest income (273) (445)
Loss from foreign exchange 260 652
(13) 207
Loss before income taxes 8,463 9,844
Income tax expense [9] - 32
Loss for the year 8,463 9,876
Deficit, beginning of year 32,313 22,437
Deficit, end of year $ 40,776 $ 32,313
Basic and diluted loss per common share [8] $ 0.12 $ 0.14
See accompanying notes to consolidated financial statements.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2 4
CONSOLIDATED STATEMENTS OF CASH FLOWS / / / / September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars)
2004 2003
Cash provided by (used in):
Operating activities
Loss for the year $ (8,463) $ (9,876)
Amortization which does not involve cash 3,061 2,746
Stock compensation expense 43 -
Change in non-cash operating working capital [11] 400 725
(4,959) (6,405)
Investing activities
Reductions to short-term investments 518 6,674
Additions to capital assets (240) (231)
27 6,443
Financing activities
Issue of shares 16 -
Increase in cash and cash equivalents (4,665) 38
Effect of currency translation adjustments on cash & cash equivalents 1,202 3,611
Cash and cash equivalents beginning of year 6,178 2,529
Cash and cash equivalents end of year $ 2,715 6,178
Supplemental disclosure of cash flow information
Income taxes paid 50 80
Interest received 243 479
See accompanying notes to consolidated financial statements.
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 2 5
Electrovaya Inc. (the “Company”), incorporated in 1996 under the Business Corporations Act (Ontario), devel-
ops, manufactures and markets portable power technology products using its patented lithium ion SuperPoly-
mer® technology.
1. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The Company prepares its financial statements in accordance with Canadian generally accepted accounting
principles. These consolidated financial statements include the accounts of the Company and its wholly owned
subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company has no operating assets located outside of Canada.
(b) Change in accounting policy
Prior to October 1, 2003, the Company applied the fair value based method of accounting prescribed by CICA
Handbook Section 3870, Stock-based Compensation and Other Stock-based Payments, only to employee stock
appreciation rights, and applied the settlement method of accounting to employee stock options. Under the
settlement method, any consideration paid by employees on the exercise of stock options or purchase of stock is
credited to share capital and no compensation expense was recognized.
Effective October 1, 2003, in accordance with one of the transitional options permitted under amended Sec-
tion 3870, the Company has prospectively applied the fair value based method to all employee stock options
granted on or after October 1, 2003. Under the fair value based method, compensation cost is measured at fair
value at the date of grant and is expensed over the award’s vesting period. During the year, due to the effect of
prospectively adopting the fair value based method, there was an increase in stock based compensation expense
of $43, with a negligible impact on loss per share.
(c) Cash and cash equivalents and short term investments
Cash and cash equivalents include temporary investments in marketable securities which are readily convert-
ible into cash and which have an original term to maturity of 90 days or less. Short term investments consist
of temporary investments in marketable securities with longer terms to maturity are recorded at cost, which is
equivalent to their market value.
(d) Capital assets
Capital assets are recorded at cost less related investment tax credits and accumulated amortization. Amortiza-
tion is provided on a straight-line basis over the estimated useful lives of the assets at the following annual rates:
(e) Impairment of long-lived assets
The Company reviews capital and intangible assets for impairment on a regular basis or whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability is assessed by
comparing the carrying amount to the projected future net cash flows that the long-lived assets are expected to
generate.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
Building 4%
Building improvements 4%
Production equipment 20%
Workshop equipment 20%
Patents and technology 20%
Office furniture and equipment 20%
Vehicles 20%
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2 6
(f) Research and development costs
Research costs, net of related investment tax credits, are expensed in the period in which they are incurred.
Development costs, net of related investment tax credits, are expensed in the period incurred unless such costs
meet the criteria under Canadian generally accepted accounting principles for deferral and amortization. To
date, the Company has not deferred any development costs.
Certain costs related to the Company’s research and development efforts related to fast batteries and electric
vehicles are being funded by a repayable grant from Technology Partnerships Canada (see Note 1 (h)).
(g) Inventories
Inventories are comprised of raw materials, work in progress and finished goods. Raw materials and work in
progress are recorded at the lower of cost and replacement cost. Finished goods are recorded at the lower of
cost and net realizable value.
(h) Government assistance
The Company receives indirect financial assistance from the government by way of the investment tax credit pro-
gram. This program provides assistance, by way of direct payments and reductions in corporate income taxes,
for specially defined qualifying expenditures. Investment tax credits are credited against the related research and
development expenses, or capital assets.
The Company has been approved for funding under the Technology Partnerships Canada initiative of Industry
Canada. The funding is to support the Company’s research and development efforts in fast rate batteries and
electric vehicles. The Company will receive contributions of up to 29.7% of the specified costs of the devel-
opment project, to a maximum amount of $6,700. Under the terms of the agreement, an amount up to a
maximum of $31,075 is to be repaid by royalties, commencing in 2007 through to 2013, with payment to be
deferred or reduced if certain revenue thresholds are not achieved. The Company’s first claim for $1,140 was
received in September, 2003. Additional claims for $666 were received in fiscal 2004.
(i) Revenue recognition
Revenue is recognized when title to the goods transfers to customers and collection is reasonably assured.
Provision is made for potential sales returns at the time of shipment. Where an estimate of the potential sales
return cannot be made, the sale is not recorded until the distributor has sold the product. For services, revenue
is recognized as each milestone is achieved and accepted by the customer.
(j) Warranty costs
Warranty costs are provided for as revenues are earned.
(k) Use of estimates
The preparation of financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses during the years. Actual results
may differ from the estimates. Sales returns are estimated at the time of delivery based on past experience and
customer specific factors. Bad debts are determined based on the ageing of accounts receivable where such
amounts are not insured and considered uncollectible.
Warranty accruals are based on the actual warranty experience rate for the past year and sales during the
most recent warranty period.
The Company operates in a competitive market subject to fast-paced technological changes. The Com-
pany has estimated the provisions for sales returns, warranty costs and obsolete inventory based on historical
patterns, communication with its distributors, industry trends and existing competitive pressures. Significant
changes in technology or competitors’ products could result in a material change in the rate of sales returns.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 2 7
(l) Income taxes
The Company uses the asset and liability method of accounting for income taxes. Future tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement car-
rying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards.
Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on future tax assets and liabilities of a change in tax rates is recognized in the income in the period that
includes the date of enactment or substantive enactment. A valuation allowance is recorded against any future
income tax asset if it is not more likely than not that the asset will be realized.
(m) Currency translation
Monetary assets and liabilities of the Company which are denominated in foreign currencies are translated into
Canadian dollars (which is considered to be the measurement currency) at the exchange rates prevailing at the
balance sheet date, and transactions denominated in foreign currencies which are included in operations are
translated at the average rates for the period. Exchange gains and losses resulting from the translation of these
amounts are reflected in the statement of operations in the period in which they occur.
As the Company’s reporting currency is the U.S. dollar, the Company translates assets and liabilities denomi-
nated in Canadian dollars into U.S. dollars at the exchange rate prevailing at the balance sheet date, and the
results of operations at the average rate for the period. Cumulative net translation adjustments are included as
a separate component of shareholders’ equity.
(n) Earnings per share
Basic earnings per share is calculated using the weighted average number of shares outstanding during the year.
Diluted earnings per share is computed using the weighted average number of common and potential common
shares outstanding during the year, if dilutive.
2. INVENTORIES
3. CAPITAL ASSETS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
2004 2003
Raw materials $ 1,052 $ 1,095
Work in progress 1,725 1,703
Finished goods 109 54
$ 2,886 $ 2,852
September 30, 2004 CostAccumulated amortization Net book value
Land $ 1,991 $ - $ 1,991
Building 624 126 498
Building improvements 5,334 1,006 4,328
Production equipment 9,032 7,216 1,816
Workshop equipment 1,064 1,019 45
Patents and technology 1,245 859 386
Office furniture and equipment 488 354 134
Vehicles 34 29 5
$ 19,812 $ 10,609 $ 9,203
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T2 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
3. Capital assets (continued)
4. SHARE CAPITAL
(a) Authorized and issued capital stock
Authorized
Unlimited common shares
(b) Stock options
The Company has reserved up to 5,400,000 common shares for issuance under the stock option plan. Options
to purchase common shares of the Company under its stock option plan may be granted by the Board of Direc-
tors of the Company to certain full-time and part-time employees, directors and consultants of the Company
and its affiliates. Stock options are non-assignable and may be granted for terms of up to 10 years. Stock
options vest at various periods from zero to three years. To date, the Company has granted options to purchase
3,322,833 common shares and 2,000,934 remain outstanding (2003 - 1,594,933) at prices ranging from
$0.49 to $8.00 per share. These options have a weighted average remaining life of 6.63 years.
The following table reflects activity under the Plan from September 30, 2001 through September 30, 2004
and the weighted average exercise prices:
September 30, 2003 CostAccumulated amortization Net book value
Land $ 1,991 $ - $ 1,991
Building 624 96 528
Building improvements 5,334 716 4,618
Production equipment 9,031 5,138 3,883
Workshop equipment 1,064 765 299
Patents and technology 1,035 570 465
Office furniture and equipment 467 241 226
Vehicles 34 20 14
$ 19,570 $ 7,546 $ 12,024
Common Shares Special Warrants
Issued Number Amount Number Amount
Balance, September 30, 2002 & 2003 69,539,109 63,729
Stock options exercised 36,333 16
Balance, September 30, 2004 69,575,442 $ 63,745 - $ -
Number
Weighted average
exercise prices
Outstanding, September 30, 2002 1,847,599 $ 1.80
Granted 25,000 0.50
Cancelled or expired (277,666) 2.31
Outstanding, September 30, 2003 1,594,933 $ 1.91
Granted 475,000 0.81
Cancelled or expired (32,666) 1.35
Exercised (36,333) 0.46
Outstanding, September 30, 2004 2,000,934 1.75
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 2 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
(b) Stock options (continued)
During the year, the Company granted options to purchase shares of common stock to certain employees total-
ing 435,000 at a price of $0.87 per share as well as 40,000 options at $0.71.
The compensation costs reflected in these amounts were calculated using the Black-Scholes option pricing
model assuming a risk-free interest rate of approximately 4.4%, a dividend yield of 0%, an expected volatility of
111% and expected lives of stock options of 10 years. The costs are amortized over the vesting period which is 3
years.
The weighted average grant date fair value of the 475,000 options issued during the year was $0.76.
5. FINANCIAL INSTRUMENTS
(a) Fair values
The reported values of the financial instruments, which consist of cash and cash equivalents, short-term invest-
ments, accounts receivable and accounts payable and accrued liabilities, approximate their fair values due to the
near-term maturity of those instruments.
(b) Foreign currency risk
The Company is exposed to foreign currency fluctuations to the extent that the Company is holding significant
cash and cash equivalent balances denominated in U.S. dollars. The Company does not hedge the risk related to
fluctuations of the exchange rate between U.S. and Canadian dollars.
(c) Credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of
trade accounts receivable. The Company performs periodic credit evaluations of the financial condition of its cus-
tomers and typically does not require collateral from them. Allowances are maintained for potential credit losses
consistent with the credit risk of specific customers, historical trends and other information. Credit losses have
been within management’s range of expectations. The company also insures some of its accounts receivable.
6. Related Party Transactions
The Company leased its Hanna Avenue premises in Toronto, Ontario, from a company owned by its control-
ling shareholders for $209 per year plus GST and business tax. The lease was renewed from January 1, 2003 to
December 31, 2003. In June 2003, the Company secured an additional 11,800 square feet at $80 per year plus
GST and business tax until December, 2003, with one rent-free month. Beginning in January 2004, the Company
occupied these premises on a monthly basis. In April 2004, the premises were sold by the controlling
Exercise Price $Number
outstanding
Weighted average
price
Weighted average
remaining life (years)
Number exercisable
Weighted average
exercise price
0.49 (Cdn$0.62) 253,668 $ 0.49 7.86 162,008 $ 0.49
0.54 (Cdn$0.68) 25,000 0.54 8.17 8,335 0.54
0.71 (Cdn$0.90) 40,000 0.71 9.86 - 0.71
0.87 (Cdn$1.10) 430,000 0.87 9.64 - 0.87
1.32 (Cdn$1.67) 908,100 1.32 4.89 908,100 1.32
2.37 (Cdn$3.00) 83,000 2.37 6.87 83,000 2.37
5.24 96,666 5.24 6.09 96,666 5.24
5.33 85,500 5.33 5.37 85,500 5.33
6.33 (Cdn$8.00) 19,000 6.33 6.09 19,000 6.33
8.00 60,000 8.00 5.95 60,000 8.00
2,000,934 1.75 6.63 1,422,609 2.13
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T3 0
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
6. Related Party Transactions (continued)
shareholders to an independent third party for consideration that included a vendor-take back mortgage.
Electrovaya has invested $115 in a private company engaged in the business of producing and evaluating
new materials in return for 6% of its Class A and 21% of its Class B shares, subsequently providing research
and development services totaling $153 in consideration of 30% of additional non-voting, participating Class
B shares. The Class B shares are convertible into Class A voting, participating shares in the event the company
becomes registered on a stock exchange. During the second quarter, Electrovaya provided a $38 loan to the
company to assist with the operation of a pilot plant. The original investment, additional shares and loan have
been valued at Nil as at the end of September 30, 2004.
7. COMMITMENTS
The Company’s future minimum lease payments under operating leases for the years ending September 30 are
as follows:
8. LOSS PER SHARE
The basic and diluted loss per share has been calculated using the weighted average number of common shares
outstanding during the periods, which are as follows:
Common share purchase options or other potential dilutive common share issuances were not considered in the
calculation of diluted loss per share for each of the periods presented since their effect would be anti-dilutive.
9. INCOME TAXES
The provision for income taxes differs from the amount computed by applying the combined federal and
provincial income tax rate of 36.23% ( 2003 – 37.1% ) to the loss before income tax recovery as a result of the
following:
2005 21
2006 7
2007 2
$ 30
September 30, 2004 69,553,913
September 30, 2003 69,539,109
Years ended September 30,
2004 2003
Loss before income taxes $ (8,463) $ (9,844)
Computed expected tax recovery (3,066) (3,652)
Reduction in income tax recovery resulting from:
Lower rate on manufacturing profits 70 192
Permanent differences (712) 191
Change in valuation allowance 5,314 3,101
Change in enacted tax rates (375) 139
Foreign operations taxed at a lower rate 2 29
Large corporations tax - 32
Benefit of previous unrecorded losses (1,233) -
Income tax expense $ - $ 32
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T 3 1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
9. Income taxes (continued)
(b) The tax effects of temporary differences that give rise to significant portions of the future tax assets and
future tax liabilities are as follows:
In addition to the above temporary differences, the Company has unrecorded non-refundable investment tax
credits (“ITCs”) amounting to approximately $2,042 which begin to expire in 2007.
As at September 30, 2004, the expiration dates of the Company’s tax losses carried forward are as follows:
In assessing the realizability of future tax assets, management considers whether it is more likely than not that
some portion or all of the future tax assets will not be realized. The ultimate realization of future tax assets
is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible.
Management considers projected future taxable income, uncertainties related to the industry in which the
Company operates and tax planning strategies in making this assessment.
10. MAJOR CUSTOMERS
During 2004, three customers represented 48% (2003 - 58% ) of total revenue and 72% (2003 - 50%) of trade
accounts receivable.
Years ended September 30,
2004 2003
Future tax assets
Non-capital losses carried forward $ 10,552 $ 6,744
Share issue costs 37 184
Capital assets 1,922 1,556
Non deductible reserves 109 102
Unclaimed research and development expenses 2,750 1,477
Capital losses carried forward 7 -
15,377 10,063
Less valuation allowance (15,377) (10,063)
Net future tax assets $ - $ -
2005 $ 581
2006 871
2007 1,032
2008 5,801
2009 7,543
2010 5,176
2011 3,024
2023 1,084
2024 106
$ 25,218
E L E C T R O V A Y A 2 0 0 4 A N N U A L R E P O R T3 2
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years ended September 30, 2004 and 2003 (Expressed in thousands of U.S. dollars, except per share amounts)
11. CHANGE IN NON-CASH OPERATING WORKING CAPITAL
12. SEGMENTED INFORMATION
The Company has reviewed its operations and determined that it operates in one business segment and has only
one reporting unit. The Company develops, manufactures and markets portable power technology products
using its patented lithium ion “SuperPolymer” technology.
(a) Revenues from major business activities were as follows:
(b) Revenues attributed to regions based on location of customer were as follows:
Years ended September 30,
2004 2003
Accounts receivable $ 349 $ (285)
Investment tax credits
Recoverable 262 (49)
Goods and Services
Tax receivable (11) 108
Inventories (34) 472
Prepaid expenses and other 86 (25)
Accounts payable and accrued liabilities (246) 540
Income taxes payable (6) (36)
$ 400 $ 725
2004 2003
Aerospace $ 1,357 $ 10
Consumer electronics 4,481 3,774
Other 531 539
$ 6,369 $ 4,323
2004 2003
Canada $ 962 $ 1,026
United States & Others 5,407 3,297
$ 6,369 $ 4,323
SHAREHOLDER INFORMATION / / / / / / / / / / / / / / / / / / / / /
DIRECTORSSankar Das Gupta, PhD
Chairman President & Chief Executive Officer
Electrovaya Inc.
Bejoy Das Gupta, DPhil
Deputy Director, Asia Pacific Department
Institute of International Finance,
Washington, D.C.
Michael L. Gopikanth, PhD, MBA[1]
Consultant, Battery Technology
James K. Jacobs, PhD
Chief Technology Officer
Electrovaya Inc.
Sydney R. McMorran, MBA[1,2]
Director
Pandit Patil, PhD[2]
Consultant in Energy & Advanced Transportation
George R. Paterson[1,2]
Director
[1]Audit Committee[2]Corporate Governance & Compensation Committee
OFFICERSSankar Das Gupta, PhD
President & Chief Executive Officer
James K. Jacobs, PhD
Chief Technology Officer & Secretary
P. L. Hart, MBA, CA
Chief Financial Officer
AUDITORSKPMG LLP
Toronto, Ontario
LEGAL COUNSELFasken Martineau DuMoulin LLP
Toronto, Ontario
TRANSFER AGENT & REGISTRARCIBC Mellon Trust Company
Toronto, Ontario
T: 800-387-0825
STOCK LISTINGToronto Stock Exchange (TSX)
Symbol: EFL
ANNUAL MEETINGThe annual meeting of shareholders will be held at
4:00 pm EST on Tuesday March 29, 2005 at the TSX
Conference Centre. The Centre is located at ground
level in the Exchange Tower, 130 King Street West
(at York Street) in Toronto, Ontario.
CORPORATE OFFICES2645 Royal Windsor Drive
Mississauga, Ontario
L5J1K9
T: 905-822-6573
INVESTOR RELATIONSPlease visit our website at www.electrovaya.com for press
releases, presentations, fact sheets and other investor
information. For further information or
additional copies of this annual report:
T: 905-855-4610
SALES & CUSTOMER CARET: 1-800-388-2865
T: 905-855-4610
F: 905-822-7953
www.electrovaya.com
2 6 4 5 R O Y A L W I N D S O R D R I V E • M I S S I S S A U G A , O N T A R I O • L 5 J 1 K 9 • W W W. E L E C T R O V A Y A . C O M