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Notes to Accounts of Amara Raja Batteries Ltd.

Mar 31, 2017

* Beneficial interest in respect of 12,795,074 shares of Dr. Ramachandra N Galla, 12,445,834 shares of Jayadev Galla and 14,990,400 shares of the rest was transferred in the name of RN Galla Family & Co.

Note: The interest free sales tax deferment loans were availed by the Company under the Government of Andhra Pradesh TARGET 2000 New Industrial Policy as per which the loans are repayable at the end of the 14th year from the year in which these loans were availed. The Company has also entered into agreements with the Deputy Commissioner of Commercial Taxes, Chittoor in respect of the aforementioned loans per which the repayment schedule of the loans have been determined as being repayable at the end of the 14th year from the month in which these loans were availed. The Management is however of the view that these loans are repayable at the end of the 14th year from the year in which these loans were availed in terms of the sanction of these loans by the Government of Andhra Pradesh, Commissioner ate of Industries and are accordingly making an early repayment of these loans.

Note: The provision for warranty claims represents the present value of the Management''s best estimate of the future outflow of economic benefits that will be required under the Company''s obligation for warranties. The estimation has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality.

a. Defined contribution plans

The Company makes Provident Fund, Superannuation Fund and Employees'' State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. The Company recognized Rs,4.30 crores (Year ended March 31, 2016: Rs,3.50 crores) for provident fund contributions, Rs,5.18 crores (Year ended March 31, 2016: Rs,4.09 crores) for Superannuation Fund contributions and Rs,3.69 crores (Year ended March 31, 2016: Rs,3.11 crores) towards Employees'' State Insurance Scheme contributions in the Statement of Profit and Loss.

b. Defined benefit plans

The Company provides to the eligible employees defined benefit plans in the form of gratuity. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The measurement date used for determining retirement benefits for gratuity is March 31.

(i) Balance Sheet

The assets, liabilities and surplus / (deficit) position of the defined benefit plans at the Balance Sheet date were:

(v) Assumptions

With the objective of presenting the plan assets and plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognized in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.

Note 1: Segment reporting

The Vice Chairman and Managing Director of the company has been identified as the Chief Operating Decision Maker (CODM) who evaluates the Company''s performance and allocates resources for manufacture and marketing of lead acid storage batteries. Accordingly, manufacturing and trading of lead acid storage batteries is considered as the operating segment of the Company.

Geographical information

The Company operates in India and makes certain sales to customers situated outside of India. The revenue from external customers by location of customers is detailed below. All the non-current assets of the Company are situated within India.

Refer to Note 43 on Financial Risk Management and Capital Management for information on revenue from major customers.

Note 2: The Company had purchased 8.68 hectares of freehold land for a consideration of Rs,15.59 crores in 2011-12 at Tehsil Laksar, District Haridwar, Uttarakhand State. Under the terms of sanction by the State Government for sale of such land, a manufacturing unit was to be set up within two years from the date of purchase of land, which owing to unforeseen circumstances could not take place. The District Collector vide order dated November 10, 2014 initiated proceedings for vesting the aforementioned land with the State Government. Based on legal advice, the Company has gone in appeal against the order of the District Collector and is pursuing the matter with relevant authorities. Consequent to the appeal by the Company against the aforesaid order, the Court of Board of Revenue, Dehradun, Uttarakhand State, has stayed the proceedings initiated under the aforesaid order.

However, pending resolution of the matter which is sub-judice, the Company had in the previous years, fully impaired the value of the aforesaid land. Consequent to the transition to Ind AS, and the Company''s election to continue with the carrying amount of all of its property, plant and equipment recognized as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date, the provision for impairment recorded in respect of the said land before the date of transition under previous GAAP cannot be reversed in later years.

Note 3: Related party transactions

(a) Details of related parties Entity exercising significant influence

RN Galla Family & Co. (Partnership Arm)

Johnson Controls (Mauritius) Private Limited, Mauritius

Key Management Personnel

Jayadev Galla Vice Chairman and Managing Director

Relative of Key Management Personnel

Dr. Ramachandra N Galla (Father of KMP) Chairman

Entities in which KMP / Relatives of KMP exercise significant influence

Amara Raja Power Systems Limited

Amara Raja Electronics Limited

Mangal Industries Limited

Amara Raja Infra Private Limited

Amara Raja Industrial Services Private Limited

Asistmi Solutions Private Limited

Amara Raja Media and Entertainment Private Limited

RNGalla Family Holdings Private Limited

G2 Healthcare Private Limited

Nine Nines Lifestyle Private Limited

Amaron Batteries Private Limited

Rajanna Trust

The Company''s significant leasing arrangements are in respect of operating leases for premises (off i ces and warehouses). These leasing arrangements which are cancellable, range between 1 years and 9 years generally and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals of Rs,16.54 crores (year ended March 31, 2016: Rs,14.50 crores) paid under such arrangements has been charged to the Statement of Profit and Loss.

Note: Net of income from sale of batteries, scrap, etc. Nil crores (Year ended March 31, 2016: Rs,2.44 crores)

Note 4: Disclosure as per Regulation 53(f) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:

(i) Loans and advances in the nature of loans given to Companies in which Directors are interested Rs,Nil (March 31, 2016: Rs,Nil)

(ii) Details of investments made under Section 186 of the Companies Act, 2013 are disclosed in Note 5. There are no loans / guarantees issued under Section 186 of the Companies Act, 2013.

The Company has obtained approval from Department of Scientific and Industrial Research for claiming of weighted tax benefit under Section 35(2AB) of the Income Tax Act, 1961.

2. The fair values of investments in unquoted equity investments has been estimated using a discounted cash fi ow model under income approach. The valuation requires Management to make certain assumptions about model inputs, including forecast cash flows, discount rate and credit risk, the probabilities of the various estimates within range can be reasonably assessed and are used in Management''s estimate of fair value for these unquoted investments.

Note 5: Fair value hierarchy

The fair value of financial instruments as referred to in Note 41 above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identified assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements]

The categories used are as follows:

Level 1: Quoted prices for identified instruments in an active market.

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data.

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value of the Company''s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company''s financial assets and financial liabilities are measured at the fair value at the end of each reporting period. The following table gives information about how the fair value of these financial assets and financial liabilities are determined (in particular, the valuation technique and other inputs used).

Notes:

1 If the Long-term revenue growth rates used were 1% higher/lower while all other variables were held constant, the carrying amount of the shares would increase/(decrease) by Rs,0.78 crores and Rs,(0.68) crores respectively [as at March 31, 2016: increase/(decrease) by Rs,0.63 crores and Rs,(0.55) crores; as at April 1, 2015: increase/(decrease) by Rs,0 .61 crores and Rs,(0.53) crores respectively].

2 A 1% increase/ (decrease) in WACC or discount rate used while holding all other variables constant would (decrease)/increase the carrying amount of the unquoted equity investments by Rs,(1.17 crores) and Rs,(0.96 crores), Rs,1.34 crores and Rs,1.12 crores respectively (as at March 31, 2016: (decrease)/increase by Rs,(0.93 crores) and Rs,(0.77 crores), Rs,1.07 crores and Rs,0.90 crores respectively; as at April 1, 2015: (decrease)/increase by Rs,(0.87 crores) and Rs,(0.73 crores), Rs,1.01 crores and Rs,0.86 crores respectively)

3 These investments in equity instruments are not held for trading. Instead, they are held for long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI irrevocably as the Management believes that this provides a more meaningful presentation for long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, credit risk and foreign currency risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are overseen by the Board of Directors of the Company.

A. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligation. Trade receivables Concentration of credit risk with respect to trade receivables are limited, due to Company''s customer base being large and diverse. All trade receivables are reviewed and assessed for default on a monthly basis.

Historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets.

The following table gives details in respect of revenues generated from top customer and top 5 customers:

Apart from one customer who is the largest customer of the Company, the Company does not have significant credit risk exposure to any single counter party.

Other financial assets

The Company maintain exposure in cash and cash equivalents, term deposits with banks and money market liquid mutual funds.

The Company''s maximum exposure of credit risk as at March 31, 2017, March 31, 2016 and April 1, 2015 is the carrying value of each class of financial assets.

B. Foreign currency risk management

The Company is subject to the risk that changes in foreign currency values impact the Company''s export revenues and import of raw materials and property, plant and equipment. The Company is exposed to foreign exchange risk arising from currency exposures, primarily with respect to US Dollars.

The Company manages currency exposures within prescribed limits. The aim of the Company''s approach to management of currency risk is to leave the Company with no material residual risk.

The following table presents foreign currency risk from non-derivative financial instruments as of March 31, 2017, March 31, 2016 and April 1, 2015.

* Others includes currencies such as Singapore $, Japanese Yen, Russian ruble, South Korean Won, etc.

Foreign currency sensitivity analysis

A 5% strengthening of the INR against key currencies to which the Company is exposed would have led to approximately an additional Rs,2.46 crores gain in the Statement of Profit and Loss (2015-16: Rs,2.81 crores gain). A 5% weakening of the INR against these currencies would have led to an equal but opposite effect.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 5% change in foreign currency rates.

C. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has unutilized credit limits with banks. The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2017 and March 31, 2016. Cash flow from operating activities provides the funds to service the financial liabilities on a day to day basis.

The Company regularly maintains the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and mutual funds with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

The table below provides details regarding the contractual maturities of significant financial liabilities as of March 31, 2017, March 31, 2016 and April 1, 2015:

Capital Management

Equity share capital and other equity are considered for the purpose of Company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimize returns to shareholders. The capital structure of the Company is based on Management''s judgment of its strategic day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or is necessary, adjust its capital structure.

Note 6: Dividend

The Board of Directors at its meeting held on May 24, 2017 have recommended a dividend of Rs,4.25 per equity share of face value of Rs,1 each for the financial year ended March 31, 2017. The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognized as a liability.

Note 7: Transition to Ind AS

For periods up to and including the year ended March 31, 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013 ("the Act") read together with Rule 7 of the Companies (Accounts) Rules, 2014 ("Previous GAAP"). The Company''s financial statements for the year ended March 31, 2017 are prepared in accordance with Ind AS notified under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016, as applicable. The adoption of Ind AS was carried out in accordance with Ind AS 101 First time Adoption of Indian Accounting Standards, using April 1, 2015 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied consistently and retrospectively for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for the year ended March 31, 2017, together with the comparative information as at and for the year ended March 31, 2016 and the opening Ind AS Balance Sheet as at April 1, 2015 the date of transition to Ind AS.

In preparing these financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at transition date under Ind AS and Previous GAAP have been recognized directly in equity [retained earnings or another appropriate category of equity]. This note explains the principal adjustments made by the Company in restating its financial statements prepared under previous GAAP, including the Balance Sheet as at April 1, 2015 and the financial statements as at and for the year ended March 31, 2016.

A. Exceptions from full retrospective application:

(i) Estimates exception: Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS except where estimates were required by Ind AS and not required by Previous GAAP.

(ii) Classification and measurement of financial assets: The Company has determined the classification of financial assets in terms of whether they meet the amortized cost creteria or the fair value through other comprehensive income criteria based on the facts and circumstances that existed as of the transition date.

(iii) Government loans: The requirements of Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance and Ind AS 109 - Financial Instruments, in respect of recognition and measurement of interest-free loans from government authorities is opted to be applied prospectively to all grants received after the date of transition to Ind AS. Consequently, the carrying amount of such interest-free loans as per the financial statements of the Company prepared under Previous GAAP is considered for recognition in the opening Ind AS Balance Sheet.

B. Exemptions from retrospective application:

(i) Deemed cost for property, plant and equipment and intangible assets: The Company has elected to continue with carrying value of all its property plant and equipment, and intangible asets recognized as of April 1, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

C. Transition to Ind AS - Reconciliations.

The following reconciliations provide a quantification of the effect of significant differences arising from the transition

from Previous GAAP to Ind AS in accordance with Ind AS 101:

i. Reconciliation of Equity as at April 1, 2015 and March 31, 2016

ii. Reconciliation of Total Comprehensive Income for the year ended March 31, 2016; and

iii. Material adjustment to Statement of cash flows.

Notes to the reconciliations

a. Under previous GAAP, dividends on equity shares (including dividend distribution tax thereon) recommended by the board of directors after the end of reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends (including dividend distribution tax thereon) are recognized when declared by the members in general meeting. The effect of this change is an increase in total equity as at March 31, 2016 of Rs,Nil (April 1, 2015 - Rs,73.99 crores), but does not affect profit before tax and profit for the year ended March 31, 2016.

b. Under previous GAAP, discounting of provisions was not permitted and provisions were measured at best estimate of the expenditure required to settle the obligation at the balance sheet date without considering the effect of discounting. Under Ind AS, provisions are measured at discounted amounts, if the effect of time value of money is material. The Company has discounted the warranty provisions to present value at the reporting dates resulting in the provisions being decreased. Consequently, the unwinding of discount has been recognized as a finance cost. Further, the corresponding differences in deferred taxes have also been recognized.

c. Under previous GAAP, actuarial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognized in other comprehensive income. Consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of profit or loss. The actuarial losses for the year ended March 31, 2016 were Rs,0.09 crores and tax effect thereon Rs,0.03 crores. This change does not affect the total equity, but there is a increase in the profit before tax of Rs,0.09 and in total comprehensive income of Rs,0.06 crores for the year ended March 31, 2016.

d. Under previous GAAP, long-term investments were measured at cost less provision for diminution, other than temporary. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at their fair value which is higher than the cost as per previous GAAP, resulting in an increase in carrying amount. The corresponding deferred taxes have also been recognized. These changes do not affect profit before tax for the year ended March 31, 2016 because the investments have been classified as FVTOCI.

e. Under previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be measured at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposits has been recognized as prepaid rent. Profit for the year end and total equity as at March 31, 2016 decreased by Rs,0.21 crores due to amortization of prepaid rent, which is partially off-set by the notional interest income of Rs,0.20 crores recognized on security deposits.

f. Under Ind AS, government grants in the nature of duty benefit under Export Promotion Capital Goods scheme (EPCG) received have been recognized separately in the financial statements. Deferred revenue of Rs,38.63 crores (April 1, 2015: Rs,Nil) arises as a result of duty benefit received on import of plant and equipment under EPCG scheme. The deferred revenue is recognized in the Statement of Profit and Loss in the proportion of depreciation charged on such assets.

g. Under previous GAAP, revenue was recognized net of trade discounts, rebates, sales taxes and excise duties. Under Ind AS, revenue is recognized at the fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as sales tax and value added tax except excise duty. Discounts given include rebates, price reductions and incentives given to customers (including through free issues of traded batteries), which have been reclassified from ''advertising and sales promotion'' within other expenses and ''purchase of traded goods'' under Previous GAAP and netted from revenue under Ind AS. The change does not affect total equity as at March 31, 2016, profit before tax or total comprehensive income for the year ended March 31, 2016.

h. Under previous GAAP, revenue from sale of products was presented net of excise duty. However, under Ind AS, excise duty is included in sale of goods. Excise duty expense is presented separately on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses. In the light of above, increase/ (decrease) of excise duty on finished goods included as part of changes in inventories of finished goods, work-in-progress and stock-in-trade has been included in ''excise duty'' presented as expense on the face of the Statement of Profit and Loss.

Note 8: The financial statements are approved for issue by the Board of Directors on May 24, 2017.


Mar 31, 2015

A) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a face value of Rs. 1 each. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Interest free sales tax deferment

The Company has availed interest free sales tax deferment under Andhra Pradesh sales tax deferment scheme (Target 2000) from the financial year 1997-98 as per the eligibility norms in respect of expanded capacities. The Company has availed total deferment of Rs. 811.40 million since March1998, which is repayable after a period of 14 years from the date of each availment in annual installments.

- Eligible amount of interest free sales tax deferment - Rs. 813.33 million

- Period eligible for availment - January 1998 till September 2015

The estimates of future salary increases considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Notes relating to Micro, Small and Medium Enterprises

Based on, and to the extent of information received from the suppliers with regard to their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), on which the auditors have relied, the disclosure requirements under Section 22 of MSMED Act with regard to the payments made/due to Micro, Small and Medium Enterprises are given below:

*The unclaimed dividends represent those relating to the years 2007-08 to 2013-14 (for previous year from 2006-07 to 2012-13) and no part thereof has remained unpaid or unclaimed for a period of seven years or more from the date they became due for payment requiring transfer to the Investor Education and Protection Fund.

a. Note on Depreciation

In view of the applicability of the provisions of Schedule II "Depreciation" w.e.f. April 1, 2014, the Company has revised its policy of providing depreciation whereby the Company continued to provide depreciation based on the useful lives as arrived at based on technical evaluation. The management of the Company is of opinion that the useful lives adopted for such assets are reasonable based on technical evaluation, past experience of usage pattern and working conditions in which such assets are put to use. In respect of other fixed assets, the Company computed depreciation based on useful lives as specified in Schedule II of the Companies Act, 2013. Accordingly the carrying amount of such assets as on April 1, 2014 are being depreciated over the remaining useful life of the assets.The above compliance with Schedule II to Companies Act, 2013 resulted in an additional depreciation of Rs. 360.76 million in the current financial year.

b. Impairment provision on freehold land of Rs. 80.36 million(previous year Rs. Nil)

The Company had procured 8.6 hectares of land in FY 2011-12. However, as the Company has not put to use the above land, the District Collector has passed orders vesting the above land with the state government. Consequent to the above action of District Collector, the Company has provided for impairment loss of the said land during the current year amounting to Rs. 80.36 million. The total cost of the land purchased was Rs. 155.88 million. The Company had already provided for impairment during FY 2012-13, to the extent of Rs. 75.52 million.

NOTE 2: The Company is engaged in the manufacture of lead acid storage batteries. In the perception of the management, identifying the Company's business into further segments as per Accounting Standard - 17, does not arise.

NOTE NO. 3: RELATED PARTY TRANSACTIONS

Related parties particulars pursuant to "Accounting Standard -18"

I. Parties where control exists: None

II. Parties with whom transactions have taken place during the year A) List of related parties

1. Investing party for which the Company is an Associate

Johnson Controls (Mauritius) Private Limited

2. Key management personnel

Sri Jayadev Galla Vice Chairman and Managing Director

3. Relatives of key management personnel

Dr. Ramachandra N Galla Father of Sri Jayadev Galla

Smt G. Amara Kumari Mother of Sri Jayadev Galla

Smt G. Padmavathi Wife of Sri Jayadev Galla

Dr. G. Ramadevi Sister of Sri Jayadev Galla

Sri Ashok Galla Son of Sri Jayadev Galla

Sri Siddharth Galla Son of Sri Jayadev Galla

4. Enterprises over which key management personnel and / or their relatives exercise significant influence

Amara Raja Power Systems Limited

Amara Raja Electronics Limited

Mangal Industries Limited

Amara Raja Infra Private Limited

Amara Raja Industrial Services Private Limited

Asistmi Solutions Private Limited

Rajanna Trust

NOTE 4: LEASES

The Company is obligated under cancelable operating leases for offices, warehouses etc, which are renewable at the option of both the lessor and the lessee. Total rental expense debited to the Statement of Profit and Loss under cancelable operating leases amounts to Rs. 127.47 million (PY Rs. 114.10 million).

There are no sub-lease payments received / receivable recognised in the Statement of Profit and Loss. Also, there are no contingent rents payable and there are no restrictions imposed by lease agreements such as those concerning dividends and additional debt.

NOTE 5: EXCEPTIONAL ITEMS

Exceptional items represent net provision for fuel surcharge adjustment for financial years 2009-10 to 2011-12, surcharge on arrears and additionnal demand charges for financial year 2014-15 of Rs. 72.79 million (PY Rs. 38.84 million) claim(s) by Southern Power Distribution Company of Andhra Pradesh Limited as per the orders from Andhra Pradesh Electricity Regulatory Commission.

NOTE 6: CONTINGENT LIABILITIES AND COMMITMENTS Rs million As at As at March 31,2015 March 31,2014

A. Contingent liabilities

Claims against the Company not acknowledged as debts

i) Excise duty/service tax 11.85 11.85

ii) Sales tax 54.05 99.77

iii) Income tax 13.14 14.49

iv) Electricity 692.35 541.86

v) Export obligation 208.82 234.23

[Against all the above, Rs71.91 million (PY Rs 66.96 million) was paid under protest]

B. Commitments

Estimated amount of contracts remaining to be executed on capital account and not 2,663.68 700.62 provided for

Note: On the basis of the current status of individual cases and as per the legal advice obtained,whereever applicable, the management is of the view that no provision is required in respect of the above cases.

The balances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

NOTE 7:

In the opinion of Board of Directors the assets other than fixed assets and non-current investments are expected to realise the value stated in the financial statements, in the ordinary course of business.

NOTE 8:

Previous year figures have been regrouped wherever necessary to conform to current year classification.

NOTE 9:

Figures have been rounded off to the nearest million.


Mar 31, 2014

1. Corporate Information

Amara Raja Batteries Limited ("the Company") is the second largest manufacturer of lead-acid storage batteries for industrial and automotive applications in India. The equity shares of the Company are listed in BSE Limited and the National Stock Exchange of India Limited. The Company''s products are supplied to various user segments viz., Telecom, Railways, Power Control and UPS under Industrial Battery business, and to Automobile OEMs, Replacement Market and Private Label Customers under Automotive Battery business. The Company''s products are being exported to various countries in the Indian Ocean Rim. The Company also provides installation S commissioning and maintenance services to the customers. The leading automotive and industrial battery brands of the Company are Amaron®, PowerZone™, Power Stack®, AmaronVolt™ and Quanta®.

NOTE 1: SHORT-TERM BORROWINGS

The working capital facilities from State Bank of India, State Bank of Hyderabad, Andhra Bank and The Bank of Nova Scotia are secured by hypothecation of all current assets of the Company. The fixed assets of the Company are provided as collateral security byway of pari-passu second charge for the working capital facilities availed from State Bank of India

NOTE 2: TRADE PAYABLES

Notes relating to Micro, Small and Medium Enterprises

Based on, and to the extent of information received from the suppliers with regard to their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), on which the auditors have relied, the disclosure requirements of Schedule VI to the Companies Act, 1956 with regard to the payments made/due to Micro, Small and Medium Enterprises are given below:

NOTE 3: The Company is engaged in the manufacture of lead acid storage batteries. In the perception of the management, identifying the Company''s business into further segments as per Accounting Standard - 17, does not arise.

NOTE 4: RELATED PARTY TRANSACTIONS

Related parties particulars pursuant to "Accounting Standard -18"

I. Parties where control exists: None

II. Parties with whom transactions have taken place during the year

A) List of related parties

1. Investing party for which the Company is an Associate

Johnson Controls (Mauritius) Private Limited

2. Key management personnel

Sri Jayadev Galla Sri Ravi Bhamidipati

3. Relatives of key management personnel

Dr. Ramachandra N Galla Father of Sri Jayadev Galla

Smt G. Amara Kumari Mother of Sri Jayadev Galla

Smt G. Padmavathi Wife of Sri Jayadev Galla

Dr. G. Ramadevi Sister of Sri Jayadev Galla

Sri Ashok Galla Son of Sri Jayadev Galla

Sri Siddharth Galla Son of Sri Jayadev Galla

NOTE 30: RELATED PARTY TRANSACTIONS (Contd.)

4. Enterprises over which key management personnel and / or their relatives exercise significant influence

Amara Raja Power Systems Limited

Amara Raja Electronics Limited

Mangal Industries Limited

Amara Raja Infra Private Limited

Amara Raja Industrial Services Private Limited

Rajanna Trust

Mangamma and Gangulu Naidu Memorial Trust

NOTE 5: LEASES

The Company is obligated under cancelable operating leases for offices, warehouses etc, which are renewable at the option of both the lessor and the lessee. Total rental expense debited to the Statement of Profit and Loss under cancelable operating leases amounts to Rs.114.10 million (PYRs.983.31 million).

There are no sub-lease payments received / receivable recognised in the Statement of Profit and Loss. Also, there are no contingent rents payable and there are no restrictions imposed by lease agreements such as those concerning dividends and additional debt.

NOTE 6: EXCEPTIONAL ITEMS

Exceptional items represent net provision for fuel surcharge adjustment for financial years 2009-10 to 2011-12, surcharge on arrears and additional demand charges for financial year 2013-14 of Rs.38.84 million (PYRs.91.57 million ) claim(s) by Southern Power Distribution Company of Andhra Pradesh Limited as per the orders from Andhra Pradesh Electricity Regulatory Commission

NOTE 7:

The balances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties

NOTE 8:

In the opinion of Board of Directors the assets other than fixed assets and non-current investments are expected to realise the value stated in the financial statements, in the ordinary course of business

NOTE 9:

Figures have been rounded off to the nearest million


Mar 31, 2013

1. Corporate Information

Amara Raja Batteries Limited ("the Company") is the second largest manufacturer of lead-acid storage batteries for industrial and automotive applications in India. The equity shares of the Company are listed in BSE Limited and the National Stock Exchange of India Limited. The Company''s products are supplied to various user segments viz., Telecom, Railways, Power Control and UPS under Industrial Battery business; and to Automobile OEMs, Replacement Market and Private Label Customers under Automotive Battery business. The Company''s products are being exported to various countries in the Indian Ocean Rim. The Company also provides installation & commissioning and maintenance services to the customers. The leading automotive and industrial battery brands of the Company are Amaron®, PowerZone™, Power Stack®, AmaronVolt™ and Quanta®.

NOTE 2 : SEGMENT REPORTING

The Company is engaged in the manufacture of lead acid storage batteries. In the perception of the management, identifying the Company''s business into further segments as per Accounting Standard - 17, does not arise.

NOTE 3 : RELATED PARTY TRANSACTIONS

Related parties particulars pursuant to "Accounting Standard -18"

I. Parties where control exists: None

II. Parties with whom transactions have taken place during the year A) List of related parties

1. Investing party for which the Company is an Associate

Johnson Controls (Mauritius) Private Limited

2. Key management personnel

Sri Jayadev Galla Sri Ravi Bhamidipati

3. Relatives of key management personnel

Dr. Ramachandra N Galla Father of Sri Jayadev Galla

Smt G. Amara Kumari Mother of Sri Jayadev Galla

Smt G. Padmavathi Wife of Sri Jayadev Galla

Dr. G. Ramadevi Sister of Sri Jayadev Galla

Sri Ashok Galla Son of Sri Jayadev Galla

Sri Siddharth Galla Son of Sri Jayadev Galla

4. Enterprises over which key management personnel and / or their relatives exercise significant influence

Amara Raja Power Systems Limited

Amara Raja Electronics Limited

Mangal Industries Limited

Amara Raja Infra Private Limited

Amara Raja Industrial Services Private Limited

Rajanna Trust

Mangamma and Gangulu Naidu Memorial Trust

NOTE 4 : LEASES

The Company is obligated under cancelable operating leases for offices, warehouses, etc, which are renewable at the option of both the lessor and the lessee. Total rental expense debited to the Statement of Profit and Loss under cancelable operating leases amounts to H 98.31 million (previous year H 66.64 million).

There are no sub-lease payments received / receivable recognised in the Statement of Profit and Loss. Also, there are no contingent rents payable and there are no restrictions imposed by lease agreements such as those concerning dividends and additional debt.

NOTE 5 : EXCEPTIONAL ITEMS

Exceptional items represent net provision for fuel surcharge adjustment claim(s) of H 91.57 million (previous year H Nil) by Southern Power Distribution Company of Andhra Pradesh Limited for financial years from 2009-10 to 2011-12 as per the orders from Andhra Pradesh Electricity Regulatory Commission.

NOTE 6 :

The balances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

NOTE 7 :

In the opinion of Board of Directors the assets other than fixed assets and non-current investments are expected to realise the value stated in the financial statements, in the ordinary course of business.

NOTE 8:

Previous year political donation of H 1.00 million represent payment to the Communist Party of India (CPI), Chittoor District Council.

NOTE 9:

Figures have been rounded off to the nearest million.


Mar 31, 2012

1. Corporate Information

Amara Raja Batteries Limited ("ARBL" or "the Company"), part of the Amara Raja Group of Companies, is the second largest manufacturer of lead-acid storage batteries for industrial and automotive applications in India. The equity shares of the Company are listed in both Bombay Stock Exchange and National Stock Exchange. The Company's products are supplied to various user segments like Telecom, Railways, Power Control, UPS and Exports under Industrial Battery business; and to Automobile OEMs, Replacement Market, Private Label Customers and Exports under Automotive Battery business. The Company also provides installation & commissioning and maintenance services to its customers. The leading automotive and industrial battery brands of the Company are Amaron®, PowerZone™, Power Stack®, AmaronVolt™ and Quanta™.

a) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs 2/- each. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the holder of equity share will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b) Aggregate number of bonus shares issued during the period of five years immediately preceding the reporting date

During the financial year 2008-09 the Company has allotted 28,468,750 equity shares as fully paid-up bonus shares by capitalising part of general reserve.

a) Interest free sales tax deferment

The Company has availed interest free sales tax deferment under Andhra Pradesh sales tax deferment scheme (Target 2000) from the financial year 1997-98 as per the eligibility norms in respect of expanded capacities. The Company has availed total deferment of Rs 811.40 Million since March,1998, which is repayable after a period of 14 years from the date of first availment.

- Eligible amount of interest free sales tax deferment - Rs 813.33 Million

a) Note forming part of accounts in relation to Micro, Small and Medium Enterprises

Based on, and to the extent of information received from the suppliers with regard to their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), on which the auditors have relied, the disclosure requirements of Schedule VI to the Companies Act, 1956 with regard to the payments made/due to Micro, Small and Medium Enterprises are given below

Note: 2. LOANS AND ADVANCES (UNSECURED AND CONSIDERED GOOD) (Contd...)

APSPDCL'S original demand. The Company has paid Rs 17.26 Million (Previous year Rs 13.57 Million) under protest. The Company has not provided the balance of Rs1.26 Million in the books and has preferred an appeal against the order of Vidyut Ombudsman.

Note: 3. CONTINGENT LIABILITIES AND COMMITMENTS

Rs Million

As at As at

Particulars March 31, 2012 March 31, 2011

A. Contingent liabilities

a) Claims against the Company not acknowledged as debts

i) Excise duty/service tax 16.10 18.62

ii) Sales tax 30.06 88.21

iii) Income tax 48.93 -

iv) Electricity 248.89 205.44

v) Dues to supplier - 0.75 [Against all the above Rs9.48 Million (Rs5.64 Million) was paid under protest]

b)Other contingent liabilities

i) Bills discounted with scheduled banks - 69.13

B. Commitments

a) Estimated amount of contracts remaining to be executed

on capital account and not provided for 142.31 236.94

Note: 4.

The balances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

Note: 5.

In the opinion of Board of Directors the assets other than fixed assets and non-current investments are expected to realise the value stated in the financial statements in the ordinary course of business.

Note: 6.

Current year political donation of Rs 1 Million represent payment to the Communist Party of India (CPI), Chittoor District Council.

Note: 7.

From the financial year 2011 -12, the revised Schedule VI notified under the Companies Act, 1956 is applicable to the Company for preparation and presentation of financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. Flowever, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified and rearranged the previous year figures in accordance with the requirements of revised Schedule VI.

Note: 8.

Figures in Rupees have been rounded off to the nearest Million.


Mar 31, 2010

1. a) The Company’s fixed assets both movable and immovable (other than those which are specifically hypothecated to HDFC Bank) both present and future have been placed as security under first charge for the term loan obtained in foreign currency from BNP Paribas.

b) The working capital facilities from State Bank of India, State Bank of Hyderabad, Andhra Bank and the Bank of Nova Scotia are secured by hypothecation of stock of raw materials, work-in-process, finished goods, stores and spares, bills receivable and book debts. The fixed assets of the Company are provided as collateral security by way of second charge for the working capital facilities availed from State Bank of India.

c) Consequent to an order passed by Vidyut Ombudsman in March 2010, Andhra Pradesh Southern Power Distribution Company Ltd., (APSPDCL) has demanded Rs. 27.00 million as low voltage surcharge (including interest) for the period from June, 2005 to November, 2007. The Company has created a liability in the accounts for Rs. 25.80 million during the financial year ended March 31, 2009, as per APSPDCL’s original demand. The Company has not provided the balance of Rs. 1.20 million in the books and has preferred an appeal against the order of Vidyut Ombudsman.

2. The Company is availing the sales tax deferment benefit since 1997-98 on its expanded capacity. Such deferment claimed, as on March 31, 2010 is Rs. 638.95 million (PY Rs. 567.43 million). This amount is subject to revision by the assessment authorities, on completion of assessments.

3.The Company is engaged in the manufacture of lead acid storage batteries. In the perception of the management, identifying the Company’s business into further segments as per Accounting Standard – 17, does not arise.

4.Related Party Transactions

Related parties particulars pursuant to “Accounting Standard –18” A) List of Related Parties

1. Key Management Personnel Sri. Jayadev Galla

3. Enterprises in which Key Management Personnel and / or their relatives have significant influence Amara Raja Power Systems Limited Amara Raja Electronics Limited Mangal Precision Products Limited Galla Foods Limited Amara Raja Infra Private Limited

4. a) Enterprise with significant influence

Johnson Controls Mauritius Private Limited, Mauritius

b) Associates of enterprise with significant influence

Boading Fengfan Rising Battery Seperator Co. Limited, China

Enertec Do Brasil Ltda., Brazil

Shanghai Johnson Controls International Battery Co. Limited, China

Johnson Controls, K. K., Japan

Johnson Controls (S) Private Limited, Singapore

5.Note forming part of accounts in relation to Micro and Small Enterprises Based on, and to the extent of information received from the suppliers with regard to their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), on which the auditors have relied, the disclosure requirements of schedule VI to the Companies Act, 1956 with regard to the payments made / due to Micro and Small Enterprises are given below:

6. The balances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

7. In the opinion of the Board of Directors the current assets, loans and advances are expected to realise the value stated in the accounts, in the ordinary course of business.

8. Previous year figures have been regrouped wherever necessary to confirm to the current year’s classification.

9. Figures have been rounded off to the nearest thousands and rupee wherever it is mentioned in million and rupees respectively.

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