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Notes to Accounts of Amara Raja Batteries Ltd.

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.

 
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