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Amara Raja Energy & Mobility Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2023

The Board of Directors are pleased to present their report for the financial year ended March 31,2023. 1. Summary of financial results

The Company''s financial performance for the year ended March 31,2023, is summarized below:

(H in Crores)

Parameters

Standalone

Consolidated

2022-23

2021-22

2022-23

2021-22

Revenue from operations

10,385.91

8,695.82

10,388.20

8,697.15

Other income

89.33

77.98

92.04

77.98

Total income

10,475.24

8,773.80

10,480.24

8,775.13

Profit before tax

947.57

689.80

947.18

691.12

Less: Tax expense (including deferred tax)

253.16

178.55

252.65

178.55

Profit for the year

694.41

511.25

694.53

512.57

Total other comprehensive Income/ (Loss)

110.12

0.70

110.31

0.74

Total comprehensive income for the year

804.53

511.95

804.84

513.31

The Company''s standalone revenue from operations for the year grew to H10,385.91 crores from H8,695.82 crores last year registering a growth of 19%. The net profit for the year was H694.41 crores as against H511.25 crores in the previous year. The Earnings Per Share (EPS) for the year stood at H40.65 per share, compared to H29.93 per share for the previous year.

The Directors propose to transfer an amount of H69.44 crores to the general reserve. An amount of H4,445.28 crores are in the retained earnings.

2. Performance review

Automotive battery business

In the fiscal year 2022-23, the Indian automobile industry demonstrated exceptional resilience, innovation, and strong demand, resulting in its best-ever performance. Our company also delivered outstanding results, aligned with the needs of our user segments. The post-covid pent-up demand and the resolution of supply-chain shortages led to double-digit growth in our original equipment (OE) business for both four-wheelers and two-wheelers.

I n January 2023, fire broke out in the tubular battery manufacturing unit which predominantly makes batteries

for inverter application and caused damage to Company''s plant and equipment, property and inventories. There was no loss of lives. Based on evaluation of physical condition of plant and equipment, property and inventories, the recognized loss amounted to H438.56 Crores for the FY23, which is subject to technical inspection and an assessment of recovery/salvage value. The property damaged is covered under the Mega All Risk Insurance Policy and based on interim survey carried out by the Surveyor appointed by the Insurance Company, the claim has been admitted. Your Company is assessing the possible options and timelines for reinstatement of the affected unit and all efforts to renew the activities are in progress.

Our focus on establishing long-term relationships with leading original equipment manufacturers (OEMs) in the automotive industry paid off, as we achieved robust sales volumes during the year. In the aftermarket segment, we experienced substantial growth in both four-wheeler and two-wheeler categories, indicating a strong preference for our brands. Consequently, our market share in these segments increased significantly. We introduced our brand mascot ''THE RON'' last year, symbolizing powerful, modern, and sustainable energy in Amaron''s signature green color.

Recognizing the importance of digitization in the face of global supply-chain disruptions, we made substantial investments in digital transformation throughout our supply chain. This strategic initiative allows us to track inventory, manage orders, optimize transportation routes, and gain real-time visibility of our extensive supply chain, enabling informed decision-making.

AMARONTM is a remarkable success story of ''Make in India,'' contributing significantly to establishing the reputation and excellence of automotive batteries from India. We focused on the Indian Ocean Rim (IOR) geography in previous years, targeting specific markets to enhance brand visibility, our products'' superior quality has earned customer trust and facilitated AMARON''s growth in existing markets.

Having established a preferential position in some of our current markets, we now aim to expand globally. To accomplish this, we have formed an international team dedicated to establishing our brand in key global markets. The team has divided the market into four divisions to ensure a focused approach. At the end of FY23, AMARON automotive batteries are marketed in 50 countries worldwide. Our future plans include expanding our presence in demanding markets such as Europe, North America, and South America, while simultaneously increasing our distribution reach in existing markets. We will enhance our global market suitability by introducing products that comply with BCI standards, as well as JIS and DIN products.

Our company is actively working on introducing world-class proprietary ''Duraframe'' plate technology and expanding our product portfolio using cutting-edge AGM and EFB technologies. This expansion aims to cater to new geographies and customize our products to better suit local demands, enabling us to offer differentiated products and deliver greater value to our global customers. The imminent launch of PowerZone™ in global markets will further enhance the availability of our Company''s products worldwide.

Industrial battery business

The Industrial Battery Division exhibited significant improvement in performance compared to previous years, with a substantial growth in top-line revenue. Economic resurgence played a crucial role in driving demand, although the first two quarters faced challenges due to elevated commodity prices and operational costs. However, the second half of the year witnessed better conditions as these challenges subsided.

The telecom sector experienced robust demand, particularly with double-digit growth, driven by the adoption of 5G technology. Despite continued pricing pressure, volumes increased, and our prompt field support for customer installations and commissioning received positive feedback, facilitating faster rollouts.

Demand for UPS batteries remained strong across all user segments, supported by substantial investments in data centers and government projects. Our continued collaboration with original equipment (OE) customers and preferred status with end users contributed to double-digit growth during the review period.

Despite persisting challenges in established markets of Africa and the APAC regions, we achieved decent export growth. Our expanded presence in the MEA region significantly contributed to improved numbers. We are aspiring to establish a meaningful presence in developed markets such as the US and EU with enhanced product portfolio.

New Energy Business:

We, a prominent player in the lead-acid battery industry, successfully entered the rapidly growing Electric Mobility sector through our New Energy Business division. As a strategic initiative, the Company approved the transfer of its New Energy Business to its wholly-owned subsidiary, Amara Raja Advance Cell Technologies Private Limited (ARACT).

This strategic move offers several advantages, including a sharper focus and specialization in the New Energy Business, improved operational efficiency through a lean and agile organization, enhanced visibility and accountability of performance. We have diligently pursued investment opportunities both domestically and internationally within the industry.

Given the favorable conditions driving the growth of the electric mobility sector, both domestically and internationally, We are well-positioned for continued upward growth in the foreseeable future. The company''s core focus lies in designing, developing, manufacturing, and selling high-performance Li-ion battery packs for electric vehicles, energy storage systems, for stationary applications. We stand out through our engineering expertise, customer-centric approach, and diligent cost reduction efforts.

The company specializes in tailored battery pack designs for various OEMs, prioritizing adaptability, efficiency, reliability,

3. Dividend

The Company recommended/ declared dividend as under:

Financial year 2021-22

Dividend per

2.90

1 Dividend %

290

Dividend pay

Dividend per Dividend pay Dividend %

share (D) out (in Crores)

Interim Dividend

49.54

4.00 400 68.33

Final Dividend

3.201

3201

54.661

0.50 50 8.54

Total Dividend

6.10

610

104.20

4.50 450 76.87

1 Recommended by the Board of Directors at their meeting held on May 23, 2023, subject to the approval of the members at the 38th AGM. The Record date for the purpose of final dividend is Friday, July 28, 2023.

and cost-effectiveness. Our modular approach optimizes manufacturing capacity for energy storage products, and the company has extensive testing and R&D capabilities in lithium-ion cell chemistry. Furthermore, plans are underway to establish a large-scale cell manufacturing facility.

As demand continues to grow, we are consistently expanding our production capacity, positioning itself as one of the industry''s leading players. The company has diversified into

I n terms of the provisions of the Income Tax Act, 1961, dividend will be taxable in the hands of the Shareholders. In terms of Regulation 43A of the Listing Regulations, please refer point 30 of this report, for weblink of the Dividend Distribution Policy.

4. Scheme of Arrangement

As per the directions of Hon''ble National Company Law Tribunal (NCLT), Bench at Amaravati vide its Order dated February 9, 2023, and based on the recommendation of the Board, equity shareholders and unsecured creditors at their meeting held on April 12, 2023, had approved a Scheme of Arrangement amongst Mangal Industries Limited and Amara Raja Batteries Limited and their respective shareholders and creditors (the Scheme) under Sections 230 to 232 of the Companies Act, 2013 for the demerger of Plastic Components for the Battery Business from the Demerged Company to the Resulting Company (Demerger).

The said Scheme is subject to various conditions, including regulatory authorities'' approval, and the Hon''ble National Company Law Tribunal''s approval. The consideration for the Scheme will be determined on an arm''s length basis. The valuation report by Bansi S. Mehta Valuers LLP and Niranjan Kumar has recommended the Share Entitlement Ratio for the demerger. Kotak Mahindra Capital Company Limited has provided its opinion on the fairness of the Share Entitlement Ratio. Although the transaction is a related

stationary applications and added chargers to our product portfolio.

The Board of Directors of the Company, at their meeting held on January 25, 2023, had approved the plan for the restructuring of the Company''s New Energy business i.e. transferring all tangible and intangible assets, contracts, permission, consents, rights, registrations, personnel and employees, other assets and liabilities on a slump sale basis to ARACT, wholly owned subsidiary.

party transaction, it is exempted from separate approval requirements under Section 188 of the Act.

The Company has received observation letters from BSE & NSE vide their letters dated January 3, 2023, and January 2, 2023, respectively. Currently, Company Petition is pending for hearing before NCLT, Bench at Amaravati.

5. Financial position

The net worth as of March 31,2023, improved to H5,297.84 crores with the net addition of H746.45 crores to the other equity during the year. There is no interest-bearing debt as of March 31,2023. The surplus cash at the year-end stood at H121 crores. CRISIL had re-affirmed the ratings on the Company''s loan-term bank loan facilities at ''CRISIL AA / Stable'' and on the short-term bank facilities at ''CRISIL A1 .

A detailed analysis of the financial performance and financial position is provided in a separate section and forms an integral part of this report.

6. Subsidiaries and Consolidated Financial Statements

i. Subsidiary Companies

During the year under review, the Company has three wholly owned subsidiaries. However, none of the subsidiary is a material subsidiary.

Amara Raja Batteries Middle East (FZE) (''ARBME''), Sharjah, UAE, a wholly-owned subsidiary of the Company, reported net revenue of H8.94 crores with a Profit After Tax of H1.65 crores for the financial year ended March 31,2023.

Amara Raja Circular Solutions Private Limited (''ARCSPL''),

Andhra Pradesh, India, a wholly-owned subsidiary of the Company, was incorporated on June 2, 2022. The Company is in process of setting up of a Battery Recycling Plant in Cheyyar, Tamil Nadu and the commercial operations are yet to commence.

Amara Raja Advanced Cell Technologies Private Limited

(''ARACT''), Telangana, India, a wholly-owned subsidiary of the Company was incorporated on November 29, 2022. The Company is in process of setting up a Lithium Cell Gigafactory and Battery Pack Assembly Plant in Divitipally, Telangana and the commercial operations are yet to commence.

ii. Consolidated Financial Statement

I n accordance with the provisions of the Act, Regulation 33 of the Listing Regulations and applicable Accounting Standards, the audited consolidated financial statements of the Company for the financial year 2022-23, together with Auditors Report thereon forms part of the Annual Report. A statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures in the prescribed Form AOC-1 is provided as Annexure I forms an integral part of this report.

I n accordance with Section 136 of the Act, the financial statements of the subsidiary companies will be made available to the members of the Company on request and will also be kept for inspection during business hours at the Registered Office of the Company. The financial statements and all other documents required to be attached to this report and separate audited financial statements of the wholly owned subsidiaries are available on Company''s website, please refer point 30 of this report for weblink of the same.

During the year, Company has not done any revision to the financial statements or report and there were no changes to the Company''s financial statements during the last three preceding financial statements.

7. Material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

8. Directors and Key Managerial Personnel

During the period under review, there were no changes to the Board of Directors. Pursuant to the provisions of Sections 149 & 184 of the Act and Regulation 25 of Listing Regulations, Independent Directors of the Company have submitted a declaration that each of them meets the criteria of independence as prescribed in Section 149(6) of the Act and Listing Regulations and there has been no change in the circumstances which may affect their status as an Independent Director during the year.

I n accordance with provisions of Section 152 of the Act and pursuant to Articles of Association of the Company, Mr. Vikramadithya Gourineni (DIN: 03167659), is liable to retire by rotation at the ensuing 38th Annual General Meeting and being eligible, offers himself for re-appointment. The brief details required to be disclosed in accordance with the Listing Regulations, Act and Secretarial Standards are included in the notice of the ensuing 38th AGM forming part of this Annual Report.

Key Managerial Personnel

Pursuant to the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following have been designated as Key Managerial Personnel of your Company as of March 31,2023:

Mr. Jayadev Galla - Chairman, Managing Director & CEO Mr. Y Delli Babu - Chief Financial Officer Mr. Vikas Sabharwal - Company Secretary

There were no changes in the Directors & Key Managerial Personnel and the Company is in compliance with the required provisions of the Act and Listing Regulations.

9. Auditors''

i. Statutory Auditors and their Report

M/s. Brahmayya & Co., Chartered Accountants (FRN 000513S) and M/s Deloitte Haskins & Sells LLP, Chartered Accountants (FRN 117366W/W-100018), Joint Statutory Auditors of the

Company have issued an unmodified Auditor''s Report (Standalone & Consolidated) for Financial Year ended March 31, 2023, and the Joint Statutory Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were re-appointed as the Joint Statutory Auditors at the AGM held on August 7, 2020, for a term of five (5) years from the conclusion of the 35th AGM till the conclusion of the 40th AGM.

ii. Cost Auditors and their Report

Pursuant to Section 148 of the Act read with the Rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on the recommendation of the Audit Committee, appointed M/s. Sagar & Associates, as Cost Auditors (Firm Registration No: 000118) to conduct the audit of the cost records of the Company for the financial year ending March 31,2023, at a remuneration of H4.75 lacs plus taxes and reimbursements.

The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the Company has been set out in the Notice to the 38th AGM, which forms an integral part of this Annual Report.

The Cost Audit Report for the financial year ended March 31, 2022, was duly filed with the Central Government within the due date and the Company has maintained the Cost Records/Accounts as required under Section 148(12) of the Act and there were no adverse observations or remarks in the said report.

During the year under review, the Cost Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

iii. Secretarial Auditors and their report

Pursuant to the provisions of Section 204 of the Act, Regulation 24A of the Listing Regulations and rules framed thereunder, the Board of Directors, on the recommendation of the Audit Committee, appointed M/s. R. Sridharan & Associates, (Firm Registration No: S2003TN063400) Company Secretaries to undertake the Secretarial Audit of the Company and issue Annual Secretarial Compliance Report.

The Secretarial Audit Report issued by M/s. R. Sridharan & Associates, Company Secretaries for the financial year ended March 31, 2023 in Form MR-3 is provided as Annexure II, forms an integral part of this report. The report does not contain any qualifications, reservations or adverse remarks.

The Annual Secretarial Compliance Report issued by M/s. R. Sridharan & Associates, Company Secretaries for the financial year ended March 31, 2023 in format prescribed by SEBI. The report does not contain any qualifications reservations or adverse remarks.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

iv. Internal Auditors

The Company has an effective full-time in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports on the adequacy and effectiveness of the internal control systems of your Company as well as the periodical results of its review of the Company''s operations as per an internal audit plan duly approved. The internal audit team works in tandem with M/s. E Phalguna Kumar & Co., Chartered Accountants (FRN 002644S), whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan.

Together they provide a robust framework. The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures were also presented periodically to the Audit Committee.

During the year under review, the Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

10. Board and its Committees

i. Independent Directors and their Declaration of independence:

The Board of Directors of the Company comprises an optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following

Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the Listing Regulations and Section 149(6) of the Act:

Mr. N Sri Vishnu Raju (DIN:00025063);

Mr. T R Narayanaswamy (DIN: 01143563);

Ms. Bhairavi Tushar Jani (DIN: 00185929); &

Mr. Annush Ramasamy (DIN: 01810872)

Each Independent Director has confirmed to the Company that he or she meets the criteria of independence as provided in Section 149(6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. There has been no change in the circumstances which may affect their status as an Independent Director during the year, which had been considered and taken on record by the Board.

All the Independent Directors are registered for a lifetime in the database maintained by the Indian Institute of Corporate Affairs (IICA) and a declaration in this regard was received from each of them. In the opinion of the Board, all the Independent Directors are persons of integrity and possess the relevant expertise and experience (including proficiency) as required under the Act and the Rules made thereunder.

ii. Number of Meetings of the Board

During the year, eight (8) meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meetings and attendance by the directors are given in the Corporate Governance Report forming an integral part of this annual report. The maximum time gap between any two consecutive meetings was within the period prescribed under the Act and Listing Regulations.

None of the Directors are disqualified under Section 164(2) of the Act. Certificate on non-disqualification, as required under Regulation 34 of Listing Regulations forms an integral part of the Corporate Governance Report.

iii. Committees of the Board

In compliance with the provisions of Sections 135, 177, 178 of the Act and Listing Regulations, the Board constituted the following sub-committees Audit Committee;

Corporate Social Responsibility Committee; Nomination and Remuneration Committee; Stakeholders Relationship Committee;

Risk Management Committee; &

Loan & Investment Committee

The details of the composition of the Committees, brief terms of reference, their meeting and the attendance of the members form an integral part of the Corporate Governance Report.

During the year, Board has accepted all the recommendations of the Committee(s), and there is no instance, where any recommendations of the Committee(s) were not accepted by the Board.

iv. Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for the selection and appointment of Directors, Senior Management Personnel and their remuneration. Please refer point 30 for weblink of the Nomination and Remuneration Policy adopted by the Board.

v. Evaluation of the Board''s performance

As per provisions of the Act, and Regulation 17(10) of the Listing Regulations, an evaluation of the performance of the board, its committees and members was undertaken. The details of the same forms an integral part of the Corporate Governance Report.

11. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Act, including any statutory modifications or re-enactments thereof for the time being in force, the Board of Directors of the Company confirm, to the best of their knowledge and belief, that in the preparation of annual financial statements for the financial year ended March 31, 2023:

i) applicable accounting standards and Schedule III of the Act have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as of March 31, 2023, and of the profit of the Company for the financial year ended March 31,2023;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature

of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) financial statements have been prepared on a going concern basis;

v) proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

vi) systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

12. Corporate Governance

The Company is committed to good Corporate Governance and best corporate practices. The report on Corporate Governance for the year ended March 31, 2023, pursuant to Regulation 34 of the Listing Regulations along with the Additional Shareholder''s Information are provided as Annexure III forms an integral part of this Annual Report.

The certificate regarding the compliance of conditions of corporate governance issued by M/s R. Sridharan & Associates, Company Secretaries forms an integral part of the Corporate Governance Report.

13. Business Responsibility & Sustainability Report

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility & Sustainability Report (''BRSR'') initiatives taken from an environmental, social and governance perspective are disclosed in the prescribed format. BRSR is provided as Annexure IV, which forms an integral part of this report.

14. Management discussion and analysis

In terms of the provisions of Listing Regulations, the Management''s discussion and analysis is set out in this Integrated Annual Report.

15. Annual Return

The Annual Return pursuant to Section 92(3) read with Section 134(3)(a) of the Act is available on Company''s website, please refer point 30 of this report for weblink of the same.


16. Corporate Social Responsibility (CSR)

Corporate Social Responsibility has been an integral part of the Company''s culture. The Company has associated itself through Rajanna Trust with philanthropic activities in the field of Education, Health, Environment and Rural Development. During the year, the Company has undertaken various CSR projects in the areas of education and rural development.

A brief outline of the CSR Policy of the Company, the CSR initiatives/activities undertaken by the Company during the year and the details of the composition of the CSR Committee are given in the Annual CSR Report provided as Annexure V, which forms an integral part of this Annual Report. Please refer point 30 of this report for weblink of CSR Policy.

17. Transactions with the Related Parties

All related party transactions entered during the financial year were on an arm''s length basis and were in the ordinary course of business. During the financial year 2022-23, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the approval so granted are reviewed and approved by the Audit Committee on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm''s length basis and in the ordinary course of business.

The details of the Related Party Transactions pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in Form AOC-2, as provided as Annexure VI, which forms an integral part of this Annual Report.

Other than receipt of Sitting Fee/ commission, none of the Non-Executive Directors have any pecuniary relationships or transactions vis-a-vis the Company.

18. Internal Financial Controls related to financial statements

The Company has put in place an adequate system of internal controls commensurate with its size and the nature of its operations. The Company''s internal control system covers the following aspects:

Financial propriety of business transactions. Safeguarding the assets of the Company.

Compliance with prevalent statutes, regulations, management authorisation, policies and procedures. Ensure optimum use of available resources.

These systems are reviewed and improved on a regular basis. It has a budgetary control system to monitor revenue and expenditure against the approved budget on an ongoing basis.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

19. Risk Management

The Company has constituted a Risk Management Committee. Details of the constitution of the Committee are set out in the Corporate Governance Report.

The Company has an elaborate Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof and also lays down the procedure for risk assessment and its mitigation through a Risk Committee.

Key risks and their mitigation arising out of reviews by the internal committee are assessed and reported to the Risk Management Committee on a periodic basis. The major risks including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

During the year, the risk assessment parameters were reviewed. The Risk Management Committee reviewed the elements of risk and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which have the potential of threatening the existence of the Company.

20. Whistle Blower Policy /Vigil Mechanism

The Company has established a whistle-blower policy/ vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against the victimization of employees who avail of it and also for the appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company''s website, please refer point 30 of this report for the same.

21. Health, Safety and Environmental protection (HSE)

The Company gives utmost importance to the employee''s health and safety, given the nature of the operations of the Company. The Company believes that "a safe and healthy workplace not only protects employees from injury and illness, it elevates the employee morale". The Company continues to be certified under ISO 14001:2015 and BS OHSAS 18001:2007 for its environmental management systems and occupational health and safety management systems respectively.

All the manufacturing plants continued to be certified under ISO 50001:2018 for their energy management systems, which helped your Company to institutionalize the system requirements and conserve energy.

22. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace

The Company has in place a policy on the prevention of sexual harassment and has constituted an Internal Committee in line with the requirements of the sexual harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. During the year, no complaint was received by Committee. There are no outstanding complaints as on March 31, 2023. The Company conducts the required workshop, and awareness programmes as part of the induction processes and regular training sessions.

23. Other disclosures i. Share Capital

The paid-up equity share capital of the Company as of March 31, 2023, stood at H17.08 crores comprising 170,812,500 equity shares of H1 each.

As of March 31, 2023, RNGalla Family Private Limited, Promoter holds 4,79,32,452 equity shares of H1 each constituting 28.06% of the paid-up share capital of the Company.

The Equity Shares of the Company are listed on the NSE and BSE. The annual listing fees for the years 2022 & 2023 have been paid to these Stock Exchanges.

ii. Particulars of loans, guarantees and investments

The details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 as of March 31,2023, are given in Note 5 & 6 to the standalone financial statements of the Company.

iii. Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. There are no outstanding deposits as of March 31,2023.

iv. Reporting of Frauds

There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and the Rules made thereunder.

v. Significant and material orders passed by Regulators or Courts

During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.

During April 2021, the Company received closure orders dated April 30, 2021, from the Andhra Pradesh Pollution Control Board (APPCB), for the Company''s Plants situated at Karakambadi, Tirupati and Nunegundlapalli village, Chittoor District, Andhra Pradesh. The Hon''ble High Court of Andhra Pradesh has granted an interim suspension of said orders of APPCB until further orders. In compliance with the orders issued by the Hon''ble High Court of Andhra Pradesh, the Company is committed to working closely with APPCB officials for a satisfactory resolution of the matter in the interest of all stakeholders. The Company has always placed its highest priority on the environment and on the health and safety of its workforce and communities around it.

Apart from the above, there are no significant and/or material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.

vi. Compliance with Secretarial Standards

During the year under review, your Company has complied with the Secretarial Standards with respect to Meetings of the Board of the Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

vii. Investor Education and Protection Fund (IEPF)

Section 124 of the Act read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, mandates the companies to transfer dividend that has remained unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund. Further, the Rules mandate that the shares on which dividend remains unpaid or unclaimed for seven consecutive years or more be transferred to the Demat account of the IEPF Authority.

The details relating to the amount of unclaimed dividend transferred to the IEPF and the shares transferred to the Demat account of the IEPF Authority during the year are provided in the Corporate Governance Report which forms part of this Annual Report.

Shareholders are requested to ensure their dividends are encashed on time. In case of non-encashment of dividends, shareholders are advised to approach the Company or RTA to claim their unclaimed dividends.

viii. Particulars of conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014, are annexed hereto as Annexure VII, which forms an integral part of this report.

ix. Particulars of Employees and Remuneration

The information required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure VIII, which forms an integral part of this report.

A statement showing names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is provided in Annexure IX. However, as per the provisions of Section 136(1) of the Act, the annual report is being sent to all the members excluding the aforesaid statement. The statement is available for inspection at the registered office of the Company during working hours up to the date of the 38th AGM.

24. Familiarisation Programme for Directors

I n addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the Director under the Act and relevant Regulations of Listing Regulations are given and explained to a new Director.

Pursuant to Regulation 25(7) of Listing Regulations, details of the familiarization programme for Directors are forming part of the Corporate Governance Report. Please refer point no.30 of this report for the weblink of the same.

25. Other Statutory Disclosures

No disclosure or reporting is required with respect to the following items as there were no transactions related to these items, during the year under review:

I ssue of equity shares with differential rights as to dividend, voting or otherwise.

Issues of sweat equity shares or any other securities. Provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees. Employee Stock Options/Plans No Shares are held in trust for the benefit of employees where the voting rights are not exercised directly by the employees.

There were no instances of failure of implementation of Corporate Actions.

There are no applications made or proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

The Company has not entered into one time settlement with any Banks or Financial Institutions during the year. Hence, disclosure pertaining to difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan is not applicable.

26. Awards and Recognitions

During the year under review, 872 quality circles completed 1212 QC projects. To embed the Six Sigma approach that will help in improving business processes throughout the organization, the company trained 17 Blackbelts and 43 Greenbelts and completed 175 projects as on March 31,2023. This task force has offered insightful advice on streamlining processes, lessening variation, and improving product uniformity.

Six Sigma - As part of the CII National Six Sigma Competitions LVRLA recognized with PLATINUM and won the Winner Award

MVRLA, ABD-2 and SBD-1 recognized with GOLD Lean Concepts

In the CII National Kaizen Competitions

MVRLA recognized with PLATINUM, GOLD and 2 SILVERS

SBD-2 recognized with PLATINUM and GOLD SBD-1 recognized with PLATINUM and SILVER LVRLA recognized with GOLD and SILVER LVRLA recognized with STAR in the Champions Trophy Awards

At the CII National Poka-Yoke Competitions

SBD-2 recognized with PLATINUM

LVRLA recognized with PLATINUM, GOLD and SILVER

MVRLA recognized with GOLD

SBD-1, ABD-2 and TBD recognized with SILVER

At the CII National SMED (Quick Changeover) Competitions

SBD-2 recognized with PLATINUM

LVRLA, SBD-1 and ABD-3 recognized with GOLD

Quality Circles

ARBL bagged 98 GOLDs and 4 SILVERS in State-Level Quality Circle Competitions (CCQC) held at Tirupati, Andhra Pradesh

ARBL bagged 22 PAR-EXCELLENCEs, 2 EXCELLENCEs and a DISTINGUISH in National-Level Quality Circle Competitions (NCQC) held at Aurangabad, Maharashtra ABD-1, SBD-1, LVRLA and MVRLA have been recognized with GOLDs in International-Level Quality Circle Competitions (ICQCC) held in Jakarta, Indonesia SBD-1 has been recognized as 1st Runner-up in CII State-Level Competitions

SBD-1 has been recognized as 3rd Runner-up in CII Southern Region Competitions


27. Industrial relations

During the year under review, industrial relations remained cordial and stable. The Directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

28. Change in the nature of business

During the year under review, there were no change in the nature of business of the Company.

29. Reconciliation of Share Capital Audit

As required by the Listing Regulations, a quarterly audit of the Company''s Share Capital is being carried out by an Independent Practicing Company Secretary with a view to reconciling the total share capital, the total share capital admitted with NSDL and CDSL and held in physical form, with the issued and listed capital. The Practicing Company Secretary''s certificate in regard to the same is submitted to BSE and NSE and is also placed before the Board of Directors.

30. Weblink of various policies/reports

As required by the Act and Listing Regulations, below table provides weblinks of various polices referred in this report

S.

No.

Particulars

Weblink

1.

Annual Return

https://www.amararajabatteries.com/I nvestors/annual-general-meetings

2.

Board Diversity policy

https://www.amararajabatteries.com/I nvestors/ DownloadPolicyPDF/27?name=Board%20Diversity%20Policy

3.

Business Responsibility and Sustainability Report

https://www.amararajabatteries.com/I nvestors/annual-general-meetings

4.

Corporate Social Responsibility Policy

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/9?name=Corporate%20Social%20

Responsibility

5.

Dividend Distribution Policy

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/18?name=Dividend%20Distribution%20

Policy

6.

Environment, health and safety policy

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/26?name=Health,%20Safety%20&%20

Environment%20Policy

7.

Familiarization programme of the Independent Directors

https://www.amararajabatteries.com/I nvestors/board-of-directors

8.

Financial Statements of Subsidiaries

https://www.amararajabatteries.com/I nvestors/annual-reports/

9.

Impact Assessment Report

https://www.amararajabatteries.com/Files/ AnnualGeneralMeetingFiles/2023/ARBL Impact%20 Assessment%20Report%20FY23.pdf

10.

Memorandum and Articles of Association

https://www.amararajabatteries.com/Investors/downloads

11.

Nomination and Remuneration Policy

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/12?name=Nomination%20and%20

Remuneration%20Policy

12.

Policy for determining material subsidiaries of the Company

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/25?name=Policy%20on%20

determination%20of%20material%20subsidiary

13.

Policy on dealing with related party transactions

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/24?name=Policy%20on%20dealing%20

with%20Related%20Party%20Transactions

14.

Whistle Blower Policy

https://www.amararajabatteries.com/I nvestors/

DownloadPolicyPDF/15?name=VIGIL%20MECHANISM/%20

WHISTLE%20BLOWER%20POLICY


31. Acknowledgement

The Directors take this opportunity to thank all the stakeholders of the Company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support

in future. The Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their superior levels of competence, dedication and commitment towards your Company.

The Directors are thankful to the shareholders for their continued patronage.


Mar 31, 2022

Your Company''s standalone revenue from operations for the year grew to C8,695.82 crores from C7,149.68 crores last year registering a growth of 22%. The net profit for the year was C511.25 crores as against C646.81 crores in the previous year. The Earnings Per Share (EPS) for the year stood at C29.93 per share, compared to C37.87 per share for the previous year.

The Directors propose to transfer an amount of C51.13 crores to the general reserve. An amount of C3,873.18 crores are in the retained earnings.


1. SUMMARY OF FINANCIAL RESULTS

The Company''s financial performance for the year ended March 31,

2022, is summarized below:

(C in Crores)

Standalone

Consolidated

2021-22

2020-21

2021-22

2020-21

Revenue from operations

8,695.82

7,149.68

8,697.15

7,149.78

Other income

77.98

87.36

77.98

87.36

Total income

8,773.80

7,237.04

8,775.13

7,237.14

Profit before tax

689.80

873.33

691.12

873.35

Less: Tax expense (including deferred tax)

178.55

226.52

178.55

226.52

Profit for the year

511.25

646.81

512.57

646.83

Total other comprehensive Income/ (Loss)

0.70

(6.75)

0.74

(6.74)

Total comprehensive income for the year

511.95

640.06

513.31

640.09

2. PERFORMANCE REVIEW

Automotive battery business

The year started with an expectation of normalcy. Soon, this got shattered and the deadly form of Covid-19 surfaced bringing the country to a standstill. However, this didn''t last long and within two months, the business bounced back and there was no looking back.

The four-wheeler (4W) vehicle production experienced high growth during 2021-22. The growth happened across all vehicle categories. The domestic vehicle sales also witnessed good growth across categories. Not to be left behind, very high growth in exports of vehicles, contributed in the sharp recovery after a pandemic hit 2020-21. The exception to this recovery was the twowheeler (2W) domestic sales, which continued to slide during the year. Though exports of these vehicles showed very high growth, it was not sufficient to bring in the production growth in 2W vehicles. In spite of various challenges faced, we were able to maintain our shares in the OE business segment

Our performance in aftermarket business, however, remained strong. During the year, both the 4W & 2W battery segments showed double digit growths. Growths witnessed in the both the segments, in spite of various challenges, is a testimony to the brand strength of Amaron® and PowerZone™, and the preference it created. The wide and deep distribution strength, ensured that, our batteries were always available at places, when and where, the customers wanted them. We continually maintained high capacity utilization, to ensure adequate product availability.

Though, markets and trade opened up, Work from Home (WFH) situation, moved into a hybrid mode. Two years

of WFH model, started showing in a dip in demand for batteries, as life of batteries started improving owing to reduced usage of vehicles. This is, however, expected to be a temporary phenomenon. Various initiatives taken in past year and many planned in the next year, will ensure that we will always remain ahead, and continue aggressive growths.

Our business in international markets was no exception, and we continued our growth further, supported by a strong brand, quality product and distribution strength in key and focused markets in the Indian Ocean Rim.

Our capacity enhancement are continuing as per plan, coupled with efficiency improvement across all our plants

Industrial battery business

The Industrial Battery Business has shown a decent growth over the previous year by about 28% in value terms. The growth has come from all the segments of the business. Overall the demand is seen picking up in the market though there were some hiccups in the first quarter due to the pandemic''s second wave in India.

Lesser effect of Covid in fiscal year 2021-22 compared to fiscal year 2020-21 has aided the Telecom segment''s new site rollouts and hence development potential. Potential will expand significantly in fiscal year 2022-23 owing to an increase in O&M replacement and energy-saving initiatives. Fewer deliveries to BSNL than anticipated contributed to an increase in the business''s total share. We have expanded our portfolio of telecom sites in the AP and Orissa circles.

The needs of the UPS OEs rebounded from the previous year, with pent-up demand from all sectors beginning in the second quarter. This has contributed to the business''s

growth throughout the year. Moreover, with our expanded product line, we could build a strong presence in the rapidly growing data centre industries.

The Company''s exports to the Middle East and Asia-Pacific experienced a phenomenal rise. The measures done in the past to hire dedicated contract personnel are now producing positive outcomes. Even though there were travel limitations to maintain seamless operations, we were able to contact customers through virtual channels. Managed input supplies and exports in the face of unknown interruptions in the global supply chain.

Motive Power and Solar, among other business categories, have also seen development and are expanding in a positive manner.

3. Dividend

The Directors are pleased to recommend a final dividend of C0.50/- per equity share (50%) of C1 each for the financial year ended March 31, 2022, subject to the approval of the members at the ensuing Annual General Meeting. The final dividend, if approved, would involve a cash outflow of C8.54 crores. The recommended final dividend is in addition to the interim dividend of C4.00 per equity share (400%) of C1 each declared on November 12, 2021, paid to the shareholders on December 10, 2021.

The total dividend for FY 2021-22 is C4.50/- per equity share of C1 each (450%), The total dividend outflow including the proposed final dividend for the financial year ended March 31, 2022, aggregated to C76.87 crores, a payout of 15.03% of the Profit after tax of the Company, which is in line with the Dividend Distribution Policy of the Company.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Dividend Distribution Policy, is available on the Company''s website at https://www. amararaiabatteries.com/Investors/corporate-governance-policies

The Register of Members and Share Transfer Books of the Company will remain closed from Sunday, July 31, 2022, to Saturday, August 6, 2022, both days inclusive, for determining the entitlement of the shareholders for the final dividend for the Financial Year ended March 31,2022, and for annual book closure.

The final dividend, if approved at the 37th Annual General Meeting (AGM) will be paid to those members whose names appear on the register of members of the Company as of the end of the day on Saturday, July 30, 2022. In terms of the provisions of the Income Tax Act, 1961, such dividends will be taxable in the hands of the Shareholders.

4. Financial position

The net worth as of March 31, 2022, improved to C4,551.39 crores with the net addition of C341.13 crores to the other equity during the year. There is no interest-bearing debt as of March 31, 2022. The surplus cash at the year-end stood at C34.31 crores. CRISIL had re-affirmed the ratings on the Company''s long-term bank loan facilities at ''CRISIL AA / Stable'' and on the short-term bank facilities at ''CRISIL A1 .''''

A detailed analysis of the financial performance and financial position is provided in a separate section and forms an integral part of this report.

5. Subsidiaries and Consolidated Financial Results

i. Subsidiary Company

Amara Raja Batteries Middle East (FZE) (ARBME), Sharjah, UAE, a wholly-owned subsidiary of the Company, reported net revenue of C6.14 crores with a Profit After Tax of C1.21 crores for the financial year ended March 31, 2022.

ii. Consolidated Financial Results

In accordance with the provisions of the Companies Act, 2013 the Act, Regulation 33 of the Listing Regulations and applicable Accounting Standards, the audited consolidated financial statements of the Company for the financial year 2021-22, together with Auditors Report thereon forms part of the Annual Report. A statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures in the prescribed Form AOC-1 is provided as Annexure I forms an integral part of this report.

In accordance with Section 136 of the Act, the financial statements of the Subsidiary Company will be made available to the members of the Company on request and will also be kept for inspection during business hours at the Registered Office of the Company. The financial statements and all other documents required to be attached to this report and separate audited financial statements of the wholly owned subsidiary are available

on Company''s website at https://www.amararajabatteries. com/Investors/annual-reports/

During the year, Company has not done any revision to the financial statements or report and there were no changes to the Company''s financial statements during the last three preceding financial statements.

6. Material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

7. Directors and Key Managerial Personnel

During the year under review, the following were the changes to the Board of Directors of the Company

S.

No

Name

Date of Change

Change

1

Dr. Ramachandra N Galla August

Retired as Director

(DIN: 00133761)

14, 2021

& Chairman of the Company.

2

Dr. Ramadevi Gourineni

June 12,

Ceased to be a

(DIN:01347211)

2021

Director due to resignation

3

Mr. Harshavardhana

June 12,

Appointed as

Gourineni (DIN: 07311410)

2021

Executive Director.

4

Mr. Vikramadithya

June 12,

Appointed as

Gourineni (DIN: 03167659)

2021

Executive Director.

5

Mr. Annush Ramasamy

June 12,

Appointed as

(DIN: 01810872)

2021

Independent

Director.

In accordance with provisions of Section 152 of the Act and pursuant to Articles of Association of the Company, Mr. Harshavardhana Gourineni (DIN: 07311410), is liable to retire by rotation at the ensuing 37th Annual General Meeting and being eligible, offers himself for reappointment. The brief details required to be disclosed in accordance with Regulation 36 of Listing Regulations, Act and Secretarial Standards are included in the notice of the 37th Annual General Meeting forming part of this Annual Report


Key Managerial Personnel

Pursuant to the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following have been designated as Key Managerial Personnel of the Company as of March 31, 2022:

Mr. Jayadev Galla - Chairman, Managing Director & CEO

Mr. Y Delli Babu - Chief Financial Officer

Mr. Vikas Sabharwal - Company Secretary

During the year under review, based upon the recommendation of the Nomination and Remuneration Committee, Mr. S Vijayanand was re-designated as President -New Energy responsible for building the New Energy Business with effect from June 12, 2021.

There were no other change in the Directors & Key Managerial Personnel and the Company is in compliance with the required provisions of the Act, and Listing Regulations.

8. Auditors''

i. Statutory Auditors and their Report

M/s. Brahmayya & Co., Chartered Accountants (FRN 000513S) and M/s Deloitte Haskins & Sells LLP, Chartered Accountants (FRN 117366W/W-100018), Joint Statutory Auditors of the Company has issued an unmodified Auditor''s Report (Standalone & Consolidated) for Financial Year ended March 31, 2022, and the Joint Statutory Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were re-appointed as the Joint Statutory Auditors at the Annual General Meeting held on August 7, 2020, for a term of five (5) years from the conclusion of the 35th Annual General Meeting till the conclusion of the 40th Annual General Meeting.

ii. Cost Auditors and their Report

Pursuant to Section 148 of the Act read with the Rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on the recommendation of the Audit Committee, appointed M/s. Sagar & Associates, as Cost Auditors (Firm Registration No: 000118) to conduct the audit of the cost records of the Company for the financial year ending March 31, 2022, at a remuneration of C4.75 lacs plus taxes and reimbursements.

The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the Company has been set out in the Notice to the 37th Annual General Meeting, which forms an integral part of this Annual Report.

The Cost Audit Report for the financial year ended March 31, 2021, was duly filed with the Central Government within the due date and the Company has maintained the Cost Records/Accounts as required under Section 148(12) of the Act and there were no adverse observations or remarks in the said report.

During the year under review, the Cost Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

iii. Secretarial Auditors and their report

Pursuant to the provisions of Section 204 of the Act, Regulation 24A of the Listing Regulations and rules framed thereunder, the Board of Directors, on the recommendation of the Audit Committee, appointed M/s. R. Sridharan & Associates, (Firm Registration No: S2003TN063400) Practicing Company Secretaries to undertake the Secretarial Audit of the Company and provide Annual Secretarial Compliance Report.

The Secretarial Audit Report issued by M/s. R. Sridharan & Associates, Company Secretaries for the financial year ended March 31, 2022 in Form MR-3 is provided as Annexure II, which forms an integral part of this report. The report does not contain any qualifications, reservations or adverse remarks.

The Annual Secretarial Compliance Report issued by M/s. R. Sridharan & Associates, Company Secretaries for the financial year ended March 31, 2022 in format prescribed

by SEBI has been submitted to the Stock Exchanges within the prescribed time limit. The report does not contain any qualifications reservations or adverse remarks.

During the year under review, the Secretarial Auditors have not reported any matter under Section 143 of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

iv. Internal Auditors

The Company has an effective full-time in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports on the adequacy and effectiveness of the internal control systems of the Company as well as the periodical results of its review of the Company''s operations as per an internal audit plan duly approved. The internal audit team works in tandem with M/s. E Phalguna Kumar & Co., Chartered Accountants (Firm Registration No: 002644S), whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan.

Together they provide a robust framework. The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures were also presented periodically to the Audit Committee.

During the year under review, the Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

9. Board and its Committees

i. Independent Directors and their declaration of independence:

The Board of Directors of the Company comprises an optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the Listing Regulations and Section 149(6) of the Act:

• Mr. N Sri Vishnu Raju (DIN:00025063);

• Mr. T R Narayanaswamy (DIN: 01143563);

• Ms. Bhairavi Tushar Jani (DIN: 00185929); &

• Mr. Annush Ramasamy (DIN: 01810872);

Each Independent Director has confirmed to the Company that he or she meets the criteria of independence as provided in Section 149(6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. There has been no change in the circumstances which may affect their status as an Independent Director during the year, which had been considered and taken on record by the Board.

All the Independent Directors are registered for a lifetime in the database maintained by the Indian Institute of Corporate Affairs (IICA) and a declaration in this regard was received from each of them. In the opinion of the Board, all the Independent Directors are persons of integrity and possess the relevant expertise and experience (including proficiency) as required under the Act and the Rules made thereunder.

ii. Number of Meetings of the Board

During the year, eight (8) meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meetings and attendance by the directors are given in the Corporate Governance Report forming an integral part of this annual report. The maximum time gap between any two consecutive meetings was within the period prescribed under the Act and Listing Regulations.

None of the Directors are disqualified under Section 164(2) of the Act. Certificate on non-disqualification, as required under Regulation 34 of Listing Regulations forms an integral part of the Corporate Governance Report.

iii. Committees of the Board

In compliance with the provisions of Sections 135, 177, 178 of the Act and Listing Regulations, the Board constituted the following sub committees

• Audit Committee;

• Corporate Social Responsibility Committee;

• Nomination & Remuneration Committee;

• Stakeholders Relationship Committee;

• Risk Management Committee; &

• Loan & Investment Committee;

The details of the composition of the Committees, brief terms of reference, their meeting and attendance of the members forms an integral part of the Corporate Governance Report.

During the year, Board has accepted all the recommendations of the Committee(s), and there is no instance, where any recommendation(s) of the Committee(s) were not accepted by the Board.

iv. Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for the selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy adopted by the Board is available on the Company''s website at https:// www.amararaiabatteries.com/Investors/corporate-governance-policies.

v. Evaluation of the Board''s performance

As per provisions of the Act, and Regulation 17(10) of the Listing Regulations, an evaluation of the performance of the board, its committees and members was undertaken. The details of the same forms an integral part of the Corporate Governance Report.

10. Directors'' Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Act, including any statutory modifications or re-enactments thereof for the time being in force, the Board of Directors of the Company confirm, to the best of their knowledge and belief, that in the preparation of annual financial statements for the financial year ended March 31, 2022:

i) applicable accounting standards and Schedule III of the Act have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such iudgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as of March 31, 2022, and of the profit of the Company for the financial year ended March 31, 2022;

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

safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) financial statements have been prepared on a going concern basis;

v) proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

vi) systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

11. Corporate Governance

The Company is committed to good Corporate Governance and best corporate practices. The report on Corporate Governance for the year ended March 31, 2022, pursuant to Regulation 34 of the Listing Regulations along with the Additional Shareholders Information (ASI) are provided as Annexure III forms an integral part of this Annual Report

The certificate regarding the compliance of conditions of corporate governance issued by M/s R. Sridharan & Associates, Practicing Company Secretaries forms an integral part of the Corporate Governance Report.

12. Business Responsibility Report

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report (BRR) detailing initiatives taken from an environmental, social and governance perspective are disclosed in the prescribed format. BRR is provided as Annexure IV, which forms an integral part of this Annual Report.


13. Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company''s business is provided in a separate section and forms an integral part of this Annual Report.

14. Annual Return

The Annual Return pursuant to Section 92(3) read with Section 134(3)(a) of the Act is available on Company''s website at https://www.amararajabatteries.com/ Investors/annual-general-meetings

15. Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) has been an integral part of the Company''s culture. The Company has associated itself through Rajanna Trust with philanthropic activities in the field of Education, Health, Environment and Rural Development. During the year, the Company has undertaken various CSR projects in the areas of education and rural development.

A brief outline of the CSR Policy of the Company, the CSR initiatives/activities undertaken by the Company during the year and the details of the composition of the CSR Committee are given in the Annual CSR Report provided as Annexure V, which forms an integral part of this Annual Report.

The said policy is available on the Company''s website at https://www.amararajabatteries.com/Investors/ corporate-governance-policies

16. Transactions with the Related Parties

All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business. During the financial year 2021-22, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the approval so granted are reviewed and approved by the Audit Committee on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm''s length basis and in the ordinary course of business.

The members at the 36th Annual General Meeting held on August 14, 2021, approved and authorised the Board and/ or its Committee to enter into transactions with Mangal Industries Limited (MIL) up to a cumulative value of transactions of C1500 crores in each financial year. During the financial year 2021-22, the transactions with MIL amounted to C972.95 crores, was a material transaction under Regulation 23 of the Listing Regulations and the policy adopted by the Company.

The details of the Related Party Transactions pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in Form AOC - 2, as provided as Annexure VI, which forms in integral part of this Annual Report.

None of the Non-Executive Directors, other than receipt of Sitting Fee/ commission, has any pecuniary relationships or transactions vis-a-vis the Company.

17. Internal Financial Controls related to financial statements

The Company has put in place an adequate system of internal controls commensurate with its size and the nature of its operations. The Company''s internal control system covers the following aspects:

• Financial propriety of business transactions.

• Safeguarding the assets of the Company.

• Compliance with prevalent statutes, regulations, management authorisation, policies and procedures.

• Ensure optimum use of available resources.

These systems are reviewed and improved on a regular basis. It has a budgetary control system to monitor revenue and expenditure against the approved budget on an ongoing basis.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the

significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

18. Risk Management

The Company has constituted a Risk Management Committee. Details of the constitution of the Committee are set out in the Corporate Governance Report.

The Company has an elaborate Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof and also lays down the procedure for risk assessment and its mitigation through a Risk Management Committee.

Key risks and their mitigation arising out of reviews by the internal committee are assessed and reported to the Risk Management Committee on a periodic basis. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

During the year, the risk assessment parameters were reviewed. The Risk Management Committee reviewed the elements of risk and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which have the potential of threatening the existence of the Company.

19. Whistle Blower Policy /Vigil Mechanism

The Company has established a whistle blower policy/ vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for the appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company''s website at https://www.amararajabatteries. com/Investors/corporate-governance-policies

20. Health, Safety and Environmental protection (HSE)

The Company gives utmost importance to the employee''s health and safety, given the nature of the operations of the Company. The Company believes that "a safe and healthy workplace not only protects employees from injury

and illness, it also elevates the employee morale”. The Company continues to be certified under ISO 14001:2015 and ISO 45001:2018 for its environmental management systems and occupational health and safety management systems respectively.

All the manufacturing plants continued to be certified under ISO 50001:2018 for their energy management systems, which helped the Company to institutionalize the system requirements and conserve energy.

21. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the workplace

The Company has in place a policy on the prevention of sexual harassment and has constituted an Internal Committee in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. During the year, no complaint was received by Committee. There are no outstanding complaints as on March 31, 2022. The Company conducts the required workshops, and awareness programmes as part of the induction processes and regular training sessions.

22. Other disclosures

i. Share Capital

The paid-up equity share capital of the Company as of March 31, 2022, stood at C17.08 crores comprising 17,08,12,500 equity shares of C1 each. During the year under review, the Company has not issued shares with differential voting rights, employee stock options and sweat equity shares.

As of March 31, 2022, RNGalla Family Private Limited (RFPL), Promoter holds 4,79,32,452 equity shares of C1 each constituting 28.06% of the paid-up share capital of the Company.

The Equity Shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The annual listing fees for the years 2021 & 2022 have been paid to these exchanges.

ii. Particulars of loans, guarantees and investments

The details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules,

2014 as of March 31, 2022, are given in Note 38 to the standalone financial statements of the Company.

iii. Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. There are no outstanding deposits as of March 31, 2022.

iv. Reporting of Frauds

There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and the Rules made there under.

v. Significant and material orders passed by Regulators or Courts

During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.

During the previous year, the Company has received closure orders dated April 30, 2021, from the Andhra Pradesh Pollution Control Board (APPCB), for the Company''s Plants situated at Karakambadi, Tirupati and Nunegundlapalli village, Chittoor District, Andhra Pradesh. The Hon''ble High Court of Andhra Pradesh has granted an interim suspension of said orders of APPCB.

In compliance with the orders issued by the Hon''ble High Court of Andhra Pradesh, the Company is committed to working closely with APPCB officials for a satisfactory resolution of the matter in the interest of all stakeholders. The Company has always placed its highest priority on the environment and on the health and safety of its workforce and communities around it.

Apart from the above, there are no significant and/or material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.

vi. Compliance with Secretarial Standards

During the year under review, the Company has complied with the Secretarial Standards with respect to Meetings of the Board of the Directors (SS-1) and General Meetings

(SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

vii. Investor Education and Protection Fund (IEPF)

Section 124 of the Act read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules”), mandates the companies to transfer dividend that has remained unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). Further, the Rules mandate that the shares on which dividend remains unpaid or unclaimed for seven consecutive years or more be transferred to the Demat account of the IEPF Authority.

The details relating to the amount of unclaimed dividend transferred to the IEPF and the shares transferred to the Demat account of the IEPF Authority during the year are provided in the Corporate Governance Report which forms part of this Annual Report.

Shareholders are requested to ensure their dividends are encashed on time. In case of non-encashment of dividends, shareholders are advised to approach the Company or RTA to claim their unclaimed dividends

viii. Particulars of conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014, are annexed hereto as Annexure VII, which forms an integral part of this Annual Report.

ix. Particulars of Employees and Remuneration

The information required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure VIII, which forms an integral part of this Annual Report.

A statement showing names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is provided in "Annexure IX”. However, as per the provisions of Section 136(1) of the Act, the Annual Report is being sent to all the Members excluding the aforesaid statement. The statement is available for inspection at the

Registered Office of the Company during working hours up to the date of 37th Annual General Meeting.

23. Familiarisation Programme for Directors

In addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the Director under the Act and relevant Regulations of Listing Regulations are given and explained to a new Director.

24. Other Statutory Disclosures

The Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items, during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of sweat equity shares or any other securities.

• Provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• Employee Stock Options/Plans.

• No Shares are held in trust for the benefit of employees where the voting rights are not exercised directly by the employees.

• There were no instances of failure of implementation of Corporate Actions.

25. Awards and Recognitions

In keeping with the Company''s exemplary performance in the area of quality and manufacturing excellence, we are proud to share the following successes in the past financial year.

• The Company has been awarded the highest ''Gold Award - Sectoral Topper in Auto Components'' during in CII-SR EHS (Environment, Health and Safety) Excellence Awards 2021 by the Confederation of Indian Industry (CII).

• The Company won ''Par Excellence'' awards at the International Convention on Quality Circles held in November 2021. The theme of the convention

"Quality Concepts Facilitating Societal and Economic Turnaround” acknowledges the efforts made by the Company for improvements & innovations in the face of the unprecedented challenges brought on by the pandemic. The Company won various awards for ABD 1, SBD 1, LVRLA, and TBD.

• Amara Raja''s rethinking of the supply chain ecosystem to tackle the limitations brought by the pandemic was recognized at the Manufacturing Supply Chain Awards, we won in the category of ''Best- in- Class Excellence in Transport Optimization'' and also in the category of ''Operational Excellence in Reverse Logistics''.

• At the 15th CII Six Sigma National Competition held in September 2021, the Company won Gold for the SBD1 and ABD1 Teams, Platinum for SBD 2, and SCM (Logistics) won Silver. The CII-Six Sigma Awards are given at an annual conference organized by the CII Institute of Quality (CII-IQ). An eminent Jury evaluates the presentation with respect to pre-determined criteria and identifies the Award Winners who exemplify best in class practices that others in the industry can learn from.

• The Company''s Amara Raja Growth Corridor has won the Excellent Energy Efficient Unit'' Award by CII at the 22nd National Award for Excellence in Energy Management. This award recognizes the outstanding contribution in the area of energy efficiency made by Amara Raja''s plants and is an acknowledgement of our sincere commitment to our ESG goals.

26. Industrial relations

During the year under review, industrial relations remained cordial and stable. The Directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

27. Change in the nature of business

During the year under review, there were no change in the nature of business of the Company.

28. Reconciliation of Share Capital Audit

As required by the Listing Regulations, a quarterly audit of the Company''s Share Capital is being carried out by an Independent Practicing Company Secretary with a view to reconcile the total share capital, admitted with NSDL and CDSL and held in physical form, with the issued and listed capital. The Practicing Company Secretary''s certificate in regard to the same is submitted to BSE and NSE and is also placed before the Board of Directors.

29. Acknowledgement

The Directors take this opportunity to thank all the stakeholders of the Company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support in future. The Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their superior levels of competence, dedication and commitment towards the Company.

The Directors are thankful to the shareholders for their continued patronage.



Mar 31, 2019

Dear Members,

The Board of Directors are pleased to present their report for the financial year ended March 31, 2019.

SUMMARY OF FINANCIAL RESULTS Rs. crores

Parameters

Standalone

Consolidated

2018-19

2017-18

2018-19

Revenue from operations

6,793.11

6,232.98

6,793.11

Other income

46.77

66.37

46.77

Total income

6,839.88

6,299.35

6,839.88

Profit before tax

730.37

714.20

730.11

Less: Tax expense (including deferred tax)

246.88

242.88

246.88

Profit for the year

483.49

471.32

483.23

Total other comprehensive income/(loss)

(0.10)

1.52

(0.12)

Total comprehensive income for the year

483.39

472.84

483.11

AUTOMOTIVE BATTERY BUSINESS

The automotive sector experienced headwinds during second half of fiscal year 2018-19 and both 4 wheeler and 2 wheeler vehicle production experienced negative growth during the last quarter. While OEM business in both the application categories, saw some pressure in growth, the aftermarket business performance remained strong with double digit growth in volume. Both Amaron® and PowerZone™ brands continued to make further inroads in markets across the country supported by channel expansion initiatives leading to incremental gain in market share.

The Company’s export initiatives started paying rich dividends during the year with about 45% growth in volume. The distribution channels have been further strengthened in focus markets such as Australia, Malaysia, Saudi Arabia etc. The sale of Amaron® branded products in the premium segments of the markets accelerated further while PowerZone™ and selective private labeled product range have complimented our product offering in these markets.

The manufacturing capacity in both 4 wheeler and 2 wheeler battery product lines has been further augmented during the year to meet the growing market demand. The company also announced the establishment of a new green field automotive battery plant with a capacity of 6.5 Mn units with a capital outlay of Rs.700 crores. The first phase of this new plant will be operational by end of FY20. The company also signed a technology license agreement with Johnson Controls to use advanced stamped grid technology. A total Capital investment of ‘ 540 crores is being made for the deployment of advanced stamped grid technology which will enable the company to offer high performance batteries to meet our customers’ present and future needs.

INDUSTRIAL BATTERY BUSINESS

The Industrial Battery Business has improved its performance in FY19 compared to a very challenging year of FY18. This is enabled by virtue of its “preferred supplier status” with all major customers, efficient after sales service, customer relationship management and consistent product performance of its flagship brands PowerStack®, Quanta® and QRS Series, Amaron Volt® batteries. The volumes grew in all segments of the business barring Telecom segment, where the volumes remained flat.

Exports continue to show strong growth in regions like South East Asia, Middle East and Africa. Company’s “Amaron Volt®” and “Amaron Sleek®” became the preferred brands for the Telecom customers in SEA and African markets. The company established its 100% subsidiary Amara Raja Batteries Middle East (FZE) at Sharjah to serve the Middle East markets effectively. Similarly the Company is aggressively looking at placing own manpower at other regions during FY20 to expand the International Business.

The new business segments like Motive Power, Solar and Energy Storage started yielding results. The Company received a major order for Energy Storage battery system from Africa.

The UPS Business continue to grew on the back of a strong performance in the Data Centre Market. The Quanta® HWS series batteries were well established in this market and became a preferred battery for all the major UPS OEM’s. The company is also expanding the UPS battery capacity by adding an additional assembly line which will become operational by the end of the financial Year FY20.

The challenges in the Telecom segment continue to be major concern for the business. The overall potential for batteries in this segment de-grew for the second year in a row in excess of 25%. Due to this and significant over capacity in the industry making the pricing in this sector challenging. Despite this the company maintained the Telecom volumes at last year levels, thus improving the market share.

The Company has initiated necessary measures in all key customer segments to provide integrated solution offering for backup power requirements to its customer.

SHARE CAPITAL

The paid up equity share capital of the Company as at March 31, 2019 stood at RS.17.08 crores comprising of 170,812,500 equity shares of Rs.1 each. During the year under review, the Company has not issued shares with differential voting rights, employee stock options and sweat equity shares.

DIVIDEND

Your Directors at the meeting held on May 15, 2019 amended the existing dividend distribution policy and approved dividend payout (excluding corporate dividend tax) to distribute upto 30% of the profit after tax of the Company effective from the financial year 2018-19. The amended Dividend Distribution Policy is available on the Company’s website viz. www. amararajabatteries.com

Your directors recommend a final dividend of RS.5.08 per equity share of RS.1 each (508%) for the financial year ended March 31, 2019, subject to the approval of the members at the ensuing annual general meeting. The final dividend, if approved, would involve a cash outflow of RS.86.77 crores (excluding corporate dividend tax). Your Directors had earlier approved an interim dividend of RS.2 per equity share of RS.1 each (200%) on November 9, 2018 and the same was paid to the shareholders on November 30, 2018.

The total dividend for the financial year ended March 31, 2019, including the proposed final dividend amounts to RS.7.08 per equity share of RS.1 each share (708%), which is in line with the amended dividend distribution policy of the Company.

TRANSFER TO RESERVES

Your Directors propose to transfer an amount of RS.48.35 crores to the general reserve. An amount of RS.2,824.68 crores is retained in the retained earnings.

SUBSIDIARY COMPANY

During the year, your Company incorporated a wholly owned subsidiary in the name and style of “Amara Raja Batteries Middle East (FZE) (ARBME)” in Sharjah Airport International Free (SAIF) Zone.

ARBME, a wholly owned subsidiary of the Company, did not commence any operations during the year 2018-19 and reported a loss of RS. 0.26 crores for the year ended March 31, 2019.

CONSOLIDATED FINANCIAL RESULTS

In accordance with the provisions of the Companies Act, 2013 (‘the Act’), Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Regulations’) and applicable Accounting Standards, the audited consolidated financial statements of the Company for the financial year 2018-19, together with Auditors Report thereon forms part of the Annual Report. . A statement showing the salient features of the financial statements of the subsidiaries, associates and joint ventures is enclosed as “Annexure I” to this report.

In accordance with Section 136 of the Act, the financial statements of the subsidiary company will be made available for inspection to the members of the Company on request and will also be kept for inspection at the Registered Office of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

TERMINATION OF AGREEMENTS BETWEEN GALLA FAMILY AND JOHNSON CONTROLS (JC) AND ITS IMPLICATIONS

During the month of November 2018, Johnson Controls International PLC (JC) announced sale of its Power Solution business globally to Brookfield Business Partners LP, its affiliates and its co-investors (“sale”). Consequently, JC and the Galla Family entered into an agreement to terminate the shareholders agreements with effect from April 1, 2019.

Consequent to the termination of the shareholders agreement, the other agreements i.e Investment Agreement, Technical Assistance Agreement and PowerFrame Technology License Agreement & Technology Collaboration Agreement stands terminated with effect from April 1, 2019.

Your Company under the Technical Assistance agreement entered in the year 1997 with JC had fully absorbed all critical technologies over the years. Your Company entered into PowerFrame Technology license agreement in September 2018 from JC. The Company has received complete technology know-how and will continue to have license for manufacturing advanced stamped grid plate making technology under PowerFrame Technology license agreement.

Further your Company announced capacity expansion project with advanced stamped grid plate making process and the project is progressing as per scheduled timelines.

PROMOTERS AND THEIR SHAREHOLDING:

RNGalla Family Private Limited (RFPL) and Mangal Industries Limited (MIL) are the Indian Promoters holding 24.24% and 1.82% of the paid up share capital of the Company respectively. RFPL is owned and controlled by the Galla Family headed by Dr. Ramachandra N Galla, Chairman of the Company and MIL is a wholly owned subsidiary of RFPL.

DIRECTORS

Mr. Nagarjun Valluripalli, Mr. N Sri Vishnu Raju, Mr. T R Narayanaswamy and Ms. Bhairavi Tushar Jani are Independent Directors of the Company appointed pursuant to the provisions of Section 149 of the Act. They have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and the Regulations. There has been no change in the circumstances which may affect their status as an Independent Director during the year, which had been considered and taken on record by the Board.

Mr. Nagarjun Valluripalli, Mr. N Sri Vishnu Raju and Mr. T R Narayanaswamy were appointed as Independent Directors for a term of five consecutive years effective from August 6, 2014. Mr. Nagarjun Valluripalli, Independent Director expressed unwillingness for his re-appointment for a second term due to his pre-occupation.

Mr. N Sri Vishnu Raju and Mr. T R Narayanaswamy had given their consent for re-appointment. Based on the evaluation of the performance of the independent directors, your directors recommend their re-appointment for another term of 5 consecutive years.

The Company has received notice(s) in writing under Section 160 of the Act proposing the appointment(s) of Mr. N Sri Vishnu Raju and Mr. T R Narayanaswamy as Independent Directors. The necessary special resolution(s) seeking your approval for appointment of the above directors as Independent Directors are included in the notice of the ensuing annual general meeting along with brief details about them.

Mr. Marc D Andraca, Director (DIN : 08032189) and Mr. Claudio Morfe (DIN: 08167880), nominees of Johnson Controls resigned from the Board with effect from April 30, 2019, consequent to the termination of the shareholders agreement between Johnson Controls and Galla Family. Your Board wishes to place on record its sincere appreciation of the valuable services rendered by Mr. Nagarjun Valluripalli, Mr. Marc D Andraca and Mr. Claudio Morfe during their tenure as directors of the Company.

Consequent to the resignation of Mr. Marc D Andraca and Mr. Claudio Morfe, Non-Executive Directors, Dr. Ramachandra N Galla who was appointed as Director at the annual general meeting held on August 11, 2018, being the longest-serving Non-Executive Director on the Board, retires by rotation at the ensuing annual general meeting and being eligible offers himself for reappointment.

The necessary resolution(s) seeking your approval by special resolution for appointment of Dr. Ramachandra N Galla as a Director is included in the notice of the ensuing annual general meeting along with brief details about him.

KEY MANAGERIAL PERSONNEL

During the year, Mr. S V Raghavendra, Chief Financial Officer retired from the services of the Company on attaining the age of superannuation on December 12, 2018. Your Directors place on record the valuable services rendered by Mr. S V Raghavendra during his tenure as Chief Financial Officer of the Company. Your Directors, based on the recommendation of Nomination and Remuneration Committee, appointed Mr. Y Delli Babu as Chief Financial officer of the Company with effect from February 11, 2019.

Pursuant to the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Jayadev Galla, Vice Chairman and Managing Director, Mr. S Vijayanand, Chief Executive Officer, Mr. Y Delli Babu, Chief Financial Officer and Mr. M R Rajaram, Company Secretary are the key managerial personnel of the Company.

STATUTORY AUDITORS AND THEIR REPORT

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as the joint statutory auditors at the Annual General Meeting held on August 14, 2015 for a term of five (5) years from the conclusion of the 30th annual general meeting till the conclusion of 35th annual general meeting. Pursuant to amendments to Section 139 of the Act, the requirements to place the matter relating to such appointment for ratification by members at every annual general meeting has been omitted with effect from May 7, 2018.

The Auditors Report given by M/s. Brahmayya & Co., Chartered Accountants and M/s Deloitte Haskins & Sells, LLP, Chartered Accountants the joint Statutory Auditors, on the financial statements of the Company for the year ended March 31, 2019 forms part of the Annual Report. The Auditor’s Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS AND THEIR REPORT

As per Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules as amended from time to time, the cost records are required to be audited. Based on the recommendation of the Audit Committee, your Board has appointed M/s. Sagar & Associates, Cost Accountants, as cost auditors for the financial year 2019-20 to audit the cost records of the Company. Necessary resolution for ratification of their remuneration is being placed for your approval.

SECRETARIAL AUDITORS AND THEIR REPORT

Pursuant to Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and pursuant to the Regulation 24A of the Regulations, the Company had appointed M/s. R. Sridharan & Associates, Company Secretaries to undertake the secretarial audit of the Company for the financial year 2018-19. The Secretarial Audit Report in Form MR-3 received from them is annexed herewith as “Annexure II”. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

CORPORATE GOVERNANCE

The report on corporate governance for the year ended March 31, 2019 pursuant to Regulation 34 of the Regulations is annexed hereto as “Annexure III”. The certificate from practicing company secretary regarding the compliance of conditions of corporate governance is attached to the report on corporate governance.

MANAGEMENT DISCUSSION AND ANALYSIS

Management discussion and analysis report, highlighting the performance and prospects of the Company’s business is provided in a separate section and forms an integral part of this report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the Regulations, the Business Responsibility Report (BRR) initiatives taken from an environmental, social and governance perspective, is annexed hereto as “Annexure IV.”

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and 134(5) of the Act, including any statutory modifications or re-enactment thereof for the time being in force the Board of Directors of the Company confirm, to the best of their knowledge and belief, that in the preparation of annual financial statements for the financial year ended March 31, 2019:

i) applicable accounting standards and Schedule III of the Act have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the financial year ended March 31, 2019;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognised in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) financial statements have been prepared on a going concern basis;

v) proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

vi) systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

INFORMATION AND DISCLOSURES UNDER THE ACT EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014 in the prescribed form MGT-9 is annexed herewith as “Annexure V”. The complete annual return is available on the website of the Company at https:// www.amararajabatteries.com/Investors/annual-reports/

NUMBER OF MEETINGS OF THE BOARD

During the year, six (6) meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming an integral part of this report.

COMMITTEES OF THE BOARD

In compliance with the provisions of Sections 135, 177, 178 of the Act, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee (Committees). The details of composition of the Committees, their meeting and attendance of the members are given in the Corporate Governance Report forming an integral part of this report.

During the year under review, your Board constituted Risk Management Committee effective from April 1, 2019 as per Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The members of the said Committee are Mr. Nagarjun Valluripalli, Mr. N Sri Vishnu Raju, Mr. T R Narayanaswamy, Independent Directors, Mr. S Vijayanand, Chief Executive Officer and Mr. Y Delli Babu, Chief Financial Officer of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are given in “Annexure VI” to this report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014. The said policy is available on the Company’s website at https://www.amararajabatteries.com/ Investors/corporate-governance-policies

NOMINATION AND REMUNERATION POLICY

The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy adopted by the Board is available on the Company’s website at https://www.amararajabatteries.com/Investors/corporate-governance-policies

EVALUATION OF THE BOARD

Pursuant to the provisions of the Act and Regulation 17 of Regulations, the Board had carried out an annual evaluation of its own performance, the Directors individually and of the committees of the Board, based on the evaluation criteria defined by Nomination and Remuneration Committee for performance evaluation process of the Board, its committees and Directors.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board’s functioning such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board. The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc.

The performance evaluation of all Directors including the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. Further, the performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

A handbook covering the role, function, duties and responsibilities and the details of the compliance requirements expected from the Directors under the Act and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were given and explained to the Independent Directors.

The newly appointed Independent Directors are given induction and orientation with respect to Company’s Vision, Core purpose, Core Values and business operations. In addition detailed presentations are made by Senior Management Personnel on business environment, performance of the Company at every Board Meeting.

The above initiatives help the Independent Directors to understand the Company, its business and the regulatory framework in which the Company operates and enables the Directors to fulfill their role/responsibility. The details of the familiarization programme are available on the Company’s website www.amararajabatteries.com

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 as on March 31, 2019 are given in Note 38 to the standalone financial statements of the Company.

TRANSACTIONS WITH THE RELATED PARTIES

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business. During the financial year 2018-19, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm’s length basis and in the ordinary course of business.

The members at the annual general meeting held on August 7, 2017 approved and authorised the Board to enter into transactions with Mangal Industries Limited (MIL) upto a cumulative value of transactions of RS.1,000 crores in each financial year. During the financial year 2018-19, the transactions with MIL amounted to RS.910.50 crores (including dividend paid), a material transaction under the Regulation 23 of the Regulations and the policy adopted by the Company under the said Regulations.

The Form AOC- 2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as “Annexure VII” to this Report.

INTERNAL CONTROLS

The Company has put in place adequate system of internal controls commensurate with its size and the nature of its operations. The Company’s internal control system covers the following aspects:

- Financial propriety of business transactions.

- Safeguarding the assets of the Company.

- Compliance with prevalent statues, regulations, management authorisation, policies and procedures.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

RISK MANAGEMENT

During the year, the risk assessment parameters were reviewed and modified. The audit committee reviewed the elements of risk and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which has the potential of threatening the existence of the Company.

WHISTLE BLOWER POLICY /VIGIL MECHANISM

The Company has established a whistle blower policy/ vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company’s website at https://www. amararajabatteries.com/Investors/corporate-governance-policies

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public falling within the ambit of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2019.

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

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules 2014, are annexed hereto as “Annexure VIII” and forms an integral part of this report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required pursuant to Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as “Annexure IX”.

A statement showing names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is also annexed to the Directors’ Report as “Annexure X”. However, as per the provisions of Section 136(1) of Act the annual report is being sent to all the members excluding the aforesaid statement. The statement is available for inspection at the registered office of the Company during working hours upto the date of 34th Annual General Meeting.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or Courts which would impact the going concern status of the Company and its future operations.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards with respect to Meetings of the Board of the Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 124 (5) of the Act, an amount of RS.17,41,938 being unclaimed final dividend(s) pertaining to the financial year 2010-11 was transferred to IEPF on September 18, 2018.

HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION (HSE)

The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety management systems respectively.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a policy on prevention of Sexual Harassment and has constituted an Internal Complaints Committee (ICC) in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. During the year, no complaints were received by ICC.

AWARDS AND RECOGNITIONS

Your Company continues to get accolades and awards from its customers and other prestigious domestic/international forums. Some of the awards and recognitions your Company received during the year under review:

- Received “Best Vendor Rating and System Audit” award from Maruti Suzuki India Limited.

- Received “4 star rating” from Hyundai Motors India Ltd

- Received “High Quality Performance” from Bajaj Auto Limited in recognition for our excellence in the field of QCDM parameters (Excellence in Quality, Delivery, and relationship Building).

- Received “Best in Quality Management” from Honda Motorcycle and Scooters India Limited

- Received “Gold award” under infra equipment’s supply category from Indus Towers Limited.

- Received “Platinum” award from Caterpillar for “Supplier Quality Excellence Process”

- Received “The Prize” at the most prestigious 9th CII National HR Excellence AwarRs. 2018.

- Received “Gold award” in Indian Green Manufacturing Challenge (IGMC) Awards 2018 from International Research Institute for Manufacturing (IRIM) for the good manufacturing practices being followed in the Company.

- Received first prize in “AP Green awards 2017” under Industries (Private) category from A.P. Greening and Beautification Corporation, Government of Andhra Pradesh.

- Received “Platinum Award” and “Gold award” for facilities at, Karakamabadi, Tirupati and Nunegundlapalli, Chittoor District respectively from Arogya World, a global health nonprofit organisation.

- Bestowed with prestigious ABK AOTS awards in following categories

i. Awards received under Sustenance Category for LVRLA Battery Plant, Karakambadi, Tirupati, Automotive Battery Plant II, Chittoor.

ii. Platinum award under Excellence category for Twowheeler Automotive Battery plant, Chittoor

- Received two Gold awards in ICQCC (International Convention of Quality Control Circles) 2018 competition held in Singapore.

- Two-wheeler automotive battery plant team won the 2nd runner award in Twelfth CII Six Sigma National Conference and Competition under the “Manufacturing Industry (Discrete and Assembly Line)” category.

INDUSTRIAL RELATIONS

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

ACKNOWLEDGEMENT

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, commitment and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your Directors also take this opportunity to thank Johnson Controls for their valuable assistance, support and successful association for 21 years, which created one of the leading battery manufacturers in India.

The Directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Hyderabad Dr. Ramachandra N Galla

Date: May 15, 2019 Chairman


Mar 31, 2018

Dear Members,

The Board of Directors are pleased to present their report for the financial year ended March 31, 2018.

Summary of financial results

The Company’s financial performance for the year ended March 31, 2018 is summarized below:

Rs. crores

Parameters

2017-18

2016-17

Revenue from operations

6,232.98

5,981.39

Other income

66.37

49.24

Total income

6,299.35

6,030.63

Profit before tax

714.20

702.21

Less: Tax expense (including deferred tax)

242.88

23.72

Profit for the year

471.32

478.49

Total other comprehensive income/(loss)

1.52

(1.29)

Total comprehensive income for the year

472.84

477.20

Share Capital

The paid up equity share capital of the Company as at March 31, 2018 stood at RS.17.08 crores comprising of 170,812,500 equity shares of RS.1 each. During the year under review, the Company has not issued shares with differential voting rights, employee stock options and sweat equity shares.

Dividend

Your directors recommend a final dividend of RS.2.15 per equity share of RS.1 each (215%) for the financial year ended March 31, 2018, subject to the approval of the shareholders. The final dividend, if approved, would involve a cash outflow of RS.36.72 crores (excluding corporate dividend tax). In the month of November, 2017, the Board declared and paid an interim dividend of RS.2 per equity share of RS.1 each (200%). The total dividend for the financial year ended March 31, 2018, including the proposed final dividend amounts to RS.4.15 per share (415%), which is in line with the dividend policy of the Company.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board approved and adopted the Dividend Distribution Policy and the same is available on the Company’s website viz. www.amararaia.co.in

Transfer to reserves

Your Directors propose to transfer an amount of RS.47.13 crores to the general reserve. An amount of RS.2,475.17 crores is retained in the retained earnings.

Material changes and commitments affecting the financial position of the company between the end of the financial year and the date of the report

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

Automotive battery business

The Company’s automotive battery business reported double digit revenue growth supported by good volume increase in both four-wheeler and two-wheeler batteries, over the previous financial year.

During the year, the Company fully expanded its capacity of the new four-wheeler battery plant, consolidating its position. In four-wheeler OEM space, the Company grew its share by growing beyond the 11% increase in automobile production. In the aftermarket segment, the Company’s brands grew in both four-wheelers and in two-wheeler batteries, thereby, registering growth in market share. The volume growth in both four-wheeler and two-wheeler aftermarket business continued during the year due to strong preference for Company’s products, supported by complete product offering, strengthening of brands Amaron® and PowerZoneTM, expansion of channel and leveraging customer relationships.

The volume from export business grew significantly at 30% over previous year. The brand and products of the Company have started gaining recognition in overseas markets, resulting in increased business. The focused market strategy in key markets, paid off leading to higher penetration and enhanced business.

The inverter battery segment saw a clear preference towards Tubular batteries, resulting in healthy utilization of the new Tubular plant. Some trading was resorted to in this segment to meet specific product range requirements.

Industrial battery business

The recent developments in the telecom market, with the new entrant, had disrupted the revenue models of all Telcos and tower companies forcing to relook at their cost structures and also merging of operations for cost efficiencies. This had impacted the volume off-take for replacement batteries in the industrial battery business during the year under review. In addition, the increase in lead price presented challenging market conditions in both Telecom and UPS segments. Under this competitive environment, the Company’s industrial battery business achieved a very good growth in volume in industrial battery business segments like UPS, Railways, Exports during the year but de-grown in Telecom segment.

The industrial battery business improved the overall performance by virtue of its “preferred supplier status” with all major customers, efficient after sales service, customer relationship management and consistent product performance of its flagship brands PowerStack®, Quanta® and QRS Series batteries.

The Company has initiated necessary measures in all key customer segments to provide integrated solution offering for backup power requirements to its customer.

Promoters and their shareholding

The individual promoters (‘Galla Family’) in the month of February 2017 as a part of consolidation of their shareholding in various Companies constituted a partnership firm namely M/s. RNGalla Family & Co., (Firm) and contributed inter-alia their shares held in the Company i.e 41,400,702 equity shares of RS.1 each as capital to the said firm. During the year under review, the said firm was converted into a Company i.e RNGalla Family Private Limited under part I of Chapter XXI of the Companies Act, 2013. At present, RNGalla Family Private Limited holds 41,400,702 equity shares of RS.1 each constituting 24.24% of the paid-up share captial of the Company.

Subsidiaries, Associates and Joint Ventures

There are no subsidiaries, associates and joint venture companies.

Directors and Key Managerial Personnel

Mr. Nagarjun Valluripalli, Mr. N Sri Vishnu Raju, Mr. T R Narayanaswamy and Ms. Bhairavi Tushar Jani are the present Independent Directors of the Company appointed pursuant to the provisions of Section 149 of the Companies Act, 2013 (“the Act”). They have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an Independent Director during the year, which had been considered and taken on record by the Board.

In accordance with the provisions of Section 152 of the Act, Dr. Ramachandra N Galla, Director (DIN: 00133761) is liable to retire by rotation at the ensuing annual general meeting and being eligible offers himself for re-appointment.

Mr. Raphael John Shemanski (DIN: 07462586) and Mr. Trent M Nevill (DIN: 07699463) nominees of Johnson Controls resigned from the Board with effect from November 9, 2017 and May 18, 2018 respectively. The Board of Directors wishes to place on record their sincere appreciation of the valuable services rendered by them during their tenure as a director of the Company.

Mr. Marc D Andraca (DIN: 08032189) was appointed as an Additional Director on the Board with effect from February 10, 2018, who holds office upto the date of the ensuing annual general meeting. The resolutions seeking your approval for the re-appointment of Dr. Ramachandra N Galla, Director and appointment of Mr. Marc D Andraca as a Director are included in the notice of the ensuing annual general meeting along with brief details about them.

Pursuant to the provisions of Section 203 of the Act, Mr. Jayadev Galla, Vice Chairman and Managing Director, Mr. S Vijayanand, Chief Executive Officer, Mr. S V Raghavendra, Chief Financial Officer and Mr. M R Rajaram, Company Secretary are the key managerial personnel of the Company.

Auditors and Auditors’ Report

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as the joint statutory auditors at the Annual General Meeting held on August 14, 2015 for a term of five (5) years from the conclusion of the 30th annual general meeting till the conclusion of 35th annual general meeting. The Auditors’ report does not contain any qualification, reservation or adverse remark.

As per Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules as amended from time to time, the cost records are required to be audited. Based on the recommendation of the Audit Committee, your Board has appointed M/s. Sagar & Associates, Cost Accountants, Hyderabad as cost auditors for the financial year 2018-19. Necessary resolution for ratification of their remuneration is being placed for your approval.

Pursuant to Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. R. Sridharan & Associates, Company Secretaries to undertake the secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report in Form MR-3 received from them is annexed herewith as Annexure I. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance

The report on corporate governance for the year ended March 31, 2018 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed hereto as Annexure II. The certificate from practicing company secretary regarding the compliance of conditions of corporate governance is attached to the report on corporate governance.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company’s business is provided in a separate section and forms an integral part of this report.

Business Responsibility Report

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report (BRR) initiatives taken from an environmental, social and governance perspective, is annexed hereto as “Annexure III.”

Directors’ responsibility statement

Pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors of the Company confirm, to the best of their knowledge and belief, that in the preparation of annual financial statements for the year ended March 31, 2018;

i) applicable accounting standards and Schedule III of the Act have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the financial year ended March 31, 2018;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognised in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) financial statements have been prepared on a going concern basis;

v) proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

vi) systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

Information and Disclosures under the Act Extract of the Annual Return

The extract of the Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014 in the prescribed form MGT-9 is annexed herewith as Annexure IV.

Number of Meetings of the Board

During the year five meetings of the Board of the Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming an integral part of this report.

Committees of the Board

In compliance with the provisions of Sections 135, 177, 178 of the Act, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee and Share Transfer and Stakeholders Relationship Committee (Committees). The details of composition of the Committees, their meeting and attendance of the members are given in the Corporate Governance Report forming an integral part of this report.

Corporate Social Responsibility (CSR)

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are given in Annexure V to this report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014. The said policy is available on the Company’s website at http://www.amararaja.co.in/policies/ARBL-Corporate-Social-Responsibility-Policy.pdf

Nomination and Remuneration Policy

The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy adopted by the Board is available on the Company’s website at https://amararaja.co.in/policies/ARBL%20%20Nomination%20 and%20Remuneration%20Policy.pdf

Evaluation of the Board

Pursuant to the provisions of the Act, and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had carried out an annual evaluation of its own performance, the Directors individually and of the committees of the Board.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board’s functioning such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board. The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc.

The performance evaluation of all Directors including the Independent Directors was carried out by the entire Board. Further, the performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.

Mr. Marc D Andraca, additional director did not participate in the evaluation process or being evaluated, as he was appointed towards the end of the financial year 2017-18.

Familiarisation Programme for Directors

A handbook covering the role, function, duties and responsibilities and the details of the compliance requirements expected from the Directors under the Act, and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were given and explained to the new Directors.

The newly appointed Directors are given induction and orientation with respect to Company’s Vision, Core purpose, Core Values and business operations. In addition detailed presentations are made by Senior Management Personnel on business environment, performance of the Company at every Board Meeting.

The above initiatives help the Directors to understand the Company, its business and the regulatory framework in which the Company operates and enables the Directors to fulfill their role/responsibility. The details of the familiarization programme are available on the Company’s website www.amararaia.co.in.

Particulars of loans, guarantees and investments

The Company has not given any loans, guarantees or security in connection with loans or made any investments falling within the ambit of Section 186 of the Act.

Transactions with the Related Parties

All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business. During the financial year 2017-18, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Act, read with the Companies (Meetings of the Board and its Powers) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm’s length basis and in the ordinary course of business.

The members at the annual general meeting held on August 7, 2017 approved and authorised the Board to enter into transactions with Mangal Industries Limited (MIL) upto a cumulative value of transactions of RS.1,000 crores in each financial year. During the financial year 2017-18, the transactions with MIL amounted to RS.721.16 crores (including dividend paid), a material transaction under the Regulation 23 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Regulations”) and the policy adopted by the Company under the said Regulations.

The Form AOC- 2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure VI to this Report.

Internal Controls

The Company has put in place adequate system of internal controls commensurate with its size and the nature of its operations. The Company’s internal control system covers the following aspects:

- Financial propriety of business transactions.

- Safeguarding the assets of the Company.

- Compliance with prevalent statues, regulations, management authorisation, policies and procedures.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

Risk Management

During the year, the risk assessment parameters were reviewed and modified. The audit committee reviewed the element of risks and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which has the potential of threatening the existence of the Company.

Whistle Blower Policy /Vigil Mechanism

The Company has established a whistle blower policy/vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company’s website at http://www.amararaja.co.in/ policies/ ARBL-Whistle-Blower-Policy.pdf

Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Sections 73 and 74 of the read with and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2018.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules 2014, are annexed hereto as Annexure VII and forms an integral part of this report.

Particulars of Remuneration

The information required pursuant to Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure VIII.

A statement showing names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is also annexed to the Directors’ Report as Annexure IX. However, as per the provisions of Section 136(1) of Companies Act, 2013, the annual report is being sent to all the members excluding the aforesaid statement. The statement is available for inspection at the registered office of the Company during working hours.

Reporting of Frauds

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.

Regulatory Orders

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

Compliance of Secretarial Standards

The Company has complied with the Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

Investor Education and Protection Fund (IEPF)

In terms of Section 124 (5) of the Companies Act, 2013, a total amount of RS.3,964,451 being unclaimed dividend(s) pertaining to the financial year 2009-10 and interim dividend for the financial year 2010-11 were transferred to IEPF on September 15, 2017 and March 22, 2018 respectively.

Health, Safety and Environmental protection (HSE)

The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety management systems respectively.

Prevention of Sexual Harassment at workplace policy

The Company has in place a policy on prevention of Sexual Harassment and has constituted an Internal Complaints Committee (ICC) in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. During the year, the Company received one (1) complaint which was investigated and resolved as per the provisions of the aforesaid Act.

Awards and Recognitions

Your Company continues to get accolades and awards from its customers and other prestigious domestic/international forums. Some of the awards and recognitions your Company received during the year under review:

- Featured in Forbes Magazine’s August 2017 issue, India’s Super 50 Companies for the second time in a row.

- Received “First Award” under the category “Private - Manufacturing (Large)” at the 14th National Awards for Excellence in Cost Management 2016 from The Institute of Cost Accountants of India.

- Received the Quality award and Q1 award from Tata Motors Limited and Bajaj Auto Limited respectively in recognition for our excellence in the field of QCDM parameters (Excellence in Quality, Delivery, and relationship Building)

- Received “Gold award” under infra equiupment’s category from Indus Towers Limited.

- Received the “Overall Performance” award from Bosch Limited Bangalore.

- Received “Environmental Leadership” award from Cummins India Limited.

- Supply Chain team won the ‘Best-in-class Supply Chain Innovation Award’ at the Asia Logistics & Supply Chain Leadership Conclave held at Mumbai.

- Two-wheeler automotive battery plant team won the 1st runner award in Eleventh CII Six Sigma National Conference and Competition under the “Manufacturing Industry (Discrete and Assembly Line)” category.

- Bestowed with prestigious ABK AOTS awards in following three different categories

i. Model 5S Company award for MVRLA Battery Plant, Chittoor and Automotive Battery Plant, Tirupati

ii. Platinum award under Excellence category for LVRLA Battery Plant, Tirupati, Tubular Battery Plant and Automotive Battery plant II, Chittoor

- Four teams won Gold awards in ICQCC (International Convention of Quality Control Circles) 2017 competition held in Manila, Philippines.

- Adjudged as winner for its presentation on “Nava Prathibha -Talent building at the Entry Level” under the category of “Most Effective Recruitment, Engagement & Innovative Retention Strategy” at the CII -First National HR Circle Competition.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

Acknowledgement

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, commitment and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your Directors also take this opportunity to thank the joint venture partner Johnson Controls for their valuable assistance and support. The Directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Milwaukee, USA Dr. Ramachandra N Galla

Date: May 18, 2018 Chairman


Mar 31, 2017

Dear Members,

The Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2017.

Financial Results

Your Company has adopted Indian Accounting Standards (Ind AS) from April 1, 2016 and these are the Company''s first annual financial statements prepared in accordance with Ind AS, with comparatives for the previous year restated as per Ind AS.

The Company''s financial performance for the year ended March 31, 2017 is summarized below:

Rs, crores

Parameters

2016-17

2015-16

Revenue from operations

5,981.39

5,184.34

Other income

49.24

45.88

Total income

6,030.63

5,230.22

Profit before tax

702.21

722.64

Profit for the year (A)

478.49

491.63

Total other comprehensive income (B)

(1.29)

1.12

Total comprehensive income for the year (A B)

477.20

492.75

Share Capital

The paid up equity share capital of the Company as at March 31, 2017 stood at Rs,17.08 crores, comprising of 17,08,12,500 equity shares of Rs,1 each. During the year under review, the Company has not issued shares with differential voting rights, employee stock options and sweat equity shares.

Dividend

In line with the dividend policy of the Company i.e. Dividend Payout (excluding corporate dividend tax) up to 15% of the profit after tax of the Company, your directors recommend a dividend of 425% i.e Rs,4.25 per equity share of Rs,1 each for the financial year 2016-17, subject to the approval of the shareholders. The dividend, if approved, would involve a cash outflow of Rs,72.60 crores (excluding corporate dividend tax).

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015, the Board approved and adopted the Dividend Distribution Policy and the same is available on the Company''s website viz. www.amararaia.co.in

Transfer to reserves

Your Directors propose to transfer an amount of Rs,47.85 crores to the general reserve. An amount of Rs,2,180.88 crore is retained in the retained earnings.

Material changes and commitments affecting the financial position of the company between the end of the financial year and the date of the report

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

Automotive battery business

The Company''s automotive battery business reported double digit revenue growth supported by good volume increase in both four-wheeler and two-wheeler batteries, over the previous financial year.

During the year, the Company fully utilized the first phase of expansion of the new four-wheeler battery plant, consolidating its position. In four-wheeler OEM space, the Company grew its share by growing beyond the 6% increase in automobile production. In the aftermarket segment, the Company''s brands grew at a healthy double digit growth in four-wheelers and in two-wheeler batteries. The volume growth in both four-wheeler and two-wheeler aftermarket business continued during the year due to strong preference for Company''s products, supported by complete product offering, strengthening of brands Amaron® and Power Zone™, expansion of channel and leveraging customer relationships.

The volume from export business grew significantly at 45% over previous year. The brand and products of the Company have started gaining recognition in overseas markets, resulting in increased business. The focused market strategy of the Company paid off leading to higher penetration and enhanced business.

The new four-wheeler battery plant at Nunegundlapalle Village, Chittoor District added a capacity of 2.25 million units p.a, taking the total installed capacity of this four-wheeler automotive battery plant to 4.50 million units p.a. During the year, the Company commenced supplies from the new tubular battery plant. The inverter battery segment saw a clear preference for tubular batteries.

In view of the anticipated growth in demand for two-wheeler battery, the Board approved expansion of two-wheeler battery capacity to be implemented in four phases, staggered over a period of five years, which would on completion take the capacity from existing 11 million units p.a to 25 million units p.a.

Industrial battery business

The recent developments in the telecom market, with the new entrant, had disrupted the revenue models of all Telcos and tower companies forcing to relook at their cost structures. This had impacted the volume off-take for replacement batteries in the industrial battery business during the last quarter. In addition, the increase in lead price presented challenging market conditions in both Telecom and UPS segments. Under this competitive environment, the Company''s industrial battery business achieved a moderate growth in volume in industrial battery business during the year. The industrial battery business improved the overall performance by virtue of its "preferred supplier status” with all major customers, efficient after sales service, customer relationship management and consistent product performance of its flagship brands Power Stack®, Quanta® and QRS Series batteries.

The Company has initiated necessary measures in all key customer segments to provide integrated solution offering for backup power requirements to its customers.

Subsidiaries, Associates and Joint Ventures

There are no subsidiaries, associates and joint venture companies.

Directors and Key Managerial Personnel

Mr. Nagarjun Valluripalli, Mr. N Sri Vishnu Raju, Mr. T R Narayanaswamy and Ms. Bhairavi Tushar Jani are the present Independent Directors of the Company appointed pursuant to the provisions of Section 149 of the Companies Act, 2013 (Act). They have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an Independent Director during the year.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Raphael John Shemanski, Director (DIN: 07462586) is liable to retire by rotation at the ensuing annual general meeting and being eligible offer himself for reappointment.

Mr. Raymond J Brown (DIN: 01916646) resigned from the Board with effect from November 6, 2016 and the Board of Directors wishes to place on record their sincere appreciation of the valuable services rendered by him during his tenure as a director of the Company.

Mr. Shu Qing Yang (DIN: 01916660) resigned from the Board with effect from January 22, 2017 and Mr. Trent Moore Nevill (DIN: 07699463) was appointed as an Additional Director on the Board with effect from January 22, 2017, who holds off i ce upto the date of the ensuing annual general meeting. The Board of Directors wishes to place on record their sincere appreciation of the valuable services rendered by Mr. Shu Qing Yang during his tenure as a Director of the Company.

The Company has received a notice in writing under Section 160 of the Act proposing the appointment of Mr. Trent Moore Nevill as a Director. The resolutions seeking your approval for the re-appointment of Mr. Raphael J Shemanski, Director and appointment of Mr. Trent Moore Nevill as a Director are included in the notice of the ensuing annual general meeting along with brief details about them.

The Board of Directors appointed Mr. S Vijayanand as Chief Executive Officer of the Company with effect from April 1, 2017. Pursuant to the provisions of Section 203 of the Act, Mr. Jayadev Galla, Vice Chairman and Managing Director, Mr. S Vijayanand, Chief Executive Off i cer, Mr. S V Raghavendra, Chief Financial Off i cer and Mr. M R Rajaram, Company Secretary are the key managerial personnel of the Company.

Auditors and Auditors'' Report

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants were appointed as the joint statutory auditors at the Annual General Meeting held on August 14, 2015 for a term of five (5) years from the conclusion of the 30th annual general meeting till the conclusion of 35th annual general meeting. As required under the provisions of Section 139 of the Act, a resolution for the annual ratification of their appointment is being placed before the shareholders for their approval. In this regard, the Company has received a certificate from the auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Act. The Auditors'' report does not contain any qualification, reservation or adverse remark.

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules as amended from time to time, the cost records are required to be audited. Based on the recommendation of the Audit Committee, your Board has appointed M/s. Sagar & Associates, Cost Accountants, Hyderabad as cost auditors for the financial year 2017-18. Necessary resolution for ratification of their remuneration is being placed before the shareholders for their approval.

Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. R. Sridharan & Associates, Company Secretaries to undertake the secretarial audit of the Company for the financial year 2016-17. The Secretarial Audit Report in Form MR-3 received from them is annexed herewith as Annexure I. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance

The report on corporate governance for the year ended March 31, 2017 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed hereto as Annexure II. The certificate from practicing company secretary regarding the compliance of conditions of corporate governance is attached to the report on corporate governance.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company''s business is provided in a separate section and forms an integral part of this report.

Business Responsibility Report

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report (BRR) initiatives taken from an environmental, social and governance perspective, is annexed hereto as "Annexure III."

Directors'' responsibility statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013(''Act''), the Board of Directors of the Company confirm, to the best of their knowledge and belief, that in the preparation of Annual financial statements:

i) applicable accounting standards and Schedule III of the Act have been followed;

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

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) financial statements have been prepared on a going concern basis;

v) proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively;

vi) systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

Information and Disclosures under the Companies Act, 2013 Extract of the Annual Return

The extract of Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 (''Act'') in the prescribed form MGT-9 is annexed herewith as Annexure IV.

Number of Meetings of the Board

During the year five meetings of the Board of the Directors of the Company were convened and held in accordance with the provisions of the Act. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming an integral part of this report.

Committees of the Board

In compliance with the provisions of Sections 135, 177, 178 of the Companies Act, 2013, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee and Share Transfer and Stakeholders Relationship Committee (Committees). The details of composition of the Committees, their meeting and attendance of the members are given in the Corporate Governance Report forming an integral part of this report.

Corporate Social Responsibility (CSR)

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are given in Annexure V to this report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014. The said policy is available on the Company''s website at http://www.amararaja.co.in/policies/ARBL-Corporate-Social-Responsibility-Policy.pdf

Nomination and Remuneration Policy

The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy adopted by the Board is available on the Company''s website at https://www.amararaja.co.in/policies/ARBL%20-%20 Nomination%20and%20Remuneration%20Policy.pdf

Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had carried out an annual evaluation of its own performance, the Directors individually and of the committees of the Board.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board''s functioning such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board. The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc.

The performance of every Director was evaluated by the Nomination and Remuneration Committee. The performance evaluation of the Independent Directors was carried out by the entire Board. Further, the performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors

Mr. Trent Moore Nevill, additional director did not participate in the evaluation process or being evaluated, as he was appointed at the end of the financial year 2016-17.

Familiarization Programme for Directors

In addition to giving a formal appointment letter to newly appointed Directors on the Board, a handbook covering the role, function, duties and responsibilities and the details of the compliance requirements expected from the Directors under the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were given and explained to the new Directors.

The newly appointed Directors are given induction and orientation with respect to Company''s Vision, Core purpose, Core Values and business operations. In addition detailed presentations are made by Senior Management Personnel on business environment, performance of the Company at every Board Meeting.

The above initiatives help the Directors to understand the Company, its business and the regulatory framework in which the Company operates and enables the Directors to fulfill their role/responsibility. The details of the familiarization programme are available on the Company''s website www.amararaja.co.in.

Particulars of loans, guarantees and investments

The Company has not given any loans, guarantees or security in connection with loans or made any investments falling within the ambit of Section 186 of the Companies Act, 2013.

Transactions with the Related Parties

All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of business.

During the financial year 2016-17, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year ahead is obtained from the Audit Committee. The transactions with the related parties are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm''s length basis and in the ordinary course of business.

The members at the annual general meeting held on August 14, 2015 approved and authorized the Board to enter into transactions with Mangal Industries Limited (MIL) up to a cumulative value of transactions of Rs,600 crores in each financial year. During the financial year 2016-17, the transactions with MIL amounted to Rs,645.86 crores, a material transaction and necessary resolution for approval of the members for additional transaction value of Rs,45.86 crores is being included in the notice of ensuing annual general meeting as required under the Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Regulations”) and the policy adopted by the Company under the said Regulations.

The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure VI.

Internal Controls

The Company has put in place adequate system of internal controls commensurate with its size and the nature of its operations. The Company''s internal control system covers the following aspects:

- Financial propriety of business transactions.

- Safeguarding the assets of the Company.

- Compliance with prevalent statues, regulations, management authorization, policies and procedures.

The Audit Committee of the Board periodically reviews audit plans, observations and recommendations of the internal and external auditors, with reference to the significant risk areas and adequacy of internal controls and keeps the Board of Directors informed of its observations, if any, from time to time.

Risk Management

During the year, the risk assessment parameters were reviewed and modified. The audit committee reviewed the element of risks and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which has the potential of threatening the existence of the Company.

Whistle Blower Policy /Vigil Mechanism

The Company has established a whistle blower policy/vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company''s website at https://www.amararaja.co.in/ policies/ARBL-Whistle-Blower-Policy.pdf

Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2017.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules 2014, are annexed hereto as Annexure VII and forms an integral part of this report.

Particulars of Remuneration

The information required pursuant to Section 197(12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure VIII.

A statement showing names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is also annexed to the Directors'' Report as Annexure IX. However, as per the provisions of Section 136(1) of Companies Act, 2013, the annual report is being sent to all the members excluding the aforesaid statement. The statement is available for inspection at the registered office of the Company during working hours.

Reporting of Frauds

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.

Regulatory Orders

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

Investor Education and Protection Fund (IEPF)

In terms of Section 124 (5) of the Companies Act, 2013 (erstwhile Section 205A of the Companies Act, 1956), an amount of Rs,7,76,953 being unclaimed dividend pertaining to the financial year 2008-09 was transferred to IEPF on September 26,

2016.

Health, Safety and Environmental protection (HSE)

The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety management systems respectively.

Prevention of Sexual Harassment at workplace policy

The Company has in place prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All women employees are covered under this policy. During the year 2016-17, no complaints were received by the ICC.

Awards and Recognitions

Your Company continues to get accolades and awards from its customers and other prestigious domestic/international forums. Some of the awards and recognitions your Company received during the year under review:

- Received "India''s most promising Company of the year 2016-17" at 12th CNBC TV18 India Business Leader Awards event.

- Received "Plaque" award in ''ICAI Awards for Excellence in Financial Reporting'' for the financial year 2015-16 from Institute of Chartered Accountants of India.

- Received "Telecom Infra Leader" in the Power Solutions Category for the year 2016 at the 24th Annual Cyber Media ICT Awards event.

- Bestowed with prestigious ABK AOTS awards in following three different categories

i. Model 5S Company award for Automotive Battery Plant, Tirupati

ii. 5S sustenance award for MVRLA Battery plant, Chittoor

iii. Gold award under Excellence category Automotive Battery plant II , Chittoor

- Six teams won Gold awards in ICQCC (International Convention of Quality Control Circles) 2016 competition held in Bangkok, Thailand

- Received "Significant Achievement in HR Excellence" - CII National HR Excellence Award from Confederation of Indian Industry.

- Received Global HR Excellence for companies with ''Best Practices in Employee Relations'' and ''Best Talent Management Practices'' from Employer Branding Institute India.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

Acknowledgement

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, commitment and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your Directors also take this opportunity to thank the joint venture partner Johnson Controls for their valuable assistance and support. The Directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Hyderabad Dr. Ramachandra N Galla

Date: May 24, 2017 Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2015.

Financial Highlights h million

Parameters 2014-15 2013-14

Net revenue 42,113 34,367

Other income 423 455

Total income 42,536 34,822

Operating profit (EBITDA) 7,241 5,758

Profit before tax (PBT) 6,099 5,367

Profit after tax (PAT) 4,109 3,674

Surplus brought forward 10,960 8,298

Amount available for appropriation 15,068 11,973

Appropriations:

Transfer to General Reserve 411 367

Dividend on equity capital

Proposed dividend 617 552

Corporate dividend tax 123 94

Surplus carried forward to balance sheet 13,917 10,960

Performance overview

- The Company continued its record of clocking highest ever turnover and profit for financial year 2014-15.

- Total revenue (net of excise duty) for the year was Rs. 42.11 billion as against Rs. 34.37 billion in the previous year registering a growth of 23%

- The operating profit (Earnings Before Interest, Tax, Depreciation and Amortisation-EBITDA) for the year stood at Rs. 7,241 million (previous year Rs. 5,758 million) representing 17.19% of net revenue.

- The Profit Before Tax (PBT) and Profit After Tax (PAT) for the year was at Rs. 6,099 million and Rs. 4,109 million as against Rs. 5,367 million and Rs. 3,674 million of the previous financial year respectively.

- The profit after tax has registered an impressive 12% growth.

Industrial battery business

The Company's Industrial Battery business registered double digit revenue growth over the previous financial year, in a challenging and competitive market conditions.

The growth in demand from telecom sector is primarily driven by data growth and the drive for energy optimisation by the tower companies. The demand for UPS batteries was moderate. Increased imports due to our country's Preferential Free Trade Agreements with ASEAN and Sri Lanka are a matter of concern, since the raw materials continue to attract higher import duty.

Amidst these challenges, the Industrial Battery Business improved the overall performance by virtue of its "preferred supplier status" with all major customers, efficient after sales service, customer relationship management and consistent product performance of its flagship brands PowerStack®, Quanta® and QRS Series batteries. The export business too registered good growth as it is more broad based in terms of geographies covered and has a much wider spread in terms of products, customers and applications.

The Company has progressively started providing total solutions to customers enabling it to forge strategic alliances.

Automotive battery business

The Company's Automotive Battery business reported double digit revenue growth supported by volume increase of 12% in four-wheeler and 52% in two-wheeler batteries, over the previous financial year, despite capacity constraints in the automotive four-wheeler batteries.

During the year, the Company commenced full year supplies to two-wheeler OEM business, consolidating its position in this space and growing at 113% over previous year. In four- wheeler OEM space, the company grew the business by 7% in spite of almost flat automobile production. In the aftermarket automotive segment, the Company's brands grew at a healthy pace of 16%. The volume growth in both four-wheeler and two-wheeler aftermarket business continued during the year due to strong preference for Company's products, supported by complete product offering, strengthening of brands Amaron® and PowerZone™, expansion of channel and leveraging customer relationships.

The volume of inverter batteries, which includes both flat and tubular plate, witnessed a good growth of 27% over previous year.

The revenue from export business grew significantly at 37% over previous year. The products of the Company and brand have started gaining recognition in overseas markets, resulting in increased business. The Company will continue its efforts to increase its exports in the Indian Ocean RIM by strengthening and expanding the distributor's network and entering into new markets.

The new four-wheeler battery plant at Nunegundlapalle village, Chittor District with capacity of 2.25 million units per annum was commissioned during the fourth quarter of FY 2015, taking the total capacity of the four-wheeler automotive battery plant to 8.25 million units per annum.

During the year, your Board approved an investment of about Rs. 500 Crores for setting up tubular batteries manufacturing plant (for Home UPS application) with a capacity of 1.44 million units per annum and the project is progressing as per schedule.

Financial position

The Company's financial position has shown immense improvement over the years. The networth as at March 31, 2015 improved to Rs. 16,996 million with the addition of Rs. 3,369 million to the reserves and surplus during the year. There is no interest bearing debt as of March 31, 2015. CRISIL had re-affirmed the ratings on the Company's long-term bank loan facilities at 'CRISIL AA /Stable' and on the short-term bank facilities at 'CRISIL A1 .'

During the year under review, the gross fixed assets including capital work-in-progress increased by Rs. 3,875 million (net of deletions of Rs. 118 million) and are at Rs. 15,277 million (previous year Rs. 11,402 million). The entire additions were funded through internal accruals. The earnings per share of Rs.1 each for the financial year 2014-15 grew by 12% at Rs. 24.05 as against Rs. 21.51 for the previous financial year, while the book value per share as at March 31, 2015 was at Rs. 99 as against Rs. 80 as at March 31, 2014.

Dividend

In line with the dividend policy of the Company, to pay dividend (excluding corporate dividend tax) upto 15% of the profit after tax of the Company, your directors have pleasure in recommending a dividend of Rs. 3.61 per equity share of Rs.1 each (361%) for the financial year ended March 31, 2015, subject to the approval of the shareholders.

The dividend, if approved, would involve a cash outflow of Rs. 616.63 million towards dividend and Rs. 123.29 million towards corporate dividend tax, resulting in a total cash outflow of Rs. 739.92 million.

Transfer to reserves

Your directors have proposed to transfer a sum of Rs. 410.86 million to the general reserve out of the profits earned by the Company. An amount of Rs. 13,917 million is proposed to be retained as surplus in the statement of Profit and Loss.

Directors and Key Managerial Personnel

Mr. Eric Stuart Mitchell (DIN: 06561619) and Mr. P Lakshmana Rao (DIN: 01463507) resigned from the Board with effect from August 6, 2014 and January 27, 2015 respectively. The Board wishes to place on record their sincere appreciation for the valuable services rendered by Mr. Eric Stuart Mitchell and Mr. P Lakshmana Rao during their tenure as directors of the Company.

Mr. Bruce Ronning Jr. (DIN: 06938974) was appointed as director in the casual vacancy caused by the resignation of Mr. Eric Stuart Mitchell (DIN: 06561619) with effect from August 6, 2014. He holds office upto the date of the ensuing annual general meeting as Mr. Eric Stuart Mitchell was liable to retire by rotation at this AGM.

Ms. Bhairavi Tushar Jani (DIN: 00185929) was appointed as an Additional Director (Independent) on the Board with effect from March 28, 2015.

The resolutions seeking your approval for the appointment(s) of Mr. Bruce Ronning Jr. as a Director and Ms. Bhairavi Tushar Jani as an independent director for a term of five years effective from August 14, 2015 are included in the notice of the ensuing annual general meeting along with brief details about them. The Company has received a notice in writing under Section 160 of the Act proposing their appointments.

All the Independent Directors have declared that each of them satisfy the criteria of the independence as stipulated under

the Section 149(6) of the Companies Act, 2013 ("Act") and Clause 49 of the listing agreement entered into with the stock exchanges and there was no change in the circumstances which may affect their independence during the year.

Pursuant to the provisions of Section 203 of the Act, Mr. Jayadev Galla, Vice Chairman and Managing Director, Mr. S V Raghavendra, Chief Financial Officer and Mr. M R Rajaram, Company Secretary are the key managerial personnel of the Company.

Auditors

M/s. E Phalguna Kumar & Co., Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, the joint statutory auditors of the Company who hold office until the conclusion of the ensuing annual general meeting had given notice expressing their desire to retire as auditors of the Company at the ensuing annual general meeting, in order to enable the Company to comply with the provisions of the Companies Act, 2013 governing rotation of auditors.

The Board of Directors wishes to place on record their sincere appreciation of the services of the joint statutory auditors especially in terms of ensuring timely completion and the quality of audit.

M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants had given their consent(s), if appointed, to hold office as the joint statutory auditors for a term of five (5) years from the conclusion of this 30th annual general meeting till the conclusion of 35th annual general meeting. The said firm(s) have confirmed their eligibility under Sections 139 and 141 of the Companies Act, 2013 and rules framed there under for their appointment as the joint statutory auditors of the Company.

The Audit Committee considered, recommended and the Board of Directors propose the appointment of M/s. Brahmayya & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants as the joint statutory auditors of the Company. Necessary resolution is being placed before the members for their approval.

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules as amended from time to time, the Cost Audit is not applicable for the financial year 2014-15. The Cost Audit report for the financial year 2013- 14 was filed on September 16, 2014.

Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed R.Sridharan & Associates, Company Secretaries to undertake the secretarial audit of the company for the financial year 2014-15. The Secretarial Audit Report in Form MR-3 received from them is annexed herewith as Annexure I.

Corporate Governance

The report on corporate governance along with the certificate from practising company secretary regarding compliance of conditions of corporate governance for the year ended March 31, 2015 pursuant to clause 49 of the listing agreement is annexed hereto and forms part of the annual report. The Managing Director and the Chief Financial Officer of the Company have submitted a certificate endorsing to the Board the correctness of the financial statements and other matters as required under clause 49 (IX) of the listing agreement entered into with the stock exchanges.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company's business, forms part of this annual report.

Directors' responsibility statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors of the Company confirm to the best of their knowledge and belief that in the preparation of the statement of profit and loss for the financial year ended March 31, 2015 and the balance sheet as at that date ("financial statements"):

i) the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognised in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) the financial statements have been prepared on a going concern basis.

v) the proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively

vi) the systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

Information and Disclosures under the Companies Act, 2013

Extract of Annual Return

The extract of Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 ('Act') in the prescribed form MGT-9 is annexed herewith as Annexure II

Number of Meetings of the Board

During the year six meetings of the Board of the Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming part of this annual report.

Committees of the Board

In compliance with the provisions of Sections 135, 177,

178 of the Companies Act, 2013, the Board constituted Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee and Share Transfer and Stakeholders Relationship Committee (Committees).

The details of composition of the Committees, their meeting and attendance of the members are given in the Corporate Governance Report forming part of this annual report.

Corporate Social Responsibility (CSR)

The brief outline of the CSR Policy of the Company and the < initiatives undertaken by the Company on CSR activities during the year are given in Annexure III to this report in the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014. The said policy is available on the Company's « website at the link http://www.amararaja.co.in/policies/ARBL- Corporate-Social-Responsibility-Policy.pdf

Nomination and Remuneration Policy

The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy < adopted by the Board is available on the Company's website http://www.amararaja.co.in

Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the listing agreement entered into with the Stock Exchanges, the Board had carried out an annual performance evaluation of its own performance, the directors individually as well as committees of the Board.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering aspects of the Board's functioning such as adequacy of the composition of the Board and its committees, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of Individual Directors including the Chairman of the Board.

The Directors performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc. The performance of every Director was evaluated by the Nomination and Remuneration Committee. Ms. Bhairavi Tushar Jani, additional director, being appointed on March 28, 2015 was excluded from the evaluation process.

The Independent Directors at their separate meeting reviewed the Performance of the Board as a whole, Non independent Directors and the Chairman of the Board.

Familiarisation Programme for Directors

In addition to giving a formal appointment letter to newly appointed Directors on the Board, a handbook covering the role, function, duties and responsibilities and the details of the compliance requirements expected from the Directors under the Companies Act, 2013 and Clause 49 of the listing agreement and other applicable laws were given and explained to the new Directors.

The Directors appointed by the Board are given induction and orientation with respect to Company's Vision, Core purpose, Core Values and business operations. In addition detailed presentations are made by Senior Management Personnel on business environment, performance of the Company at every Board Meeting.

The above initiatives help the Directors to understand the Company, its business and the regulatory framework in which the Company operates and enables the Directors to fulfill their roles/responsibility. The details of the familiarisation programme is available on the Company's website.

Particulars of loans, guarantees and investments

The Company has not given any loans, guarantees or security in connection with loans or made any investments falling within the ambit of Section 186 of the Companies Act, 2013.

Transactions with the Related Parties

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business.

During the year, the Company entered into lease agreements with Amara Raja Infra Private Limited to take on lease land admeasuring 12 acres and 62 acres situated at Nunegundlapalle village, Bangarupalyam Mandal, Chittoor District to construct hostel/canteen, amenities for workmen and also for its expansion plans, which may be deemed not to be in the ordinary course of business of the Company. The shareholders approved these proposals by way of special resolution at the AGM on August 6, 2014 and through postal ballot process. The results of the postal ballot were declared on September 24, 2014.

During the financial year 2014-15, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus

approval of the Audit Committee is obtained for transaction with the related parties which are routine and repetitive in nature.

The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on a quarterly basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm's length basis and in the ordinary course of business.

As all the transactions with the related parties are on Arm's length basis and there are no material related party transactions as per policy adopted by the Company, the particulars of contracts or arrangements with the related parties under Section 188 in Form AOC-2 is not enclosed herewith.

Internal Controls

The details of internal control system and the adequacy of internal financial controls with respect to financial statements are given in the corporate governance report which forms part of the annual report.

Risk Management

During the year, the risk assessment parameters were reviewed and modified. The audit committee reviewed the element of risks and the steps taken to mitigate the risks. In the opinion of the Board, there are no major elements of risk which has the potential of threatening the existence of the Company.

Whistle Blower Policy/Vigil Mechanism

The Company has established a whistle blower policy/ vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company's website at the link http://www.amararaja.co.in/policies/ARBL-Whistle-Blower- Policy.pdf

Deposits from Public

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposit) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2015.

Particulars of Remuneration

The information required pursuant to Section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexured hereto as Annexure IV.

A statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under Rule 5(2) of the said rules is also annexed to the Directors' Report. However, in terms of the provisions of Section 136(1) read with relevant proviso thereto of the Act, the annual report is being sent to the members of the Company excluding the aforesaid statement. The statement is available for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company at its registered office address.

Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as per Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules 2014, are annexed hereto as Annexure V and forms part of this annual report.

Regulatory Orders

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

Awards and Recognitions

Your Company continues to get accolades and awards from its customers and other prestigious domestic/international forums. Some of the awards and recognitions your Company received during the year under review:

- Business Today in its edition "BEST CEOs" ranked Mr. Jayadev Galla, Vice Chairman and Managing Director at 6th position in the overall ranking for the mid-sized companies in India.

- Platinum award" for "Partner of the Year 2014-15" from Indus Towers Limited for customer focused approach, service delivery and product innovation.

- Received "OVERALL EXCELLENCE" award from Maruti Suzuki Limited in the field of QCDM (Quality, Cost, Delivery and Management) parameters.

- Amaron® has been awarded as 'Asia's Most Promising Brand' for the year 2013-14 under Automotive Category by World Consulting and Research Corporation (WCRC).

- The Company won second position in "National award for excellence in cost management for the year 2013 under "Private-Manufacturing-Organisation large" from the Institute of Cost Accountants of India.

- Amara Raja has been adjudged as "1st Best Employer Award" for 2014-15 by The Employer Branding Institute and has won Employer Branding Awards 2014-15 for Talent Management, HR Strategy in Line with Business, Training, Recruitment, Retention Strategy and Career Development. Amara Raja also won "Global HR Excellence Award" for "Talent Management and Innovative HR Practices."

- Amara Raja has been awarded "The Golden Globe Tigers Award 2015" for Excellence and Leadership in Training and Development in three categories. The awards were bestowed by HRD Management committee of World HRD Congress.

Transfer to the Investor Education and Protection Fund

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs. 4,35,179 being unclaimed dividend pertaining to the financial year 2005-06 was transferred to the Investor Education and Protection Fund (IEPF) on October 16, 2014.

Health, safety and environmental protection

The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety management systems respectively.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

Acknowledgement

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, commitment and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your Directors also take this opportunity to thank the joint venture partner Johnson Controls Inc. for their valuable assistance and support. The Directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Hyderabad Dr. Ramachandra N Galla Date: July 15, 2015 Chairman


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2014.

Financial Highlights Rs. million

Parameters 2013-14 2012-13

Net revenue 34,367 29,589

Other income 455 465

Total income 34,822 30,054

Operating profit (EBIDTA) 5,758 4,658

Profit before tax (PBT) 5,367 4,218

Profit after tax (PAT) 3,674 2,867

Surplus brought forward 8,298 6,221

Amount available for appropriation 11,973 9,088 Appropriations:

Transfer to General Reserve 367 287

Dividend on equity capital

Proposed dividend 552 430

Corporate dividend tax 94 73

Surplus carried forward to balance sheet 10,960 8,298

Performance overview

The financial year 2013-14 was yet another significant year in which your company continued its record of clocking highest ever turnover and profit. The Company has recorded total revenue (net of excise duty) of Rs.34.37 billion as against Rs.29.59 billion in the previous year registering a growth of 16%. The operating profit (Earnings Before Depreciation, Interest, Tax and Amortisation-EBIDTA) for the year stood at Rs.5,758 million (previous year Rs.4,658 million) representing 16.75% of net revenue. The Profit Before Tax (PBT) and Profit After Tax (PAT) for the financial year ended March 31, 2014 was at Rs.5,367 million and Rs.3,674 million as against Rs.4,218 million and Rs.2,867 million of the previous financial year respectively. The profit after tax has registered an impressive 28% growth

Industrial battery business

The Company''s Industrial Battery business registered double digit revenue growth over the previous financial year despite capacity constraints by better product mix. The demand from the telecom sector grew during the year primarily driven by growth in data and for energy optimisation by tower companies. The adverse macro economic conditions had moderated the demand for UPS during the first three quarters and improved in the fourth quarter mainly due to finalisation of projects in the banking sector.

Amidst these challenges, our efficient after sales service, customer relationship management, consistent product performance of both PowerStack® and Quanta® batteries coupled with continued preferred supplier status accorded by all major customers resulted in the improved performance of the industrial battery business

During the year the Company had successfully introduced new range of Quanta series UPS batteries (120 AH and 150 AH), which were well received by the market resulting in improved market share in IT&ITES and Banking sector. The Quick Recharge Series large VRLA battery introduced for telecom application consolidated its position in the market.

The medium VRLA battery for Home UPS application which was introduced in the African markets helped to broad base the export business. The capacities of medium and large VRLA product lines were enhanced to 3.00 million standard equivalent units per annum and 900 million Ah in standard equivalent units per annum respectively during the Q4 of FY 2014.

Automotive battery business

The Company''s Automotive battery business reported double digit revenue growth supported by volume increase of 9% in four-wheeler and 63% in two-wheeler batteries, over the previous financial year, despite capacity constraints in the automotive four-wheeler batteries

During the year, the Company commenced bulk supplies to two-wheeler OEM business, consolidating its position in this space and witnessed a flat volume growth in four-wheeler OEM business due to slowdown in automobile production on account of various macro-economic conditions. The volume growth in both four-wheeler and two-wheeler aftermarket business continued during the year due to strong preference for Company''s products, supported by complete product offering, strengthening of brands Amaron® and PowerZone™, and leveraging customer relationship

The volume of inverter batteries witnessed a drop mainly on account of early onset of monsoon during the year. A separate task force was created to focus and develop this business vertica as the Company sees a promising future for this business

The revenue from export business grew significantly during the year aided by the quality of the product, moderation in import tariff and depreciation rupee. The Company will continue its efforts to increase the exports in the Indian Ocean RIM by strengthening and expanding the distributor''s network and entering into new markets

During the year, the capacity of two-wheeler battery and four- wheeler battery was enhanced to 8.40 million and 6.00 million units per annum respectively. The green field expansion of four- wheeler battery capacity to 8.25 million units is progressing as per schedule and is expected to commence supplies in the second half of FY 2015.

Financial position

The Company''s financial position has shown immense improvement over the years. The networth as at March 31, 2014 improved to Rs.13,627 million with the addition of Rs.3,029 million to the reserves and surplus during the year. There is no interest bearing debt as of March 31, 2014. The surplus cash as at the year end stood at Rs.2,446 million. CRISIL had re-affirmed the ratings on the Company''s loan-term bank loan facilities at ''CRISIL AA /Stable'' and on the short-term bank facilities at ''CRISIL A1 .''

During the year under review, the gross fixed assets including capital work in progress increased by Rs.3,570 million (net of deletions of Rs.161 million) and are at Rs.11,402 million (previous year - Rs.7,832 million). The entire additions were funded through internal accruals. The earnings per share of Rs.1 each for the financial year 2013-14 grew by 28% at Rs.21.51 as against Rs.16.78 for the previous financial year, while the book value per share as at March 31, 2014 was at Rs.80 as against Rs.62 as at March 31, 2013.

Dividend

The Board of Directors of the Company at their meeting held on May 19, 2010 had approved a policy on payment of dividend to shareholders i.e., to pay dividend (excluding corporate dividend tax) up to 15% of the profit after tax of the Company. In line with the said dividend policy your directors have pleasure in recommending a dividend of Rs.3.23 per equity share of Rs.1 each (323%) for the financial year ended March 31, 2014, subject to the approval of the shareholders

Transfer to reserves

As stipulated under the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your directors have proposed to transfer a sum of Rs.367.44 million to the general reserve out of the profits earned by the Company. A sum of Rs.10,959.62 million is proposed to be retained as surplus.

Directors

In accordance with the provisions of the Companies Act, 2013, Mr. Shu Qing Yang, Dr. Ramachandra N Galla and Mr. N Sri Vishnu Raju, directors are liable to retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the present independent directors i.e Mr. P Lakshamana Rao, Mr.Nagarjun Valluripalli, Mr. N Sri Vishunu Raju, Mr. T R Narayanaswamy and Mr. Raymond J Brown are being proposed for appointment as an independent directors of the Company to hold office for a term of five consecutive years effective from August 6, 2014.

Necessary resolutions for appointment/re-appointment of the above directors are being placed before the members for their approval

During the year, Mr. Ravi Bhamidipati resigned from the office of Executive Director and as director with effect from August 31, 2013. The Board wishes to place on record their appreciation for the valuable services rendered by Mr. Ravi Bhamidipati during his tenure as director of the Company.

Auditors

M/s. E Phalguna Kumar & Co., Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, the joint statutory auditors of the Company who hold office until the conclusion of the ensuing annual general meeting and being eligible, have offered themselves for re-appointment.

The Central Government had approved the appointment of M/s. Sagar & Associates, Cost Accountants, Hyderabad as cost auditors for the financial year 2013-14. The cost audit report will be filed with Central Government within 180 days from the close of the financial year. The cost audit report for the previous financial year 2012-13 signed by M/s. Nageswara Rao & Co., Cost Accountants, Hyderabad was filed in extensible Business Reporting Language (XBRL) mode on September 24, 2013, within due date.

Corporate Governance

The report on corporate governance along with the certificate from practising company secretary regarding compliance of conditions of corporate governance for the year ended March 31, 2014 pursuant to clause 49 of the listing agreement is annexed hereto and forms part of the annual report. The Managing Director and the Chief Financial Officer of the Company have submitted a certificate endorsing to the Board the correctness of the financial statements and other matters as required under Clause 49 (V) of the listing agreement entered into with the stock exchanges.

Management discussion and analysis

Management discussion and analysis report, highlighting the j performance and prospects of the Company''s business, forms j part of this annual report.

Transfer to the Investor Education and j Protection Fund

In terms of Section 205A read with Section 205C of the j Companies Act, 1956, an amount of Rs.305,957 being j unclaimed dividend pertaining to the financial year 2005-06 j was transferred to the Investor Education and Protection Fund j (IEPF) on September 30, 2013.

Fixed deposits

The Company has not accepted any deposits from the public j in terms of Section 58A of the Companies Act, 1956, during j the year under review and hence there were no outstanding j deposits as on March 31, 2014.

Health, safety and environmental protection The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety : management systems respectively.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their sincere appreciation for the co-operation received from employees at all levels.

Disclosures

The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 217(1 )(e) of the Act read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.

The statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the annexure to the Directors'' Report.

However, in terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the registered office of the Company. Any member interested in obtaining such particulars may write to the Company at its registered office.

Awards and Recognitions

Your Company continues to get accolades and awards from its customers and other prestigious domestic/international forums Some of the awards and recognitions your Company received during the year under review:

- Two Excellence awards at International level Quality Circle competitions (ICQC) organised by the Association of Pioneer Quality Control Research (PQCRA) in Taiwan

- Won "Best Organisation Supporting QC movement" award, (fourth time in a row) along with seven Gold awards and two Silver awards at Regional level QC competitions organised by Quality Circle Forum of India (QCFI)

- Won "Best Organisation Supporting QC movement" award in Private Sector for the first time at the National Level along with four par excellence and four excellence awards from QCFI at National Level

- Received "Operational Excellence in Warehousing" award at Asia Manufacturing Supply Chain Summit.

- Won "Most Preferred Battery Brand - Telecom" award from FROST & SULLIVAN at India Back-up Power Industry Excellence Awards 2013

- "Platinum award" for "Partner of the Year 2013-14" from Indus Towers Limited for customer focused approach, i service delivery and product innovation.

- "Consistent high quality performance" award from Maruti Suzuki Limited.

- The Company won first position in "National award for excellence in cost management" for the year 2012 under "Private-Manufacturing-Organisation large" from the Institute of Cost Accountants of India.

Directors'' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company confirm to the best of their knowledge and belief that in the preparation of the statement of profit and loss for the financial year ended March 31, 2014 and the balance sheet as at that date ("financial statements"),:

i) the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognised in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function,

iv) the financial statements have been prepared on a going concern basis

Acknowledgement

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, commitment and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your directors also take this opportunity to thank the joint venture partner Johnson Controls Inc. for their valuable assistance and support. The directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Hyderabad Dr. Ramachandra N Galla

Date: May 28, 2014 Chairman


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2013.

Financial Highlights Rs. Million

Parameters 2012-13 2011-12

Net revenue 29,614 23,645

Other income 465 280

Total income 30,079 23,925

Operating profit (EBIDTA) 4,658 3,570

Profit before tax (PBT) 4,218 3,186

Profit after tax (PAT) 2,867 2,151

Surplus brought forward 6,221 4,661

Amount available for appropriation 9,088 6,812

Appropriations:

Transfer to General Reserve 287 215

Dividend on equity share capital

Proposed dividend 430 323

Corporate dividend tax 73 52

Surplus carried forward to balance sheet 8,298 6,221

Performance overview

The Company has recorded total revenue (net of excise duty) of Rs.29.61 billion as against Rs.23.64 billion in the previous year showing a remarkable 25% growth. The operating profit (Earnings Before Depreciation, Interest, Tax and Amortisation-EBIDTA) for the year stood at Rs.4,658 million (previous year Rs.3,570 million) representing 15.73% of net revenue. The Profit Before Tax (PBT) and Profit After Tax (PAT) for the financial year ended March 31, 2013 was at Rs.4,218 million and Rs.2,867 million as against Rs.3,186 million and Rs.2,151 million of the previous financial year respectively. The profit after tax has registered an impressive 33% growth. The financial year 2012-13 was a yet another significant year in terms of highest ever turnover and profit in the history of the Company.

Industrial battery business

The Company''s Industrial Battery business registered double digit revenue growth over the previous financial year and improvement in price realisation, despite capacity constraint and challenging & competitive market conditions. The demand from the telecom sector is primarily from replacement. This sector during the year has witnessed significant slowdown in both network expansion and up-gradation plans. The growth rate of UPS demand has moderated by the country''s adverse macro-economic conditions. Amidst these challenges, the industrial battery business improved the overall performance by virtue of its "preferred supplier status" with all major customers, backed by timely supplies, efficient after sales service, customer relationship management and consistent product performance of both PowerStack® and Quanta® batteries. During the year the Company has successfully introduced a new range of large VRLA battery (Quick Recharge Series - QRS) for telecom application which offers reliable performance enabling customers to optimise power cost.

The Company continues to retain dominant market share both in telecom and UPS battery businesses. The Company is investing on the capacity enhancement in medium and large VRLA product lines to meet the growing demand and also to sustain the growth momentum. The greenfield capacity expansion (from 1.80 million units to 3.60 million units per annum) project in medium VRLA product line and brownfield capacity expansion (to 900 million Ah per annum) project in large VRLA product line are progressing as per schedule and will commence supplies in Q3/Q4 FY 2014. The ultimate large VRLA product line capacity will be 1.00 billion Ah. The total capital commitment for the said expansions is Rs.2.40 billion.

Automotive battery business

The Company''s Automotive Battery business reported strong double digit revenue growth supported by good volume increase of 20% in four-wheeler and 37% in two-wheeler batteries, over the previous financial year, despite capacity constraints in automotive four-wheeler batteries during the year. The year under review witnessed double digit volume growth in automotive OEM business, notwithstanding depressed automobile production in the country due to unfavorable macro-economic conditions.

Substantial volume growth in both four-wheeler and two-wheeler replacement segments was due to strong demand for Company''s products, ably supported by focused action around the product offering, brand, channel and customer relationship. The continuing consumer preference for Amaron® and PowerZone™ enabled gains in market share both in aftermarket and OEM. The Company is well on course towards bulk supplies to two-wheeler original equipment manufacturers.

The launch of Amaron® and PowerZone™ branded tubular inverter batteries and Home UPS under private label program facilitated the Company to fill the gap in product offering to the channel and helped to improve volume and market share. The pan-India consumer response to these products has been very encouraging and this vertical will aid to grow the revenue and profits of the Company in the years to come.

During the year, the Board of Directors has approved investments of Rs.5.05 billion for enhancing automotive four-wheeler battery capacity from 5.60 million units to 8.25 million units per annum and two-wheeler battery capacity from 4.80 million units to 8.40 million units per annum through green and brownfield projects to meet the growing demand and to improve market share.

Financial position

The Company''s financial position has shown immense improvement over the years. The networth as at March 31, 2013 improved to Rs.10,598 million with the addition of Rs.2,363 million to the reserves and surplus during the year. There is no interest bearing debt as of March 31, 2013. The surplus cash as at the year end stood at Rs.3,652 million. The Company has parked the surplus funds in fixed deposits with reputed banks to ensure utmost safety, liquidity and return. The debt to equity ratio as at March 31, 2013 is 0.08 times, without adjusting for surplus cash. The Company is confident of funding the recently announced various capacity expansions, at the current location and at a strategic second location, through surplus cash, estimated internal accruals during 2013-14 and with moderate debt.

CRISIL has upgraded the ratings on the Company''s long- term bank loan facilities to ''CRISIL AA /Stable'' from ''CRISIL AA/Stable'' and has re-affirmed the ratings on the short- term bank facilities at ''CRISIL A1 ''.

During the year under review, the gross fixed assets including capital work in progress increased by Rs.1,304 million (net of deletions of Rs.155 million) and are at Rs.7,832 million (previous year - Rs.6,528 million). The entire additions were funded through internal accruals. The earnings per share of Rs.1 each for the financial year 2012-13 grew by 33% at Rs.16.78 as against Rs.12.59 for the previous financial year, while the book value per share as at March 31, 2013 was at Rs.62 against Rs.48 as at March 31, 2012.

Sub-division of Shares

Pursuant to the approval of the shareholders at the twenty seventh annual general meeting of the Company held on August 14, 2012, the face value of the equity shares of the Company was sub-divided from Rs.2 per equity share to Rs.1 per equity share, with effect from September 26, 2012. Consequent to this sub- division, shareholders were issued two equity shares of Rs.1 each in lieu of one equity share of Rs.2 each held by them as on the record date i.e. September 26, 2012, fixed for this purpose. Subsequent to the sub-division, the total number of shareholders has significantly increased to over 21,000 from about 16,500.

Dividend

The Board of Directors of the Company at their meeting held on May 19, 2010 had approved a policy on payment of dividend to shareholders i.e., to pay dividend (excluding corporate dividend tax) up to 15% of the profit after tax of the Company. In line with the policy your directors recommend a dividend of Rs.2.52 per equity share of Rs.1 each (252%) for the financial year ended March 31, 2013, subject to the approval of the shareholders.

The dividend, if approved, would involve a cash outflow of Rs.430.45 million towards dividend and Rs.73.15 million towards corporate dividend tax, resulting in a total cash outflow of Rs.503.60 million.

Transfer to reserves

As stipulated under the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your directors have proposed to transfer a sum of Rs.287 million to the general reserve out of the profits earned by the Company.

A sum of Rs.8,298 million is proposed to be retained as surplus.

Awards and Recognitions

Your Directors have pleasure in reporting the following awards and recognitions that your Company received during the year under review:

- "Gold award for excellence" in SME (Subject Matter Expertise) services from Indus Towers Limited

- Automotive battery plant won 5S sustenance award from CII Southern Region

- Won 3 star award in International Convention on Quality Circles

- Quality award from Bosch India Limited

- "World excellence award" under the category of warranty improvement from Ford, USA

- Special prize for "Good TPM Practices" by ABK AOTS DOSOKAI

- Won "Most Preferred Battery Brand - Telecom" award from FROST & SULLIVAN at India Back-up Power Industry Excellence Awards 2013

The Company won third position (back to back recognition) in "National award for excellence in cost management" for the year 2012 under "Private-Manufacturing-Organisation large" from the Institute of Cost Accountants of India.

Directors

In accordance with the provisions of Section 256(1) of the Companies Act, 1956 and Article 105(a) of the Articles of Association of the Company, Mr. T R Narayanaswamy, Mr. P Lakshmana Rao and Mr. Nagarjun Valluripalli, directors are liable to retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment.

Mr. Ravi Bhamidipati was appointed as an additional director with effect from October 8, 2012 and has been designated as an Executive Director of the Company for the period from October 8, 2012 to March 31, 2014, subject to the approval of the shareholders.

Mr. Craig W Rigby resigned from the Board with effect from April 18, 2013 and Mr. Eric Stuart Mitchell was appointed as an additional director with effect from April 18, 2013 who will hold office upto the date of the ensuing annual general meeting.

Necessary resolutions for appointment/re-appointment of the above directors are being placed before the members for their approval.

The Board wishes to place on record their appreciation and acknowledgement for the valuable services rendered by Mr. Craig W Rigby, the outgoing director, during his tenure as director of the Company.

Auditors

M/s. E Phalguna Kumar & Co. Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, the joint statutory auditors of the Company who hold office until the conclusion of the ensuing annual general meeting and being eligible, have offered themselves for re-appointment. The Board recommends their re-appointment as the joint statutory auditors of the Company.

The Central Government had approved the appointment of M/s. Nageswara Rao and Co. Cost Accountants, Hyderabad as cost auditors for the financial year 2012-13. The cost audit report will be filed within 180 days from the close of the financial year. The cost audit report for the previous financial year 2011-12 signed by Mr. A.V.N.S Nageswara Rao, Cost Accountant, Hyderabad was filed in extensible Business Reporting Language (XBRL) mode on December 31, 2012, within due date.

Corporate Governance

The report on corporate governance along with the certificate from practising company secretary regarding compliance of conditions of corporate governance for the year ended March 31, 2013 pursuant to Clause 49 of the listing agreement is annexed hereto and forms part of the annual report. The Managing Director and the Chief Financial Officer of the Company have submitted a certificate endorsing to the Board the correctness of the financial statements and other matters as required under Clause 49 (V) of the listing agreement.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company''s business, forms part of this annual report.

Transfer to the Investor Education and Protection Fund

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs.307,659 being unclaimed dividend pertaining to the financial year 2004-05 was transferred to the Investor Education and Protection Fund (IEPF) on October 1, 2012.

Fixed deposits

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956, during the year under review and hence there were no outstanding deposits as on March 31, 2013.

Health, safety and environmental protection

The Company has complied with all applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management systems and occupational health and safety management systems respectively.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The directors wish to place on record their appreciation for the excellent co-operation received from all employees at all levels.

Particulars of employees

The statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the annexure to the Directors'' Report.

However, in terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the registered office of the Company. Any member interested in obtaining such particulars may write to the company secretary at the corporate operations office of the Company.

Conservation of energy, technology and foreign exchange

The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 217(1)(e) of the Act read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.

Directors'' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors confirm that, to the best of their knowledge and belief:

i) In the preparation of the statement of profit and loss for the financial year ended March 31, 2013 and the balance sheet as at that date ("financial statements"), applicable accounting standards have been followed;

ii) Appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) The financial statements have been prepared on a going concern basis.

Acknowledgement

The Board of Directors takes this opportunity to place on record their appreciation for the unstinted co-operation, hard work and dedication of all the employees of the Company, and the support extended by the channel partners, customers, vendors, business associates, banks, government authorities and all concerned without which it would not have been possible to achieve all round growth of the Company.

Your directors also take this opportunity to thank the joint venture partner for their valuable assistance and support. The directors are thankful to the shareholders for their continued patronage.

On behalf of the Board

Place: Milwaukee Dr. Ramachandra N Galla

Date: May 13, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2012.

Financial highlights Rs Million

Parameters 2011-12 2010-11

Net revenue 23,674 17,611

Other income 152 78

Total income 23,826 17,689

Operating profit (PBDIT) 3,580 2,588

Profit before interest & tax (PBIT) 3,115 2,171

Profit before tax (PBT) 3,186 2,204

Profit after tax (PAT) 2,151 1,481

Surplus brought forward 4,661 3,786

Amount available for appropriation 6,812 5,267 Appropriations:

Transfer to general reserve 215 148 Dividend on equity capital

Interim dividend - 171

Final dividend 323 222

Dividend tax 52 65

Surplus carried forward 6,222 4,661

Performance overview

The Company has posted gross sales of Rs26,057 million for the financial year 2011 -12 (previous year Rs19,443 million), a 34% growth over the previous financial year. The net sales for the year ended March 31, 2012 grew by 34% at Rs23,674 million (previous year Rs17,611 million). The export sales improved from Rs834 million in 2010-11 to Rs1,170 million in 2011-12 - 40% | growth.

The operating profit (Earnings Before Interest, Depreciation, Tax and Amortisation-EBIDTA) for the year stood at Rs3,580 million (previous year Rs2,588 million) representing 1 5.12% of net sales, The Profit Before Tax (PBT) and Profit After Tax (PAT) for the financial year ended March 31, 2012 was at Rs3,186 million and 2,151 million as against Rs2,204 million and Rs1,481 million of the previous financial year respectively. The profit after tax has registered an impressive 45% growth. The financial year 2011-12 was a significant year in terms of highest ever turnover and profit in the history of the Company.

Industrial battery business

The Company's Industrial Battery business registered 14% volume growth over the previous financial year amidst challenging and competitive market conditions. During the financial year 2011 -12, the telecom sector witnessed significant slowdown in network expansion and up-gradation plans. Lack of growth in 3G business and delay in roll out of Broadband Wireless Access (BWA) networks also affected the growth in telecom business. Despite these challenges, the Company increased the volume and market share by virtue of its "preferred supplier status" with all major customers, backed by timely supplies; efficient after sales service; customer relationship management and product performance of both Powerstack@ and Amaron VoltTM batteries.

During the year under review, the Company has capitalised on the growing demand for UPS batteries in India. The continuous demand for Quanta® batteries and better price realisation from various customers in the UPS sector contributed significantly for the improved performance in the Industrial Battery business. The Company continues to retain dominant market share in UPS battery business. During the year, the distribution channel (AQuA) of Quanta® batteries has been expanded from 75 to 100 dealers to augment sales in UPS battery replacement market.

Exports in the Industrial battery business have been growing significantly in the last couple of years aided by surge in demand through the expansion of Bharti Airtel's network in Africa. The Company has also made significant inroads into Bangladesh and Srilanka.

While the Company is focusing on strengthening the businesses in the sectors in which it currently operates, it is also exploring new opportunities in emerging areas viz., renewable energy and power control sectors, to ensure that the leadership position in the Industrial Battery business is sustained. The Company is investing a sum of Rs1900 million on the capacity enhancement in the medium VRLA product line during the next 12-1 6 months to meet the growing needs and also to sustain the growth momentum.

Automotive battery business

The Company's Automotive Battery business witnessed significant volume growth of 19% and 26% in 4-wheeler and 2- wheeler batteries respectively, over the previous financial year.

During the period under review, the Company clocked a healthy double digit volume growth in automotive OEM business, despite muted automobile production in the Country due to adverse macro-economic conditions. The Aftermarket business saw substantial volume growth in 4-wheeler and 2-wheeler due to strong demand for Amaron'® and PowerZone™ batteries from the customers. The aggressive advertisement campaigns and

effective promotional activities for brand Amaron'® and the launch of Amaron'® and PowerZone™ branded tubular inverter batteries and Home UPS under private label program has helped the Company to increase volume and market share.

During the year, the Company has expanded the Amaron® channel with the addition of 34 franchisees and initiated various activities around the channel to enhance the number of active retailers among the 18,000 retailers in Amaron'®channel. The number of retail partners in PowerZone™ channel has increased to 900 in semi-urban and rural locations across the country.

The export business continues to grow in the Middle East with enrollment of more distributors. The Amaron'® brand is well accepted in various countries across the Indian Ocean Rim, built through focused effort over the years.

In a short span of 4 years, the first ever VRLA motorcycle battery in India (Amaron Pro Bike Rider™) carved out an impressive share of about 24% of 2-wheeler organised replacement battery market. With the introduction of PowerZone™ branded batteries in the two wheeler segment, the Company is confident of garnering more volumes in the replacement market. The Company is well on course towards bagging the first few bulk orders from two wheeler original equipment manufacturers.

During the year, the 4-wheeler and 2-wheeler battery capacities were enhanced to 5.60 million units per annum and 4.80 million units per annum respectively to cater to the growing demand for the Company's products. The 4-wheeler battery capacity will be enhanced further to 6.00 million units per annum during 2013- 14 to meet the capacity requirement of financial year 2013-14.

Financial position

The Company's financial position has vastly improved over the years. The net worth as at March 31, 2012 improved to Rs8,235 million with the addition of Rs1,776 million to the reserves during the year. During the financial year 2011-12, the Company has repaid in full the balance of term loan availed from BNP Paribas (ECB) and as at March 31, 2012 there are no interesting bearing debts in the books.

The debt to equity ratio as at March 31, 2012 stands at 0.10 times, without adjusting for cash and bank balances of Rs2,292 million. The Company has parked the surplus funds in fixed deposits with reputed banks to ensure utmost safety, liquidity and return. The Company is confident of funding the recently announced capacity expansion at a strategic second location through the surplus cash and internal accruals. During the year under review, CRISIL reaffirmed the ratings for bank loan facilities for long-term at "CRISIL AA/stable" and for short-term at "CRISIL A1 ."

During the year under review, the gross fixed assets including capital work in progress increased by Rs765 million and are at Rs6,528 million (previous year - Rs5,763 million). The entire additions were funded through internal accruals.

The earnings per share of Rs2/- each for the financial year 2011 -12 was at Rs25.18/- as against Rs17.34/- for the previous financial year 2010-11, while the book value per share as at March 31, 2012 was at Rs96/- against Rs76/- as at March 31, 2011.

Dividend

In line with the dividend policy adopted by the Board of Directors at their meeting held on May 19, 2010 to pay dividend (excluding dividend tax) up to 1 5% of the Profit After Tax (PAT) of the Company, your directors recommend a dividend of Rs3.78/- per equity share of Rs2/- each for the financial year ended March 31, 2012, subject to the approval of the shareholders.

The dividend, if approved, would involve a cash outflow of Rs322.84 million towards dividend and Rs52.37 million towards dividend tax, resulting in a total cash outflow of Rs375.21 million.

Transfer to reserves

As stipulated under the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your Directors have proposed to transfer a sum of Rs21 5.06 million to the general reserve out of the profits earned by the Company. A sum of Rs1,560.36 million is proposed to be retained as surplus.

Sub-division of shares

With a view to enhance the shareholders' wealth, easy accessibility and liquidity of the Company's equity shares to small shareholders, the board at their meeting held on May 28, 2012 recommended, subject to the approval of the shareholders, the

sub-division of the face value of the equity shares from Rs2/- each to Rs1/- each. The notice of the ensuing annual general meeting contains necessary resolutions for approval of the shareholders in this regard.

Awards & recognitions

Your Directors have pleasure in reporting the following awards and recognitions that your Company received during the year under review:

The Employer Branding Institute, a premier industry body on assessment of best people practices, has recognised Amara Raja as 3rd best employer in India for the year 2011 and conferred the following awards at the National Level:

- "Best HR Strategy in line with business."

- "Continuous Innovation in HR Strategy at work."

- "Excellence in HR through technology."

- "Excellence in Training."

- "Innovation in Recruitment."

- "Talent Management."

The Company received the "World Excellence Award - Recognition of Achievement" under the category of Warranty

Improvement for the year 2011 from Ford Motor Company at its annual world excellence awards function.

The Company received the first prize in "Best Organisation for Quality Movement" consecutively for the second time from Quality Control Forum of India (QCFI) and bagged two gold category awards at regional level (south) for QCC and excellence level awards at the national level in the automotive battery business.

The Company won third position in "National award for Excellence in Cost Management" for the year 2011 under 'Private-Manufacturing-Organisation-Large' from The Institute of Cost Accountants of India.

The Company's Amaron® "Life Saver" media commercial has won Silver Medal under 'Automotive Vehicles and Accessories' category in the Creative ABBY Award - 2012.

Directors

In accordance with the provisions of Section 256(1) of the Companies Act, 1956 and Article 105(a) of the Articles of Association of the Company, Dr. Ramachandra N Galla and Mr. N. Sri Vishnu Raju, directors are liable to retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment.

Mr. Jorge A Gonzalez resigned from the board with effect from May 28, 2012 and Mr. Craig W Rigby was appointed as a director to fill the casual vacancy caused by the resignation of Mr. Jorge A Gonzalez, with effect from May 28, 2012.

Mr. Raymond J Brown was appointed as an additional director (independent) with effect from May 28, 2012 and will hold office upto the date of the ensuing annual general meeting.

The board wishes to place on record their appreciation and acknowledgement for the valuable services rendered by Mr. Jorge A Gonzalez, the outgoing director, during his tenure as director of the Company.

Auditors

M/s. E. Phalguna Kumar & Co, Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, the joint statutory auditors of the Company retire at the conclusion of the ensuing annual general meeting and are eligible for re-appointment.

The Central Government has approved the appointment of Mr.A.V.N.S. Nageswara Rao, Cost Accountant as the Cost Auditor for the financial year 2011 -12. The cost audit report will be filed within 180 days from the close of financial year.

In respect of previous financial year 2010-11, the cost audit report from Mr.A.V.N.S. Nageswara Rao, Cost Accountant was filed on September 20, 2011 within due date of September 27, 2011.

Corporate governance

The Company's Corporate Governance practices have been detailed in a separate section and are annexed to and forms part of this annual report. The certificate from a practising company

secretary on the compliance of conditions of corporate governance as per clause 49 of the listing agreement is also attached as an annexure and forms part of this report.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company's business, forms part of this annual report.

CEO and CFO Certification

As required under clause 49 (V) of the listing agreement, the CEO/CFO certification on the financial statements of the Company as given by Mr. Jayadev Galla, Managing Director and Mr. K. Suresh, Chief Financial Officer forms part of this annual report.

Transfer to the investor education and protection fund

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs300,107/- being unclaimed dividend pertaining to the financial year 2003-04 was transferred to the Investor Education and Protection Fund (IEPF) on October 1, 2011.

Fixed deposits

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956, during the year under review and hence there were no outstanding deposits as on March 31, 2012.

Health, safety and environmental protection

The Company has complied with all the applicable environmental and labour laws. The Company continues to be certified under ISO-14001 and OHSAS 18001-2007 for its environment management system and occupational health and safety management systems respectively.

Industrial relations

During the year under review, industrial relations remained cordial and stable. The Directors wish to place on record their appreciation for the excellent cooperation received from all employees at all levels.

Particulars of employees

The statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the annexure to the Directors' Report.

However, in terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Director's Report is being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the registered office of the Company. Any member interested in obtaining such particulars may write to the company secretary at the corporate operations office of the Company.

Conservation of energy, technology and foreign exchange

The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.

Directors' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors confirm that, to the best of their knowledge and belief:

- In the preparation of the statement of profit & loss for the financial year ended March 31, 2012 and the balance sheet as at that date ("financial statements"), applicable accounting standards have been followed;

- Appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- The financial statements have been prepared on a going concern basis.

Acknowledgement

The Board wishes to place on record its sincere appreciation for the continued support extended to the Company by the customers, vendors, investors, business associates, banks, government authorities and employees.

Your Directors acknowledge with gratitude the encouragement and support extended by joint venture partner and the shareholders.

On behalf of the Board

Place: Hyderabad Dr. Ramachandra N Galla

Date: May 28, 2012 Chairman


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their report together with the audited accounts for the financial year ended March 31, 2011.

Financial highlights

(Rs million)

Parameters / Year 2010-11 2009-10

Gross sales 20,765 16,904

Net sales 17,611 14,645 Profit before depreciation,

interest and tax (PBDIT) 2,588 2,965

Profit before interest and tax (PBIT) 2,171 2,536

Profit before tax (PBT) 2,210 2,546

Profit after tax (PAT) 1,481 1,670

Surplus brought forward 3,786 2,573

Amount available for appropriation 5,267 4,243 Appropriations:

Transfer to General Reserve 148 167 Dividend on equity capital:

Special dividend 171 -

Proposed dividend 222 248

Dividend tax 65 42

Surplus carried to balance sheet 4,661 3,786

Performance overview

The Company recorded gross sales of Rs20,765 million in 2010-11, a 23% growth over the previous fiscal year. The net sales for the year ended March 31, 2011 was at Rs17,611 million as against Rs14,645 million for the financial year 2010, an increase of 20%. The export sales improved from Rs522 million to Rs834 million – 60% growth.

The operating profit (earnings before interest, depreciation, tax and amortisation - EBIDTA) for the year stood at Rs2,588 million (previous year Rs2,965 million) representing 14.69% of net sales against 20.24% in financial year 2009-10. The lower profit was primarily on account of significant drop in price realisations in the telecom sector, despite good volume growth.

The Profit Before Tax (PBT) and Profit After Tax (PAT) for the financial year ended March 31, 2011 was at Rs2,210 million and Rs1,481 million as against Rs2,546 million and Rs1,670 million of the previous financial year respectively.

The average LME lead price was at USD 2,245/MT for the year 2010-11 as compared with USD 1,985/MT for the year 2009-10.

Industrial battery business

The Company's industrial battery unit registered a 20% volume growth during the year, amidst highly competitive market conditions. The Company touched the first ever one billion ampere hour (Ah) volume mark in 2010-11 and emerged as the market leader in both telecom and UPS businesses with 42% and 32% market share respectively.

Slowdown in network expansion and sharing of tower infrastructure reduced the market potential in telecom. This presented significant challenges both in volume and in price realisations. The Company was able to partially minimise this impact by continuing to increase its market share in the telecom sector by virtue of its ‘preferred supplier status’ with all the major telecom customers, backed by product performance of its leading brand PowerStack® and service. The Company benefited from the growing demand for its QuantaTM batteries in the UPS sector, resulting in substantial growth in sales volume during the financial year 2010-11. While the price erosion in telecom segment impacted revenues and margins significantly, favourable overall business mix aided by higher share of UPS battery volume and aggressive cost management strategies helped the Company achieve better than planned margins.

During the year, the Company introduced Amaron VoltTM Hi-Life range of premium batteries for critical application requirements in telecom networks, renewable energy sector and power control business. The Company expanded its footprint in African countries by partnering with Bharti Airtel, Africa for supplying its products to power their African telecom network.

Automotive battery business

The Company's automotive battery unit sales volume grew by 20% and 58% in four- wheeler and two-wheeler batteries respectively, over the previous financial year. Consequent to the significant increase in sales volume, the Company's market share improved to 30% in the organised automotive aftermarket. The overall growth in sales volume was achieved due to various initiatives around channel expansion in the Indian aftermarket, robust demand from OEMs and the addition of new geographies in international markets. The improved operational performance of the automotive battery unit was due to increased volumes and efficiency thereof.

During the year, the Company doubled its two-wheeler battery capacity from 1.80 million units to 3.60 million units per annum in line with market potential. The Company also placed orders for manufacturing equipment to enhance the capacity of both four-wheeler and two-wheeler batteries during 2011-12. The four-wheeler battery capacity will be enhanced from 4.20 million units to 5.60 million units per annum and two-wheeler battery capacity from 3.60 million units to 5.00 million units per annum by end September 2011.

Financial position

The Company's net worth as at March 31, 2011 was at Rs6,459 million. During the year under review, Rs1,023 million was added to the reserves. The debt of Rs950 million, as at the date of balance sheet, comprises Rs89.44 million (USD 2 million) 'External Commercial Borrowing', Rs710 million 'Interest free sales tax deferment' and Rs151 million short-term working capital borrowing. The debt to equity ratio as at March 31, 2011 was at 0.15 times, without adjusting for cash and bank balances of Rs402 million. During the year under review, CRISIL reaffirmed the rating for term loan and cash credit at "AA/Stable" and for letter of credit and bank guarantee at P1 .

The gross fixed assets (including capital work in progress) increased by Rs625 million during the year to be at Rs5,763 million (previous year - Rs5,138 million). During the year, the Company embarked on a capacity expansion programme, both in four-wheeler and two-wheeler battery plants, with a capital outlay of about Rs850 million to be completed by September 2011. The entire capital expenditure will be funded through internal accruals.

During the year under review, despite an increase in lead price and significant volume growth, the Company maintained its working capital well within the targeted limits to improve the overall working capital ratio and optimise costs.

The earnings per share for the year was at Rs17.34 as against Rs19.56 in financial year 2010, while the book value per share was at Rs76 compared with Rs64 as at March 31, 2010.

Dividend

During the year, the Company paid a special dividend (100%) of Rs2 per equity share of Rs2 each to commemorate the silver jubilee occasion. Further, your Directors are pleased to recommend a final dividend (130%) of Rs2.60 per equity share of Rs2 each for the financial year ended March 31, 2011. With this, the total dividend declared for the year is Rs4.60 per equity share – 230% dividend.

The final dividend, if approved, would involve a cash outflow of Rs222.06 million towards dividend and Rs36.88 million towards dividend tax, resulting in a total additional cash outflow of Rs258.94 million.

Transfer to reserves

In accordance with the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your Directors have proposed to transfer a sum of Rs148.10 million to the general reserve out of the profits earned by the Company. A sum of Rs4,661.08 million is proposed to be retained in the profit and loss account.

Awards & recognitions

Your Directors have pleasure in reporting the following awards and recognitions that your Company received during the year under review:

- First prize under the discrete manufacturing category at the CII- 4th National conference and competitions on Six Sigma.

- Employer Branding Institute a premier industry body on assessment of best people practices awarded Amara Raja the following awards:

Regional round (Southern region):

- Award for 'Best HR Strategy in line with Business'

- Award for 'Continuous Innovation in HR Strategy at Work'

- Award for 'Excellence in HR Through Technology'

National rounds:

- Award for 'Best HR Strategy in line with Business'

- Award for 'Continuous Innovation in HR Strategy at Work'

- The Supply Chain Leader 2011 award under the category dry cells and storage batteries by Industry 2.0 India SCM Conclave.

Directors

In accordance with the provisions of Section 256(1) of the Companies Act, 1956 and Article 105(a) of the Articles of Association of the Company, Mr. Shu Qing Yang and Mr. Jorge A Gonzalez, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

A brief resume, expertise and details of other directorship(s) etc., relating to re-appointment of Directors is provided in the notice of the ensuing Annual General Meeting.

Mr. Rohit Kochhar who acted as an alternate Director to Mr. Shu Qing Yang, Director, vacated his office in terms of Section 313 of the Companies Act, 1956 with effect from July 29, 2010.

Mr. Anthony Wu Huang who acted as an alternate Director to Mr. Jorge A Gonzalez, Director, vacated his office in terms of Section 313 of the Companies Act, 1956 with effect from January 24, 2011.

The Board wishes to place on record its grateful appreciation and acknowledgement for the valuable contributions rendered by Mr. Rohit Kochhar and Mr. Anthony Wu Huang during their tenure as alternate Directors of the Company.

Auditors

M/s. E. Phalguna Kumar & Co, Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, the joint auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

The Board, on the recommendation of the Audit Committee, proposed that M/s. E.Phalguna Kumar & Co, Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, be re-appointed as the joint auditors of the Company. Necessary resolution is being placed before the shareholders for their re-appointment at the ensuing Annual General Meeting. The Company also received from the auditors, certificates to the effect that their re-appointment, if made, would be in accordance with the limits as prescribed in Section 224 (1B) of the Companies Act, 1956.

Cost auditor

In terms of Section 233B of the Companies Act, 1956 and as per the directives of the Central Government,

Mr. A. V. N. S. Nageswara Rao, Hyderabad, was appointed as Cost Auditor of the Company to conduct the cost audit for the financial year 2010-11.

The Company re-appointed Mr. A. V. N. S. Nageswara Rao as Cost Auditor for the year 2011-12. The Company received the approval of the Central Government for re-appointment of Mr. A. V. N. S. Nageswara Rao as the Cost Auditor of the Company for auditing the cost records for the financial year 2011-12.

Corporate governance

The Company's Corporate Governance practices have been detailed in a separate section and are annexed to and forms part of this annual report. The certificate from a Practising Company Secretary on the compliance of Corporate Governance Code embodied in Clause 49 of the Listing Agreement is also attached as annexure and forms part of this report.

Management discussion and analysis

Management discussion and analysis report, highlighting the performance and prospects of the Company's business, forms part of this annual report.

CEO/CFO certification

As required under Clause 49 (V) of the Listing Agreement, the CEO/CFO certification on the accounts of the Company as given by Mr. Jayadev Galla, Managing Director and Mr. K. Suresh, Chief Financial Officer, forms part of this annual report.

Transfer to the investor education and protection fund

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs2,60,321 being unclaimed/unpaid dividend pertaining to the financial year 2002-03 was transferred to the Investor Education and Protection Fund (IEPF) on September 17, 2010.

Further, the unclaimed/unpaid dividend relating to the financial year 2003-04 is due for remittance on September 16, 2011 to IEPF, during the financial year 2011-12.

Conservation of energy, technology and foreign exchange

The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.

Directors' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief:

- In the preparation of the profit and loss account for the financial year ended March 31, 2011 and the balance sheet as at that date ("financial statements"), applicable accounting standards have been followed;

- Appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit Committee meets at regular intervals to review the internal audit function;

- The financial statements have been prepared on a going concern basis.

Acknowledgement

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers, vendors, investors, business associates, banks, government authorities and employees.

Your Directors acknowledge with gratitude the encouragement and support extended by the joint venture partner and the shareholders.

On behalf of the Board

Dr. Ramachandra N Galla Chairman

Place: Milwaukee, USA Date: May 16, 2011


Mar 31, 2010

The directors have pleasure in presenting their report together with the audited accounts for the financial year ended March 31, 2010.

Financial highlights

(Rs. million) Particulars For the year ended March 31, March 31, 2010 2009 Profit after tax 1,670.33 804.79 Add: Profit brought forward 2,572.80 1,928.43 from last year Profit available for appropriation 4,243.13 2,733.22 Appropriation General reserve 167.03 80.48 Dividend (Including dividend tax) 289.77 79.94 Surplus carried to balance sheet 3786.33 2,572.80

Performance

During the year under review, the Company achieved a gross turnover of Rs. 16,910.84 million as against Rs.15,794.10 million. Other income for the year was at Rs. 170.17 million as against Rs. 80.56 million of the previous year.

The net sales for the year ended March 31, 2010 was Rs.14,652.10 million, as against Rs.13,131.79 million for the corresponding period of the previous year thereby achieving a growth of 12%. The Profit Before Tax (PBT) stood at Rs. 2,546.35 million as against Rs.1,226.59 million and Profit After Tax (PAT) at Rs. 1,670.33 million as against Rs. 804.79 million.

The financial year 2009-10 was a significant year for the Company in terms of growth in profitability. The net profit during

the year has grown by 107% over the previous financial year.

Industrial battery unit

The Company’s industrial battery unit witnessed double digit growth in sales volume during the financial year 2010. During the year, the installed capacity of Medium VRLA was enhanced from 1.20 million to 1.80 million units per annum. The Company continues to enjoy its preferred supplier status from leading telecom operators. The industrial battery unit’s two leading brands viz., PowerstackTM and QuantaTM have continued its brand preference in Telecom, UPS and other user segments viz., ITES, Railways, Power Control, Solar etc. The Company’s market share in telecom continued to increase during the year under review and was at 32% at the end of the financial year.

Automotive battery unit

During the year, the Company’s automotive battery unit revenue and volume grew by 20% over the previous financial year 2008- 09. The growth in sales volume outpaced the industry growth both for automotive and motor cycle batteries. The Company was able to maintain its market share both in OEM and aftermarket aided by its focus on channel building, realignment of its product portfolio and brand awareness programmes. The Company received the permit to use the “Diamond Mark” from the Kenya Bureau of Standards and received “Gulf Standard Organisation Certification” from the Directorate General of Specifications and Measurements, Ministry of Commerce and Industry, Sultanate of Oman, for its automotive batteries.

During the year the Company launched its second variant in the category of motor cycle batteries (with VRLA technology) under the name of “Amaron Pro Bike RiderTM BETA series” with 48 months warranty in the aftermarket. The BETA series would enhance the product portfolio in addition to the existing variant - ALPHA with 60 months warranty.

In 2009-10, the Company expanded its Amaron® network to over 200 franchisees and 18000 retailers and strengthened the presence through 700 PowerZoneTM outlets in semi-urban and rural locations.

A detailed report on both industrial and automotive battery businesses and their outlook is covered under Management Discussion and Analysis Report (MDAR) which is part of the directors’ report.

Finance

The Company’s financial position continues to be comfortable with its debt equity ratio at 0.17:1. As at March 31, 2010 the Company’s cash balance was healthy at Rs. 624.67 million. During the year under review, the Company has reduced its long term liabilities (secured loans) to Rs. 272.95 million as against Rs. 2,078.32 million of previous year. The Company pre closed the term loans availed from Citibank and Bank of Nova Scotia aided by improved cash flow.

Credit rating

During the year under review, CRISIL based on its evaluation, upgraded the rating for term loan and cash credit to “AA/Stable” from AA-/Stable and reaffirmed the ratings for the letters of credit and bank guarantees as P1+.

The improved rating affirms the Company’s financial strength and positive business scenario.

Dividend

The board of directors at their meeting held on May 19, 2010 adopted a dividend policy to pay dividend (excluding dividend tax) upto 15% of the net profit after tax (PAT) of the Company.

The board of directors recommended a dividend @ 145% on the paid up equity share capital of the Company, i.e. Rs. 2.90 per

equity share of Rs. 2/- each for the financial year ended March 31, 2010.

The dividend, if approved, would involve an outflow of Rs. 248 million towards dividend and Rs. 42 million towards dividend tax, resulting in a total cash outflow of Rs. 289 million.

The register of members and share transfer books of the Company will remain closed from July 22, 2010 to July 29, 2010 (both days inclusive) for the purpose of determination of the members entitled for dividend. The annual general meeting of the Company is scheduled to be held on Thursday, July 29, 2010 at 3.00 PM at the registered office of the Company.

Transfer to reserves

In accordance with the provisions of the Companies Act, 1956 read with Companies (Transfer to Reserves) Rules, 1975, your directors propose to transfer a sum of Rs. 167.03 million to the general reserve out of the profits earned by the Company. A sum of Rs. 3786 million is proposed to be retained in the profit and loss account.

Awards and recognitions

Your directors have pleasure in reporting the following awards and recognitions the Company received during the year under review:

1. Best Employer Award in the Electronics Industry category by ‘Employer Branding Institute of India’.

2. “Continuous Innovation in HR Strategy at Work” (National Round) and for “Excellence in HR through Technology” (Regional round) by ‘Employer Branding Institute of India’

3. “Best Telecom Equipment Manufacturer” under the category of VRLA battery by BSNL (a government undertaking) Telecom Quality Assurance Circle, Bangalore.

4. “Quality Excellence” for the year 2009 by Indus Towers Limited.

Directors

In accordance with the provisions of Section 256(1) of the Companies Act, 1956 and Article 105(a) of the Articles of Association of the Company, Mr. P. Lakshmana Rao and Mr. Nagarjun Valluripalli, are liable to retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment.

The board has recommended the re-appointment of Mr. Jayadev Galla as the Managing Director of the Company for a further period of five years commencing from September 1, 2010, subject to the approval of shareholders at the ensuing annual general meeting. Necessary resolutions are being placed before the shareholders at the ensuing annual general meeting for their consideration and approval.

A brief resume, expertise and details of other directorship(s) etc., relating to appointment and reappointment of directors are provided in the notice of the ensuing annual general meeting.

Mr. Jorge A Gonzalez was appointed as director of the Company with effect from November 1, 2009 in the casual vacancy caused by the resignation of Mr. Raymond J Brown in terms of Section 262 of the Companies Act, 1956.

Mr. Raymond J. Brown had tendered his resignation and the same was accepted by the board with effect from November 1, 2009.

Mr. Frank E. Kraick, who was appointed as alternate director to Mr. Raymond J. Brown vacated his office in terms of Section 313 and related provisions of the Companies Act, 1956 with effect from November 1, 2009.

The board wishes to place on record its grateful appreciation and

acknowledgement for the valuable contributions rendered by the outgoing directors during their tenure.

Mr. Tony. W. Huang was appointed as an alternate director to Mr. Jorge A Gonzalez in terms of Section 313 of the Companies Act, 1956 with effect from May 19, 2010.

Mr. Rohit Kochhar was appointed as an alternate director to Mr. Shu Qing Yang in terms of Section 313 of the Companies Act, 1956 with effect from May 19, 2010.

Auditors

The board, on the recommendation of the audit committee, has proposed that M/s. E.Phalguna Kumar & Co, Chartered Accountants, Tirupati and M/s. Chevuturi Associates, Chartered Accountants, Vijayawada, be re-appointed as the joint statutory auditors of the Company. Necessary resolution is being placed before the shareholders for their re-appointment at the ensuing annual general meeting. The Company has also received from the auditors confirmation to the effect that their re-appointment, if made, would be in accordance with the limits as prescribed in Section 224 (1B) of the Companies Act, 1956.

Cost auditor

In terms of Section 233B of the Companies Act, 1956 and as per the Government’s directives, Mr. A.V.N.S. Nageswara Rao, was appointed as the cost auditor of the Company to conduct the cost audit for the financial year 2009-10.

For the year 2010-11 the Company re-appointed Mr. A.V.N.S. Nageswara Rao as the Cost Auditor of the Company. The Company has since received the approval of the Central Government for the appointment of Mr. A.V.N.S. Nageswara Rao as the cost auditor of the Company for auditing the cost records of the Company for the financial year 2010 -11.

Corporate Governance

The Company’s corporate governance practices have been detailed in a separate section and are annexed to and forms part of this annual report. The certificate from the auditors’ on the compliance of corporate governance code as required under clause 49 of the listing agreement is also attached as annexure and forms part of this report.

Management Discussion and Analysis

Management Discussion and Analysis Report, highlighting the performance and prospects of the Company’s business, forms part of this annual report.

CEO and CFO Certification

As required under clause 49 (V) of the listing agreement, the CEO/CFO certification on the accounts of the Company as given by Mr. Jayadev Galla, Managing Director and Mr. K. Suresh, Chief Financial Officer forms part of this annual report.

Transfer to the Investor Education and Protection Fund

In terms of Section 205A read with Section 205C of the Companies Act, 1956, an amount of Rs. 616,911/- being unpaid/unclaimed dividend pertaining to the financial year 2001-02 was transferred to the Investor Education and Protection Fund (IEPF) on October 13, 2009.

Further the unclaimed/unpaid dividend relating to the financial year 2002-03 is due for remittance on September 05, 2010 to the Investor Education and Protection Fund during the financial year 2010-11.

Fixed deposits

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956 during the year under review and hence there were no outstanding deposits as on March 31, 2010

Health, safety and environmental protection

The Company has complied with all the applicable environmental laws and labour laws. The Company continues to be certified under ISO–14001 for its environment management system. The Company has been complying with the relevant laws and has been taking all necessary measures to protect the environment and maximise employee health and safety.

Industrial relations

During the year under review, the industrial relations remained cordial and stable. The directors wish to place on record their appreciation for the excellent cooperation received from all employees at all levels.

Particulars of Employees

The statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given in the annexure to the directors’ report.

However, in terms of the provisions of section 219 (1) (b) (iv) of the Companies Act, 1956, the directors’ report is being sent to all the members of the Company, excluding the aforesaid information. The said information would be filed with the Registrar of Companies and also would be available for inspection by the members at the corporate operations office of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

Conservation of energy, technology and foreign exchange

The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms part of this report.

Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors confirm that, to the best of their knowledge and belief: in the preparation of the profit & loss account for the financial year ended March 31, 2010 and the balance sheet as at that date (“financial statements”), applicable accounting standards have been followed; appropriate accounting policies have been selected and applied consistently and such judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations. In weighing the assurance provided by any such system of internal controls its inherent limitations

should be recognised. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function; the financial statements have been prepared on a going concern basis.

Acknowledgement

The board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers, vendors, investor’s, business associates, banks, Government authorities and employees.

The directors acknowledge with gratitude the encouragement and support extended by the shareholders.

On behalf of the Board Place: Hyderabad Dr. Ramachandra N Galla Date: May 19, 2010 Chairman

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