GNA Axles Ltd Directors Report

Dear Members,

The Directors of your Company have pleasure in presenting their 31st Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended March 31, 2024.

Financial Performance

The Financial results for the year are as under:-

Particulars Year ended on March 31, 2024 Year ended on March 31, 2023

Net operating Revenue 1,50,626.18 1,58,293.37

Other Income 240.39 142.58

Profit Before Depreciation, Interest and Tax 19,972.41 23,411.80

Financial Costs 1,154.34 1,096.38

Profit before Depreciation and Tax 18,818.07 22,315.42

Depreciation 5,333.71 4,851.25

Profit before Tax 13,484.36 17,464.17

Tax Expense 3,482.27 4,441.06

Profit after tax 10,002.09 13,023.11

Earnings Per Share

- Basic 23.30 60.67

- Diluted 23.30 60.67

Financial analysis and review of operations:

Revenue from operations decreased by 7,667.19 Lacs to

1,50,626.18 Lacs for the Fiscal 2024 from 1,58,293.37 Lacs for the Fiscal 2023, showing a decrease of 4.84%. Export sales decreased by 6,271.22 Lacs to 77,620.15 Lacs for the Fiscal 2024 from 83,891.37 Lacs for the Fiscal 2023 due to the correction in the steel prices. Domestic sales decreased by 632.21 Lacs to 71,433.73 Lacs in the Fiscal 2024 from 72,065.94 Lacs in the Fiscal 2024 thereby showing a decrease of 0.88 %.

The Company earned Profit before Tax of 13,484.36 Lacs during the year under review against 17,464.17 Lacs for the Fiscal 2023 showing a decrease of 22.79%. Profit after tax decreased by 3,021.02 Lacs to 10,002.09 Lacs for the Fiscal 2024 from 13,023.11 Lacs for the Fiscal 2023 thereby showing a decrease of 23.20 %.

There has been no material changes and commitments which can have an effect on the position of the Company which have occurred between the end of the financial year under review and the date of this report.

Transfer to reserves

Your Directors do not propose to transfer any amount to Reserves.

Deposits from Public

The Company has not accepted any deposits from the public as such no amount on account of principal or interest on deposits from public was outstanding as on March 31, 2024.

Resource Utilisation: Property Plant & Equipment

The property, plant & Equipment (including capital work in progress) as at March 31, 2024 were 35,254.12 Lacs as against previous years value of 31,738.30 Lacs.

Current Assets

The net current assets as on March 31, 2024 were 44,980.14 Lacs as against 39,420.84 Lacs in the previous year.

Dividend:

The Board of Directors in its meeting held on May 24, 2024 had recommended a dividend @ 20.00 % i.e of 2.00/- per Equity Share of 10/- each (Previous year 6.00/- per Equity Share) to the shareholders of the Company for their consideration and approval at the ensuing Annual General Meeting of the Company. The dividend @ 20.00 %, if approved at the forthcoming Annual General Meeting, will result in the outflow of 858.62 Lacs. The Dividend, if approved at the ensuing Annual General Meeting, will be paid within the stipulated time under the Companies Act, 2013 (subject to deduction of Tax at source).

Share Capital

The paid up Equity share Capital of the Company as on March 31, 2024 was 42,93,08,000/- divided into 4,29,30,800 Equity shares of 10/- each. During the Year under review the Company alloted bonus equity shares in the ratio of 1:1 to the shareholders of the Company and the share capital of the Company increased from 21,46,54,000 to 42,93,08,000.

Bonus Shares

During the financial year 2023-24, the Company issued and allotted 2,14,65,400 Bonus Equity Share of Rs. 10 each in proportion of 1 (one) Bonus Equity Share for every 1 (one) Equity Share (fully paid-up). The said shares rank pari-passu in all respects with the existing fully paid-up equity shares of the Company. Post bonus share, the issued and paid-up share capital of the Company increased to 42,93,08,000

Subsidiaries, Joint Ventures and Associate Companies

The Company has one subsidiary namely GNA Axles Inc. incorporated in Michhigan USA. The subsidiary is yet to start its business operations. A statement pursuant to section 129(3) in form AOC – 1 is enclosed as an Annexure 1 to this Report.

The Company does not have any associate or joint venture Company.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared after consolidating the accounts of the Subsidiary Company M/s GNA Axles Inc in the form and manner prescribed under the Companies Act, 2013 and shall be laid before the forthcoming 31st Annual General Meeting. The Consolidated Financial Statements are provided in this Annual Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report is presented in a separate section forming part of this Annual report.

Corporate Social Responsibility (CSR) Initiatives:

Your company has formulated its Corporate Social Responsibility required under section 135 of the Companies

Act, 2013. The Company has identified following thrust areas for CSR:

1. To promote and help in providing healthcare and preventive healthcare facilities to the people.

2. To promote Education and help in delivering quality education to the society and students.

3. To promote the rural sports, nationally recognised sports and Olympic sports.

4. To take initiative in eradication of hunger, malnutrition, sanitation.

5. To promote women empowerment

6. Any other project / programme pertaining to activities listed in Schedule VII of the Companies(Corporate Social Responsibility) Rules, 2014 and amendments thereto.

The disclosures under Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules2014 i.e. Annual Report on CSR activities for Financial Year 2023-24 is attached herewith as Annexure 2.

Risk Management

The Board of Directors of the Company had formulated and approved the Risk Management Policy of the Company under the provisions of the Companies Act 2013 and SEBI (LODR), Regulations, 2015. The objective of Risk Management at GNA Axles Limited is to create and protect shareholder value by minimising threats or losses, and identifying and maximising opportunities. An enterprise-wide risk management framework is applied so that effective management of risks is an integral part of every employees job.

The Risk Management Policy of the Company may be accessed on the Companys Website at the link: http://gnagroup.com/wp-content/uploads/2015/09/Risk-Management-Policy.pdf

Vigil Mechanism and Whistle Blower Policy.

Pursuant to provisions of section 177 (9) of the Companies Act, 2013, the Company has established a "Vigil Mechanism" incorporating Vigil Mechanism Policy which also incorporates the Whistle Blower Policy in terms of rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, frauds or violation of the codes of conduct. The Company has also provided adequate safeguards against victimisation of employees and Directors who express their concerns. The Policy on Vigil Mechanism as approved by the Board of Directors can be accessed on the Companys website at the link: http://gnagroup.com/wp-content/uploads/2015/09/VIGIL-MECHANISM-POLICY.pdf

Dividend Distribution Policy

The Board of Directors of the Company in their meeting held on April 23, 2021 had adopted and approved the Dividend

Distribution policy of the Company and the same is annexed as Annexure 5 to this Directors Report and is available on the website of the Company at www.gnaaxles.in/pdf/ unpaid-dividend/Dividend-Distribution-Policy-23.04.21.pdf.

Remuneration Policy

The Board of Directors of the Company had formulated and approved the Nomination and Remuneration Policy of the Company which includes the criteria determining the qualifications and other matters as provided under section

178(3) of the Companies Act 2013.

The Nomination and Remuneration Policy of the Company is annexed hereto and forms part of this report as Annexure 3.

Internal Financial Control:

The Internal Financial Control systems of the Company with reference to financial statements are well placed and are commensurate with the size and nature of operations of the Company. The Statutory Auditors report on the internal financial controls, as required under section 143 of the

Companies Act 2013 forms part of the Independent Auditors Report as Annexure B.

Particulars of Contracts or Arrangements made with Related Parties:

The Company has not entered into any contract or arrangement with related parties during the period under review except payment of remuneration and payment of Dividend to the Related parties and the details the same are included in the Notes on accounts forming part of the Annual Accounts (both consolidated and standalone) form part of this Annual Report.

Particulars of Loans, Guarantees or Investments Made Under Section 186 of the Companies Act, 2013

The Company has not given any loan, provided any guarantee, provided any security or made any investments u/s 186 of the Companies Act during the financial year 2023-2024.

Directors

In accordance with provisions of the Articles of Association of the Company, Mr. Ranbir Singh, Mr. Gurdeep Singh and Mr. Maninder Singh Directors of your Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment. The Board of Directors recommends their reappointment as Directors at the forthcoming Annual General Meeting. Mr. Saravjit Singh Hothi, Non Executive Independent Director of the Company was appointed on June 09, 2022 for a period of 5 years. He is attaining the Age of 75 years on October 23, 2024. In terms of Regulation 17A of SEBI (LODR) regulations, 2015 his appointment is to be ratified by the shareholder by way of Special Resolution for continuation of his Directorship. Your Directors recommend the continuation of his Directorship at the forthcoming Annual General Meeting.

Pursuant to provisions of Section 203 of the Companies Act, 2013, the Company has designated below mentioned persons as KMPs :-

WholeTime Key Managerial Personnel of the Company Designation

Gursaran Singh Executive Chairman

Jasvinder Singh Executive Vice Chairman

Ranbir Singh Managing Director & Chief Executive Office

Rakesh Kumar Chief Financial Officer (CFO)

Gourav Jain Company Secretary (CS)

There has been no change in the Key Managerial Personnel of the Company during the year under review.

Declaration under Section 149(6):

The Independent Directors have submitted their disclosures to the Board that they fulfillall the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and read with the relevant rules. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity.

Familiarisation programmes for Board Members:

The Board members are from time to time provided with necessary documents/policies/internal procedures to get them familiar with the practices of the Company. The business strategies, performance, global developments, legal& other updates, compliance reports and other relevant information/reports etc. are being periodically provided to the Board of Directors.

Board Evaluation:

The Company has put in place the policy for performance evaluation of the Individual Directors of the Company and the Board as a whole including the Chairman of the Company. The meeting of the Independent Directors of the Company for the year 2023-2024 was held on February 09, 2024 to evaluate the performance of the Non Independent Directors of the Company, the Chairman of the Company and Board as a whole. The evaluation was done by discussing the performance of the Individual Directors and the Board as a whole.

Auditors and Auditors Report:

a. Statutory Auditors:

The tenure of Statutory Auditors M/s Harish & Co.,

Chartered Accountants is going to end at the ensuing Annual General Meeting and the Board of Directors in their meeting held on July 11, 2024 had appointed M/s

G S Syal & Co., Chartered Accountants Jalandhar as

Statutory Auditors of the Company for a period of 5 years, i.e to do the Audit of the Books of Accounts of the Company till March 31, 2029, subject to the approval of the shareholders in the ensuing Annual General Meeting.

M/s G S Syal & Co., Chartered Accounts have confirmed their eligibility to be appointed as Statutory Auditors of the Company at the ensuing Annual General Meeting. The Board of Directors recommend the appointment of M/s G

S Syal & Co, Chartered Accountants as Statutory Auditors of the Company hold office from the conclusion of this

Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2029. The Company intends to pay a a sum of 7.50 Lacs (Plus Applicable

Taxes) to M/s G S Syal & Co, Chartered Accountants as

Statutory Audit Fees for the each Financial Year of their tenure. During the year under review, the Company has paid a sum of 7.50 Lacs as Statutory Audit Fees to M/s

Harish & Co., the Statutory Auditors.

The Auditors Report does not have any qualification, reservation, adverse remark or disclaimer by the Statutory Auditors.

b. Secretarial Auditor:

M/s H.K & Associates, Practicing Company Secretaries, were appointed as Secretarial Auditor for the year 2023-24. The Report of the Secretarial Auditor in form no MR-3 is annexed to this Report. The Secretarial Audit Report is self explanatory and do not call for any comments. The Secretarial Audit Report forms part of this report as Annexure 4.

Board Meetings:

During the Financial Year 2023-24, the Board met 4 times on May 01, 2023, July 21, 2023, October 27, 2023 and February 09, 2024.

Board Committees A. Audit Committee

The Audit Committee comprises of the following Directors.

1. Air Vice Marshal Sarvjit Singh Hothi – Chairman, Independent Director

2. Mr. Jasminder Singh Johal – Independent Director

3. Mr. Ajit Singh - Independent Director

4. Mr. Ranbir Singh – Non Independent Director

5. Mr. Rajan Wadhera - Independent Director

B. Nomination and Remuneration Committee

The Nomination and remuneration Committee comprises of the following Directors.

1. Mr. Ashwani Kumar Malhotra – Chairman, Independent Director

2. Mr. Jasminder Singh Johal – Independent Director

3. Mr. Gurdeep Singh – Non Independent Director

C. Stakeholders Relationship Committee

The Stakeholder Relationship Committee comprises of the following Directors.

1. Mr. Ajit Singh – Chairman, Independent Director

2. Mr. Jasvinder Singh – Non Independent Director

3. Mrs. Pooja Uppal – Independent Director

D. Corporate Social Responsibility Committee

The Corporate Social responsibility Committee comprises of the following Directors

1. Air Vice Marshal Sarvjit Singh Hothi – Chairman, Independent Director

2. Mr. Ashwani Kumar Malhotra – Independent Director

3. Mr. Ranbir Singh – Non Independent Director

E. Risk Management Committee

The Corporate Social responsibility Committee comprises of the following Directors

1. Mr. Ranbir Singh – Non Independent Director

2. Mr. Gurdeep Singh – Non Independent Director

3. Mr. Kulwin Seehra – Non Independent Director

4. Mr. Jasminder Singh Johal – Independent Director

Corporate Governance

A Separate section on Corporate Governance forms an integral part of this Annual Report of the Company. The Statutory Auditors of the Company have given their certificate regarding the compliance of the conditions of

Corporate Governance as stipulated under the SEBI (LODR) Regulations, 2015 and the same is annexed to the report on Corporate Governance.

Business Responsibility Sustainability Report

In Compliance of regulation 34 of SEBI Listing regulations, the Business Responsibility Sustainability Report detailing the various initiatives taken by the Company on environmental, social and governance front is forming part of this Annual Report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo:

Conservation of energy has been a major area of emphasis of your Company and every effort is made to achieve the optimumutilisationofenergyincarryingoutthemanufacturing processes. Particulars with respect to conservation of energy and other areas as per section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure 6.

Annual return

In terms of the provisions of section 92(3) of the Companies Act, 2013 read with Companies (Amendment) Act 2017 and the relevant rules made thereunder, a copy of the Annual Return as prescribed under Section 92 of the Companies Act, 2013 as amended shall be made available at the website of the Company www.gnaaxles.in under the investor relations tab on the website of the Company.

Human Resources/Industrial Relations:

For your Company its Human Resources are its most important assets. It has been the endeavor of the Company to attract and retain talent. Performance management is the key word for the Company. The Industrial relations have been peaceful and harmonious in both the plants of the Company during the year under review. As on March 31, 2024, 1489, personnel were employed by the Company.

Personnel & Related Information:

The disclosures required under section 197(12) of the Companies Act 2013 and Rule 5(1) of the Companies

(Appointment & Remuneration of Managerial Personnel)

Rules, 2014 are annexed as Annexure 7 hereto and forms part of this report.

Disclosure under Sexual Harrassement of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Prevention of Sexual Harassment policy (POSH) in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, contractual, temporary and trainees) are covered under this policy. The Company has not received any complaint about sexual harassment during the year 2023-24.

Directors Responsibility Statement:

Pursuant to Section 134 (5) of the Companies Act, 2013, the

Directors of the Company confirm that:

1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed;

2. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

3. Proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a going concern basis.

5. The Board of Director of the Company has laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

6. Devised proper systems to ensure compliance with the provisions of all applicable laws and those systems were adequate and operating effectively.

General Disclosures:

Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details of joint venture or associate company.

2. Issue of equity shares with differential rights to dividend, voting or otherwise.

3. Details relating to the deposits covered under Chapter V of the Companies Act 2013.

4. No significant/material orders have been passed by any Regulator/Court /Tribunal which could impact the going concern status & future operations of the Company.

5. No change in nature of Business of the Company.

Acknowledgement:

Your Directors express their appreciation for the sincere co-operation and assistance of the Central and state Government authorities, bankers, customers, suppliers and business associates. Your Directors also wish to place on record their appreciation for the Committed employees of the Company. They also acknowledge with gratitude, the encouragement and support extended by our valued shareholders.

For and on Behalf of the Board

Date: July 11, 2024 Gursaran Singh

Place: Mehtiana Executive Chairman