Amara Raja Batteries Ltd Management Discussions.

In the backdrop of an increasingly competitive market, disruptions in different sectors, and existing and predicted economic challenges, it has become vital for a company to draw up a narrative that shows its ability to sustain the growth momentum. It helps the shareholder gain an insight into the organisation to decide on his investments

– a review titled Management Discussion & Analysis.

World Economy: Performance & Prospects

The global economy continued to slide in 2019 and was eventually pushed to the edge by a host of factors like a sharp slowdown in manufacturing activity, a sleep plunge in demand for capital goods, and volatility in global trade triggered by higher tariffs and uncertainties.

These factors were added to a sustained contraction in automotive industry that led to large-scale unemployment across markets. An intensifying social unrest in many countries and several weather-related disasters too contributed greatly to the downturn.

The woes have been so strong that in 2019 the world economy recorded its lowest growth of 2.9% in a decade. This dragged the core inflation further down across advanced economies and below historical averages in emerging markets and developing economies.

As the world stepped into a new year, it encountered its worst nightmare in history. As on 1st July 2020, the Covid-19 pandemic claimed more than 5 lakh lives and the count kept rising with little sign of abatement.

The world economy suffered irreversible damage because of the containment measures like lockdown that kept more than 60% of the global populace indoors for days, stopping all business activities.

The fast plunge in global economic outlook and a breakdown of the OPEC+ (the Organization of Petroleum Exporting Countries, including Russia and other non-OPEC oil exporters) agreement among oil suppliers weighed heavily on commodity prices. From mid-January to end-March, base metal prices fell about 15%, natural gas prices slumped 38%, and crude oil dropped about 65%.

The financial market sentiment deteriorated since mid-February 2020 when the Corona virus outbreak began taking a scary magnitude. Financial conditions in advanced as well as emerging market economies turned significantly tight with drastic sell off in equity markets, significant widening of high-yield corporate and emerging market sovereign spreads, and reversal of portfolio flow to emerging market funds particularly in case of hard currency bonds and equities. Signs of dollar funding shortages have emerged amid general rebalancing of portfolios toward cash and safe assets. Currencies that had depreciated significantly in the early part of 2020 appreciated with time.

The steep decline in activity has come with a catastrophic hit to the global labor market with companies being forced to cut down on workforce. Low-skilled workers have been hit hardest.

Outlook: The health crisis has had a severe impact on the global economic activity. Global lending agency IMF anticipates a steep recession and a slow recovery. As a result of the pandemic, the global economy is projected to contract sharply by 4.9% in 2020, much worse than what it was during the 2008 09 financial crisis.

The crisis has paved way for an external demand shock, tightening of global financial conditions and a continued slump in commodity prices.

The downward revision to growth prospects for emerging markets and developing economies over 2020–21 (2.8 percentage points) exceeds the revision for advanced economies (1.8 percentage points).

The GDP of emerging and developing Asia is expected to contract by 0.8%.

Indian Economy: Performance & Prospects

The Indian economy slowed down in sync with the global economic turmoil to its lowest pace of growth in a decade at 4.2% in 2019-20 from 6.1% a year before.

On the output front, agriculture (3.7% growth) and mining (3.1% growth) seemed to have held forts, while on the expenditure front, government spending perhaps saved the day for the economy. Manufacturing and gross revised estimates fixed capital formation stayed extremely disappointing. The three components of demand fell sharply during the year – consumption demand kept sliding to a historic low, while investments and exports stayed in the negative territory.

Keeping the agri sector performance in perspective, the 3.7% growth at current price level translates to an 11.3% growth, which is 60% more than the rate of growth for the non-agri sector. Industrial output for fiscal 2019-20 contracted 0.7% compared with a growth rate of 3.8% in 2018-19.

The governments tax revenue remained subdued throughout the financial year as the slowed. Total receipts stood at Rs.7.5 lakh crore, about 10% short of the budgeted Rs.9.31 lakh crore. On the other hand, expenditure for FY20 reached RS.26.86 lakh crore or 99.5% of the target.

With a considerable revenue shortfall and limited expenditure compression, the governments fiscal deficit by a massive Rs.70,000 crore, taking the deficit for FY2020 to 4.6% of GDP as against a revised estimate of 3.8%.

Indias Foreign direct investment (FDI) receipts grew by 13% to a record $49.97 billion in 2019-20 up from $44.36 a year ago perhaps because of Indias consistent upward move in the World Banks ‘Ease of Doing Business ranking. India jumped 14 places to stand at 63rd position on the index.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), services sector attracted foreign inflow of $7.85 billion in 2019-20, computer software and hardware received $7.67 billion, telecommunications $4.44 billion, trading $4.57 billion, automobile $2.82 billion and construction $2 billion.

India continued to make steady progress in GST collections. Between November 2019 and February 2020, GST collections surpassed the Rs.-lakh-crore mark. In March 2020 though it slipped below this benchmark. For, 2019-20, GST for domestic transaction grew 8% over the revenues during last year. GST from import on goods reduced by 8% over the last year.

Overall, the gross GST revenues grew at 4% over the year-ago period. While the first green shoots were seen in some sectors of the economy, the Covid-19 pandemic made the dreaded onslaught on India. Although the authorities declared a lockdown only in the last week of March, the adverse impact was experienced by business enterprises across the board, in particular those with a global presence. Indias GDP growth rate slowed down to 3.1% in the fourth quarter of 2019-20 with the Corona virus further ailing the consumer demand and private investments in the March quarter.

The Covid-19 outbreak ran riots on the teetering economy, leading to large-scale loss of employment. In April 2020, Indias manufacturing and services activities recorded the sharpest contraction among the worlds top 10 economies. The agriculture sector functioned with lesser hitches as there has been no shortage of food grains, vegetables and dairy products. A part of services sector remained agile and alive, especially the BFSI and the Telecom and IT sectors, as the work-from-home culture became the only means of keeping commerce alive.

But thats not the end of the road. Built over a strong foundation and seasoned by several crises, the Indian economy has gathered enough strength to rebound. Experts believe that that while the economic damage of the pandemic has so far been deep and far-reaching in India, there is hope that the economic activities will spike once the Covid restrictions are eased.

The lead-acid battery sector

The lead-acid battery industry has been in existence for more than 150 years, but the ubiquitous technology displays remarkable traction even today.

With a proven arrangement for reliable and low-cost energy storage, lead-acid battery plays an important role in our day-to-day life. acid battery market Growth in the lead-acid battery market is led by increasing industrialization and urbanization, rising inclination towards green energy sources. There has been significant technological advancements to push the performance boundaries of lead acid batteries enabling their deployment in new and merging application segments. While lithium ion batteries have built a remarkable presence in EVs and grid scale energy storage application, lead-acid batteries continue to stay ahead in terms of production costs, adoption and recycling – lead-acid batteries are 99% recyclable – making them the biggest contender for affordable energy storage solutions.

The Indian is about $5bn in FY20 and is likely to de-grow in FY21 due to Covid19 impact. While the post COVID19 market rebound in after market segment is expected to be sharp, the OE de-growth over last several quarters will have a dampening impact in the medium term. The 5 year CAGR upto FY25 is expected to be in the range of 5-7% largely determined by the speed and scale of auto OE recovery.

With developments in the packaging of batteries and their construction, the durability and storage capacities of lead-acid batteries have improved considerably, presenting opportunities in few other emerging sectors like renewable energy.

India is planning to diversify its energy sources in addition to its target of providing 24x7 electricity to every citizen by making large increments in renewable energy generation capacities. This is estimated to be a significant driver for the lead-acid battery market.

Stationary lead-acid batteries are more efficient in storage of energy obtained from renewable sources like wind and solar and are more suitable installations in offshore and onshore platforms to store, supply and direct electric power as per requirements.

The sectoral structure

The Indian lead-acid battery industry is split equally between the automotive segment and the non- automotive segment. The industry is divided into three segments:

(a) Organized segment controlled by five manufacturers,

(b) SME segment and

(c) SSI segment. Given the high share of replacement demand for sectors like automotive, home inverter, UPS and traction, the share of unorganized/semi- organized players is high. To beat the increasing competition, the organized players are promoting more and more entry-level brands at competitive pricing and shorter warranty periods and are expanding their distribution network in the semi-urban and rural markets. This should help raise their share in the overall battery market.

Business Operations

Amara Raja Batteries Limited is the technology leader and one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry.

The Company is a leading manufacturer of automotive batteries and home UPS/ Inverter batteries under the brands Amaron and PowerZoneTM, which are distributed through pan-India sales & service retail network. Amara Raja supplies automotive batteries under OE relationships to Ford India, Honda, Hyundai, Mahindra & Mahindra, Maruti Suzuki, Ashok Leyland, Tata Motors, Honda Motorcycles & Scooters India

Private Ltd, Royal Enfield, Bajaj Auto Ltd among others. The Company is also the leading private label supplier for prominent brands. In India, Amara Raja is the preferred supplier to major telecom service providers, telecom equipment manufacturers, the UPS sector (OEM & Replacement), Indian Railways and to the Power, Oil & Gas, Motive among other industry segments. Amara Rajas Industrial Battery Division comprises of brands such as PowerStack, Amaron Volt, Amaron Sleek, Amaron Brute, Amaron Solar and Amaron Quanta. The Companys products are exported to most of the countries in the Indian Ocean Rim.

The Automotive Battery division

Meet Amaron, the flagship AmaraRaja transformed the automotive battery space in India.

The Tirupati and Chittoor manufacturing facilities are benchmarked to the ISO/IATF 16949, ISO 14001, OHSAS 18001 and EnMS 50001 standards.

The iconic Amaron and PowerZone range finds application in passenger vehicles, commercial vehicles, tractors, three-wheelers and two-wheelers and caters to OEs and the aftermarket segments. The automotive battery division also produces home UPS batteries.

Over the years, Amara Raja has set up an entrenched distribution network comprising 30,000-plus Amaron and PowerZone retailers for a pan-India reach. This distribution edge has helped the Company sustain its competitive dominance in the aftermarket segment.

Our progress in 2019-20

For Amara Raja, 2019-20 was an exciting year. Despite the continued deceleration in the automotive sector, the team put up a healthy show. Although sales volumes to OEs declined, the aftermarket segment grew, not only compensating the loss in the

OE segment, but also ensuring overall growth of the business. The standout feature for the year was a host of approvals it secured that are potent to accelerate growth.

OE market: The team widened OE customer base in 2019-20.

• Secured approvals from two large two-wheeler OEs operating in India.

• Firmed up business share with a fast-growing two-wheeler major.

• Received two awards from Indias largest passenger manufacturer for people practices and vendor quality system.

• Bagged contract from leading OEs for their recent launches as well as for the upgraded versions of existing models to be launched shortly.

These achievements will help Amaron firm up its connect with OE players and grow its aftermarket volumes subsequently.

Private label: The team expanded its private label business by adding good customers to this revenue vertical, which will translate into increased volumes.

• Secured a sales and marketing license from an MNC operating in India.

• Became a preferred supplier to major STUs in India.

Aftermarket:

The Company strengthened its aftermarket presence by beefing up its distribution network that led to additional volumes. A host of initiatives were launched to entrench its presence in the Indian markets.

• Conducted the Franchisee Customer Executive (FACE) Training Program across the country. About 925 participants from sales and service were benefited.

• Strengthened the warranty replenishment process to channel partners for quick turnout of claim settlements.

Li-ion: The team continued its efforts to expand the market place with its lithium-ion packs, which was launched in 2018-19. While a number of customers accepted the product for undertaking field trials, some placed direct orders for the product. This will give the Company rich insight into the product, its application, its challenges and the overall market opportunity, and also help explore opportunities to backward integrate in the same business space.

HUPS: The team took its home UPS batteries to the power-deficient pockets of India and the effort led to a higher sales volume.

International market: In the international markets, the Companys products gained traction in a number of geographies, resulting in an increase in export volumes. It emerged as the largest automotive battery exporter in India and was awarded as the ‘Largest Exporter by the Export Promotion council in the Electrical category. Amaron has emerged as the fastest growing brand in the ASEAN and the Middle East markets. the automated With an eye on mid-term, the Company continued to seed its presence across geographies and raise its market share in select areas.

• Opened two Pit stops, taking the tally of international Pit stop count to 15.

• Introduced Power Zone and JPC (brand owned by Nissan).

• Launched Amaron in new countries.

• Launched EFB range of batteries in the markets.

• Continued programs like service training, dealer meets and plant visits.

At the facilities: Our operations team worked toward improving internal efficiency to raise man-machine productivity, better product performance and enhance customer experience.

In 2019-20, the team identified ways to improve plant operations. Besides automation solutions, it implemented more than 100 projects under various initiatives such as like TPM, Lean Six Sigma, 5S, Suggestion Scheme and Energy Management Projects. These initiatives led to higher productivity, lower scrap generation, improved product quality, lower energy consumption and cost optimisation.

The saved cost was ploughed back into the system for technology upgrade. The team guided vehicle solution at one of its units in the formation area. It improved people productivity and reduced the area required for formation operations. It would be replicated to other operating units as well.

We collaborated with machine suppliers to make innovative modifications in pasting. This significantly improved productivity of machines.

On the safety front, we nearly doubled our capacity of the Dust and Fume Collection System to cut down on air pollution. The team aligned the operations with the global POKAYOKE tool a mistake proofing mechanism to make the working environment safer and healthier. It also incorporated engineering control in critical machines to ward off accidents.

During the year under review, the Company invested heavily in augmenting capacities.

• A third unit at its Chittoor facility for manufacturing batteries for passenger cars will go on stream by the end of 2020-21.

• It added more lines at its two- wheeler battery plant for serving the demand from OE alliances forged in 2019-20.

• A capacity enhancement project has been launched at its tubular battery unit to meet the demand for home UPS applications.

Our prospects

Automotive sector ve been ha Thelast 15 months somewhat of a nightmare of sorts for the Indian automotive industry. The industry, one of the key employment generators and a significant contributor to the economic progress, witnessed its worst slowdown in 2019-20 with domestic sales plunging nearly 18%.

The Society of Indian

Manufacturers (SIAM) showed that the cumulative sale of domestic passenger vehicles, commercial vehicles, three-wheelers and two-wheelers sales stood at 21.55 million units in 2019-20 as against 26.27 million units a year ago.

Exports provided marginal relief with a meagre growth of 2.9%.

Overall exports in the fiscal stood at 4.77 million units as against 4.63 million units from FY2018-19.

Why did the automotive sector continue to slide?

The decline in the automotive sector is a fallout of multiple events coming up close on the heels of one another, impacting customer confidence. The factors behind the decline can be summed up as:

• Cost of vehicle ownership went up largely because of an increase in fuel prices, higher interest rates and a hike in vehicle insurance costs.

• The NBFC crisis resulted in a severe liquidity crunch, almost drying up credit for dealers and customers.

• Customers postponed purchase of vehicles for the onset of the Bharat Stage (BS)-VI emission standard vehicles.

• The new axle load norms on the commercial vehicle industry will also bring down gross vehicle weights in India at par with that of other markets.

A reputed research house said the slowdown in the sector is very different from those the industry experienced earlier. The slowdown needs government intervention to correct itself. Several auto makers , however, have expressed their intention to invest in Indias automotive industry. Some of the recent/planned investments and developments in the automobile sector in India are as follows:

• Force Motors planned to invest C600 crore ($85.85 million) to develop two models over the next two years.

• Morris Garages (MG), a British automobile brand, announced plans to invest Rs.3,000 crore ($429.25 million) more.

• Audi India plans to launch nine new models, including sedans and SUVs along with futuristic e-tron electric vehicle (EV) from 2019 onwards.

• MG Motor India to launch MG ZS EV electric SUV in early 2020 and plans to launch affordable EV in the next 3-4 years.

• Hyundai plans to invest $1 billion by 2020.

• SAIC Motor has announced to invest $310 million.

• Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per year, highest for any luxury car manufacturing in India.

2) Passenger vehicles

India was the favourite destination of multinational car manufacturers before the slowdown. The annual sales of passenger vehicles were increasing consistently through the last five years. India was expected to overtake Japan and Germany and emerge as the third-largest global car market after the US and China. But the slowdown in the automobile sector has changed the scenario.

The downslide for this segment started in July 2018 and continued ever since. Sales of passenger vehicles, comprising cars, utility vehicles and vans, suffered a 17.8% de growth vis- -vis the 2018-19 sales. According to SIAM, cumulative PV sales in 2019-20 stood at 2,775,679 units, dipping below the 3-million-unit mark for the first time since 2016-17. While passenger car volumes slipped over 23%, utility vehicle sales grew by 0.48% on the back of by launches like the Kia Seltos and MG Hector.

Worryingly, 2019-20 sales were also down on 2015-16 sales figures, reflecting a 5-year low. While the buyer sentiment has been low since the beginning of 2018-19, the switch to BS-VI emission norms on April 1, 2020 brought its own set of complications which hampered sales significantly.

The Covid-19 pandemic and the related lockdowns at the tail-end of 2019-20 only compounded the grave situation. March, traditionally a month of strong demand, saw sales nosedive 51% from the same period a year ago.

Going forward: The prospects for the current year, in terms of new vehicle sales, do not appear encouraging owing to the fast spreading pandemic and the extended lockdowns imposed to contain this disease. The resultant job losses, enterprise shutdowns and salary cuts have significantly tarnished customer confidence.

As such discretionary expenses, which also covers purchase of a passenger vehicle, will be sent to the backburner for some time. It is expected that green shoots of demand growth should emerge towards the later half of the current financial year.

Aftermarket: In India, about 2.5–3 million vehicles are sold every year over the last 4-5 years. This provides a large and growing aftermarket opportunity for batteries. In addition to being a large market, it is a lucrative space for the following reasons:

• B2C nature of business

• Better pricing power with diffused customer base

• Demand for higher quality and performance

With cities getting increasingly congested, growing vehicle population and the government imposing emission norms, the start-stop-start action of vehicles is expected to increase which will strengthen the demand for quality batteries in the aftermarket segment.

India is the fifth largest car market in the world . Indias continuous rise in the league will strengthen the aftermarket segment battery demand over the medium term.

In the immediate near-term, battery makers could witness replacement demand driven by an upsurge in the aftermarket demand for replacement of old and discharged batteries.

3) Two-wheelers

The shaky macro-economic environment in the country saw two-wheeler volumes falling by 17.76% from 21.18 million units in 2018-19 to 17.42 million in 2019-20.

Exports provided a silver lining to the prevailing gloom growing by more than 7% over the previous year.

Recovery in markets such as Africa, Latin America, Central America, Africa and Southeast Asia has helped Indian two-wheeler companies to expand their presence further and increase their export volumes.

The domestic electric two-wheeler segment had a successful 2019-20. Electric two-wheeler sales in India in 2019-20 registered a growth of 20.6%, compared to the 2018-19 figures.

Going forward: Credible sources suggest that the two-wheeler market, in terms of new vehicle sales, will be faster on the rebound.

This optimism is based on the presumption that the average Indian who hitherto used public or share transport for this daily movement would now, owing to safety and health compulsions due to the Covid-19 pandemic, shift to a two-wheeler. Low interest rates could lure him into making the shift.

Aftermarket: India is one of the largest two-wheeler market in the world, adding more than 15 million vehicles annually to the wheels-on-the-street inventory for the last 3-4 years. Between 2012 and 2018, over 124 million bikes were sold in the country, creating a huge aftermarket opportunity.

Further regulatory requirements have only enhanced the aftermarket opportunity for quality batteries:

• In April 2017, the government mandated the use of AHO (Automatic Headlight On) in two-wheelers. The mandated ABS braking system in all new >125 cc two-wheelers in April 2018. Both AHO and ABS would result in higher consumption of battery power, reducing the battery life, which would eventually result in higher battery sales in the replacement market.

• Increasing penetration of advanced digital speedometers in two-wheelers boosts demand for automotive batteries in the replacement market.

Also, new variants introduced by two-wheeler OEs are based on battery-based ignition (akin to passenger vehicles). This has graduated batteries from an important part to a critical requirement.

4) E-mobility

The Union government is trying to encourage the adoption of electric mobility to reduce the dependence on crude oil imports and bring down pollution across cities. With its cleaner carbon footprint and reduced localised pollution, e-mobility can serve as a solution.

Though the Indian Government laid out a broad plan in 2013 with the ‘National Electric Mobility Mission Plan (NEMMP) 2020, e-mobility has seen better traction in the recent times with the Phase 2 of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) rolled out on 1st April 2019. The second phase aims at boosting electric mobility and increasing the number of electric vehicles in commercial fleets. This includes buses using EV technology, electric, plug-in hybrid, and strong hybrid four-wheelers as well as electric three-wheelers including e-rickshaws and electric two-wheelers. It also focuses on the establishment of charging infrastructure across multiple cities.

5) E-rickshaws

The Indian electric rickshaw market has witnessed significant growth in recently, owing to rising environmental awareness, government incentives and implementation of stringent regulations to curb environmental degradation.

Analysing the dominance of electric rickshaws, which cover 80% of the EV market in India, Frost and Sullivan has said in a recent report that e-rickshaws in India will grow to 1 million units by FY2025 from 0.4 million in FY2019. Around 72% of the electric rickshaws plying on Indian roads providing last mile mobility solutions to in Tier II and III cities, are 0-2 years old and approximately 98% of them are powered by lead acid batteries. It presents an interesting opportunity for us.

Business strategy

The automotive battery business has developed preferred brands like Amaron and PowerZone. Both the brands have garnered significant market share and continue to acquire more. The brands operate in market segments of automotive, two-wheeler and inverter batteries.

The automotive battery business has drawn up a roadmap designed to sustain its growth momentum over the medium term. It covers geographic expansion, new products and applications, and new technologies and processes.

Progress agenda for 2020-21

Although the slump in the automotive market is likely to continue this year, leading to a reduced OE demand, the Company will use this period to prepare itself for a resurgence when the tide and economic winds turn favourable.

In the interim, the automotive battery team would continue to improve its prospects in all its verticals. While the projects team would focus on commissioning new capacities in all products – four-wheeler batteries, two-wheeler batteries and tubular batteries – the business development team would sharpen its expertise on identifying and capitalising on growth opportunities, both in India and in the global markets.

Improving internal efficiencies and introducing automation solutions will continue to be a high-priority area for the team. Having received the TPM award for one operating plant, the team plans to replicate this success in other units too.

Industrial Battery Division

The Industrial Battery Division powers telecom equipment, UPS, railways and solar and motive power sectors. Amara Rajas world-class facilities located at Tirupati and Chittoor, benchmarked to the ISO 9001, ISO 14001, BS OHSAS 18001 and EnMS 5001 standards, manufacture batteries ranging from 7 Ah to 6,000 Ah capacity.

The Company largely handles the business on B2B basis to serve customers like telecom operators, tower companies, UPS OEMs, power utilities and solar integrators. The Company has a strong distribution network covering 130 AQuA channel partners across the nation to serve the replacement markets of UPS batteries. The sales team is aptly supported by a network of 120 SWEAR service partners in addition to its own personnel.

The Company brands Amaron Quanta, Amaron Volt, Amaron Sleek, Amaron Brute, Amaron Solar and Power Stack are well recognised and accepted by the customers both in domestic and international segments.

Our progress in 2019-20

The Company performed well during the year despite subdued growth in some of the customer segments. It could have been even better if the Covid-19 pandemic hadnt affected the year-end closing sales in March 2020.

In the market place: The slowdown in battery demand continued in the telecom sector for the third consecutive year. Despite this, the division performed well and increased its market share. Some of the considerable achievements of the Company in the telecom sector during the year were:

• Regained dominance in battery supply to Indias largest tower company.

• Commercialised the Fixed Energy Cost Model (FCM) by managing more than 500 sites for a leading telecom operator.

• Improved SLAs (99.998% uptime) in site operations and maintenance services, leading to customer satisfaction and preference.

• Bagged the first order of single- site installation of 500 KWh for LiB solution for the switching center of a major telecom operator.

In the UPS sector, the Companys performance was particularly heartening with the strengthening of credentials at major UPS OEMs and in the fast-growing data center segment. Its growth exceeded the industry average, increasing the market share.

The High Wattage variant in Amaron Quanta developed three years back for data center applications emerged as the most-preferred battery among major customers.

The growth in data centers, IT& ITES and government initiatives to push local manufacturing has fueled demand for batteries driving the product vertical to register a double-digit growth, some of the most significant achievements of the Company in the segment during the year were:

• Consolidated its position as the most preferred battery supplier for UPS applications.

• Expanded the distribution network by adding 10 AQUA partners across India.

• Expanded the product range with the competitive range of SVRLA batteries and superior performance tubular batteries.

• Strengthened preferred supplier status with all major UPS OEMs in India.

In the Solar and energy storage solution space, the Company launched long-warranty variants of Amaron Solar Tubular and VRLA series. The product basket now covers the complete range of 2 Volt & 12 Volt VRLA and tubular range of batteries to suit all applications in renewable energy space . This will widen the Companys prospects with the rise in green energy. "….harnessing Solar energy"

The Amaron Brute Hi Life Batteries became the preferred choice among Indian fleet rental companies in the Forklift truck market, which is skewed towards electric vehicles in India. In the Railways, the Company further strengthened its market share in VRLA battery supplies for various applications to the Indian Railways, aided by 100% conversion of train lighting applications to VRLA.

The Company also became part of the prestigious NFS project for the supply of VRLA batteries in building a robust communication network covering 342 sites for the defense segment. This has been one of the largest projects in developing exclusive communication network for the defense sector. Amara Raja aggressively pursued opportunities in key international markets and made significant inroads by.

• Launching commercial operations at its first overseas warehousing facility at Sharjah, UAE, through a subsidiary.

• Strengthening distribution business by expanding network across Africa, the Middle East and the Asia-Pacific regions.

• Initiating supplies to UPS OEMs for their regional requirements in the Middle East, Africa and the Asia-Pacific.

• Retaining preferred brand position for Amaron Quanta in Nigeria for UPS and HUPS applications.

In the international energy storage market place, the division supplied and commissioned the worlds largest lead acid Energy Storage System with a cumulative installed capacity of 37.83 MWh at three locations of Africa, powering entire university campuses through solar and battery.

On the services front: The Company undertook important process and system improvements in its after-sales customer support, which include:

• Upgraded infrastructure and improved processes to further reduce the turnaround time taken in resolving issues – living up to its credo, ‘Gotta be a better Way.

• Installed 22 Battery Revival Centers across the country to reduce the time taken to respond to site complaints resulting in a significant customer satisfaction.

• Strengthened support at the in-house call center facility for speedy response.

• Located residential engineers and established stock points in remote areas to serve customers.

At the facilities: In the manufacturing facilities at Chittoor and Tirupati, the Company worked relentlessly on improving efficiencies, product quality and optimizing the cost structure. Some of the important improvements implemented include:

• Improved productivity at the formation area of the MVRLA plant by redesigning the water tubs.

• Installed an automation solution at the packing and finishing area of the MVRLA unit. This solution will be horizontally deployed across all the plants.

The Company sustained its efforts toward energy efficiency, productivity improvement and waste reduction, leveraging global concepts like TPM, Lean Six Sigma, 5S, Quality Circle Projects, Suggestion Scheme and Energy Management Projects.

In addition to significant cost savings, these projects are an important employee engagement tool that continued to bind the workforce into a cohesive team.

Our prospects Batteries for telecom sector

Indias telecom sector, which has been grappling with huge debts and massive regulatory headwinds for the past few years, has received investments of more than Rs..42 lakh crore in the last six months. All the four mobile operators have received some form of funding, which indicates that the investor confidence has not waned out.

More than 50% of the Indian market is still not connected by data services. Those who have access to the internet, are consuming data like never before. The Covid-19 pandemic and the consequent lockdown gave a new lease of life to the industry with a massive surge in data usage. Millions were able to buy essential commodities, make financial transactions, watch movies, catch up with news, and work from home only because of reliable telecom networks.

Telecom networks are clearly at the heart of Amara Rajas digital future. While most sectors are saddled by terrible slump in business, telecom is slated to grow by 15-20% even in the midst of the economic slowdown. As data usage skyrockets, focus to improve rural coverage and launch of 5G can increase the power requirement at towers. ecord a CAGR

Batteries for UPS applications

Indias UPS market size is around $1 billion and it is expected to continue growing because of the digital transformation sweeping through the country.

Data Centers: A move toward a connected, inclusive digital economy means more and more data is being generated across various platforms as well as accessed by more people using mobile technology. Data centers have started making big strides with the spurt in data consumption. The cloud computing and edge data center technologies are increasingly being adopted across businesses as well as consumers adding to the demand for batteries.

Mobile telephony: Improved device penetration, affordable data tariff plans and increased data-intensive content such as videos are driving the growth of mobile telephony in India. Mobile data traffic is growing as more Indians spend time streaming videos, which is expected to account for 75% of the overall mobile traffic by 2024. Estimates suggest that the total mobile data traffic per monthwill of 23% from 4.6 exabytes in 2018 to 16 exabytes in 2024. Indias IT industry contributed around 7.7% to the countrys GDP and is expected to contribute 10% to the GDP by 2025.

Thegovernment initiative to computerize its various departments coupled with the National e-Governance Plan is expected to boost the demand for low-end UPS systems. Infrastructure push on Airport expansions, Metro Rail, smart cities, and banking, financial services and insurance (BFSI) are adding fuel to the UPS business growth in India.

Manufacturing Sector: with increased impetus to local manufacturing and intensifying focus on pharma, chemical and food processing sectors, India is expected to rank among the top three growth economies and manufacturing destinations of the world.

Batteries for Solar and Energy Storage Sector

The governments earlier RE targets of 175GW which was further enhanced to 450 GW by 2030 as announced by the Honble Prime Minister will significantly drive the demand for energy storage systems in India.

Other drivers like one of the lowest RE tariffs in the world, reforms in power tariffs, Renewable Purchase Obligations (RPO), solar parks and mini grids promise a significant jump in demand for battery energy storage.

Increased renewable component in overall energy generation mix of India necessitates the need for frequency stabilization and also handle peak demand in morning and evening hours, driving the need for energy storage. The recent changes in the tender specifications call for peak shaving (2 to 4 hours of back up) in addition to grid stabilization (15 minutes backup) also will drive for bigger energy storage needs.

Behind the meter requirement of energy storage at residential, commercial and industrial locations is expected to witness faster adoption with the likely introduction of differential tariffs will further drive growth in the energy storage needs.

Batteries for motive power

Unlike developed economies, the usage of Fork Lifts/Pallet Trucks in India has been limited owing to traditional practice of usage of labor for goods movement as well as very little adoption of palletization.

However, things are changing, driven by increased labor cost, mechanization of processes and more and more adoption of vertical rise in storage boosting the need for Fork Lifts and Pallet Trucks.

The motive power battery is by the needs of the manufacturing sector, warehousing/e-commerce and preference for electric vehicles over their diesel variants specifically in segments like pharma and food processing.

The adoption of electric vehicles for forklift will continue to grow with more and more conversion of diesel vehicles to electric vehicles, adding to the battery requirements. Among most of the emerging regions of the world, the adoption of lift trucks per million people is very low and it is significantly low in India at approximately 10 lift trucks per million as against 273 in China and 693 in North America. This certainly offers a huge legroom for growth in the Indian market.

Prospects in international markets

Increased preference for Indian engineering products in the global markets and rapid adoption of successful business models of India in segments like telecom driven (tower companies, fixed energy cost model) UPS (India as a manufacturing base for global markets) and the renewable energy storage are set to offer tremendous opportunities.

Close on the actions initiated by the Chinese government a few years back to ensure HSE measures in manufacturing and reduced play in global requirements of lead acid batteries, India has turned out to be a preferred destination for sourcing, apart from Vietnam. The undeniable fact of India being a significantly large captive user of batteries has worked in its favor in rolling out technologically superior and cost-competitive batteries for global requirements.

Business strategy

Amara Raja industrial batteries continue to be the most preferred choice in industrial batteries and holds a high market share in all segments of business operations. While continuing to grow the business in India, the strategic roadmap of industrial battery business highlights geographic expansion, new applications, new processes and new technologies to emerge as a credible global supplier for energy storage products and services.

Progress agenda for 2020-21

Even as the Indian economy is expected to take time to heal the bruises inflicted by the global pandemic, some of the sectors for industrial batteries like telecom and efforts data centers are expected to register a healthy growth this year. The Company looks forward to capitalise this emerging opportunities to ensure the growth momentum.

The Company will continue aggressively to pursue growth opportunities in telecom by offering complete solutions and providing more services to more towers.

The Company plans to increase its reach further to consolidate its position as the most preferred battery for the data center industry in India, while continuing to track and tap the opportunities emerging out of the governments large by global stimulus package for reviving the economy in the post-Covid scenario. Supported by the complete range of competitive products and aggressive market strategies, the division would like to strengthen its presence in the solar segment.

While Covid-19 continues to pose some restrictions to access the international customers, the division plans to pursue the opportunities aggressively for the targeted regions by strengthening the teams and product portfolio. The focus continues to be on the markets in the Indian Ocean Rim Africa, Middle East Asia and South East Asia.

Increasing companies to de-risk their supply chains in view of the Covid-19 pandemic will lead to diversification of their sourcing origin, creating opportunities for Indian manufacturers, and the Company is pursuing these opportunities with a focused approach.

At the facilities

The Company would work concurrently to enhance product quality and plant productivity to cater to the enhanced volumes. In addition, it will focus its energy on absorbing the new plate-making technology which is expected to be introduced this year.

The division will work on raising the standard of its medium VRLA facility to participate in the TPM Excellence Awards in 2022. This would necessitate intense training to the workforce on technical aspects, improving systems and processes and enhancing the efficiency and reliability of the equipment.

Innovation and Technology

Lead acid batteries have nearly a 160-year-old history. The low cost and ease of manufacturing lead-acid batteries compared to other electrochemical couples ensure a sustained demand for this system. Over the years, the manufacturing of lead acid batteries has evolved and latest technologies have given a new meaning to scale, volume, throughput and costs.

Advanced manufacturing facilities at Amara Raja are a testimony to its technology leadership and has been its hallmark since inception. Among the many technologies that the Company has integrated into its manufacturing process, plate making oductassumes prominence. Plates are at the heart of battery functioning and, therefore, plate making technology assumes great importance. At Amara Raja, this technology has progressed from workhorse gravity casting to continuous plate making.

The an innovative advancement in the continuous plate making process. The Company has taken up a transformative shift to the stamped grid technology to raise the bar and reset the industry benchmark for reliability, consistency, productivity and the overall battery performance, apart from superior environmental standards in manufacturing practices.

Worlds first stamped grid technology project for two-wheeler battery

Amaron Pro Bike Rider stormed into the Indian two-wheeler battery market with the AGM technology for the first time and transformed the market forever. Robust product design and strong manufacturing technology ensured that the product not only met the life and warranty periods but exceeded it by considerable margins. The has since been powering new two-wheeler models from reputed Indian two-wheeler manufacturers.

Given the ‘Progress On DNA of Amara Raja, the team has started working on the next-generation manufacturing technology for two-wheeler batteries. It has adopted a three-layered proactive approach towards this by

• Anticipating futuristic customer needs and developing low- weight battery with lead material conservation.

• Introducing advanced technologies to set an industry benchmark in manufacturing metrics of efficiency, productivity and environmental standards.

• Achieving world-class quality with process capability, consistency and product performance. Amara Raja partnered with Sovema SpA to work on the design and development of worlds first ‘Multi-Grid Panel Stamping & Pasting technology for two-wheeler automotive battery.

This pioneering technology was designed, developed and commissioned in 2017 with the following innovative solutions. technology is

• The stamping process incorporates innovative, continuous strip flow at constant speed and no does not require lubricants. It has the ability to punch low thickness of relatively soft lead alloy (leading to lower alloy cost). Very high punching speeds up to five times the other typical continuous plate-making technologies.

Innovative equipment design enabling continuous piece flow and minimal line stoppage and scrap generation have been achieved by incorporating dual belt feeder to avoid cross-cutting, multiple park area concept in plate conveying and collection, index wheel guided transfer mechanism, position control sensors to avoid plate jamming.

This is the first of its kind in the world for two-wheeler/small battery manufacturing.

Advanced automated monitoring and controlling system in this new technology facilitate manpower reduction by 50% compared to the discrete plate making technology.

• ‘Multi Grid Stamping and Pasting technology enables working tolerances to be reduced by 50% compared to discrete plate making technology, resulting in significant improvement in reliable product performance and durability.

This path breaking manufacturing technology has garnered accolades in the industry and the Company won the best innovation award at the prestigious CII Innovation Award Competition in December 2019.

Intellectual Capital

Thats the philosophy behind the transformation of Amara Raja into an industry leader. This programs philosophy is seeded deep into the people it treasures. Each one in the 10,000-plus-strong Amara Raja family has powered the Company to a leadership position, breaching boundaries and setting trends for the industry. Amara Raja continues to invest in its people – building their capability, sharpening their expertise and nurturing the spirit of leadership, which makes it a learning and delivering institution and facilitates sustaining its industry out performance.

The Amara Raja Way

In 2019-20, Amara Raja continued its journey of institutionalising The Amara Raja Way. The Company conducted training and experiential workshops through Large-Scale Interactive Programs to engrain this philosophy in its core assets – the intellectual capital. These covered about 3,505 people in 2019-20.

People Strategy

The organisation has a comprehensive Talent Management Model that enables it to initiate and institutionalise innovative programs in line with the People Strategy of the organisation. As part of the model, the team spearheaded various initiatives during the year aligned to the Companys business strategy. The Amara Raja Way helps achieve objectives in an invigorating digital work environment by exceling in people engagement, development and performance.

Switching Lanes Program

Amara Rajas Switching Lanes Program (SLP) provides a platform to choose between a swift-track or a standard-track career growth. It has been designed and implemented in a manner that offers fast-track career growth opportunities to all. In 2019-20, in partnership with a leading strategic consultant, the program was rolled out for junior-level employees.

The fast-track aspirants went through qualifying tests that decided the choice between the fast track or the Right Lane. These participants took up specific objectives in addition to their regular goals. At the end of the annual process, successful participants got promoted to the next levels of higher responsibility.

AR Speak Experiences Survey

Like every year, a survey was conducted to understand the Experiences Score and Engagement Levels of people by measuring the perception on various aspects of the functioning of the organisation. The complete workforce participated in the 2019 survey conducted across all locations and grades. The overall ‘Experiences Score of 82+ and the ‘Engagement Score of 84+ were found to be above par on a market comparison of reputed companies.

Amara Vani The Voice of Amara Raja

The organisation launched a quarterly newsletter called Amara Vani, an eMagazine, a colorful magazine with rich content that is entirely developed and designed by the employees. It is circulated fully electronically and the unique feature is that it carries, a special message from our Founder Chairman. The newsletter is providing a platform to people from across the organisation to exhibit their creative side and their interests.

Amara Raja POSH (Prevention of Sexual Harassment) Awareness Program

POSH awareness programs were conducted for people across levels in the organisation. This is an ongoing program and, in 2019-20, around 2,251 employees were covered.

An e-learning program has also been developed and launched to cover 100% of the people across the Company.

Digital Platform for our People: WE@AR

Extending our digital transformation journey to become a digital enterprise, the organisation automated HR processes through a comprehensive HR Suite. WE@AR was implemented with a host of automated HR processes that has improved efficiency and effectiveness leading to excellence.

The suite has automated the processes of recruitment, onboarding and employee life cycle management, and fostered the development of a learning, communication and collaboration platform called Zippi. All the platforms are mobile enabled and have given high levels of empowerment to people and leaders on the move.

These digital platforms have placed the organisation in a better position to design and implement focused engagement programs to all people across the Company.

WE@AR has created an important strategic infrastructure to enable productivity and engagement in the new ways of working.

Navaprathibha Sukalpa

The team continued its Navaprathibha Sukalpa program to build a robust talent pipeline for the middle management to support its aggressive growth plans.

Through this program, the team made campus recruitment from premier management and engineering institutions.

These recruits will go through an accelerated training program and will be groomed to take up various specialist and general managerial roles in the future.

Amara Raja Supervisors Empowerment and Expertise Development (AR SEED)

The organisation is mindful that supervisors who are the first-line managers form the backbone of the organisation. In todays world, where both the workplace and the workforce are evolving, front-line supervisors are key to high performance and process excellence. The AR SEED program was devised to help these first-line managers in their transition from high performers into leaders. The program covers all the supervisors across the organisation.

Great Managers Award

Amara Raja featured on the list of Organisations with Great Managers in the Great Manager Awards Program 2019, a joint initiative by People Business and The Economic Times. About 100 organisations from across the country participated in the fifth edition of the competition where 20 companies were selected.

The Organisations with Great Managers award was announced after a rigorous analysis of employee feedback, one-on-one interviews with the managers by the jury and further research. Two of our next-generation leaders made it to the top 50 list among 7,000 individual participants across the country.

Supply Chain Management

Truck parking bay at Karakambadi, Tirupati.

• Experiencing the customer delight through Advanced Shipment Note and e-POD.

• As a progressive partner approach, the Company has established driver amenity center for the drivers to relax, refresh and recreate.

Distribution Logistics

Distribution logistics pertains to Secondary distribution – from the distribution center to the channel partner. The team services 2,000-plus partners all over India through 29 distribution centers and 10 3PLs OEMs.

Key initiatives in 2019-20

• Equipped all DCs with CCTV / biometric systems as part of safety and security measures and to meet the local regulatory requirements.

• Implemented high-storage racks as part of space optimisation initiative and to support Extended Warehouse Management System (EWMS).

• Introduced the Transportation Management System (TMS) which brings systems-driven freights charges for each shipment.

• Installed Effective Contract Management systems and bill processing mechanism.

• Warehouse Management System was made more effective by deploying TMS, tracking the product serial numbers, minimising the aged inventories through automated FIFO.

Overseas Logistics

Focus on expanding its horizon beyond the domestic boundaries has called for the creation of a dedicated team to manage sea-based logistics.

The EXIM team taking the products to more than 20 countries focuses on shipping export materials to its destination on planned vessel and adhering to delivery schedules to meet customer expectations.

The team deals directly with freight forwarders and shipping lines resulting in cost-effective international logistics for imported raw materials and finished goods.

The EXIM team handled over 7,500 containers for inbound / outbound shipments per annum, with exports of over 3,000 units and imports the rest. Such high and growing export volume necessitated the Company to obtain maximum MEIS export incentive as Three-Star Exporter Status.

Key initiatives in 2019-20

The teams have been clearing all import shipments through self-clearance that has minimised demurrages and detentions at the port which helped timely customs clearance and embarking vessels to the designated gates.

The Company stayed in constant touch with freight forwarders and shipping lines which helped freight optimisation, elimination of middle men and on-time reach and facilitated ease of transactions during disembarking.

The Company has earned the AEO T2 importer status from the Indian Customs which led to cost-effective management of port operations, including deferred payment of customs duty as fortnightly.

Procurement Policy

Armed with a very strong database of marketers and suppliers, Amara Raja has, over the years, framed the smartest procurement solutions that save costs for its stakeholders.

The Company stays engaged with its vendors through long-term relationships and effective contract management. These have strengthened its material sourcing capabilities.

The Company works to expand and strengthen its supplier base for sourcing of major raw materials like lead and alloys, separators and other materials both on domestic and international fronts.

When it comes to Safe Lead Recycling Initiatives, the Company company has always been a torchbearer working closely with various environmental groups, NGOs and government authorities. The Company now part of the working group (WG) under the World Economic Forums (WEF) Global Battery Alliance whose mission is to improve health, environment and minimise economic impacts practices, is from used lead acid battery manufacturing and recycling, is focused on reducing the number of ULABs recycled in the informal sector.

Over the years, The Company has been associated with various government bodies, channel partners and internal and external stakeholders in supporting and establishing the circular economy principles to maintain safe and sustainable growth.

The Company has ensured that all its partners are registered with the local Pollution Control Boards and, in the process, made sure to sell new batteries only to registered channel partners.

In FY20, as a responsible organisation, the Company sourced a portion of lead and alloy requirements through safe lead recycling initiatives by focusing on strengthening the scrap collection processes through establishing collection centers and reverse logistics operations.

Amara Raja, through its robust and efficient geared up to meet the ever-growing business requirements of all the internal and external customers. It has been a constant endeavor for the Company to deliver the best all the time and align to changes in technology and its practices.

Accolades

• Awarded for ‘Operational Excellence in Reverse Logistics at the 9th Edition Manufacturing Supply Chain Awards held on March 4, 2020 at Mumbai. The Company emerged as a clear winner competing with more than 20 reputed organisaitons.

• Received South Indias best exporter award from Dr Tamilsai Soundarajan, the Honble Governor of Telangana, for consistently high export business in the engineering industry at the event organized by Engineering Export Promotion Council of India.

Quality Management

Amara Raja has fostered a culture within the organisation that makes every deal with the Company an experience to reckon with – be it a customer or a vendor or a partner. What makes it possible is its unwavering focus on quality. the global benchmarks like Continuous Improvement (CI), Lean Implementation Programs – Visual Management, TPM and 5S, Industrial Engineering Studies, Lean Six Sigma and Quality Circle Concepts. It is a passion to better every day. Its not just the design team that carries the onus of quality, it runs down the rank and file of the organisation, and quality enhancement has been inculcated into the way of life at Amara Raja.

The Quality Circle Concepts encourage the people on the shopfloor to improve the processes, optimise the costs, upgrade the safety measures and step up the operational management turns to the Six Sigma tools to minimise process variations and maintain consistency in product performance.

Key Initiatives in 2019-20

The Company kept the focus on reinforcing its quality commitment with the introduction of several initiatives.

1. Improved the maturity level of QMS implementation, carried out a self-assessment for all processes (based on ISO 9004:2018 standards) by involving the top management.

2. Institutionalised the lean management culture by deploying Poka Yoke (75 projects) and Single Minute Exchange of Die concepts (SMED-17 projects).

3. Stressed on inculcating the culture of quality enhancement among the employees with the celebration of World Quality Month across all manufacturing sites and remote facilities, recognised individual and team The middle efforts in raising the quality standards.

4. Enhanced the efficiency and effectiveness of all processes by engaging the senior management in the QMS audit process.

5. Conducted an Exclusive Six Sigma Black Belt program for transactional teams. beyond achieving

6. Designed and developed a unique e-evaluation system for Continuous Improvement programs like QC, Six Sigma, Lean projects and 5S audit as a part of rewards and recognition.

7. Migrated to e-portal system for effective monitoring and review of QC projects and identifying the best teams for regional, national and international level competitions.

8. Sharpened the focus on the Headcount Optimisation & Productivity Enhancement (HOPE) program for effective utilisation of resources.

9. Kicked off the Human Factors & Workplace Ergonomics program with focus on work-related musculo skeletal disorders (MSD).

5S, Quality Circles & Lean Six Sigma

In 2019-20, around 1,956 quality control (QC) projects were implemented by 1,053 quality circles. To foster the Six Sigma methodology across the organisation, the Company trained 288 members as Black Belts and 924 members as Green Belts and successfully implemented 2,419 projects as on March 31, 2020. This taskforce has provided rich insights into the streamlining processes and improving consistency in product performance.

Awards & Recognition

1) QC & SIX SIGMA

• Received three awards at the 13th CII National Competition on Six Sigma at Bengaluru.Automotive segment in ‘Automotive & Auto Ancillary Organisation Category

• Four wheeler Battery Plant, Karakambadi, Tirupati team became the ‘Winner

• Two wheeler Battery Plant, Chittoor team became the ‘2nd Runner Up Non-Automotive segment in ‘Discrete Manufacturing Organisation Category

• Industrial Battery Plant, (LVRLA) Karakambadi, Tirupati team became the ‘2nd Runner Up

• Received three ‘GOLD awards and one ‘SILVER award at an international convention on Quality Control Circles – ICQCC 2019 in Tokyo, Japan.

• Received highest level of Quality Circles awards for 17 teams at the National Convention in Varanasi.

2) 5S – Recognition from ABK AOTS Japan

• Received Sustenance Level – II Award for

• Industrial Battery Plant (LVRLA), Karakambadi, Tirupati

• Tubular Battery Plant, Chittoor

• Four wheeler Automotive Battery Plant, Chittoor

• Received Sustenance Level – I Award for

• Two wheeler Battery Plant, Chittoor

3) Customer Recognition

• Received 4+ star rating from Hyundai Motors India Ltd

• Received Platinum level rating from Caterpillar for ‘Supplier Quality Excellence Process.

Health, Safety and Environment

Manufacturing batteries involves handling of chemicals that pose health hazards. Any erratic decision could impact the environment. A robust Health, Safety and Environment (HSE) policy is essential to make the business sustainable.

Our HSE policy requires conduct of operations in such a way that safety of all concerned, compliance of environmental regulations and preservation of natural resources are ensured.

Health, safety and environment rule the framing of every strategy at Amara Raja. The Companys commitment to sustainable business practices is reinforced by the mandatory HSE initiatives it has adopted to continue its partnerships with several global OEMs.

The Amara Raja Way is the engine to drive its HSE policies and practices. The Company conducts training sessions and workshops to instill the culture in the entire team.

Health

An employee is a strength to a Company. A healthy employee is an asset to it. At Amara Raja, we believe that a healthy employee brings with him energy and positivity, which are essential for enhanced performance and productivity and also contributes massively to overall employee engagement within the business.

• A slew of measures have been taken with support from Amara Hospital, which provides expert opinions on various health issues and offers high-quality preventive checks periodically to our employees.

• A program called, Readiness to work, which is a 5-minute warm-up/stretching exercise before starting of the shift, was institutionalized.

• A tobacco-free environment is being strictly maintained.

• The Company is sustaining lead levels in blood as per OSHA standards for employees.

• The Company continuously re- evaluates the nutrition programs and modifies it as per the needs of its employees.

• Periodical and annual health checkups are conducted for the employees.

• Regular awareness and training programs are carried out on health and wellness.

• Communication is sent out to employees from the desk of the medical officer to bring awareness to health topics and tips to stay healthy on a daily basis.

• It has initiated Ergonomics/ Human Factor Engineering Program focusing on preventing the occurrence of work-related musculoskeletal disorders (WMSD) by anticipating, identifying, analyzing and controlling the risk factors to improve employee health and safety at our premises.

Safety

Safe working environment is a priority for any sustainable business. A safe and healthy workplace not only protects the employees physically, but also elevates the employee morale.

• The risk management mechanism at Amara Raja involves technical risk analysis by competent and experienced teams. The risk assessments involve identifying potential hazardous situations and corresponding checks, including engineered and administrative controls. The Company continue to be certified under BS OHSAS 1800:2007 for its occupational health and safety management system standards.

• At Amara Raja, we believe in the philosophy of Sarvendriyanam Nayanam Pradhanam. From its inception, the Company has been providing personal protective equipment to employees at all facilities. In 2019-20, as per international best practices, we took up a pilot project and provided goggles to every employee in the plant.

• Introduced safety ambassadors in all our plants to monitor and rectify the safety deviations and also to campaign the safety promotional activities.

• An international best safety practice of Lock Out & Tag Out (LOTO) is being implemented at all manufacturing plants to safeguard employees.

• Safety is a proven route to change peoples behavior, developing leadership qualities and strengthening the corporate immune system, which impact all facets of business. To achieve this, we initiated behavior-based safety programs during the year.

Environment

As India makes big strides in science and technology and stays on course to be a global economic superpower, an unwritten responsibility is thrust upon businesses like ours to protect the planet from environmental pollution.

Amara Raja always places the highest level of importance on its commitment towards environment protection. Through a systematic and process-oriented approach, reinforced by the spirit of entrepreneurship, we are mitigating adverse environmental impacts while creating value for our stakeholders and maintaining social responsibility. We aim to make a sustainable operation so as to have a minimum impact on the environment where we operate and continuously work to improve our performance.

• Our environmental performance has improved consistently through the last 24 years. The Company adheres to all relevant international standards in the field of environment and continues to be a front-runner in adopting latest technologies at all its manufacturing facilities. All our plants are certified with latest version of the Environment Management System ISO 14001:2015.

• Latest technologies in the fields of renewable energy and green technology sector have been adopted to reduce dependence on natural resources.

• Our energy management system is of ISO 50001:2018 standard which is implemented across all our units to help ensure conservation of energy with planned actions.

• Amara Raja has increased installed capacity of solar rooftop panels from 6.3 MW to 9.25 MW in FY20 which proves our commitment to use clean energy.

• Our environmental policy is aligned with the guidelines set by the United Nations Sustainable Developmental Goals (SDG). The Sustainability Report for FY19 was prepared as per the guidelines from UN SDGs for internal circulation and usage.

• Conservation of raw materials is addressed by adopting latest technologies in the manufacturing process and also controlled at the end level to reduce the scrap levels in the best possible manner.

• Amara Raja has installed latest pollution control equipment in the area of local exhaust ventilation to take care of the industrial exhaust. Regular monitoring is in place to control the levels as per the statutory requirements.

• Domestic sewage and process effluents from the plant are treated by sewage treatment and effluent treatment units. The treated water is used for in-house gardening and cleaning.

• The Company is pro-actively working with Rajanna Trust in setting up a model in the field of social forestry by adopting a hillock called as Pemmugutta near Petamitta in Chittoor district of Andhra Pradesh to increase the forest cover. This helps us neutrale the carbon emissions generated in our operations.

• It fully supports the Paris

Agreements to keep the rise in global average temperature to well below 2 degrees Celsius (2C) above pre-industrial levels and inventoration. The reporting of greenhouse gases is also in place.

• Continuous Ambient Air Quality Monitoring Station (CAAQMS) has been set up for real-time monitoring of PM10 and PM2.5.

• Irreversible magnetic water flow meters are in place to monitor the consumption of water across the plant. We monitor the water consumption at our facilities through the water flow meters connected online.

• Rain water harvesting bodies have been developed in the premises to improve the ground water levels.

Information Technology (IT)

The SAP S/4 HANA IDEA project will help Amara Raja migrate from its existing SAP ECC legacy system to the 15+ modules of the latest S/4 HANA system, including rolling out some of the newest modules of SAP like EWM (Extended Warehouse Management), MRP Live, PPDS (Production Planning), SAP Fiori and SAC (SAP Analytics Cloud).

The embedded Extended Warehouse Management (EWM) solution in S/4 HANA will bring increased visibility of inventory and movement of goods in more than 30 warehouses across the country. EWM supports a full range of warehouse processes, optimises warehouse asset utilisation and manages movement within warehouses from goods receipt to issue.

Transport management implementation at Karkambadi and ARGC will drive the centralised monitoring of trucks, load factor optimisation, planning and monitoring the utilisation of trucks for all distribution and plant locations. Lorry receipt processing time optimisation has been achieved with single freight order combining multiple outbound deliveries.

MRP implementation will help streamline the planning hand-offs between the marketing, planning and supply chain functions and minimise manual intervention.

Further, the PPDS implementation will result in optimising critical resources like pasting lines, battery assembly lines and setup time optimisation of mould changes, which will reduce the cycle time and improve the overall productivity.

SAP Analytics Cloud will give the Company a significant advantage monitor various Key Performance Indicators across several functions like sales, production, quality and finance data in real time. The embedded analytics empower leaders of all functions with the right data and at the right time to make informed decisions.

To give its users a smooth, intuitive experience with S/4 HANA and enhance speedy adoption, the team implemented SAP FIORI, a role-based user experience that can be personalised across all functions and devices.

The team rolled out EXIM to digitally enable its international business operations at the Companys regional office at solution to S/4 HANA, which brings in accuracy and efficiency in Letter of Credit, bonds and license obligation processes and eliminates revenue leakage. It also provides complete visibility into our imports of lead and separators and battery shipments to multiple countries.

WE@AR – HR Digital Transformation

As part of the IDEA Journey, a cross-functional team comprising HR and IT experts collaborated with PeopleStrong to implement PeopleStrong HR Suite. The Human Resource Management System, WE@AR, was rolled out to cover more to than 10,000 Amara Raja employees, creating an automated solution for various HR processes, including candidate screening, recruitment, pre-joining documentation, onboarding, leave management, attendance tracking, transfers, payrolls and reporting, employee engagement, learning, etc.

As a part of WE@AR, a highly secure collaboration platform called Zippi was also implemented. It has features like instant messaging, group formation and sharing of documents. The data shared is highly secure with no interfaces with such tools in the external world. An AI-based Chat Bot ‘Jinie to respond to employee queries on HR policies is also part of Zippi. is an add-on The Company has been successful in completely migrating to online platforms for recruitment and onboarding. Alt Recruit, a hiring platform, is integrated with job portals and features like candidate profile matching helps the organisation screen the market for potential candidates. The candidates can start engaging with the organisation right from the offer acceptance stage, they can submit the required statutory documents and also get to know about the organisation.

Alt Learning – a comprehensive eLearning Platform – is also a part of WE@AR. This enables learning at the fingertips through mobile phones and provides learning on the move. Many e-learning programs have been developed to help people work from across the country.

Digital Transformation for Products/Services and Customers

A key part of our focus on staying ahead in a disruptive business environment is to leverage advanced technologies to offer superior customer experiences with innovative products and services.

Digital Warranty: This project will transform our warranty management program. Customers will be able to register battery purchases online making it possible for us to manage warranties in real time without needing customers to furnish a physical document.

Iot-Based Cell Tower Monitoring: We Have Deployed The Intelligent Telecom Monitoring System at cell phone towers. A product of our R&D work in IoT, this system measures, monitors and displays parameters like battery voltage, diesel generator fuel levels, energy consumption, and environment conditions in real time on handheld devices.

IT Infrastructure

The work on the deployment of the IT infrastructure and audio video technologies at the new corporate office building at Karkambadi has commenced.

The Company has made a number of investments in employee collaboration tools, including desktop chat tools, video conferencing solutions and Zoom, to enable our employees to work from home and attend meetings remotely, gather information quickly, and service customers efficiently across all locations, locally and globally.

It has also provided our employees a secure access to network and corporate data wherever they go through the Checkpoint Capsule solution.

Information Security

The Companys Information Security team continued to strengthen IT security by implementing a security scorecard dashboard and supporting the team on cloud security initiatives. The team also won two prestigious awards from IDG for their implementation of Internet Security Solutions.

Covid Response – Doing Business Safely

An important implication of our technology focus is our ability to ensure business continuity and to keep our employees safe, engaged and informed during the lockdown period.

Supporting the business in response to Covid, the Company rolled out several solutions to enable work-from-home for employees, tracking location of employees using geo-tagging features of WE@AR application.

We also rolled out the Amara Raja People Safety Management System to track employee health and issue gate passes during the lockdown period.

Financial performance

During the year under review, the cost of materials consumed decreased by about 8% over the previous year primarily owing to the reduction in the price of lead.

This helped in improving business profitability. The country wide lockdown of businesses during last week of March20 in view of Covid-19 pandemic resulted in excess closing inventory at the year-end.

c) Employee Cost: Addition of new capacities heralded an increase in people count which together with the annual increment to the entire team resulted in an increase in the employee cost by about 12% over the previous year.

d) Finance cost jumped by about 75% from C6.95 crore in 2018-19 to Rs.2.19 crore in 2019-20. This increase was primarily owing to the adoption of Ind AS 116 "Leases" to its lease contracts, which were earlier treated as Operating Leases.

e) Other expenses

Rs. in crore

FY 20 FY 19 % Change
Other expenses 908.59 852.03 7.0

Other expenses were higher as compared to the previous year primarily on account of increase in power and fuel cost, increase in provision for doubtful trade receivables and increase in warranty expense.

Depreciation, a non-cash expense, increased from Rs.261.20 crore in 2018-19 to Rs.300.74 crore in 2019-20 an increase of 15%. This increase in depreciation and amortisation expense is due to regular additions in fixed assets in view of capacity expansion and depreciation on Right-to-use asset on lease contracts on adoption of Ind AS 116 "Leases"

Tax Expense: The Tax liability for 2019-20 decreased appreciably against the liability for 2018-19 as the Company elected to exercise the option permitted under section 115BAA of Income-tax Act, 1961 wherein the tax rate applicable is 25.168% for the current financial year as against the 34.944% for previous financial year. Accordingly, the Company has recognised provision for Income-tax for the year ended March 31, 2020 and remeasured its deferred tax liabilities.

Profit after tax for the year increased by 37% from Rs.483.49 crore in 2018-19 to Rs.660.82 crore in 2019-20. Of this surplus, about Rs.424.90 crore howcases the capital will be ploughed into the business after the payment of dividend at Rs.1 per share, which should help in strengthening the business foundation.

Balance Sheet

A. Capital employed in the business increased by 7% from Rs.3489.66 crore as on March 31, 2019 to Rs.3746.54 crore as on March 31, 2020. This increase was largely to the addition of business surplus to the Shareholders fund; the equity capital of the Company remained unchanged at Rs.7.08 crore comprising of 17.08 crore shares with a face value of Rs. per share.

B) Property, plant and equipment and Right-to-use asset

Rs. in crore

FY 20 FY 19 % Change
Property, plant and equipment 1647.61 1809.05 (9.0)
Right-to-use asset 178.48 - 100.0

Despite an addition to the existing capacity, balance under Plant, Property and Equipment declined by 9% over the balance as at march 31, 2019. The decrease in carrying value was on account of reclassification to Right-to-use on transition to Ind AS 116, thereby increasing the Right-to-use assets.

The balance under Capital Work-in-Progress increased from Rs.233.88 crore as on March 31, 2019 to Rs.732.58 crore as on March 31, 2020.This expansion projects (to increase the existing production capacities of plants and for new infrastructure development) which are at different stages of implementation.

C. Non-current financial assets at the end of 2019-20 declined from Rs.27.11 crore as on March 31, 2019 to Rs.20.25 crore as on March 31, 2020. This drop was due to the loss in fair valuation on unquoted investments carried at FVTOCI. Current Investments, on the other hand, were higher than the previous year balance primarily due to short term investments in liquid mutual Assets funds.

D. Non-current Borrowings dropped from Rs.46.80 crore as on March 31, 2019 to Rs.34.34 crore as on March 31, 2020 as the Company repaid Rs.2.46 crores interest free sales tax deferment loan during the period under review.

E. Lease liabilities increased due to adoption of Ind AS 116 "Leases" to lease contracts, which were earlier treated as Operating Leases.

Internal controls

The Company is committed to ensuring an effective Internal Control System and Internal Control Environment that will help in preventing and detecting errors, irregularities and frauds, thus ensuring security of Companys assets and efficiency of operations. The Company has an internal control system and mechanism which is commensurate with the size and complexity of business and aligned with evolving business needs.

The Company has laid down Internal Financial Controls as detailed in the Companies Act, 2013 and has covered major processes commensurate with size of the business operations. Controls have been established at the entity level and process levels, and are designed to ensure compliance with internal control requirements, regulatory compliance and appropriate recoding and reporting of financial and operational information.

Key ratios and their movement

FY20 FY19 % Change
Debtors Turnover (days) 33.96 41.30 (18)
Inventory Turnover (days) 60.98 57.03 7
Current ratio 2.02 2.44 (17)
Debt-Equity ratio (times) 0.01 0.02 (36)
PBT to Net Sales (%) 12.29 10.75 2
PAT to Net Sales (%) 9.66 7.12 3
Return on Networth (%) 18.91 15.42 3

Managing business risks

Risk is integral to any business. Predicting and pre-empting risks are the most essential part of drawing up the blueprint for businesses. Only a robust risk management mechanism can protect the business from various internal as well as external threats.

Our risk management framework at Amara Raja seeks to proactively identify and address the existing and emerging risks. The mechanism goes beyond the traditional formulation and involves all key managers of the Company.

We have a formal monitoring process at the unit and company levels to identify and categorise new risks depending on their calculated impact and probability, map them to the responsibilities of select managers, and countered with an efficient mitigation strategy.

Competition risk

Market share of the Company may shrink in the face of intensifying competition in the market from local and regional players.

Mitigation strategy

Our brand value, which we built over the course of time investing sheer passion and an endless drive to explore and innovate, gives us the edge over others. Our disruptive products have created an unmistakable brand recall in the mind of the customer.

The GST regime gives branded battery makers a room to override local and regional players by virtue of the market share. We clearly stand miles ahead in the competition.

Technology risk

Constantly evolving technology may blunt the Companys product edge in the market.

Mitigation strategy

• Technology itself gives us the edge to outsmart our peers. We constantly strive to upgrade and develop ourselves using emerging technology and analyze every opportunity and risk it throws up.

• For the lithium-ion technology, the Company did an in-depth groundwork to understand it, analyze its positives and challenges. We first set up a lithium-ion pack assembly unit to enter the the e-rickshaw and telecom sectors. We are now doing the spadework on the lithium-ion cell to grab the opportunities whenever they emerge without any delay.

• The Company keeps a close watch on innovations in manufacturing of lead-acid batteries. We have absorbed and localised the stamped grid technology which promises to improve our products while optimising costs.

• We have a very competent R&D team which continues to build capabilities for designing products that stay relevant.

Localisation risk

Excessive dependence on a particular geography could be detrimental to the Companys business prospects.

Mitigation strategy

• The Amara Raja management is cognizant of the reality that majority of its business resides India.

• Realising the time to explore beyond the Indian frontiers, the Company has set up an office and a warehouse in the Middle East which helps it serve those markets better.

• The Company is looking atSouth East Asia and Africa for similar ventures. These efforts would help Amara Raja service the Indian Ocean Rim more effectively while reducing its dependence on India.

Lead price risk

Lead is the key input in battery manufacturing. Swing in the price of lead can impact the Companys profitability adversely.

Mitigation strategy

The Company has entered into lead-linked contracts with customers who contribute to the lions share to the overall revenue.

• It implements periodic price corrections to factor in the lead price fluctuations.

Growth risk

Markets could get saturated which would impact the Companys business growth.

Mitigation strategy

• Storage batteries will continue to be in great demand as we move in more toward automation and digital platforms.

• Amara Rajas ability to grow its business is reflected in its widening product range and growing customer approvals. In the automotive space, recent OE approvals in the two- and four- wheeler segments promise to increase volumes. force, which has

• Growing acceptance of our products in the e-rickshaw space will add to the volumes.

• In the industrial space, while the UPS segment continues to grow, the Company plans to explore opportunities in the motive power and defense spaces.

• The focus on strengthening the presence in the Indian Ocean Rim will help shore up volumes.

• The business development team is also in continuous touch with global OEs operating in India to everage their business relations . beyond the Indian shores.

Health risk

A lead-based working environment could result in health hazards for the shopfloor team.

Mitigation strategy

• The Companys HSE team continues to monitor the health parameters of the team on a regular basis and the results are presented to top management.

• We have invested in world-class equipment and implemented contemporary processes which ensure very low levels of lead pollution on the shopfloor.

• The Leadership team has also brought in change in the management based on behavioral changes (personal hygiene and eating habits) at the shopfloor resulted in very low levels of lead in blood.

• The effectiveness of these measures is borne out in an important reality – we have reached level of lead in blood at <25 g/dL among employees, which is significantly lower than the international benchmark or OHSAS specified 40 g/dL. The Company aims to take this to 15 g/dL.

Shopfloor operation risk

A global crisis of the order of Covid-19 could bring the shopfloor operations to a grinding halt.

Mitigation strategy

The Covid-19 pandemic has taught an important lesson to every business house that there can be a possibility of an operational halt any moment. Amara Raja has been one of the earliest to resume operations when the lockdown began being lifted systemically. This was primarily because of its non-migrant worker policy – most of its workforce was from villages proximate to its facility. The Company provided safe transportation facilities to all workers to prevent any contagion. Our operations were efficiently supported by stringent SOP and health measures for all employees at manufacturing facilities.

Covid-19: Result, Response & Revival

In January 2020, the world slipped into the Covid-19 pandemic that became the worst disaster in the history of human civilization in the next two months. A microbe, 10,000th of a millimeter in size, snacked on nearly 600,000 lives and stung over 10 million people in the last six months, threatening the very existence of mankind.

As authorities clamped lockdowns to contain the spread of the contagion, all activities came to a sudden halt, blocking livelihoods and driving lives into an abyss of uncertainty.

The Indian government slapped a nationwide lockdown – the strictest and longest in the world – from March 25 and extended it till June 30 as the number of infection kept soaring.

With the lockdown restrictions being eased systemically, a fear has gripped every mind: a second wave of contagion. The concern is that the virus may resurface with renewed strength and revive yet another round of shutdown.

Economies on the edge

The Covid-19 pandemic has in an alarming speed delivered an economic shock of enormous magnitude, driving many countries into a deep recession. According to a World Bank report, The Economic mpact of Covid-19 (June 2020), the baseline forecast sees a 5.2% decline in global GDP in 2020 — the deepest contraction in eight decades – despite unprecedented policy support. Per-capita incomes across emerging markets and developing economies (EMDEs) are also likely to shrink this year, tipping millions back into poverty, it said.

In India, growth is estimated to have slowed to 4.2% in FY20 and is projected to contract in FY21 with contrary views between -3% and -10%. With an end to the menace still being out of bounds, no prediction on the likely continuation of the pandemic holds ground and no forecast on an economic revival can be established on solid grounds.

Our understanding and analysis of the situation tell us that the short-term and medium-term impact of the pandemic will vary across business segments. While some of the service industry segments like travel and tourism and aviation may suffer the biggest brunt, and consumer electronics may get over with moderate impact, while telecom, digital services, public infrastructure, FMCG and pharma may see least or no impact at all.

The silver lining though, in our view, lies in large-scale digitalization of various business processes across industries leading to a spurt in e-commerce, e-education, e-banking, data consumption in general and data storage.

The sweep of digital transformation in India has created opportunities for our industrial battery business in sectors like telecommunications and data centers. Projections also indicate return of consumer interest in owning up cars and two-wheelers to avoid public transport and shared mobility in the medium-term. This will also benefit us in our automotive battery business.

Our fight with Corona crisis

Amara Raja created at apex level various taskforces to deal with the health and safety aspects of people and facilities, business continuity and corporate social responsibility.

Health & Safety of people & facilities

Within a couple of weeks of imposition of lockdown, a detaile tandard Operating Procedure (SOP) was issued to be implemented across locations to ensure health and safety of all our employees and a trouble-free operation.

Business Continuity

1) Manufacturing Operations

• Arranged for required governmental and regulatory approval to restart limited manufacturing operations within one week (April 2020) of lockdown to support the requirements of segments identified as essential by the overnment of India.

• Ramped up manufacturing operations within four weeks of restarting with 93% attendance and 95% manufacturing capacity to ensure meeting the market requirements. This was possible due to our inherent belief in a couple of factors: o Creating non-migratory jobs for workers which has been our policy and belief since inception.This could avoid the issues faced by many industries due to labor migration during lockdown

• Installing technology solutions and location-tracking software across our workforce to remain digitally connected through their smartphones to get regular updates and also ensure their wellbeing.

• Implementing industry- best safety protocols across locations and for every business process to ensure health and safety of all.

2) Customer Support

• Even before the announcement of lockdown in the last week of March 2020, we had experimented and prepared a blueprint for work-from-home (WFH) operations for all our staff across locations in India.

• All necessary preparations were made to ensure that our supplies and services are not interrupted for essential sectors by deploying over 500 people to ensure

• Telecommunication network towers and switching centers (MSC) and data centers run without interruption – supplied and installed batteries at 1430 telecom sites/towers and 42 core sites (MSC/data centers) across the nation.

• Maintained our telecom

• ME and energy services operations at 3000-plus sites with an uptime of 99.999% and breakdown rectification at close to 1,300 sites.

• Conducted nationwide program ‘JUMP START to support consumers for their mobility by ensuring complimentary battery health checkup after several weeks of lockdown.

• Ensured timely supplies of tractor batteries for supporting agriculture sector in the kharif season by arranging for permission from authorities To open required franchisee network.

• Uninterrupted services and supplies to the data center network.

• Timely supply of batteries at UPS installations for hospitals, banks, pharma and manufacturing units.

Going beyond Batteries

Amara Raja reaches out to the disadvantaged communities living near its facilities and works to empower them, such that they achieve a better standard of living.

The Company lines up a series of social initiatives around healthcare, education, skill development and environmental conservation to provide these people an opportunity to live a better life. All these corporate social initiatives of the Company are led by Rajanna Trust.

COVID – 19 Response

The outbreak of Covid-19 as the worst threat the planet has ever encountered left a deep impact on both the economy and communities world over. Responding to this crisis, Amara Raja has undertaken a slew of measures to stand by the people in need.

The company has made significant financial contributions to state and local bodies to combat the disease, extended support to hospitals by providing PPEs, ventilators and other essential equipment, and carried out food distribution programs for local communities and migrant laborers. Amara Raja continues to live up to its values by energising the lives of the communities it supports despite the additional challenges imposed by the pandemic.

Education

Rajanna Trust provides financial and operational support to three schools in villages close to the Companys operating units.

• Mangal Vidyalayam, Pettamitta, a CBSE-affiliated senior secondary school, imparting education to more than 2,200 students.

• Amara Raja Vidyalayam, Karakambadi, a CBSE-affiliated secondary school near Tirupati, imparting education to about 900 students.

• Amara Raja Vidyalayam, Diguvamagham, a CBSE-affiliated school located near Chittoor,

was founded in 2016 and is now imparting education to over 1000 students, up to class VII. The schools is being expanded into a secondary school with additional infrastructure.

These schools are setting new standards of excellence in the region by focusing not only on the academic achievements of the students but also on their achievements in sports and other extracurricular activities. The goal of the schools is to mold its students into well-rounded youths who can take over as tomorrows leaders.

The schools celebrate the various achievements of the students in regular events in which the Trust Executive Committee members make active participations.

Skill Development

As India gears up to be the worlds biggest manufacturing hub – in step with the prime ministers Make-in-India vision – there is an imminent need for skilled manpower resources.

The Amara Raja Skill Dvelopment Centre (ARSDC) has come up to contribute to the nations workforce-building initiative. The institute imparts training in various industrial activities and helps develop multiple skillsets to increase the employability of these people.

This skill development program, carried out with a mission – Skilling Rural India to Make in India – is an 18-month residential course comprising a prudent mix of on-job training at various plants of Amara Raja Group and class-room training. The ARSDC complex houses well-equipped classrooms, laboratories, workshops and hostel facilities for boys and girls.

The entire course, inclusive of food, accommodation, uniforms and study material, is free for the students. The students are also paid a stipend as a recognition for their efforts. More than 945 students have cleared the course so far. Most of these students have been inducted into various companies in the Amara Raja Group. In 2019-20, 197 students passed out, across two batches.

The Trust is planning to set up similar skill development centers at other locations to focus on skilling the rural youth, especially women, and help empower them and foster inclusive growth.

Health

To supplement the governments efforts in providing healthcare to every Indian, the Trust financially and operationally supports a 30-bed primary health center in Chittoor district. Qualified staff and experienced doctors provide preventive and primary healthcare to more than 50,000 people living in 81 neighboring villages. The Trust continued to organise health camps with specialists from India and abroad for people from 86 villages across 12 Panchayats. At these health camps, patients are provided free consultation and medicines.

The services provided by the health center have been of particular importance, during the lockdown, as it was the only PHC in the entire region to remain open and continued to address the healthcare needs of nearby communities.

Water Conservation

The Trust built 23 check dams and desilted three tanks under Rajanna Jalasayamu Program in Chittoor district. Around 60 villages, covered under 12 panchayats, continue to benefit from this project.

Rural Development

The Trust developed rural infrastructure by building proper connecting roads, water tanks for safe drinking water in villages through RO plants, street lighting, leisure parks with internet access and a library in Chittoor district. These facilities are maintained by the Trust on an ongoing basis. The Trust continues to support the adopted panchayats of Karakambadi, Pettamitta and Diguvamagham in Chittoor district under the ‘Smart Panchayat Scheme.

Environment

Amara Raja adopted a 250-hectare plot on a hillock in Pemmagutta, in Chittoor district, to develop plantation. In addition, it purchased and donated a 30-acre adjoining plot to the government. The plantation project provided livelihood to about 40 tribal families. More than 60,000 saplings were planted in and around the hillock. Under the Blue Sky CSR initiative, the Rajanna Trust enjoyed assistance from the communities, school children and its employees.