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Amara Raja Energy & Mobility Ltd. Directors Report
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You can view full text of the latest Director's Report for the company.
Market Cap. (Rs.) 13917.25 Cr. P/BV 2.63 Book Value (Rs.) 289.60
52 Week High/Low (Rs.) 916/563 FV/ML 1/1 P/E(X) 20.04
Bookclosure 10/11/2023 EPS (Rs.) 37.95 Div Yield (%) 0.80
Year End :2023-03 

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.


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