Amara raja delux


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Amara raja delux

  2. 2. Our new baselineBetter is the most important word in OUR NEWthe history of the world.It never allows us to rest on our CORPORATE IDENTITYlaurels. Amara Raja Batteries Limited unveiled aIt gently reminds us to do betterthan yesterday. new corporate identity in 2010-11, theIt prods us to think better thanyesterday. 25th year of its existence.It pushes us to create better This new identity, recognised as theexperiences for people working andinteracting with us. Amara Raja Way, showcases theIt urges us to be better humanbeings than we are. Company’s five core values - experiences,Better. It’s not a word. innovation, excellence, entrepreneurshipIt is a higher calling. and responsibility.Gotta be a Better Way The new logo identifies these values through separate colours on the one hand and the five natural elements on the other - integrating them through a sense of harmony. 04 25 years of AMARA RAJA 54 Corporate social responsibility 74 General shareholder information 06 2010-11 in retrospect 56 10-year financials 81 Financial section CONTENTS 08 Chairman statement 58 Directors’ report 10 Managing Director’s statement 65 Corporate governance report 22 Management discussion and analysis 73 CEO and CFO certification
  3. 3. Blue signifies indelible Experiences created which, like the serene and deep Water, engulfs all our stakeholders. Burgundy symbolises Innovation which, like the vastness of Space, provides us with limitless scope to transcend boundaries. Magenta denotes Excellence which, like the strength of Wind, lifts and drives our ceaseless pursuits. Orange stands for Entrepreneurship which, like the energy of Fire, fuels our creativity. Green indicates our sense of Responsibility which, like the nurturing Earth, guides us in all we do. The new logo is the symphony of diverse elements coming together and moving forward in perfect harmony. THE AMARA RAJA WAY. AMARA RAJA BATTERIES LIMITED GOTTA BE A02 ANNUAL REPORT 2010-11 BETTER WAY 03
  4. 4. A DOMINANT PLAYER IN THE INDIANBATTERY SPACE Amara Raja has a lasting recall Amara Raja is a pioneer Pro Bike RiderTM’ battery with VRLA Amara Raja is a leader technology for the two-wheeler  Altered the image of a battery from a  Pioneered the use of VRLA technology  Sole supplier to Ford India segment mundane black box to a youthful, sleek in India  Largest supplier of industrial standby green power pack  Pioneered the PowerSleekTM FrontDuring an eventful 25-year journey, Amara Raja Batteries Limited  Only battery with the patented storage power in India Access Terminal (FAT) battery, a neataltered the dynamics of the Indian battery industry, established  Transformed the perception of lead-acid Silver X Alloy that protects the insides stylish 12V mono-block power source  Largest single location fully integrateditself around innovation and consolidated its brand as a ‘green standby batteries from a product that from corrosion for telecom networks manufacturing facility in Asiabattery’ manufacturer. leaked acid and corroded surroundings  Introduced expanded metal technology to a safe energy box  Provided a memorable urban (Amaron® successfully for the first time in India Pitstop) and rural (PowerZoneTM)  Redefined the job of battery dealers  Pioneered the zero maintenance customer purchase experience from selling, filling acid and charging to battery with a 60-month warranty (formatted, air-conditioned outlets ) only selling as Amaron batteries emerged as fully charged, ‘fit and  Introduced the innovative ‘Amaron® forget’ when they were dispatched  Launched PowerZoneTM branded  Doubled both LVRLA and MVRLA batteries – part of rural retail battery capacities initiative  Awarded the Best Telecom Supplied the first ever VRLA battery Inaugurated greenfield automotive  Launched new look Amaron® Equipment Manufacturer by BSNL used by Indian Railways – 1100Ah battery plant with a 1 million unit product range (PRO, FLO, GO,  Awarded Quality Excellence Award for coach air-conditioning capacity Black and Fresh) by INDUS Towers 1996 2001 2007 2009MILESTONES1992 1997 2002 2004 2008 2010 Commenced production in India’s Signed JV with Johnson Controls  Received ISO 14001 certification  Received the Ford World Launched the Amaron® Pro Bike  Featured in the Forbes’ ‘Best under a USD first and most advanced VRLA Inc (JCI), USA  Launched QuantaTM UPS, Excellence award RiderTM – first VRLA two-wheeler billion’ Asia list battery plant Amaron Hi-way® and Amaron  OE agreement with Maruti batteries in India  Received the Supply Chain Leader 2011 Harvest® batteries Udyog Limited Award under the category ‘Dry cells and storage batteries’ by Industry 2.0 India SCM Conclave  Received the award for ‘Best HR Strategy in line with Business’ at the National Round AMARA RAJA BATTERIES LIMITED GOTTA BE A04 ANNUAL REPORT 2010-11 BETTER WAY 05
  5. 5. 2010-11IN RETROSPECT  Declared a special dividend of ` 2 per share on the occasion of the silver jubilee Our growth Revenue growth Book value growth  Achieved a 20% growth in sales volume of automotive and industrial batteries  Received OHSAS-2007 certification  Featured in Forbes ‘Best under a USD in numbers 20% Over 2009-10 19% Over 2009-10 billion’ Asia list  Achieved a 20% growth in net sales  Received the first prize under the  Doubled two-wheeler/small VRLA ‘discrete manufacturing category’ in CII – battery capacity from 1.80 million units 4th National conference and to 3.60 million units per annum competitions for Six Sigma  Touched one billion Ah sales in industrial battery business  Received the Supply Chain Leader 2011 Volume growth Export growth Dividend payout Award under the category ‘Dry cells and  Introduced Amaron batteries in the 2V high integrity series, a specialised storage battery used in the VoltTM Hi-Life storage batteries’ by Industry 2.0 India SCM Conclave 20% Over 2009-10 60% Over 2009-10 58% Over 2009-10  Won the commendation (Foundation Indian telecom industry Award) ‘Strong commitment to HR  Achieved market leadership in the Excellence’ award at the National HR telecom and UPS segments Conclave of CII 13,132 14,645 17,611 2,056 2,965 2,588 1,670 1,481 15.66 20.24 14.69 47.49 63.65 75.63 19.56 17.34 30.62 44.51 34.62 21.80 35.18 24.90 0.70 0.17 0.15 9.42 0.80 2.90 4.60 805 POST TAX PROFIT (` Million) DIVIDEND PER SHARE (`) EARNING PER SHARE (`) REVENUE (` Million) DEBT-EQUITY (times) EBIDTA MARGIN (%) EBIDTA (` Million) BOOK VALUE (`) RONW (%) ROCE (%) 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 AMARA RAJA BATTERIES LIMITED GOTTA BE A06 ANNUAL REPORT 2010-11 BETTER WAY 07
  6. 6. This yearCHAIRMAN’S STATEMENT Amara Raja celebrates its Silver Jubilee. We started our entrepreneurial journey 25 years ago, and we stand today at a significant milestone. THE GLOBAL ECONOMY SHOWED A new journey…. a new excellent practices. In appreciation of our to drive business over the future.“OUR CORE VALUES STRONG INDICATIONS OF A identity Company’s HR practices, the ‘Employer In recent years, emerging economies led Branding Institute’, conferred variousTHAT PAVED OUR PATH TURNAROUND AT THE BEGINNING OF 2010-11 AND EXPECTATIONS This year Amara Raja celebrates its Silver Jubilee. We started our entrepreneurial awards to our Company like ‘Best HR by China and India have confidently proven that they are not only capable ofTO SUCCESS OVER THE WERE GENERALLY OPTIMISTIC. While journey 25 years ago, and we stand Strategy in line with Business’, managing their own but can also ‘Continuous Innovation in HR Strategy atLAST 25 YEARS WILL the state of affairs is recovering from the global meltdown two years ago, today at a significant milestone. We look back with satisfaction, achievement and Work’ and ‘Excellence in HR through influence the global economy. These countries are currently in a position toCONTINUE TO GUIDE US the global economy is still not back to responsibility. We look forward to Technology’. The Company bagged the assert themselves as superior in economic Supply Chain Leader 2011 award underTO REACH AND PASS desired health. While developed nations are growing slowly, emerging continuing this journey with greater achievements and bigger goals. We are the category ‘Dry cells and storage management and crisis control than many advanced nations. Amara RajaMANY MORE SUCH economies are standing out as real commemorating this milestone with a batteries’ by Industry 2.0. CII awarded Group is committed to play a significant the first prize under the ‘discreteMILESTONES”. drivers of the global economic activity, India and China the prime movers new corporate identity. The identity rests on five strong pillars that define our core manufacturing category’ at CII- 4th role in this momentum of growth and prosperity through the ‘Amara Raja with India’s GDP growth at 8.6 per values that we call the ‘Amara Raja Way’. National Conference and competition on Way’. cent in 2010-11. The new logo articulates our five core Six Sigma. The 25 year journey would not have values of Experiences, Innovation, The Indian manufacturing sector grew Way forward been the same without our JV partner, Excellence, Entrepreneurship and 8.8% in 2010-11. India is ranked The Indian economy is set to expand customers, employees, vendors and Responsibility, symbolising harmony and second in terms of manufacturing faster with a projected growth being other stakeholders. I take this how they address the challenges of a competence and is currently rated as 8.5% in 2012. opportunity to thank them for making dynamic business environment. one of the most attractive global Amara Raja a force to reckon within the Automotive battery business: The investment destinations. As per the An ever-changing business environment storage battery business in India and look ongoing capacity additions, both in the super-cycle report by Standard warranted this change even as our core forward to their continued support. I am four-wheeler and two-wheeler plants, Chartereds global research team, enduring values will continue to guide us confident that we will replicate what we will help the Company capitalise on China is likely to grow at 6.9% rate to pass more milestones. have achieved in 25 years by doubling opportunities. The automotive sector will over the next two decades while India them in the next five years. Performance… propel our growth over the next few is likely to grow on an average of In this special year, our Company crossed years, with India expected to become the 9.3% over the same period and trail the ` 2000 cr mark turnover, a sixth largest passenger vehicle producer the US as the third-largest economy noteworthy milestone. We achieved in the world with annual car sales by 2030. The said report also sees the market leadership in our telecom and projected to increase to over 9 million by world economy reaching USD308 UPS businesses in the industrial battery 2020. trillion by 2030. Based on the growth and inflation forecasts, China will be business and improved our aftermarket Industrial battery business: With growing a USD73 trillion economy and India presence in the automotive battery avenues, including replacement will be a USD30 trillion economy by space. opportunities in the telecom sector, 2030. Currently, India is slightly over a surging demand in the UPS and power trillion dollar economy. Recognitions sectors, exports to new geographies and During the year, our Company won the government’s thrust to connect vast several accolades for its innovative andDr. Ramchandra N Galla, Chairman rural areas, there is a growing potential AMARA RAJA BATTERIES LIMITED GOTTA BE A08 ANNUAL REPORT 2010-11 BETTER WAY 09
  7. 7. MANAGING DIRECTOR’S STATEMENT“OUR CORE PURPOSE The financial year 2010-11 was a year of memories and achievements for our In the Industrial Battery business, the year 2010-11 witnessed sharp reduction in in two-wheeler battery organized Aftermarket segment has reached 25% and replacement requirement are expected to push the demand in the nearOF CREATING INCLUSIVE Company. This year we completed 25 demand in the Telecom sector, resulting within three years from launch. future. UPS battery market will continueAND SUSTAINABLE years of our existence; crossed the milestone revenue of ` 20 billion; in unsustainable aggression in pricing by competition, which impacted the During the year, two-wheeler and to show a healthy annual growth of about 14%, which coupled with emergingGROWTH WHILE launched new products; emerged revenue and margins. Despite the small-VRLA battery combined installed capacity has been doubled to 3.60 applications like Solar and Motive PowerDELIVERING WORLD- market leader in Telecom and UPS (Medium VRLA) battery business; adverse market conditions, we gained market share in Telecom business, owing million units per annum to support the will propel the growth in the Industrial battery business. We anticipate increasingCLASS PRODUCTS AND featured in Forbes “Best under a USD to our “preferred supplier” status with growing demand for our Company’s products. business opportunity from the AfricanSERVICES CONTINUES billion” Asia list; and unveiled our new corporate identity. Our Company’s our customers. The thrust on volume coupled with cost efficiency initiatives Ongoing capacity additions in both the continent and intend to establish a strong presence there.TO REMAIN performance was supported by the moderated the impact on our margins. Customer’s preference for our products four-wheeler battery plant (4.20 million In spite of some slowdown in OEMUNWAVERING.” stability in the Indian economy and stupendous growth in the Automobile was reinforced by the fact that Bharti units to 5.60 million units per annum) and the two-wheeler battery plant (3.60 production in the short-term, the Indian Automobile Industry is expected to sustain Airtel (the leading telecom operator) million units to 5 million units per sector. Despite lower demand in the double-digit growth for the next five years preferred us for their battery annum) will be completed by the 2nd Telecom sector, which created volume on the back of a growing economy, rising requirements in Africa. quarter of 2011-12. This will enable our and margin pressure, our Company incomes and favorable demographics. The weathered the storm with a more diverse The overall sales volume touched one Company to benefit from the growth Aftermarket will continue to present an business mix backed by portfolio of billion Ampere hour (Ah) with 20% growth opportunities available in the attractive opportunity aided by customer over the previous year, backed by strong Aftermarket and new geographies preference for branded batteries and products and expansion into new demand for UPS QuantaTM batteries. We outside of India, simultaneously helping sustained growth in Automobile geographies. emerged as the market leader in Telecom our Company to garner higher market production. Our Company achieved gross sales and UPS battery business with 42% and share from OEMs. of ` 20,765 million in FY 2010-11 We will continue to judiciously create 32% market share respectively, backed by Our Company continues to enjoy capacity ahead of demand and continue compared to ` 16,904 million in customers’ preferences for Company’s comfortable liquidity and is confident of to lead the market with innovative FY 2009-10. Net revenues for the year quality products. meeting the funding requirements products. were at ` 17,611 million compared to Amaron VoltTM, a specialized Hi-Life planned for the financial year 2011-12, ` 14,645 million in FY2009-10 recording We will strive to reach our stated goal of battery in the 2V high-integrity series, was through internal accruals and we expect a topline growth of 20%. The profit after USD1billion revenues by 2015-16. It will launched during the year for critical to continue to be near debt-free. tax in FY2010-11 stood at ` 1,481 be our endeavour to explore and excel in applications in the Telecom, Renewable million against ` 1,670 million in all business initiatives and reward all Energy and Power Control sectors, which Outlook FY2009-10. Our Company has been stakeholders even better in times to come. received very good market response. As we celebrate the Silver Jubilee year, achieving aggressive growth targets, we are geared up with renewed vigor for On behalf of the Company, I take this with 37% CAGR in revenues and 44% In the Automotive Battery business, sales a brighter future, despite near-term opportunity to convey my sincere thanks CAGR in profits over the past five years. volume grew by 20% and 58% in the challenges in Telecom and possible lower to all shareholders and place on record four-wheeler battery and two-wheeler growth rates in Automobile production. our gratitude to our employees, The Board of Directors have proposed a battery applications respectively. The We are optimistic about continuing our customers, channel partners, bankers, dividend of ` 2.60 per share, which is in growth was realized through channel growth story, aided by robust long-term suppliers and our joint-venture partner line with the dividend policy of distributing expansion in the Aftermarket business, fundamentals of the Indian economy. Johnson Controls Inc. upto 15% of the net profits after tax to the robust demand from OEMs and addition Our core purpose of creating inclusive shareholders. This is over and above the of new geographies in international Let’s all believe there’s ‘Gotta be a better and sustainable growth while delivering “One time special dividend” of ` 2.00 per markets. In the four-wheeler battery way’ and lets work together towards world-class products and services share declared and paid in February 2011, business, our Company enjoys a achieving it. continues to remain unwavering. to commemorate the silver jubilee of our market share of 25% in OEM and Company. 30% in Aftermarket segment in In Telecom, Value Added Services (VAS)Jayadev Galla, Managing Director organized market, while market share enabled by 3G and Wi-MAX, rural rollout AMARA RAJA BATTERIES LIMITED GOTTA BE A10 ANNUAL REPORT 2010-11 BETTER WAY 11 Annual Report 2010-11 11
  8. 8. We strengthened our customer experience through the following initiatives:  We were the first to offer a 60- month warranty on batteries in India, providing consumers with peace of mind.  We enhanced the retail purchase experience through unique, urban (Amaron® Pitstop) and rural (PowerZoneTM) formatted outlets.  We emerged as the preferred partner for major vehicle launch programmes of leading automobile OEMs in India.  We created a collaborative working culture and empowered teams to undertake strategic initiatives, thereby providing an invigorating working experience. A NUMBER OF OUR INDUSTRY PLAYERS WOULD PROBABLY GIVE INITIATIVES LIKE THESE ACRONYMS LIKE CRM AND TQM. WE CONSIDER THEM TO BE THE INTRINSIC AMARA RAJA WAY!  We were the battery supplier for India’s first micro hybrid vehicle of Mahindra & Mahindra.  We are the single source of batteries for the entire fleet of Comfort Delgro taxis in Singapore.  We were the first to introduceEXPERIENCESAT AMARA RAJA, WE ARE ENGAGED IN MANUFACTURING AND MARKETING BATTERIES. VRLA technology for railway rolling stock application, enabling Indian Railways to roll out III tier AC coaches.WHAT WE RELISH IS EXCEEDING CUSTOMER EXPECTATIONS AND ENHANCINGCUSTOMER DELIGHT. AMARA RAJA BATTERIES LIMITED GOTTA BE A12 ANNUAL REPORT 2010-11 BETTER WAY 13
  9. 9. We facilitated the transformation through painstaking innovations:  We were the first to introduce VRLA technology in India for industrial standby applications.  We pioneered VRLA batteries for motorcycle applications in India.  We were the first to introduce Zero Maintenance batteries for automotive applications in India.  We transformed India’s automotive battery market with the launch of Amaron®, backed by a unique sales and service model. In doing so, we grew faster than the industry average in each of the last five years leading to 2010-11. A NUMBER OF INDUSTRY OBSERVERS WOULD CONSIDER THIS TO BE UNIQUE. WE CONSIDER IT TO BE THE TYPICAL AMARA RAJA WAY!  We launched Amaron Volt® Hi-Life batteries, a high-integrity series battery to provide robust back-upINNOVATIONAT AMARA RAJA, WE EMBEDDED ‘INNOVATION’ INTO OUR ORGANISATIONAL DNA. power solutions.  We launched ‘PowerZoneTM’, the first formatted rural distribution initiative in the Indian battery industry.THE RESULT IS THAT WE WENT ON TO SHAPE OUR COMPANY’S FORTUNES ANDALTER THE DYNAMICS OF THE INDIAN BATTERY INDUSTRY. AMARA RAJA BATTERIES LIMITED GOTTA BE A14 ANNUAL REPORT 2010-11 BETTER WAY 15
  10. 10. EXCELLENCEAT AMARA RAJA, WE MANUFACTURE BATTERIES AT A SINGLE LOCATION; WE DELIVERDEPENDABILITY ACROSS THOUSANDS OF POINTS OF USE. We achieved this through some  We grew net sales, EBIDTA and profit  In 2010-11, we received the 1st prize in diligent investments: after tax by 4.84 times, 4.97 times and TPM Best Practices in AOTS (South 6.22 times respectively over the last five Chapter) and received the Supply Chain  We created Asia’s largest, single- years leading to 2010-11. Leader 2011 Award under the category location, vertically-integrated battery manufacturing facility accredited for ISO  There are more than 1,90,000 live ‘Dry cells and storage batteries’ by Industry 9001:2000, ISO/TS 16949 (certified by battery banks, providing uninterrupted 2.0 India SCM Conclave. TUV NORD), ISO 14001 and OHSAS backup power to GSM & CDMA Base  Two teams from the Company 18001- 2007 Trans-receiver Stations (BTS), Base participated in National level QCC Switching Centers (BSC) and Main convention; one featured in the “Excellence  We received the Ford World Excellence Switching Centers (MSC) in telecom. category”, the other stood in the award, the award for the Best Telecom Equipment Manufacturer from BSNL and A NUMBER OF INDUSTRY PLAYERS “Distinguished Category”. the Quality Excellence Award from Indus WOULD CONSIDER THIS TO BE GOING  Won the first prize under the discrete Towers BEYOND THE USUAL CALL OF BUSINESS. manufacturing category at the CII- 4th WE CONSIDER IT TO BE THE NATURAL National conference and competitions on  We enjoy the preferred supplier status AMARA RAJA WAY! Six Sigma. with major telecom, UPS and automotive OEM customers; we are market leaders in supplying batteries to the telecom and UPS segments AMARA RAJA BATTERIES LIMITED GOTTA BE A16 ANNUAL REPORT 2010-11 BETTER WAY 17
  11. 11. ENTREPRENEURSHIPAT AMARA RAJA, OUR BUSINESS IS TO MAKE BATTERIES BUT OUR PASSION IS TO BUILD ENTREPRENEURS. We demonstrated this through a number of initiatives:  We built successful and progressive partnerships especially our joint venture with Johnson Controls Inc., USA (JCI), a global leader in automotive batteries.  We created a team of 70 ‘freshers’ (average age 27 years) to independently manage exciting segments like the two- wheeler and the small VRLA battery facility.  We created entrepreneurs by developing business partners through our Amaron® Pitstop, PowerZoneTM outlets and AQuA channel on a pan-India basis.  We nurtured ‘intra-preneurship’ among the employee community through Continuous Improvement programmes – enhancing value for the individual and the organisation. A NUMBER OF PEERS WOULD CONSIDER THIS TO BE A BUSINESS STRATEGY. WE CONSIDER IT TO BE THE FUNDAMENTAL AMARA RAJA WAY!  We strengthened our entrepreneur- channel partners (Amaron® Pitstop, PowerZoneTM outlets and AQuA network) from 147 as on March 31, 2006 to 1,112 as on March 31, 2011.  We ranked 22nd among the Best Employers in India, as per ‘Employer Branding Institute of India’.  We were featured in Forbes ‘Best under a US$ billion’ Asia list. AMARA RAJA BATTERIES LIMITED GOTTA BE A18 ANNUAL REPORT 2010-11 BETTER WAY 19
  12. 12. We have done so for the last number of years through the following initiatives:  We created non-migratory job opportunities in rural communities.  We dedicated 2% of profits or 0.2% of revenue (whichever is higher) towards corporate social responsibility initiatives, creating social infrastructure (schools, hospitals, public centers, sanitation infrastructure and community facilities).  We transformed barren, dry land into one of the greenest battery facilities; more than 70% of the area is green. A NUMBER OF CORPORATES WOULD PROBABLY DESCRIBE SUCH INITIATIVES AS COMMUNITY BUILDING. WE CONSIDER THEM TO BE THE CORE AMARA RAJA WAY!  Our manufacturing units employ over 85% of people from surrounding villages.RESPONSIBILITYAT AMARA RAJA, WE DO NOT MERELY PROVIDE POWER SOLUTIONS; WE EMPOWER THE  We contributed Rs.126 million towards social development initiatives over the last five years leading to 2010-11.WORLD AROUND US. AMARA RAJA BATTERIES LIMITED GOTTA BE A20 ANNUAL REPORT 2010-11 BETTER WAY 21