Amara Raja Batteries

I AM DELIGHTED TO ANNOUNCE THAT OUR COMPANY ACHIEVED A REMARKABLE
 MILESTONE IN 2008-09 CROSSING Rs. 15,000 MILLION IN GROSS SALES FOR THE
 FIRST TIME. THIS MILESTONE WAS DOUBLY SPECIAL AS WE ACHIEVED IT IN THE
 MIDST OF A GLOBAL ECONOMIC MELTDOWN.
 
 In fiscal 2009, the global economy went through a tailspin, reviving
 memories of the Great Depression. All dire eventualities that
 enterprise managers feared, materialised - markets and demand vanished
 within a few weeks while a large number of companies were driven to the
 brink as asset values evaporated and the rest had to resort to severe
 cost-cuts and lay-offs to survive. The sub-prime crisis in the US wiped
 out huge swathes of asset value for individuals and organisations. More
 importantly, the fall of legendary corporations like Lehman Brothers
 and General Motors, among others, dealt a severe blow to the sentiment
 of people.
 
 These events affected India too. Indian economys progress towards a
 10% GDP growth was stalled and reversed.  Many feared that the newly
 resurgent economy was totally unprepared and could fall into recession
 if the global economy continued its downward spiral.  A few sober
 voices did point
 
 out that Indias economy was not fully in sync with that of the world
 and at some stage would be able to decouple and continue its growth
 path. The economic indicators of the last few months seem to echo their
 pronouncements and indicate that our economy is getting stable now.
 
 The economic adversities impacted our Company (ARBL) as well. The
 greatest effect was felt in the rupee depreciation against the dollar
 resulting in a foreign exchange loss and reduced demand from automotive
 OEM business. However, the impact was considerably cushioned by the
 continuing buoyancy of the telecom sector and UPS business and the
 robust demand from the automotive after market. Overall, our Company
 exhibited a healthy topline growth of 21% for FY 2008-09, recording net
 revenues of Rs. 13,177.23 million compared with Rs. 10,833.26 million
 in FY 2007-08.
 
 We recorded a PBT of Rs. 1,226.59 million (Rs. 1,459.38 million in
 2007-08) after providing for a sum of Rs. 322 million towards foreign
 exchange loss (both cash and notional) owing to the depreciation of the
 rupee against the US dollar. The profit after tax stood at Rs. 804.78
 million.
 
 Distinctive tie-ups
 
 It is a matter of pride that we forged unique associations in the auto
 batteries business with two of the most respected brands in India. We
 tied up with Maruti Suzuki India Ltd for retailing Amaron MGB (Maruti
 Genuine Battery) through the large network of Maruti authorised service
 centres. We also entered into an MOU with TATA International Ltd for
 exporting automotive batteries under the Amaron brand name to select
 African countries. Both alliances will enhance brand Amarons customer
 base in India and abroad.
 
 Winning awards
 
 I have more heartening achievements to share with you. The Company was
 recognised for HR strategy by the Employer Branding Institute of India
 with two regional awards for Best HR Strategy in line with Business
 and Continuous innovation in HR Strategy at work. The Company also
 received the Corporate Excellence Award in Marketing for its
 initiatives from Amity Business School, Noida. The Company was
 accredited for its Six Sigma initiative to increase ball mill
 productivity through process optimisation by the Confederation of
 Indian Industry (Cll) with a national award. These awards stand
 testimony to our culture of innovation. Whatever the business
 environment, this culture empowers our people and derives efficiencies
 for the collective good.
 
 The road ahead
 
 As things stand today, Indian industry looks ready to rebound. However,
 the year gone by has been a real test even as we see some light at the
 end of the tunnel, Indian companies need concerted help from the
 government to find safe ground. Banks should stop playing ultra- safe
 and make credit available to companies. Relaxed norms, tax rebates and
 holidays should be made available to deserving sectors and demand
 inducing infrastructure projects and other economic activity should be
 diligently implemented. The stability of the political system is a boon
 in these trying times. We look forward to this glimmer of revival
 becoming a real surge in the Indian economy.
 
 A word of caution at this stage is necessary. Indian companies would do
 well to remember the trials of the past year and imbibe the learnings
 of this period to build a stronger future.
 
 At ARBL, we are committed to do even better in the year ahead and are
 looking ahead with confidence, backed by our people, culture and
 support of stakeholders and JV partner Johnson Controls Incorporated
 (JCI), USA. Our bankers have continued their support in keeping our
 expansion plans on course.
 
 We would like to place on record our heartfelt gratitude to our valued
 shareholders and all other partners and associates.
 
                                                           Thank you,
                                              Dr. Ramachandra N Galla
                                                             Chairman