Directors Report of Automotive Axles Ltd.

Mar 31, 2025

Your Directors have the pleasure in presenting the 44^th Annual Report on the business and operations of your Company
together with the Audited Statements of Accounts for the financial period ended March 31, 2025:

Financial Highlights:

Particulars	2024-2025	2023-2024
Total Revenue	21,047.52	22,448.83
Profit before depreciation & tax	2,442.58	2,593.40
Less : Depreciation, amortization expenses	336.45	363.75
Profit before tax	2,106.13	2,229.65
Tax expenses	550.78	568.10
Profit for the year after tax	1,555.35	1,661.55
Other comprehensive income/(Loss) for the year, net of tax	-11.91	-11.82
Total comprehensive income for the year	1,543.44	1,649.73
Balance of Profit from Previous Year	8,033.85	6,867.70
Less: Dividend	483.58	483.58
Profit available for appropriation	9,093.69	8,033.85

Dividend

The Board, at its meeting held on May 20, 2025, is pleased
to recommend a Final dividend of ''30.50 per Equity Share
of the face value of '' 1 0/- each for the financial year ended
March 31, 2025 subject to the approval of shareholders at
the ensuing Annual General Meeting to be held on Tuesday,
August 12, 2025.

The total amount of Dividend aggregates to ''460.92 million.

The register of members and share transfer books will remain
closed from August 06, 2025 to August 12, 2025 (both days
inclusive) for the payment of final dividend to the eligible
shareholders of the Company, for the year ended on March

31, 2025.

The Dividend will be paid to members within 30 days from
the date of declaration of dividend to whose names appear
in the Register of Members as on August 05, 2025 and as
per the Dividend Distribution Policy of the Company.

The Dividend Distribution Policy, in terms of Regulation
43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015
("SEBI Listing Regulations") is available on the Company''s
website at www.autoaxle.com/Downloads/Dividend%20
Distribution%20Policy.pdf

Transfer of unpaid or unclaimed amount to
Investor Education and Protection Fund (IEPF)

Pursuant to provisions of the Companies Act, 2013, the
declared dividends, which remained unpaid or unclaimed
for a period of seven years, shall be transferred by the
Company to the Investor Education and Protection Fund
(IEPF) established by the Central Government.

Pursuant to Section 124(6) of the Companies Act, 2013
read with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 as
amended, all shares in respect of which dividend has not
been paid or claimed for seven consecutive years or more,
shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective
shareholders who have not claimed their dividend for seven
consecutive years or more and the newspaper advertisement
stating the same has been published in the newspapers.

In terms of the provisions of the Companies Act, 2013
and Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 a
sum of '' 5,70,800/- which is unpaid/unclaimed dividends
pertaining to the FY 2016-17 was transferred to the Investor
Education and Protection Fund during the year.

The list of equity shareholders whose shares are transferred
to IEPF can be accessed on the website of the Company at
below mentioned link:autoaxle.com/Annual_reports.aspx
under the head IEPF Transfers.

The total income for the financial year under review was
''21,047.52 Million as against '' 22,448.83 Million for
the previous financial year. The Profit before tax (PBT) was
''2,106.13 Million for the financial year under review, as
against '' 2,229.65 Million for the previous financial year.
Overall performance detail has been covered as part of the
Management Discussion and Analysis which is presented in
a separate section forming part of the Annual Report.

Share Capital

The paid up Equity Share Capital as on March 31, 2025
stood at '' 151.12 Million. During the year under review, the
Company has not issued shares with differential voting rights
nor has granted any stock options nor sweat equity.

Deposits

Your Company has not accepted any deposits under Chapter
V of the Companies Act, 2013 during the year.

Transfer to Reserve

The company has not proposed any amount to be transferred
to the General Reserves.

Listing

The equity shares of the Company are listed with BSE Limited
and National Stock Exchange of India Limited. There are
no arrears on account of payment of listing fees to the
Stock Exchanges.

Directors & Key Managerial Personnel

As on March 31, 2025 there were six (6) Directors on the
Board of your Company, consisting of three (3) Independent
Directors, one (1) Executive Director and two (2) Non¬
Executive Directors of whom one is the Chairman.

Mr. Girish Dinanath Nadkarni (DIN : 00112657) and
Dr. Venkata Ramana Murthy Pinisetti (DIN 03483544) have
been appointed as an Independent Directors with effect from
August 07, 2024 and February 04,2025 respectively. Further,
in the opinion of the Board, Mr. Girish Dinanath Nadkarni
and Dr. Venkata Ramana Murthy Pinisetti possess the requisite
skills and capabilities required for the role of an Independent
Director of the Company. Also in the opinion of the Board,
the newly appointed Independent Directors possess the
requisite integrity, experience, expertise and proficiency
required to fulfil their duties as Independent Directors

Mr. Bhalachandra Basappa Hattarki (DIN: 00145710) and
Mr. Bhoopalam Chandrashekharaiah Prabhakar (DIN:
00040052) ceased from their position of Independent
Directors of the company with effect from February 05,2025
on completion of their full term.

In terms of the provisions of the Companies Act, 2013, Dr. B
N Kalyani (DIN: 00089380), Director of the Company,

retires by rotation at the ensuing Annual General Meeting
and, being eligible, offers himself for re-appointment.

Below resolutions were passed by the shareholders through
postal ballot:

1. Appointment of Mr. Girish Dinanath Nadkarni (DIN:
00112657) as an Independent Director of the Company
for a period of five (5) years effective August 07,2024
passed on October 8, 2024.

2. Appointment of Dr. Venkata Ramana Murthy Pinisetti
(DIN: 03483544) as an Independent Director of the
Company for a period of five (5) years effective February
04, 2025 passed on April 9, 2025.

Declaration by Independent Directors

The Company has received declarations from all the
Independent Directors of the Company confirming that
they meet with the criteria of independence and that there
has been no change in the circumstances which may affect
their status as an independent director during the year as
prescribed under sub-section (6) of Section 149 of the
Companies Act, 2013 and Securities and Exchange Board
of India (Listing Obligations and Disclosure requirements)
Regulations, 2015.

Further the names of the Independent Directors of the
Company have been included in the Data bank maintained
by the Indian Institute of Corporate Affairs of Independent
directors as per the provisions of the Companies Act, 2013
and the rules made thereunder.

Independent Directors have complied with the Code for
Independent Directors prescribed in Schedule IV to the Act.

Company has received a confirmation from the Directors
and senior management personnel of the company
w.r.t. compliance of the code of conduct required under
Regulation 26 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

Board Evaluation

The Companies Act, 2013 states that a formal Annual
Evaluation needs to be made by the Board of its own
performance and that of its committees and individual
Directors. Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015, mandates that the Board shall monitor and review the
Board evaluation framework. Pursuant to these provisions,
the Company has developed a framework for the Board
evaluation. The framework includes evaluation on various
parameters such as information flow, Board dynamics,
decision making, company performance and strategy, Board
and committee''s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole
was conducted based on the criteria and framework adopted
by the Board.

During the year 2024-25, independent Directors met on
January 31, 2025, discussed and reviewed the below:

• Performance of Non independent Directors;

• Performance of the Chairman;

• Performance of the Board Committees;

• Discussed on the quality, quantity and timeliness of flow
of information between the Company management and
the Board Members;

• Overall performance of the Company;

The Nomination and Remuneration Committee is responsible
for the formulation of criteria for evaluation.

Familiarization program for the Board
Members

Your Company has in place a structured induction and
familiarization program for all its directors including
independent Directors and new appointee(s) to the
Board. Through such programs, the Directors are briefed
on the background of your Company, their roles, rights,
responsibilities, nature of the industry in which it operates,
business model operations, ongoing events etc.

The Board members are provided with the necessary
documents, brochures, reports and internal policies to
enable them to familiarize with the Company''s procedure
and practice.

Periodic presentations are made at the Board Meetings
and Board Committee Meetings on business and overall
performance updates of the Company, business strategy and
risk involved.

The details of programs for Familiarization for independent
Directors are posted on the website of the Company and can
be accessed at below weblink:

https://www.autoaxle.com/assets/pdf/46SEBi/
Familiarisation%20Programme%20for%20independent%20
Directors%20of%20Automotive%20Axles%20
Limited-24 -25.pdf

Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the
Companies Act, 2013 with respect to Directors'' Responsibility
Statement, your Directors make the following statements:

(a) i n the preparation of the annual accounts for the year
ended March 31, 2025, the applicable accounting
standards have been followed along with proper
explanation relating to material departures if any;

(b) we have selected such accounting policies and applied
them consistently and 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 as
at March 31, 2025 and of the profit of the company for
the year ended on that date;

(c) we have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going
concern basis;

(e) we have laid down internal financial controls to be
followed by the company and that such internal financial
controls are adequate and were operating effectively;

(f) we have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such
systems are adequate and operating effectively.

Auditors & Auditors'' Report

a. Statutory auditor

M/s. S R Batliboi & Associates LLP, Chartered
Accountants [Firm Registration No.: 101049W/
E300004] are holding the position of Statutory Auditors
of the Company.

The Auditors'' Report does not contain any qualification,
reservation or adverse remarks.

Further, no fraud has been reported by the Auditors in
their reports.

b. Internal Auditor

On recommendation of the Audit Committee the Board
of Directors approved the appointment of, M/s Deloitte
Touche Tohmatsu india LLP having Firm Registration
Number AAE-8458 as internal Auditors of the Company
for the Financial Year 2025-26. The internal auditors
conducted the audit as per the terms of reference by the
Audit Committee which has reviewed the reports and
the action taken by the Company for streamlining the
gaps identified by the auditors.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the
Companies Act, 2013 and the rules made there under
and based on the recommendations of the Audit
Committee, CS Pracheta M, Practicing Company
Secretary has been appointed to conduct Secretarial
Audit of the Company''s secretarial and other related
records for the financial year 2024-25.

The Secretarial Audit Report for the financial year ended
March 31, 2025 in Form MR-3 is appended to this
report under Annexure - A. it does not contain any
qualification, reservation or adverse remarks.

in compliance with Regulation 24A of the SEBi Listing
Regulations and Section 204 of the Act, the Board
at its meeting held on May 20, 2025, based on
recommendation of the Audit Committee, has approved
for the appointment of Pracheta and Associates,

Practicing Company Secretaries, a peer reviewed firm
(Unique Number. S2018KR589100) as Secretarial
Auditors of the Company for a term of five consecutive
years commencing from April 1, 2025 till March 31,
2030, subject to approval of the Members at the
ensuin g An nual General Meeting.

Internal Financial Controls

The Board has adopted policies and procedures for ensuring
the orderly and efficient conduct of its business, including
adherence to the Company''s policies, the safeguarding of
its assets, the prevention and detection of frauds and errors,
the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no
reportable material weaknesses in the design or operation
were observed.

Corporate Governance

The Company''s governance ethos is predicated on the
tenets of probity, accountability, and equitable stewardship.
Renowned for its distinguished governance paradigm, the
Company regards a resilient and transparent governance
framework as imperative to fortifying stakeholder confidence
and sustaining long-term enterprise value. Strategic
deliberations and operational execution are consistently
aligned with the highest echelons of ethical integrity.

India''s corporate regulatory landscape—comprehensively
reinforced by the Companies Act, 2013, and the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015—has significantly
recalibrated governance norms. The Company remains in
exemplary compliance with all statutory mandates, honouring
both the prescriptive and purposive dimensions of the law.
The Board of Directors, in its capacity as fiduciary custodian,
discharges its obligations with discernment, prudence, and
an expansive interpretation of its oversight mandate.

In consonance with applicable statutes, all requisite Board
committees have been duly constituted and operate with
defined charters. A granular exposition of their constitution,
remit, and cadence of meetings is articulated in the Corporate
Governance Report, which constitutes a discrete and integral
component of the Annual Report.

A certificate issued by CS Pracheta M., Practicing Company
Secretary, attesting to the Company''s adherence to the
corporate governance norms as prescribed under Regulation
34(3) and Schedule V (E) of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, is annexed to the Corporate Governance
Report as a formal affirmation of statutory compliance.

During the financial year, the Board met five times, details of
which are provided in the Corporate Governance Report. The
maximum interval between any two meetings did not exceed
120 days as prescribed under the Companies Act, 2013.

Committees of the Board

Your Company has the following committees which have
been established as a part of the corporate governance
practices and are in compliance with the requirements of the
Companies Act, 2013 and the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirement)
Regulations, 2015.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The details with respect to the compositions, roles, and
number of meetings held during the year is detailed in the
corporate governance report of the Company, which forms
a part of this Board''s Report.

All the recommendations by any of the above Committees are
accepted by the Board and there are no recommendations
which the Board has not accepted.

Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as
required to be disclosed under Section 134 of the Companies
Act, 2013 read with Companies (Accounts) Rules, 2014 are
appended as Annexure - B to this report.

Particulars of Remuneration of Directors &
certain specified employees

In terms of the provisions of Section 197(12) of the Companies
Act, 2013 read with Rule 5 of Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014 and
any amendment thereto is appended as Annexure - C.

Statement containing particulars of top ten employees and
particulars of employees as required under Section 197(12)
of the Companies Act, 2013 read with Rule 5(2) and 3 is a
separate annexure in terms or Section 136(1) of the Act and
the Report and Accounts are being sent to the Members,
excluding the aforesaid annexure. The said annexure is open
for inspection. Any member interested in obtaining a copy
of the same may write to the Company Secretary at sec@
autoaxle.com . None of the employees listed in the said
annexure are related to any Director of the Company.

Annual Return 2024-25

Pursuant to section 134 (3) (a) and section 92 (3) of the
Companies Act, 2013, a copy of the Annual return is placed
on the website of the Company and can be accessed at the
weblink; www.autoaxle.com/annualreturns

Particulars of Loans, Guarantees or Investment
under Section 186 of the Companies Act, 2013

Particulars of loans covered under Section 186 of the
Companies Act, 2013 form part of the notes to the financial
statement provided in this Annual Report. These loans
are primarily granted for furtherance of business of the
borrowing companies.

Your Company has not given any guarantee or provided
any security in connection with a loan to any other body
corporate or persons.

The company has made the balance investment of
'' 3,86,66,090/- during the FY 2024-25 in Torrent Surya Urja
3 Private Limited to acquire 38,66,609 number of Class A
Equity Shares of '' 10/- each, constituting 26% of total equity
shareholding as per Share Subscription and Shareholder''s
Agreement dated April 13, 2023 and amendment to the
Share Subscription and Shareholder''s Agreement on
December 8, 2023 entered into with Torrent Surya Urja 3
Private Limited and with this infusion, the total investment in
Torrent Surya Urja 3 Private Limited is of '' 4,14,65,590/-
constituting 41,46,559 number of Class A Equity Shares.
This investment is to comply with regulatory requirements of
the Electricity Act, 2003 read with Electricity Rules, 2005 to
procure Solar Power. Particulars of Investment made by the
company form part of the notes to the financial statement
provided in this Annual Report.

Policy on Directors'' Appointment &
Remuneration

The current policy is to have an appropriate mix of executive
and independent directors to maintain the independence
of the Board and separate its functions of governance and
management. As on March 31, 2025, the Board consist
of six members, one of whom is executive or whole-time
director, two are non executive directors and three are
independent directors out of whom one is an Independent
Woman Director.

The Nomination and Remuneration Policy of the Company
has been formulated in accordance with the Act and
Listing Regulations. The Policy is designed to guide the
Board in relation to appointment and removal of directors,
Key Managerial Personnel and Senior Management and
recommend to the Board on remuneration payable to them.
Policy enables the Company to retain, motivate and promote
talent and to ensure long term sustainability of talented
managerial persons and create competitive advantage.
The current policy is available on Company''s website at

www.autoaxle.com/Investor_Policy.aspx. There has been
no changes to the policy during the financial year.

Particulars of contracts or arrangements with
Related Parties (RPT)

The related party transactions that were entered into during
the financial year were in the ordinary course of business
and on the arm''s length basis.

All related party transactions are placed before the Audit
Committee and also the Board for approval. Prior omnibus
approval of the Audit Committee is obtained on a yearly
basis for the transactions, which are foreseen and of
repetitive nature.

Further, all transactions entered into pursuant to the omnibus
approval so granted are reviewed and a statement giving
details of all related party transactions is placed before the
Audit Committee and the Board of Directors for their review
on a quarterly basis.

For transactions with Meritor HVS (India) Limited, the
Company has obtained shareholders'' approval;

1. By passing special resolution through Postal Ballot on
December 26, 2023, for transaction value of ''40,000
Million for the Financial Year 2024-2025.

2. The Company proposed a Special resolution seeking
members'' approval to enter into material related party
transactions with Meritor HVS (India) Limited, with an
aggregated value of '' 25,000 million for the year
from April 1, 2025, to March 31, 2026. However, the
resolution was rejected by the members.

Pursuant to the approval of Board of Directors on March
20, 2025, the Company has entered into a Memorandum
of Understanding and a Service Agreement with Meritor
HVS (India) Limited dated March 20, 2025 and March 31,
2025 respectively, wherein both the parties have agreed
that the Company will sell the products directly to original
equipment manufacturers with effect from April 1, 2025 and
obtain certain services in relation to marketing, business
development, product technology, engineering and product
development, account management and relationship,
program management from Meritor HVS (India) Limited.

In accordance with the requirements of the Companies Act,
2013 and Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015, your Company has formulated a Policy on Related
Party Transactions which is also available on Company''s
website at www.autoaxle.com/Investor_Policy.aspx

Related Party disclosures as per Indian Accounting Standards
(Ind AS) -24 have been provided in Note No. 36 to the
financial statement.

The particulars on RPTs in Form AOC - 2 is annexed to the
Report as Annexure - D.

Risk Management System

The Company has a robust risk management framework
comprising risk governance structure and defined risk
management processes. Th ese processes include the
development and implementation of a risk management
policy for the company including identification therein of
elements of risk, if any, which in the opinion of the Board may
threaten the existence of the company. The risk governance
structure of the Company is a formal organisation structure
with defined roles and responsibilities for risk management.

The processes and practices of risk management of the
Company encompass risk identification, classification and
evaluation. The Company identifies all strategic, operational
and financial risks that the Company faces, by assessing
and analysing the latest trends in risk information available
internally and externally and using the same to plan for
risk activities.

The Company has set up a Risk Management Committee
to review the risks faced by the Company and monitor the
development and deployment of risk mitigation action
plans and the status is updated to the members of the Audit
Committee and the Board of Directors.

Corporate Social Responsibility (CSR)

The Company has been carrying out various Corporate
Social Responsibility (CSR) activities. These activities are
in terms of Section 135 read with Schedule VII of the
Companies Act, 2013 and Companies (Corporate Social
Responsibility Policy) Rules, 2014 read with CSR policy of the
Company. During the year the Company has spent '' 13.04
Million on various CSR activities and transferred ''26.42
Million to Unspent CSR Account for the FY 2024-25 for the
ongoing projects.

The Annual Report on CSR activities that includes details
about the CSR policy developed and implemented by
the Company and CSR initiatives taken during the year is
appended to the Report as Annexure - E.

State of Company''s Affairs

Discussion on the state of the Company''s affairs has been
covered as part of the Management Discussion and Analysis
(MDA). MDA for the year under review, as stipulated under
Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015, is presented
in a separate section forming part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of Securities and Exchange
Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 Management Discussion
and Analysis Report is presented in a separate section
forming part of the Annual Report.

Business Responsibility & Sustainability Report

A detailed Business Responsibility & Sustainability Report in
terms of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015
is available as a separate section in the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical,
moral and legal business conduct. Accordingly, the Board
of Directors has formulated a Whistle Blower Policy which
is in compliance with the provisions of Section 177 of the
Companies Act, 2013 and Regulation 22 of Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Under the policy, the
Directors and employees are free to report any violation
of the applicable laws and regulations and the code of
conduct of the Company. The reportable matters are to be
disclosed to the Audit Committee. During the year under
review, the Company has not received any complaints under
the said mechanism.

Whistle Blower Policy of the Company can be accessed at
below weblink:

https://www.autoaxle.com/Downloads/Whistle%20

Blower%20Policy.pdf

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

The Company has consistently upheld its commitment
to fostering a secure and respectful workplace for all
individuals operating within its premises. Through proactive
measures and robust internal practices, it strives to cultivate
an environment that is not only physically safe but also
emotionally and psychologically empowering. The Company
remains unwavering in its efforts to eliminate all forms of
discrimination and harassment, including sexual harassment,
by promoting a culture anchored in dignity, inclusiveness,
and mutual respect.

In terms of provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act,
2013, the Company has formulated a Policy to prevent
Sexual Harassment of Women at Workplace aimed at
fostering a workplace environment that is safe, dignified,
and free from sexual harassment. To ensure effective
implementation of the said Policy, the Company has duly
constituted an Internal Committee as mandated under the
aforementioned legislation.

During the financial year under review, "no complaints
were received or filed" under the purview of the
aforementioned legislation.

Significant or Material Orders

No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the going
concern status and Company''s operations in future.

Material Changes and Commitments, if any,
affecting the Financial Position of the Company

There were no adverse material changes or commitments
occurred after March 31,2025 which may affect the financial
position of the Company or may require disclosure.

Subsidiaries, Joint Ventures and Associates

Your Company does not have any subsidiary or joint
venture Company.

The company has made an investment with Torrent Surya Urja
3 Private Limited of '' 4,14,65,590/- constituting 41,46,559
number of Class A Equity Shares and with Parola Renewables
Private Limited of '' 2,25,00,000/- constituting 22,50,000
number of Equity Shares, constituting 26% of total equity
shareholding of the respective Company, to comply with
regulatory requirements of the Electricity Act, 2003 read with
Electricity Rules, 2005 to procure Solar Power.

Hence 26% voting interest is a mere requirement of the
regulators, and the Company doesn''t have any significant
influence on Torrent Saurya Urja 3 Private Limited and Parola
Renewables Private Limited and therefore Torrent Saurya Urja
3 Private Limited and Parola Renewables Private Limited
doesn''t qualify as an associate of the Company as per IND

AS 28.

Change in the nature of business

There is no change in the nature of business of your Company.

Secretarial Standards:

The Directors have devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards and that such systems are adequate and
operating effectively.

Awards and Recognition

During FY 2024-25, your company received recognitions
from the following bodies/customers as listed below:

1. Customer UD Trucks SUPPLIER AWARD - 2024 for
returnable and reusable UD - Steel pallet Implementation.

2. Recognised as the "Best Supplier for Daily Work
Management" during Quality Month Nov-2024 by
TATA Motors.

3. Recognised as the ''Best Horizontal deployment & Best
QC Story Competition 1^st Runner-up" by TATA Motors.

4. Enterprise Growth Awards 2025 from Deloitte India.

Maintenance of Cost records

The maintenance of cost records as specified by the Central
Government under sub-section (1) of section 148 of the
Companies Act, 2013, is required by the Company and
accordingly such accounts and records are made and
maintained. Cost Audit is not applicable to the Company.

Other Disclosure

Your company has not made any application, nor any
proceeding is pending against the company under the
Insolvency and Bankruptcy Code, 2016 during the year
under review.

As the company has not made any one time settlement with
any banks or financial institution during the year under review,
Rule (8) sub-rule (5) clause (xii) of Companies (Accounts)
Rules,2014 is not applicable.

Acknowledgements

Your Directors wish to convey their gratitude and place on
record their appreciation for the employees at all levels for
their hard work, cooperation and dedication during the
year. Your Directors sincerely convey their appreciation
to customers, shareholders, bankers, auditors, business
associates, regulatory and government authorities for their
continued support.

Your Directors wish to place on record their appreciation for
the continued co-operation and support extended by Bharat
Forge Limited, Pune and Meritor Heavy Vehicle Systems
LLC, USA.

For and on behalf of the Board of Directors

Place : Pune B. N. Kalyani

Date : 20^th May 2025 Chairman

---

Mar 31, 2024

Your Directors have the pleasure in presenting the 43^rd Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2024:

Financial Highlights:

('' in million)

Particulars	2023-2024	2022-2023
Total Revenue	22,448.83	23,286.20
Profit before depreciation & tax	2,593.40	2,594.67
Less : Depreciation, amortization expenses	363.75	413.72
Profit before tax	2,229.65	2,180.95
Tax expenses	568.10	560.66
Profit for the year after tax	1,661.55	1,620.29
Other comprehensive income/(Loss) for the year, net of tax	(11.82)	(10.99)
Total comprehensive income for the year	1,649.73	1,609.30
Balance of Profit from Previous Year	6,867.70	5,485.08
Less: Dividend	483.58	226.68
Profit available for appropriation	8,033.85	6,867.70

Dividend

The Board, at its meeting held on May 27, 2024, is pleased to recommend a dividend of '' 32/- per Equity Share of the face value of ''10/- each for the financial year ended March 31, 2024 subject to the approval of shareholders at the ensuin g An nual General Meeting to be held on Monday, August 5, 2024.

The total amount of Dividend aggregates to ''483.58 million.

The register of members and share transfer books will remain closed from July 30, 2024 to August 5, 2024 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2024.

The Dividend will be paid to members within 30 days from the date of declaration of dividend whose names appear in the Register of Members as on July 29, 2024 and as per the Dividend Distribution Policy of the Company.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") is available on the Company''s website at https://www.autoaxle.com/Downloads/ Dividend%20Distribution%20Policy.pdf.

Transfer of unpaid or unclaimed amount to Investor Education and Protection Fund (IEPF)

Pursuant to provisions of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the

Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant to Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting , Audit, Transfer and Refund) Rules, 2016 as amended, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective shareholders who have not claimed their dividend for seven consecutive years or more and the newspaper advertisement stating the same has been published in the newspapers.

In terms of the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 a sum of ''4,04,426/- which is unpaid/unclaimed dividends pertaining to the FY 2015-16 was transferred to the Investor Education and Protection Fund during the year.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at below mentioned link: https://autoaxle.com/Annual_reports. aspx under the head IEPF Transfers

Performance of the Company

The total income for the financial year under review was ''22,448.83 Million as against '' 23,286.20 Million for the previous financial year. The Profit before tax (PBT) was ''2,229.65 Million for the financial year under review, as against ''2,180.95 Million for the previous financial year.

Share Capital

The paid up Equity Share Capital as on March 31, 2024 stood at '' 151.12 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

Deposits

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

Transfer to Reserve

The company has not proposed any amount to be transferred to the General Reserves.

Listing

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

Directors & Key Managerial Personnel

As on March 31, 2024 there were six (6) Directors on the Board of your Company, consisting of three (3) Independent Directors, one (1) Executive Director and two (2) NonExecutive Directors of whom one is the Chairman.

Ms. Bijal Tushar Ajinkya (DIN : 01976832), has been appointed as an Independent Director with effect from February 11, 2024. Further, in the opinion of the Board, Ms. Bijal Tushar Ajinkya possess the requisite skills and capabilities required for the role of an Independent Director of the Company, considering her qualifications, rich experience and expertise.

Dr. Shalini Sarin (DIN: 06604529) has ceased from the position of Independent Director of the company with effect from February 12, 2024, due to completion of her term.

In terms of the provisions of the Companies Act, 2013, Mr. Nagaraja Gargeshwari (DIN: 00839616), Director of the Company retires by rotation at the ensuin g An nual General Meeting and, being eligible, offers himself for reappointment.

Below two resolutions were passed by the shareholders through postal ballot on December 25, 2023 & March 30, 2024 respectively;

1. To Approve Material Related Party Transactions of the Company with Meritor HVS (India) Limited.

2. Appointment of Ms. Bijal Tushar Ajinkya (DIN: 01976832) as Independent Director of the Company for a period of five (5) years effective February 10, 2029.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has

been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

Further the names of the Independent Directors of the Company have been included in the Data bank maintained by the Indian Institute of Corporate Affairs of Independent directors as per the provisions of the Companies Act, 2013 and the rules made thereunder.

Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Company has received a confirmation from the Directors and senior management personnel of the company w.r.t. compliance of the code of conduct required under Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board Evaluation

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee''s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2023-24, Independent Directors met on January 31, 2024, discussed and reviewed the below:

• Performance of Non Independent Directors;

• Performance of the Chairman;

• Performance of the Board Committees;

• Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members;

• Overall performance of the Company;

The Nomination and Remuneration Committee is responsible for the formulation of criteria for evaluation.

Familiarization program for the Board Members

Your Company has in place a structured induction and familiarization program for all its directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed

on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarize with the Company''s procedure and practice.

Periodic presentations are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarization for Independent Directors are posted on the website of the Company and can be accessed at below weblink:

https ://www.autoaxle.com/Downloads/Familiarisation%20 Programme%20for%20Independent%20Directors%20 of%20Automotive%20Axles%20Limited-23-24.pdf

Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, your Directors make the following statements:

(a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we have selected such accounting policies and applied them consistently and 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 as at March 31, 2024 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors & Auditors'' Report

a. Statutory auditor

M/s. S R Batliboi & Associates LLP, Chartered Accountants [Firm Registration No.: 101049W/ E300004] are holding the position of Statutory Auditors of the Company.

The Auditors'' Report does not contain any qualification, reservation or adverse remarks.

Further, no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

On recommendation of the Audit Committee the Board of Directors approved the appointment of M/s PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for the Financial Year 202324. The internal auditors conducted the audit as per the terms of reference by the Audit Committee which has reviewed the reports and the action taken by the Company for streamlining the gaps identified by the auditors.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary had been appointed to conduct Secretarial Audit of the Company''s secretarial and other related records for the financial year 2023-24.

The Secretarial Audit Report for the financial year ended March 31, 2024 in Form MR-3 is appended to this report under Annexure - A.

Explanation for observations made under Secretarial Audit Report

This was a first time violation by one of our employee and his relative and was done inadvertently. Warning issued to the employee considering the amount involved and the employee had also transferred the profit of ''8,489/- earned on the transaction to the SEBI-IEPF account. Going forward we will strengthen our reporting mechanism.

Internal Financial Controls

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Corporate Governance

Corporate Governance is about maximizing the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believes that sound corporate governance is critical to enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from CS Pracheta M., Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) Schedule V (E) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

Meetings of the Board

During the financial year, the Board met four times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

Committees of the Board

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The details with respect to the compositions, roles, and number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board''s Report.

All the recommendations by any of the above Committees are accepted by the Board and there are no recommendations which the Board has not accepted.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

Particulars of Remuneration of Directors & certain specified employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees'' remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of ''102 Lakhs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of ''8.50 Lakhs or more per month is appended as Annexure - C.

Annual Return 2023-24

The copy of Annual Return for the financial year ending March 31, 2024- is available at https://www.autoaxle.com/ Annual_Return.aspx.

Particulars of Loans, Guarantees or Investment under Section 186 of the Companies Act, 2013

Particulars of loans covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons.

The company has made investment of '' 27,99,500/- during the FY 2023-24 in Torrent Surya Urja 3 Private Limited to acquire 2,79,950 number of Equity Shares of '' 10/- each, constituting 26% of total equity shareholding as per Share Subscription and Shareholder''s dated April 13, 2023 and amendment to the Share Subscription and Shareholder''s Agreement on December 8, 2023 entered into with Torrent Surya Urja 3 Private Limited out of the total agreed amount of investment of '' 4,14,65,590/-, to comply with regulatory requirements of the Electricity Act, 2003 read with Electricity Rules, 2005 to procure Solar Power. Particulars of Investment made by the company form part of the notes to the financial statement provided in this Annual Report.

Policy on Directors'' Appointment & Remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. On March 31, 2024, the Board consist of six members, one of whom is executive or whole-time director, two are non executive directors and three are independent directors out of whom one is an Independent Woman Director.

The Nomination and Remuneration Policy of the Company has been formulated in accordance with the Act and Listing Regulations. The Policy is designed to guide the Board in relation to appointment and removal of directors, Key Managerial Personnel and Senior Management and recommend to the Board on remuneration payable to them. Policy enables the Company to retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The current policy is available on Company''s website at https://www.autoaxle.com/Investor_Policy.aspx. There has been no changes to the policy during the financial year.

Particulars of contracts or arrangements with Related Parties (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm''s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their review on a quarterly basis.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholders'' approval:

1. At their 37^th Annual General Meeting held on August 13, 2018 for annual transaction value of '' 30,000 Million for a period of five (5) financial years starting from April 1, 2019 and ending on 31^st March 2024

2. By passing special resolution through Postal Ballot on December 26, 2023 for transaction value of ''40,000 Million for the Financial Year 2024-2025.

In accordance with the requirements of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related

Party Transactions which is also available on Company''s website at https://www.autoaxle.com/Investor_Policy.aspx

Related Party disclosures as per Indian Accounting Standards (Ind AS) -24 have been provided in Note No. 36 to the financial statement.

The particulars on RPTs in Form AOC - 2 is annexed to the Report as Annexure - D.

Risk Management System

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. Th ese processes include the development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

Corporate Social Responsibility (CSR)

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 read with CSR policy of the Company. During the year the Company has spent '' 20.07 Million on various CSR activities including the excess spent of previous year of ''0.07 Million.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - E.

State of Company''s Affairs

Discussion on the state of the Company''s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

Business Responsibility & Sustainability Report

A detailed Business Responsibility & Sustainability Report in terms of the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Under the policy, the Directors and employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

Whistle Blower Policy of the Company can be accessed at below weblink:

https://www.autoaxle.com/Downloads/Whistle%20

Blower%20Policy.pdf

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

Your Company has always believed in providing a safe workplace for every individual working in Company''s premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. The Company has also constituted Internal Committee, as required under the said enactment. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Significant or Material Orders

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There were no adverse material changes or commitments occurred after March 31, 2024 which may affect the financial position of the Company or may require disclosure.

Subsidiaries, Joint Ventures and Associates

Your Company does not have any subsidiary, joint venture.

I. Company has made investment of ''27,99,500/- during the FY 2023-24 in Torrent Saurya Urja 3 Private Limited to acquire 2,79,950 number of Equity Shares of '' 10/-each, constituting 26% of total equity shareholding as per Share Subscription and Shareholder''s Agreement entered into with Torrent Saurya Urja 3 Private Limited on April 13, 2023, and amendment thereto on December 8, 2023 to comply with regulatory requirements of the Electricity Act, 2003 read with Electricity Rules, 2005 to procure Solar Power.

II. Company has made investment of ''2,50,00,000/-during the FY-2022-23 in Parola Renewables Private Limited to acquire 25,00,000 number of Equity Shares of '' 10/- each, constituting 26% of total equity shareholding as per Share Subscription and Shareholder''s Agreement entered into with Parola Renewables Private Limited on February 7, 2022, to comply with regulatory requirements of the Electricity Act, 2003 read with Electricity Rules, 2005 to procure Solar Power.

Hence 26% voting interest is a mere requirement of the regulators, and the Company doesn''t have any significant influence on Torrent Saurya Urja 3 Private Limited and Parola Renewables Private Limited and therefore Torrent Saurya Urja 3 Private Limited and Parola Renewables Private Limited doesn''t qualify as an associate of the Company as per IND

AS 28.

Change in the nature of business

There is no change in the nature of business of your Company.

Secretarial Standards:

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

Awards and Recognition

During FY 2023-24, your company received recognitions from the following bodies/customers as listed below:

1. Successfully achieved TPM Excellence Category A Award-2023 after completing First Stage Assessment on July 14, 2023, and Second Stage Assessment on January 8, 2024. Honored at the ceremony held in Kyoto, Japan on March 20, 2024.

2. Recognised as the ''Supplier Samrat Regional Competition Runner-up'' by Ashok Leyland.

3. Received Gold Award for Best Performance in ESG from Ashok Leyland

4. Secured 20 Gold Awards and 1 Silver Award at the Mysuru Chapter Convention on Quality Concept-CCQC Kaizens competition organised by Quality Forum of India-QCFI (CCQC-2023).

5. Received 5 Excellence Awards in the NCQC-2023 Allied Case Study Presentation competition during the National Convention on Allied Concepts.

6. Received Gold Awards with 2 teams in the ICQCC-2023 Allied Case Study Presentation competition at the International Convention on Allied Concepts.

Maintenance of Cost records

The maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.

Other Disclosure

Your company has not made any application, nor any proceeding is pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

As the company has not made any one time settlement with any banks or financial institution during the year under review, Rule (8) sub-rule (5) clause (xii) of Companies (Accounts) Rules,2014 is not applicable.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA.

For and on behalf of the Board of Directors

Place : Pune B. N. Kalyani

Date : May 27, 2024 Chairman

---

Mar 31, 2023

The Directors have the pleasure in presenting the 42^nd Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2023:

Financial Highlights:

(Rs. in Million)
Particulars	2022-2023	2021-2022
Total Revenue	23,286.20	14,948.78
Profit before depreciation & tax	2,594.67	1,364.68
Less : Depreciation, amortization expenses	413.72	364.18
Profit before tax	2,180.95	1000.50
Tax expenses	560.66	256.92
Profit for the year after tax	1,620.29	743.58
Other comprehensive income/(Loss) for the year, net of tax	(10.99)	(5.50)
Total comprehensive income for the year	1,609.30	738.08
Balance of Profit from Previous Year	5,485.09	4,815.02
Less: Dividend	226.68	68.01
Profit available for appropriation	6,867.71	5,485.09

Dividend

The Board, at its meeting held on May 16, 2023, is pleased to recommend a dividend of '' 32/- per Equity Share of the face value of ''10/- each for the financial year ended March 31, 2023 subject to the approval of shareholders at the ensuin g An nual General Meeting to be held on Thursday, August 3, 2023.

The total amount of Dividend aggregates to '' 483.58 million.

The register of members and share transfer books will remain closed from July 28, 2023 to August 3, 2023 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2023.

The Dividend will be paid to members within 30 days from the date of declaration of dividend whose names appear in the Register of Members as on July 27, 2023 and as per the Dividend Distribution Policy of the Company.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") is available on the Company''s website at https://www.autoaxle.com/Downloads/ DividendX20DistributionX20Policy.pdf.

Transfer of unpaid or unclaimed amount to Investor Education and Protection Fund (IEPF)

Pursuant to provisions of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the

Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant to Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting , Audit, Transfer and Refund) Rules, 2016 as amended, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective shareholders who have not claimed their dividend for seven consecutive years or more and the newspaper advertisement stating the same has been published in the newspapers.

In terms of the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 a sum of '' 59,076/- which is unpaid/unclaimed dividends pertaining to the FY 2014-15 was transferred to the Investor Education and Protection Fund during the year.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at below mentioned link: https://autoaxle.com/Annual_reports. aspx under the head IEPF Transfers

Performance of the Company

The total income for the financial year under review was '' 23,286.20 million as against '' 14,948.78 million for the previous financial year. The Profit before tax (PBT) was '' 2,180.95 million for the financial year under review, as against '' 1000.50 million for the previous financial year.

General Information

Cummins Inc. acquire 145 number of Equity Shares of the Company on January 11,2023 against the open offer made, pursuant to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, for indirect acquisition of up to 3,929,114 fully paid-up equity shares with a face value of ? 10/- representing 26% of the Voting Share Capital of the Company. Cummins Inc. is categorized under Promoter Group of the Company.

Share Capital

The paid up Equity Share Capital as on March 31, 2023 stood at ? 151.12 million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

Deposits

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

Transfer to Reserve

The company has not proposed any amount to be transferred to the General Reserves.

Listing

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

Directors & Key Managerial Personnel

As on March 31, 2023 there were six (6) Directors on the Board of your Company, consisting of three (3) Independent Directors, one (1) Executive Director and two (2) Non-Executive Directors of whom one is the Chairman.

Mr. Nagaraja Sadashiva Murthy Gargeshwari, (DIN:00839616) has been appointed as President and Whole-time Director of the Company w.e.f. April 7, 2022 for a period of five years subject to the approval of Central Government, which is still pending.

Dr. Muthukumar N. (DIN : 06708535) has resigned from the position of Wholetime Director of the company with effect from April 05, 2022.

Below two resolutions were passed by the shareholders through postal ballot on April 26, 2022;

1. Appointment of Mr. Nagaraja Sadashiva Murthy Gargeshwari, (DIN:00839616) as Whole Time Director of the Company for a period of five (5) years effective April 7, 2022.

2. Ratification of appointment of Dr. Muthukumar N., (DIN : 06708535) as Whole Time Director of the Company from January 27, 2022 to April 5, 2022.

Mr. Rakesh Kalra (DIN : 00780354) has ceased from the position of Independent Director of the company with effect from February 13, 2023 due to completion of his term.

In terms of the provisions of the Companies Act, 2013, Mr. Kenneth James Hogan, Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

Further the names of the Independent Directors of the Company have been included in the Data bank maintained by the Indian Institute of Corporate Affairs of Independent directors as per the provisions of the Companies Act, 2013 and the rules made thereunder.

Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Company has received a confirmation from the Directors and senior management personnel of the company w.r.t. compliance of the code of conduct required under Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Board Evaluation

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee''s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2022-23, Independent Directors met on March 31, 2023, discussed and reviewed the below:

• Performance of Non Independent Directors;

• Performance of the Chairman;

• Performance of the Board Committees;

• Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members;

• Overall performance of the Company;

The Nomination and Remuneration Committee is responsible for the formulation of criteria for evaluation.

Familiarization program for the Board Members

Your Company has in place a structured induction and familiarization program for all its Directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarize with the Company''s procedure and practice.

Periodic presentations are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarization for Independent Directors are posted on the website of the Company and can be accessed at below weblink:

https ://www.autoaxle.com/Downloads/Familiarisation%20 Programme%20for%20Independent%20Directors%20 of%2 0Au tomoti ve%2 0Axles%2 0Limited.pdf

Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, your Directors make the following statements:

(a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we have selected such accounting policies and applied them consistently and 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 as at March 31, 2023 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors & Auditors'' Reporta. Statutory auditor

M/s. S R Batliboi & Associates LLP, Chartered Accountants [Firm Registration No.: 101049W/ E300004] are holding the position of Statutory Auditors of the Company.

The Auditors'' Report does not contain any qualification, reservation or adverse remarks.

Further, no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

On recommendation of the Audit Committee the Board of Directors approved the re-appointment of M/s PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for the Financial Year 202223.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary has been appointed to conduct Secretarial Audit of the Company''s secretarial and other related records for the financial year 2022-23.

The Secretarial Audit Report for the financial year ended March 31, 2023 in Form MR-3 is appended to this report under Annexure - A

Internal Financial Controls

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Corporate Governance

Corporate Governance is about maximizing the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believes that sound corporate governance is critical to

enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from CS. Pracheta M., Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) Schedule V (E) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

Meetings of the Board

During the financial year, the Board met four times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

Committees of the Board

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The details with respect to the compositions, roles, number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board''s Report.

As per Regulation 26(6) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the board of directors had constituted a committee of independent directors on November 7, 2022 with the chairmanship of Mr. B. C. Prabhakar to provide reasoned recommendations on the Open offer for

acquisition of up to 3,929,114 (three million nine hundred twenty nine thousand and one hundred fourteen) fully paid-up equity shares of face value of ? 10/- (Indian Rupees ten) each, representing 26.00% of the Voting Share Capital of the Company made by Cummins Inc. to the shareholders of the company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 ofthe Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

Particulars of Remuneration of Directors & certain specified employees

In terms ofthe provisions of Section 197(12) ofthe Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees'' remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of? 102 lacs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of? 8.50 lacs or more per month is appended as Annexure - C.

Annual Return 2022-23

The copy of Annual Return for the financial year ending March 31, 2023- is available at https://www.autoaxle.com/ Annual_Return.aspx

Particulars of Loans, Guarantees or Investment under Section 186 of the Companies Act, 2013

Particulars of loans covered under Section 186 of the Companies Act, 2013 form part ofthe notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons.

Company has made investment of ? 22.50 million during the FY-2022-23 in Parola Renewables Private Limited to acquire 25,00,000 number of Equity Shares of? 10/- each, constituting 26% of total equity shareholding as per Share Subscription and Shareholder''s Agreement entered into with Parola Renewables Private Limited on February 7, 2022, to comply with regulatory requirements of the Electricity Act, 2003 read with Electricity Rules, 2005 to procure Solar Power. Particulars of Investment made by the company form part of the notes to the financial statement provided in this Annual Report.

Policy on Directors'' Appointment & Remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. On March 31, 2023, the Board consist of six members, one of whom is executive or whole-time director, two are non executive directors and three are independent directors out of whom one is an Independent Woman Director.

The Nomination and Remuneration Policy of the Company has been formulated in accordance with the Act and Listing Regulations. The Policy is designed to guide the Board in relation to appointment and removal of directors, Key Managerial Personnel and Senior Management and recommend to the Board on remuneration payable to them. Policy enables the Company to retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The policy was modified due to the changes in the definition of Senior Management as per the notification of SEBI (Listing Obligation and Disclosure Requirements) Amendment Regulation, 2023 dated 17^th Jan, 2023. The current policy is available on Company''s website at https://www.autoaxle. com/Investor_Policy.aspx

Particulars of contracts or arrangements with Related Parties (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm''s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholders'' approval at their 37^th Annual General Meeting held on August 13, 2018 for transaction value annually of '' 30,000 million for a period of five (5) financial years starting from April 1, 2019.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their review on a quarterly basis.

In accordance with the requirements of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s website at https://www.autoaxle.com/Investor_Policy.aspx

Related Party disclosures as per Indian Accounting Standards (Ind AS) -24 have been provided in Note No. 37 to the financial statement.

The particulars on RPTs in Form AOC - 2 is annexed to the Report as Annexure - D

Risk Management System

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. Th

development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

Corporate Social Responsibility (CSR)

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 read with CSR policy of the Company. During the year the Company has spent '' 13.11 million on various CSR activities including the excess spent of previous year of '' 0.51 million.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - E.

State of Company''s Affairs

Discussion on state of Company''s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

Business Responsibility & Sustainability Report

A detailed Business Responsibility & Sustainability Report in terms of the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Under the poli cy, the Directors and employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

Whistle Blower Policy of the Company can be accessed at below weblink:

https://www.autoaxle.com/Down loads/Wh is tle%20 Blower%20 Policy, pdf

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

Your Company has always believed in providing a safe workplace for every individual working in Company''s premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. The Company has also constituted Internal Committee, as required under the said enactment. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Significant or Material Orders

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There were no adverse material changes or commitments occurred after March 31, 2023 which may affect the financial position of the Company or may require disclosure.

Subsidiaries, Joint Ventures and Associates

Your Company does not have any subsidiary, joint venture.

Company has made investment of ? 25 million during the FY-2022-23 in Parola Renewables Private Limited to acquire 25,00,000 number of Equity Shares of? 10/- each, constituting 26% of total equity shareholding as per Share Subscription and Shareholder''s Agreement entered into with Parola Renewables Private Limited on February 7, 2022, to comply with regulatory requirements of the Electricity Act, 2003 read with Electricity Rules, 2005 to procure Solar Power.

Hence 26% voting interest is a mere requirement of the regulators and the Company doesn''t have any significant influence on Parola Renewables Private Limited and therefore Parola Renewables Private Limited doesn''t qualify as an associate of the Company as per IND AS 28.

Change in the nature of business

There is no change in the nature of business of your Company.

Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

Awards and Recognition

During FY 2022-23, your company received recognitions from the following bodies/customers as listed below:

1. Awarded the ''DICV Quality QUAD 2022 Excellent Performance Award'' by Daimler India Commercial Vehicles (DICV) in recognition of our outstanding performance in quality metrics.

2. Recognised as the ''BestSupplier'' for our commendable product development and delivery performance in supply chain management by Mahindra & Mahindra.

3. Received ''Gold'' award in recognition of our outstanding performance in cost excellence from Ashok Leyland.

4. Awarded the title of ''2^nd Best Supplier of the Year'' for our admirable performance in demand fulfilment of spare parts.

5. Awarded the ''Engineering Gold Award'' by Meritor for our successful implementation of a digital poke-yoke on brake shoe conveyor assembly, which led to a reduction in rework and inspection costs.

6. Received 2 Gold and 1 Bronze awards from Meritor for our global quality achievements in Quality Improvement projects.

7. Won 20 Gold Awards and 1 Silver Award at the Mysuru Chapter Convention on Quality Concept-CCQC Kaizens competition conducted by Quality Forum of India - QCFI. (CCQC-2022).

8. Received 4 Excellence Awards and 1 Distinguish Award in the NCQC-2022 Allied Case Study Presentation competition during the National Convention on

Allied Concepts.

9. Won the Prime Gold Award in the ICQCC-2022 Allied Case Study Presentation competition at the International Convention on Allied Concepts.

Maintenance of Cost records

The maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.

Other Disclosure

Your company has not made any application, nor any proceeding is pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

As the company has not made any one time settlement with any banks or financial institution during the year under review, Rule (8) sub-rule (4) clause (xii) of Companies (Accounts) Rules,2014 is not applicable.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA.

---

Mar 31, 2022

Your Directors have the pleasure in presenting the 41^st Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2022:

Financial Highlights:

('' in million)
Particulars	2021-2022	2020-2021
Total Revenue	14,948.78	9126.48
Profit before depreciation & tax	1,364.68	661.68
Less : Depreciation, amortisation expenses	364.18	360.03
Profit before tax	1000.50	301.65
Tax expenses	256.92	74.35
Profit for the year after tax	743.58	227.30
Other comprehensive income/(Loss) for the year, net of tax	(5.50)	5.96
Total comprehensive income for the year	738.08	233.26
Balance of Profit from Previous Year	4,815.02	4,593.84
Less: Dividend	68.01	12.08
Profit available for appropriation	5,485.09	4,815.02

Dividend

The Board, at its meeting held on May 17, 2022, is pleased to recommend a dividend of '' 15/- per Equity Share of the face value of '' 10/- each for the financial year ended March 31, 2022 subject to the approval of shareholders at the ensuing Annual General Meeting to be held on Friday, August 5, 2022.

The total amount of Dividend aggregates to '' 226.68 million.

The register of members and share transfer books will remain closed from July 30, 2022 to August 5, 2022 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2022.

The Dividend will be paid to members within 30 days from the date of declaration of dividend whose names appear in the Register of Members as on July 29, 2022.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") is available on the Company''s website at https://www.autoaxle.com/Downloads/ DividendX20DistributionX20Policy.pdf.

Transfer of unpaid or unclaimed amount to Investor Education and Protection Fund (IEPF)

Pursuant to provisions of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the

Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant to Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting , Audit, Transfer and Refund) Rules, 2016 as amended, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective shareholders who have not claimed their dividend for seven consecutive years or more and the newspaper advertisement stating the same has been published in the newspapers.

In terms of the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 a sum of '' 1,48,605/- which is unpaid/unclaimed dividends pertaining to the FY 2013-14 was transferred to the Investor Education and Protection Fund during the year.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at below mentioned link: https://autoaxle.com/Annual_reports. aspx under the head IEPF Transfers

Performance of the Company

The total income for the financial year under review was '' 14,948.78 Million as against '' 9,126.48 Million for the previous financial year. The Profit before tax (PBT) was

'' 1000.50 Million for the financial year under review, as against '' 301.65 Million for the previous financial year.

Share Capital

The paid up Equity Share Capital as on March 31, 2021 stood at '' 151.12 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

Deposits

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

Transfer to Reserve

The company has not proposed any amount to be transferred to the General Reserves.

Listing

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

Directors & Key Managerial Personnel:

As on March 31, 2022 there were seven (7) Directors on the Board of your Company, consisting of four (4) Independent Directors, one (1) Executive Director and two (2) NonExecutive Directors of whom one is the Chairman.

Mr. Kenneth James Hogan (DIN: 0009161738) was appointed as an Additional Director of the Board based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, and also on the recommendation of Nomination & Remuneration Committee of the Company, in place of Mr. Chrishan Anton Sebastian Villavarayan (DIN: 03020467) who resigned from the Board, w.e.f May 14, 2021. The Board places its appreciation for Mr. Chrishan Anton Sebastian Villavarayan''s valuable contributions during his tenure. Appointment of Mr. Kenneth James Hogan (DIN: 0009161738) got regularised by the shareholders in their 40^th Annual General Meeting held on August 10, 2021.

Mr. Srinivasan Kumaradevan, (DIN: 08107660) has resigned from the position of Wholetime Director of the company with effect from July 31, 2021.

Dr Muthukumar N. (DIN: 06708535) has been appointed as President and Whole-time Director w.e.f. January 27, 2022.

However, after the closure of the financial year:

Mr.Nagaraja Sadashiva Murthy Gargeshwari, (DIN:00839616) has been appointed as President and Whole-time Director of the Company w.e.f. April 7, 2022 for a period of five years subject to the approval of Central Government.

Dr Muthukumar N. (DIN: 06708535) has resigned from the position of Wholetime Director of the company with effect from May 05, 2022.

Below two resolutions were passed by the shareholders through postal ballot on April 26, 2022;

1. Appointment of Mr. Nagaraja Sadashiva Murthy Gargeshwari, (DIN:00839616) as Whole Time Director of the Company for a period of five (5) years effective April 7, 2022.

2. Ratification of appointment of Dr. Muthukumar N., (DIN : 06708535) as Whole Time Director of the Company from January 27, 2022 to April 5, 2022.

In terms of the provisions of the Companies Act, 2013, Dr. B. N. Kalyani, Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

Further the names of the Independent Directors of the Company have been included in the Data bank maintained by the Indian Institute of Corporate Affairs of Independent directors as per the provisions of the Companies Act, 2013 and the rules made thereunder.

Board Evaluation:

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee''s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2021-22, Independent Directors met on February 4, 2022, discussed and reviewed the below:

• Performance of Non Independent Directors

• Performance of the Chairman

• Performance of the Board Committees

• Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members.

• Overall performance of the Company.

The Nomination and Remuneration Committee is responsible for the formulation of criteria for evaluation.

Familiarisation program for the Board Members

Your Company has in place a structured induction and familiarisation program for all its Directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarise with the Company''s procedure and practice.

Periodic presentations are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarisation for Independent Directors are posted on the website of the Company and can be accessed at below weblink:

https ://www.autoaxle.com/Downloads/Familiarisation%20 Programme%20for%20Independent%20Directors%20 of%2 0Au tomoti ve%2 0Axles%2 0Limited.pdf

Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, your Directors make the following statements:

(a) i n the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we have selected such accounting policies and applied them consistently and 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 as at March 31, 2022 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors & Auditors'' Reporta. Statutory auditor

M/s. S R Batliboi & Associates LLP, Chartered Accountants [Firm Registration No.: 101049W/ E300004] the statutory auditors of the Company, will hold office till the conclusion of the 41^st Annual General Meeting of the Company. The Board has recommended the re-appointment of M/s. S R Batliboi & Associates LLP, Chartered Accountants as the statutory auditors of the Company, for a second term of five consecutive years, from the conclusion of the 41^st Annual General Meeting scheduled to be held in the year 2022 till the conclusion of the 46^th Annual General Meeting to be held in the year 2027, for approval of shareholders of the Company, based on the recommendation of the Audit Committee.

The Auditors'' Report does not contain any qualification, reservation or adverse remarks.

Further, no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

On recommendation of the Audit Committee Board of Directors approved the re-appointment of M/s PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for the Financial Year 2022-23.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary has been appointed to conduct Secretarial Audit of the Company''s secretarial and other related records for the financial year 2022-23.

The Secretarial Audit Report for the financial year ended March 31, 2022 Form MR-3 is appended to this report under Annexure - A

Explanation for observations made under Secretarial Audit Report:

As per the observations made by secretarial Auditor on delay of 8 days in the reconstitution of Stakeholders relationship committee, it is to clarify to the members that the company has already complied this requirement on November 8, 2022, paid the fine to the stock exchanges and noted it in their Board Meeting held on March

18, 2022. Going forward company will strengthen the process, not to skip such compliance requirement.

Internal Financial Controls

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Corporate Governance

Corporate Governance is about maximising the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believes that sound corporate governance is critical to enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from CS. Pracheta M., Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) Schedule V (E) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

Meetings of the Board

During the financial year, the Board met five times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

Committees of the Board

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board

of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The details with respect to the compositions, roles, number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board''s Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

Particulars of Remuneration of Directors & certain specified employees:

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees'' remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of '' 102 lacs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of '' 8.50 lacs or more per month is appended as Annexure - C.

Annual Return 2021-22

The copy of Annual Return for the financial year ending March 31, 2022 is available at https://www.autoaxle.com/ Annual_Return.aspx

Particulars of Loans, Guarantees or Investment under Section 186 of the Companies Act, 2013

Particulars of loans covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons and has not made any investment in the securities of any other body corporate.

Policy on Directors'' Appointment & Remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. On March 31, 2022, the Board consist of seven members, one of whom is executive or whole-time director, two are non executive directors and four are independent directors out of whom one is an Independent Woman Director.

The Nomination and Remuneration Policy of the Company has been formulated in accordance with the Act and Listing Regulations. The Policy is designed to guide the Board in relation to appointment and removal of directors, Key Managerial Personnel and Senior Management and recommend to the Board on remuneration payable to them. Policy enables the Company to retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. The current policy is available on Company''s website at https:// www.autoaxle.com/Investor_Policy.aspx

Particulars of contracts or arrangements with Related Parties (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm''s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholders'' approval at their 37^th Annual General Meeting held on August 13, 2018 for transaction value annually of '' 30,000 Million for a period of five (5) financial years starting from April 1, 2019.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their review on a quarterly basis.

In accordance with the requirements of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s website at https://www.autoaxle.com/Investor_Policy.aspx

Related Party disclosures as per Indian Accounting Standards (Ind AS)-24 have been provided in Note No. 37 to the financial statement.

The particulars on RPTs in Form AOC 2 is annexed to the Report as Annexure - D

Risk Management System

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. Th is processes include the development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

Corporate Social Responsibility (CSR):

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 read with CSR policy of the Company. During the year the Company has spent '' 36.23 Million on various CSR activities including '' 16.99 Million of unspent CSR amount pertaining to the fiscal year 2020-21.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - E.

State of Company''s Affairs

Discussion on state of Company''s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

Business Responsibility Report

A detailed Business Responsibility Report in terms of the provisions of Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations, 2015 is available as a separate section in the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Under the policy, the Directors and employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

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

Your Company has always believed in providing a safe workplace for every individual working in Company''s premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. The Company has also constituted Internal Committee, as required under the said enactment. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Significant or Material Orders

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There were no adverse material changes or commitments occurred after March 31,2022 which may affect the financial position of the Company or may require disclosure.

Subsidiaries, Joint Ventures and Associates

Your Company does not have any subsidiary, joint venture or associates.

Change in the nature of business

There is no change in the nature of business of your Company.

Secretarial Standards:

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

Awards and Recognition

During FY 2021-22, your company received recognitions from the following bodies/customers as listed below:

1. Bagged 4 Gold Awards & 1 Silver Award during Confederation of Indian Industry (CII) Mysuru Chapter Convention on Quality Concept Kaizens competition (CCQC-2021) in Sep 2021

2. Won 3 Excellence award in NCQC-2021 Allied Case Study Presentation competition during National Convention on Allied Concepts held during Dec 2021 in Coimbatore

3. Team Pragathi won Excellence award in ICQCC-2021 Allied Case Study Presentation competition during International Convention on Allied Concepts held during Nov 2021 in Hyderabad.

4. Bagged advance problem solving (APS) project appreciation award by Ashok Leyland for the Quality improvements in Aug''21.

5. Bagged Global President quality achievement award by Meritor for the Quality improvement project in Nov''21.

Maintenance of Cost records

The maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.

Other Disclosure

Your company has not made any application, nor any proceeding is pending against the company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

As the company has not made any one time settlement with any banks or financial institution during the year under review, Rule (8) subrule (4) clause (xii) of Companies (Accounts) Rules,2014 is not applicable.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors Place : Pune B. N. Kalyani

Date : May 17, 2022 Chairman

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Mar 31, 2018

To the Members,

The Directors have the pleasure in presenting the 37th Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2018:

Financial Highlights:

(Rs. in million)

Particulars	2017-2018	2016-2017
Total Revenue	15,580.63	13039.92
Profit before depreciation & tax	1710.30	1143.77
Less : Depreciation, amortization & Loss on assets discarded	432.13	393.64
Tax expenses	438.85	255.95
Profit for the year after tax	839.32	494.18
Other comprehensive income for the year, net of tax	(16.35)	(5.93)
Total comprehensive income for the year	822.97	488.25
Balance of Profit from Previous Year	3040.37	2652.16
Less: Dividend	120.90	83.12
Dividend Distribution tax on Dividend	24.62	16.92
Profit available for appropriation	3717.82	3040.37

Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Being applicable, the Company has adopted Ind AS from April 1, 2017 and accordingly, the transition was carried out, from the Indian GAAP as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP) to Ind AS 101 “First time adoption of Indian Accounting Standards”.

The impact of transition has been recorded in opening reserves as at April 1, 2016 and the periods presented have been restated / reclassified. The reconciliation and descriptions of the effect of the transition from Indian GAAP to Ind AS have been provided in [Note 39 to 41] in the notes to accounts in the standalone and consolidated financial statements.

Dividend

The Board, at its meeting held on May 8, 2018, is pleased to recommend a dividend of Rs.13.50/- per Equity Share of the face value of Rs.10/- each for the financial year ended March 31, 2018 subject to the approval of shareholders at the ensuing Annual General Meeting to be held on Monday, 13th August, 2018.

The total amount of Dividend aggregates to Rs.204.01 million, excluding Dividend Distribution Tax.

The register of members and share transfer books will remain closed from August 4, 2018 to August 13, 2018 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2018.

The Dividend will be paid to members within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members as on August 3, 2018.

Transfer of unpaid or unclaimed amount to Investor Education and Protection Fund (IEPF)

Pursuant to provisions of the Companies Act, 2013, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting , Audit, Transfer and Refund) Rules, 2016 as amended, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall be transferred by the Company to the IEPF.

Accordingly, the Company has sent notice to the respective shareholders who have not claimed their dividend for seven consecutive years or more and the newspaper advertisement stating the same has been published in the newspapers.

In terms of the provisions of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting , Audit, Transfer and Refund) Rules, 2016 a sum of Rs.374,757/- which is unpaid/unclaimed dividends pertaining to the FY 2009-10 was transferred to the Investor Education and Protection Fund during the year.

The list of equity shareholders whose shares are transferred to IEPF can be accessed on the website of the Company at below mentioned link: www.autoaxle.com/Annual_reports. aspx under the head IEPF Transfers

Performance of the Company

The total income for the financial year under review was Rs.15,580.63 Million as against Rs.13,039.92 Million for the previous financial year. The Profit before tax (PBT) was Rs.1278.17 Million and the Profit after tax (PAT) was Rs.839.32 Million for the financial year under review, as against Rs.750.13 Million and Rs.494.18 Million respectively for the previous financial year.

Share Capital

The paid up Equity Share Capital as on March 31, 2018 stood at Rs.151.12 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

Deposits

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

Transfer to Reserve

The company has not proposed any amount to be transferred to the General Reserve.

Listing

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

Directors & Key Managerial Personnel:

As on March 31, 2018 there were seven (7) Directors on the Board of your Company, consisting of four (4) Independent Directors, one (1) Executive Director and two (2) NonExecutive Directors of whom one is the Chairman..

Mr. Chrishan Anton Sebastian Villavarayan (DIN: 03020467) was appointed as an Additional Director of the Board based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, and also on the recommendation of Nomination & Remuneration Committee of the Company, in place of Mr. Joseph A Plomin (DIN: 06739214) who resigned from the Board, with effect from January 31, 2018. The Board places its appreciation for Mr. Plomin’s valuable contributions during his tenure. Mr. Villavarayan holds the office upto the ensuing Annual General meeting and his appointment is being sought to be regularised at the ensuing Annual General Meeting.

Mr. Satish Sekhri (DIN: 00211478) has resigned from directorship with effect from February 13, 2018. The Company has, on the recommendation of Nomination & Remuneration Committee and in accordance with provisions of the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015, appointed Mr Rakesh Kalra (DIN: 00780354) as Additional and Independent Director, for a tenure of 5 years on February 13, 2018, subject to approval of Members at the forth coming Annual General Meeting (AGM) of the Company. He shall hold office as Additional Director upto the date of the AGM and is eligible for appointment as Director.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Narayanaswamy Muthukumar, President & Whole Time Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Ms. Thejeshwini. N, Company Secretary resigned from her office with effect from 18th August, 2017 and Mr. Debadas Panda has been appointed as Company Secretary of the Company with effect from 18th August, 2017.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

Board Evaluation:

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee’s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2017-18, Independent Directors met on February 13, 2018, discussed and reviewed the below:

o Performance of Non Independent Directors o Performance of the Chairman o Performance of the Board Committees o Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members. o Overall performance of the Company.

Familiarization programme for the Board Members

Your Company has in place a structured induction and familiarization programme for all its Directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarize with the Company’s procedure and practice.

Periodic presentations are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarization for Independent Directors are posted on the website of the Company and can be accessed at: www.autoaxle.com/Directors.aspx

Directors’ Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, your Directors make the following statements:

(a) i n the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we have selected such accounting policies and applied them consistently and 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 as at March 31, 2018 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors & Auditors’ Report

a. Statutory Auditors

At the 36th Annual General Meeting of the Company held on 18th August, 2017, M/s. S R Batliboi & Associates LLP, Chartered Accountants [Firm Registration No.: 101049W/E300004], were appointed as Statutory Auditors to hold office upto the conclusion of the 41st Annual General Meeting of the Company subject to ratification of appointment at every Annual General Meeting. However, the Companies (Amendment) Act, 201 7, published in the Gazette of India on January 3, 2018, omitted first proviso to Section 139(1) of Companies Act 2013, which provided for ratification of appointment of Statutory Auditors by members at every AGM which has been effective from May 7, 2018.

In view of the above, the Board of Directors of the Company have proposed to ratify the appointment of Statutory Auditors and recommended to continue their appointment for the period of four years commencing from the conclusion of this AGM, till the conclusion of 41st AGM, without seeking any further ratification of their appointment from members at the ensuing AGMs.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Further, no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

The Audit Committee and the Board of Directors recommend for the re-appointment of M/s. Pricewaterhouse Coopers Pvt. Ltd. as Internal Auditors of the Company for the Financial Year 2018-19.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary has been appointed to conduct Secretarial Audit of the Company’s secretarial and other related records for the Financial year 2017-18.

The Secretarial Audit Report for the financial year ended March 31, 2018 in form MR-3 is appended to this report under Annexure - A

Explanation for observations made by the Company Secretary in practice:

Explanation for observation under clause no. (a) of the Secretarial Audit Report please refer to the reason for ‘part of CSR Amount Un-spent’ mentioned in Annexure - G attached to this report.

Explanation for observation under clause no. (b) of the Secretarial Audit Report: Company has good systems and practices for compliances under the Companies Act, 2013 and the Secretarial Standards. During the year Company has met with all the compliance requirements and its process except for few suggestions on improvement on current procedural requirements and henceforth which would be taken care with.

Internal Financial Control

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Corporate Governance

Corporate Governance is about maximizing the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believe that sound corporate governance is critical to enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) Schedule V (E) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

Meetings of the Board

During the financial year, the Board met four times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribed under the Companies Act, 2013.

Committees of the Board

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders Relationship Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

The details with respect to the compositions, roles, number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board’s Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

Particulars of Remuneration of Directors & certain specified employees:

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees’ remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of Rs.102 lacs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of Rs.8.50 lacs or more per month is appended as Annexure - C.

Extract of Annual Return 2017-18

The detail forming part of the extract of Annual Return in MGT-9 is appended as Annexure - D to this report.

Particulars of Loans, Guarantees or Investment under section 186 of the Companies Act, 2013

Particulars of loans covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons and has not made any investment in the securities of any other body corporate.

Policy on Directors’ Appointment & Remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. On March 31, 2018, the Board consisted of seven members, one of whom is executive or whole-time director, two are non executive directors and four are independent directors out of whom one is Independent Woman Director.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration.

The Nomination and Remuneration policy is appended as Annexure - E to this report.

Particulars of contracts or arrangements with Related Parties (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm’s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholders’ approval at their 33rd Annual General Meeting held on February 5, 2015 for transaction value annually of Rs.25,000 Million p.a for a period of five (5) financial years starting from October 1, 2014.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

In accordance with the requirements of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at www.autoaxle.com/Policy.aspx.

Related Party disclosures as per Indian Accounting Standards (Ind AS)-24 have been provided in Note No. 34 to the financial statement.

The particulars on RPTs in AOC 2 is annexed to the Report as Annexure - F

Risk Management System

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

Corporate Social Responsibility (CSR):

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. During the year the Company has spent Rs.7.13 Million on various CSR activities.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - G.

State of Company’s Affairs

Discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 1 77 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. Under the policy, the Directors and Employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

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

Your Company has always believed in providing a safe workplace for every individual working in Company’s premise through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Significant and Material Orders

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There were no adverse material changes or commitments occurred after March 31, 2018 which may affect the financial position of the Company or may require disclosure.

Subsidiaries, Joint Ventures and Associates

Your Company does not have any subsidiary, joint venture nor any associates.

Change in the nature of business

There is no change in the nature of business of your Company.

Secretarial Standards:

The Company has complied with the applicable secretarial standards. The improvements suggested by the Secretarial auditor shall be implemented in the ensuing year.

Awards and Recognition

During the year 2017-18, your Company was conferred with awards and recognition as listed below:

1. The Company bags Gold Award for outstanding performance in delivery during the Ashok Leyland Supplier Conference meet held in Chennai during April’ 2017.

2. Got Certified by Union of Japanese Scientists & Engineers (JUSE) through Quality Circle Forum of India (QCFI) in the month of Dec 2017 for Implementing best 5S practices.

3. During Quality Circle Forum of India (QCFI) 1st Chapter Convention held on May 28, 2017 at Vidyavardhaka Engineering College, Mysuru, AAL Teams bagged 9 gold awards and 1 silver award.

4. Won Gold Awards in Ooty and Bangalore conventions which was organised by Quality Circle Forum of India (QCFI) during the months of Aug and Sep 2017.

5. Won 3 Excellence and 1 Par Excellence Awards during National Convention on Quality Concepts-at Mysuru held during the month of Dec 2017 including one 5S Home Kaizen Award.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place : Pune Dr. N. Muthukumar B. C. Prabhakar

Date : 8th May 2018 President & Whole-time Director Director

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Mar 31, 2017

To the Members,

The Directors have the pleasure in presenting the 36th Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2017:

FINANCIAL HIGHLIGHTS:

(Rs. in million)

Particulars	2016-2017	2015-2016
Total Revenue	11,488.17	10,875.44
Profit before depreciation & tax	1133.23	919.94
Less : Depreciation, amortization & Loss on assets discarded	394.63	404.70
Tax expenses	252.81	167.50
Profit After Tax	485.79	347.74
Balance of Profit from Previous Year	2546.45	2,298.81
Profit available for appropriation	3032.25	2,646.55
Appropriations :
Dividend for the year	-	83.12
Tax on dividend	-	16.98
Transfer to General Reserve	-	-
Surplus retained in Profit & Loss Account	3032.25	2,546.45

DIVIDEND

The Board, at its meeting held on May 18, 2017, is pleased to recommend a dividend of Rs.8/- per Equity Share of the face value of Rs.10/- each for the financial year ended March 31, 2017 subject to the approval of shareholders at the ensuing Annual General Meeting to be held on Friday, August 18, 2017.

The total amount of Dividend aggregates to Rs.120.90 million, excluding Dividend Distribution Tax.

The register of members and share transfer books will remain closed from August 16, 2017 to August 18, 2017 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2017.

The Dividend will be paid to members within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members as on August 15, 2017.

Transfer of Amount to Investor Education & Protection Fund

In terms of the provisions of the Companies Act, 2013 and Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 a sum of Rs.133,753/- which is unpaid/unclaimed dividends pertaining to the FY 2008-09 was transferred to the Investor Education and Protection Fund during the year.

PERFORMANCE OF THE COMPANY

The Sales and other income for the financial year under review was Rs.11,488.17 Million as against Rs.10,875.44 Million for the previous financial year. The Profit before tax (PBT) was Rs.738.60 Million and the Profit after tax (PAT) was Rs.485.79 Million for the financial year under review, as against Rs.515.24 Million and Rs.347.74 Million respectively for the previous financial year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2017 stood at Rs.151.12 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

DEPOSITS

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

TRANSFER TO RESERVE

There is no transfer to General Reserve Account duri ng the year under review.

LISTING

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

As on March 31, 2017 there were seven (7) Directors on the Board of your Company, consisting of four (4) Independent Directors, two (2) Non-Executive Directors of whom one is the Chairman and one (1) Executive Director. None of the Directors have resigned or appointed during the year under review.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Narayanaswamy Muthukumar, President & Whole Time Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Mr. S Ramkumar, Chief Financial Officer & Company Secretary retired from his office with effect from April 30, 2016 and Mr. Ranganathan Sankaran has been appointed as Chief Financial Officer of the Company with effect from April 1, 2016.

Ms. Thejeshwini. N has been appointed as Company Secretary of the Company with effect from November 5, 2016.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

BOARD EVALUATION:

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee’s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2016-17, Independent Directors met on February 6, 2017, discussed and reviewed the below:

- Performance of Non Independent Directors

- Performance of the Chairman

- Performance of the Board Committees

- Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members

- Overall performance of the Company

FAMILIARIZATION PROGRAMME FOR THE BOARD MEMBERS

Your Company has in place a structured induction and familiarization programme for all its Directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarize with the Company’s procedure and practice.

Periodic presentation are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarization for Independent Directors are posted on the website of the Company and can be accessed at: www.autoaxle.com/Directors.aspx

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, your Directors make the following statements:

(a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we have selected such accounting policies and applied them consistently and 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 as at March 31, 2017 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS & AUDITORS’ REPORT a. Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountant, Bangalore (Firm Registration No.008072S) were appointed as auditors of the Company since its inception. They were last re-appointed as auditors of the Company at 33rd Annual General Meeting held on February 5, 2015 as per the Companies Act, 2013. Currently, they are holding office of the auditors up to the conclusion of the 36th Annual General Meeting. As per second proviso to Section 139(2) of the Companies Act, 2013, (the Act), a transition period of three years from the commencement of the Act is provided to appoint a new auditor if the existing auditor’s firm has already completed the tenure as per the provisions of the Companies Act, 2013.

Accordingly, as per the said requirements of the Act, M/s.S R Batliboi & Associates LLP Chartered Accountants (Firm Registration No. 1 01 049W/E300004) are proposed to be appointed as auditors for a period of 5 years commencing from the conclusion of 36th Annual General Meeting till the conclusion of the 41st Annual General Meeting, subject to ratification by shareholders every year, as may be applicable, in place of M/s. Deloitte Haskins & Sells, Chartered Accountants.

M/s. S R Batliboi & Associates LLP, Chartered Accountants, have consented to the said appointment, and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

The Audit Committee and the Board of Directors recommend for the appointment of M/s. S R Batliboi & Associates LLP, Chartered Accountants, as statutory auditors of the Company from the conclusion of the 36th Annual General Meeting till the conclusion of 41st Annual General Meeting, to the shareholders.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Further no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

The Audit Committee and the Board of Directors recommend for the re-appointment of M/s. Price Waterhouse & Co. Bangalore, LLP Chartered Accountants, as Internal Auditors of the Company for the Financial Year 2017-18.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary has been appointed to conduct Secretarial Audit of the Company’s secretarial and other related records for the Financial year 2016-17.

The Secretarial Audit Report for the financial year ended March 31, 2017 in form MR-3 is appended to this report under Annexure - A.

Explanation for observations made by the Company Secretary in practice:

The compliance under Secretarial Standards on meetings of the Board of Directors have been largely met with but for certain improvements on the procedural aspects which would be complied henceforth.

INTERNAL FINANCIAL CONTROL

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

CORPORATE GOVERNANCE

Corporate Governance is about maximizing the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believe that sound corporate governance is critical to enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 [SEBI (LODR Regulations), 2015] have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) [(Schedule V (E)] of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

MEETINGS OF THE BOARD

During the financial year the Board met four times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribe under the Companies Act, 2013.

COMMITTEES OF THE BOARD

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

- Audit Committee

- Nomination and Remuneration Committee O Stakeholders Relationship Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

The details with respect to the compositions, roles, number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board’s Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES:

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees’ remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of Rs.102 lacs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of Rs.8.50 lacs or more per month is appended as Annexure - C.

EXTRACT OF ANNUAL RETURN 2016-17

The detail forming part of the extract of Annual Return in MGT - 9 is appended as Annexure - D.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons and has not made any investment in the securities of any other body corporate.

POLICY ON DIRECTORS’ APPOINTMENT & REMUNERATION

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. On March 31, 2017, the Board consists of seven members, one of whom is executive or whole-time director, two are non executive directors and four are independent directors out of which one is Independent Woman Director.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration.

The Nomination and Remuneration policy is appended as Annexure - E to this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm’s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholder’ approval in their 33rd Annual General Meeting held on February 5, 2015 for transaction value annually of Rs.25,000 Million for a period of five (5) financial years starting from October 1, 2014.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

In accordance with the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 your Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at www.autoaxle. com/Policy.aspx.

Related Party disclosures as per AS-18 have been provided in Note 32 to the financial statement.

The particulars on RPTs in AOC 2 is annexed to the Report as Annexure - F.

RISK MANAGEMENT SYSTEM

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. During the year the Company has spent Rs.3.83 Million on various CSR activities.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - G.

STATE OF COMPANY’S AFFAIRS

Discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

VIGIL MECHANISM

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. Under the policy the Directors and Employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe workplace for every individual working in Company’s premise through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no adverse material changes or commitments occurred after March 31, 2017 which may affect the financial position of the Company or may require disclosure.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Company does not have any subsidiary, joint venture nor any associates.

CHANGE IN THE NATURE OF BUSINESS

There are no change in the nature of business of your Company.

AWARDS AND RECOGNITION

During the year 2016-17, your Company was conferred with awards and recognition as listed below:

1. Machinist Super Shop Floor 2016 Award in Green Manufacturing Category on May 26, 2016 at Pune.

2. During Quality Circle Forum of India (QCFI) 7th Regional Convention Quality Concepts-Kaizen Award held on May 22, 2016 at Vidyavardhaka College, Mysuru your Company bagged 13 gold awards, 1 silver award and 1 bronze award.

3. Your Company won Quality Circle Forum of India (QCFI) - Chapter Convention of Quality Concepts Kaizen Awards at Coimbatore on October 15, 2016 and QCFI - CCQC 2016 Kaizen Awards at Bangalore on October 23, 2016.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place: Pune Dr. B. N. Kalyani

Date: 18th May, 2017 Chairman

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Mar 31, 2016

The Directors have the pleasure in presenting the 35th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the financial period ended 31st March 201 6:

FINANCIAL HIGHLIGHTS:

2015-2016 2014-2015

Particulars (12 months) (6 months)

Total Revenue 10,875.44 4,617.03

Profit before depreciation & tax 919.94 338.03

Less : Depreciation, amortization & Loss on assets discarded 404.70 173.21

Provision for Taxation 67.50 59.40

Profit After Tax 347.74 105.42

Balance of Profit from Previous Year 2,298.81 2,223.20

Profit available for appropriation 2,646.55 2,328.62

Appropriations :

Dividend for the year 83.12 15.11

Tax on dividend 6.98 4.16

Transfer to General Reserve - 10.54

Surplus retained in Profit & Loss Account 2,546.45 2,298.81

DIVIDEND

Your Directors are pleased to recommend a Dividend of X 5.50 per equity share of face value of X 1 0/- each for the period ended 31st March 2016 aggregating to X 83.12 million, excluding Dividend Distribution Tax.

The Dividend, subject to the approval of Members at the Annual General Meeting to be held on 12th August 2016, will be paid within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members, as on the date of book closure, i.e. from 10th August 201 6 to 12th August 201 6 (both days inclusive).

In terms of the provisions of the Companies Act, a sum of X 304,635/- of unpaid/unclaimed dividends was transferred during the year to the Investor Education and Protection Fund.

PERFORMANCE OF THE COMPANY

The Sales and other income for the financial period (1 2 months) under review wasRs, 1 0,875.44 Million as against Rs,4,61 7.03 Million for the previous financial year (6 months). The Profit before tax (PBT) of X 51 5.24 Million and the Profit after tax (PAT) of X 347.74 Million for the financial period under review, as against Rs, 164.82 Million and Rs, 105.42 Million respectively for the previous financial year.

The Company in its journey towards world class manufacturing has further improved the quality standards towards Zero Chips, Oil & Coolant (COC) initiatives implemented last financial year in all plants, to make it clean from Chips, Oil and Coolant on floor. Further, to improve the standards of Organization Health and Safety, your organization implemented OHSAS 18001 and was certified for OHSAS 1 8001 2007 which is valid for three years.

BOARD OF DIRECTORS

Ms.Sudhasri.A resigned from the Board due to other pressing engagements effective 10th February 2016. The Board places its appreciation for her valuable contributions made during her tenure.

Pursuant to Sections 149 and 1 52 of the Companies Act, 201 3 and in terms of Regulation 1 7 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has at its meeting held on 1 0th February 201 6, appointed Ms.Supriti Bhandary as an additional director, who is being proposed to be appointed as an Independent Director with effect from the date of ensuing Annual General Meeting. The requisite resolution for approval of her appointment as Independent Director is being proposed in the notice of the meeting for the approval of the members.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A Plomin, Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

FIXED DEPOSITS

Your Company has not accepted any Public Deposits under Chapter V of Companies Act, 201 3, during the year.

POLICY ON NOMINATION & REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) & OTHER EMPLOYEES

The Company has framed a policy on Nomination & Remuneration of Directors, KMP & other employees as per the requirement of the Companies Act, 2013 which formulates the criteria for determining qualifications, positive attributes & independence of a director and their remuneration. The Nomination and Remuneration Policy is annexed herewith as Annexure - A to this report.

AUDITORS & AUDITORS'' REPORT

The report given by the Statutory Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

M/s. Deloitte Haskins & Sells (Chennai), Bengaluru were appointed as Statutory Auditors of your Company in the Annual General Meeting held on 5th February 2015 for a term of three consecutive years. As per the provisions of Section 1 39 of the Companies Act, 201 3, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

No frauds have been reported by the Auditors in their reports.

The Secretarial Audit Report for 2015-16 in form MR-3 is annexed to this Report under Annexure - B

Explanation for observations made by the Company Secretary in Practice :

The compliances under Secretarial Standards on meetings of the Board of Directors have been largely met with but for certain minor improvements which would be complied henceforth.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed by the Board to conduct the secretarial audit of Company''s secretarial and related records for the financial year 201 6-1 7.

CORPORATE GOVERNANCE

Your Company is renowned for exemplary governance standards since inception and continues to lay a strong emphasis on transparency, accountability and integrity.

The Companies Act, 201 3 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (LODR Regulations) have strengthened the governance regime in the Country. Your Company is in compliance with the governance requirements provided under the new law and has proactively adopted many provisions of the new law, ahead of time. Your Company is committed to embrace the new law in letter and spirit. In line with the requirements of new law, your Company has constituted Board Committees. Your Company has in place all the statutory committees required under the law. Details of Board Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) (Schedule V(E)) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided as Annexure - C to this report.

ANNUAL RETURN 2015-16

The extract of annual return in MGT - 9 is annexed under Annexure -D

RELATED PARTY TRANSACTIONS (RPT)

In line with the requirements of the Companies Act, 2013 and LODR Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s website at www.autoaxle.com/Policy.aspx. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on annual basis for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at Arm''s Length.

All Related Party Transactions entered during the year were in ordinary course of the business and on arm''s length basis. The particulars on RPTs in AOC 2 is annexed to the Report as Annexure E

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Disclosure on CSR has been annexed to the Report under Annexure F

PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of certain employees, who are covered by the said rules, are set out in the Annexure G to the Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) we have selected such accounting policies and applied them consistently and 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 and loss of the Company for that period;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis; and

(e) we have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT SYSTEM AND ITS POLICY

Your Company introduced the Risk Management System almost a decade back and it has attained the maturity whereby the Enterprise-wise Risk-log-cum-register is being maintained by the departmental head and is being periodically reviewed for adequacy and effectiveness by the Audit Committee and the Board. The Company''s Risk Management Committee is being assisted by Chief Risk-Coordinator. The Risk Management policy developed by the Company aims to cover all the business and other risks, which are revisited at reasonable intervals.

The Board level Committee on Risk Management is formed with the following directors as its members:

(a) Mr. B C Prabhakar, Chairman

(b) Dr. N Muthukumar, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34(2)(e) of LODR Regulations, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

BOARD ANNUAL EVALUATION

The Nomination & Remuneration Committee arranges for a performance evaluation of the Board, its Committees and its individual Directors on an annual basis. The Committee will conduct an annual review of the role of the Board, assess the performance of the Board over the previous 12 months and examine ways of assisting the Board in performing its duties more effectively.

The review will include:

(a) comparing the performance of the Board with the requirements of the Act;

(b) examination of the Board''s interaction with management;

(c) the nature of information provided to the Board by management; and

(d) management''s performance in assisting the Board to meet its objectives.

A similar review will be conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made. The Nomination & Remuneration Committee will oversee the performance evaluation of the Senior Management Team. This evaluation is based on specific criteria, including the business performance of the Company, whether strategic objectives are being achieved and the development of management personnel.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place: Pune Dr. B.N. Kalyani

Date: 1 Oth May 201 6 Chairman

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Sep 30, 2014

To the Members,

The Directors have the pleasure in presenting the 33rd Annual Report on the business and operations of the Company and the audited accounts for the financial year ended 30th September, 2014.

FINANCIAL RESULTS

(Rsin Million) Particulars 2013-2014 2012-2013

Profit before Depreciation & Tax 553.41 470.87

Less : depreciation & amortisation 294.79 285.29

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 76.83 58.60

Profit After Tax 181.79 126.98

Balance of Profit from Previous Year 2,103.79 2,024.87

Profit available for appropriation 2,285.58 2,151.85

Appropriations :

Dividend for the year 37.78 30.22

Tax on dividend 6.42 5.14

Transfer to General Reserve 18.18 12.70

Surplus retained in Profit & Loss Account 2,223.20 2,103.79

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was '' 7,576.72 Million as against '' 7,154.12 Million for the previous financial year. The Profit before Tax of '' 258.62 Million and the Profit After Tax of ''181.79 Million for the financial year under review as against '' 185.58 Million and '' 126.98 Million respectively for the previous financial year.

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of '' 2.50 per Equity Share (25%) of the face value of '' 10/- each, aggregating to '' 37.78 (exclusive of tax on dividend) for the financial year ended on 30th September, 2014 for your consideration.

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations. The Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

DIRECTORS

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A. Plomin Director of the Company, retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers him for re-appointment.

Mr. Marco Bassi was appointed as an Additional Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Mr. Chris Villavarayan who resigned from the Board. The Board places its appreciation for the valuable contributions made by Mr. Villavarayan during his tenure. Mr. Bassi holds the office upto the ensuing AGM and his appointment is being sought to be regularised at the ensuing AGM.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors has, at its meeting held on 25th November, 2014, appointed the existing Independent Directors Mr. B B Hattarki, Mr. B C Prabhakar, and Mr. Satish Sekhri as Independent Directors for a term of five consecutive years with effect from the date of ensuing AGM, subject to approval of shareholders in their Meeting. The requisite resolutions for approval of their appointment as Independent Directors are being proposed in the notice of the ensuing AGM for the approval of the members.

The Company has received declarations from all the Independent Directors of the Company, confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company is required to appoint two more Independent Directors and a Woman Director on the Board. The Company is under the process of identifying suitable candidatures for appointment.

AUDITORS & AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company were holding office as Auditors, prior to the commencement of the Companies Act, 2013 ("the Act") and for more than 10 years now. In terms of the provisions of the Act and the related rules there under, in respect of rotation of auditors, M/s. Deloitte Haskins & Sells (Chennai), Bangalore are eligible for re-appointment for three consecutive financial years subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

The Directors, based on the recommendation of the Audit Committee, propose the appointment of M/s. Deloitte Haskins & Sells (Chennai), Bangalore for the period from the conclusion of ensuing 33rd AGM till the conclusion of the 36th AGM and seek authority for fixation of their remuneration for the year 2014-15.

The Company has received letter from Deloitte Haskins & Sells (Chennai), Bangalore to the effect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013, and the conditions prescribed read with the Rule 4 of Companies (Audit and Auditors) Rules, 2014 and that they are eligible for such appointment.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed to conduct a secretarial audit of Company''s Secretarial and related records for the financial year 2014-15. The Secretarial standards issued by the Institute of Company Secretaries of India (ICSI) from time to time are currently recommendatory in nature. The Company is, however, complying with most of them.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 along with the Rules there under and revised Schedule VII to the Act, concerning Corporate Social Responsibility (CSR), have been effective from 1st April, 2014. The Company being covered under the provisions of the said section has taken necessary initial steps in this regard. A committee of the Directors, titled ''Corporate Social Responsibility Committee'', has been formed by the Board in its meeting held on 29th April, 2014, consisting of the following Directors:

a. Mr. Amit B. Kalyani, Chairman

b. Mr. B. C. Prabhakar, Member

c. Mr. N. Muthukumar, Member

A policy on CSR has been formulated for the Company and was approved by the Board in its meeting held on 14th August, 2014.

CHANGE IN FINANCIAL YEAR

The new Companies Act, 2013 has mandated the financial year to be in line with the Section 2(41) of the Act which is April to March as against our financial

year October to September. The Act also gives two years'' timeline from the date of its notification i.e., 12th September, 2013. Hence, we had option either to close the year 2013-14 on 31st March, 2014 or to close the year 2014-15 on 31st March, 2015. The Board in its meeting held on 10th February, 2014 decided to close the financial year by 6 months from October 2014 to March 2015, so as to comply with the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to the best standards. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred by the Company to the Investor Education and Protection Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 21 7(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any member interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act 2013" introduced by the GOI, which came into effect from 9th December, 2013. The Company has constituted a Committee and framed a Policy on Prevention of Sexual Harassment at Workplace as per the applicable rules. So far no complaints have been received by the Committee.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2014 the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and 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 as at 30th September, 2014 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive cooperation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued cooperation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysuru B. N. Kalyani Date: 25th November, 2014 Chairman

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Sep 30, 2013

To the Members,

The Directors have the pleasure in presenting the 32nd Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2013.

FINANCIAL RESULTS

(Rs. in Million)

2012-2013 2011-2012

Profit before Depreciation & Tax 470.87 939.63

Less : depreciation & amortisation 285.29 273.88

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 58.60 215.57

Profit After Tax 126.98 450.18

Balance of Profit from Previous Year 2,024.87 1,795.43

Profit available for appropriation 2,151.85 2,245.61

Appropriations :

Dividend for the year 30.22 151.12

Tax on dividend 5.14 24.52

Transfer to General Reserve 12.70 45.10

Surplus retained in Profit & Loss Account 2,103.79 2,024.87

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs. 7154.12 Million as against Rs. 10,445.63 Million for the previous financial year. The Profit Before Tax of Rs. 185.58 Million and the Profit After Tax of Rs. 126.98 Million for the financial year under review as against Rs. 665.75 Million and Rs. 450.18 Million respectively for the financial year.

Despite a volatile economic scenario, your Company launched two new products in 2012-13 - one in the lower variant of 5T axle and the higher variant of 18T reduction axle. Your Company also got a prestigious contract manufacturing order from TELCON for manufacturing the 100T dump truck axle. This places your Company in a completely new segment of axles, expanding our product range from 5T GVW to 100T GVW. Moreover, your Company launched prototypes for four new products: MS04 - 5T axle; HR 610 -18T hub reduction axles; and 6x6 and 8x8 axle for military application.

Your Company will continue to adapt to the evolving market trends and focus on creating a sustainable organisation. Moving ahead, AAL is determined to broaden the product portfolio to address a wider cross-section of auto component industry. You Company has strategically diversified into off-highway and military vehicles segments to try and mitigate the volatility in MHCV segment. Moreover, your Company with many global players eyeing to capitalise on the under-penetrated MHCVs market in India, it gives us an added opportunity to serve them as well.

DIVIDEND

The Directors recommend the payment of dividend of Rs. 2/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

DIRECTORS

Chris Villavarayan was appointed as a non-retiring Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Pedro N. Ferro who resigned from the Board. The Board places its appreciation to Mr. Ferro for his valuable contributions during his tenure.

P C. Bhalerao resigned from the directorship of the company effective 25.11.2013. The Board accepted his resignation and thanked Mr. Bhalerao for the contribution made by him during his tenure on the Board.

Ashok Rao ceased to be a Whole Time Director effective 30.09.2013 consequent to his resignation from the employment with the company. The Board while accepting his resignation, placed on record its appreciation for the services rendered by him during his tenure on the Board.

N. Muthukumar was appointed Additional Director effective 01.10.2013. As he holds office upto the date of ensuing Annual General Meeting, members'' approval is being sought for his appointment and payment of remuneration as Whole Time Director.

Amit B. Kalyani and Joseph A. Plomin were appointed Additional Directors effective 25.11.2013 and hold office up to the date of the ensuing Annual General Meeting where their appointment is being sought as Directors retiring by rotation.

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Bhalchandra B. Hattarki retires by rotation and being eligible, offers himself for re-appointment as Director.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2013 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and 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 as at 30th September, 2013 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2013 on a ''going concern'' basis.

AUDITORS AND AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing AGM and are eligible for re-appointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

COST AUDITORS

In Compliance with the Orders and Circulars issued by Ministry of Corporate Affairs (MCA) with respect to Cost Audit, M/s G.S.R & Associates, Mysore were appointed as Cost Auditors of the Company and the relevant filings with MCA with respect to maintenance of Cost Accounts were made well within in the prescribed time limit.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

The Directors also take this opportunity to express their gratitude and appreciation to all its executives, officers, workers and staff of the Company

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysore Dr. B. N. Kalyani

Date: 25th November, 2013 Chairman

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Sep 30, 2012

To the Members,

The Directors have the pleasure in presenting the 31st Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2012.

FINANCIAL RESULTS

(Rs. in Million)

2011-2012 2010-2011

Profit before Depreciation & Tax 939.63 1,105.28

Less : depreciation & amortisation 273.88 233.93

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 215.57 295.78

Profit After Tax 450.18 575.57

Balance of Profit from Previous Year 1,795.43 1,453.09

Profit available for appropriation 2,245.61 2,028.66

Appropriations :

Dividend for the year 151.12 151.12

Tax on dividend 24.52 24.52

Transfer to General Reserve 45.10 57.56

Surplus retained in Profit & Loss Account 2,024.87 1,795.43

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs.10,445.60 Million as against Rs. 11,144.87 Million for the previous financial year. The Profit Before Tax of Rs. 665.75 Million and the profit After tax of Rs. 450.18 Million for the financial year under review as against Rs. 871.35 Million and Rs. 575.56 Million respectively for the financial year

DIVIDEND

The Directors recommend the payment of dividend of Rs. 10/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

WIND MILL

During the year the Company took up the initiative, along with other group companies, to generate power from Green Energy sources and installed one Wind Turbine Generator with 2.00 MW generation capacity at Tithwa, Gujarat. Total Generation of power from the wind mill during the year was 1742 Lacs KwH (April to September, 2012) which was in turn sold to Gujarat Urja Vikas Nigam Limited.

AUDITORS'' REPORT

The Auditors'' Report to the Shareholders does not contain any qualification.

DISCLOSURE OF PARTICULARS

Information as per the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is provided in the Annexure " A " forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

- In the preparation of the annualaccounts, the applicable accounting standards have been followed and there has been no material departure.

- Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made 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 of the Company for that period.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The annualaccounts have been prepared on an ongoing concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, M/s. B C Prabhakar & Satish Sekhri retires by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of ensuing AGM and are eligible for Reappointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors.

Place: Mysore B. N. Kalyani

Date: 29th November, 2012 Chairman

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Sep 30, 2010

The Directors are pleased to present the Twenty-Ninth Annual Report of your company with the audited accounts for year ended September 30, 2010.

Financial Results (Rs. in Million)

2009-2010 2008-2009

Profit before Depreciation & Tax 868.83 311.66

Less: Depreciaation & amortization 209.95 184.97

Provision for Taxation-Current/ 218.13 30.07

Deferred/Fringe Benefit Tax

Profit After Tax 440.74 96.61

Balance of Profit from Previous 1,205.66 1,167.01 Year

Profit available for appropriation 1,646.98 1,263.63

Appropriations :

Dividend for the year 128.45 41.29

Tax on dividend 21.33 7.01

Transfer to General Reserve 44.10 9.66

Surplus retained in Profit & 1,453.09 1,205.66

Loss Account

Review of performance

The Gross Sales and other income for the financial year under review was Rs.7323.62 Mn as against Rs.2,907.99 Mn for the previous financial year registering a growth of 152%. The Profit Before Tax of Rs.658.87 Mn and the Profit After Tax of Rs.440.74 Mn for the financial year under review as against Rs.126.69 Mn and Rs.96.61 Mn respectively for the financial year, improved by 420% and 356% respectively.

Dividend

The Directors recommend payment of dividend of Rs.8.50 per share of Rs. 10.00 each.

The Dividend Distribution tax shall be paid by the Company and the dividend is exempt from tax in the hands of shareholders.

Fixed deposits

Your company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Auditors Report

The Auditors Report to the Shareholders does not contain any qualification.

Disclosure of Particulars

Information as per the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 relating to conversion of Energy, Technology Absorption, Foreign Exchange Earning and outgo is provided in the Annexure “A“ forming part of this report.

Management Discussion and analysis Report and Report of the Directors on Corporate Governance

In accordance with clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

Particulars of Employees

The Board of Directors wishes to express their appreciation to all the employees for their contribution to operation of the company during the year. The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)iv) of the Act, the report and accounts are being sent to the shareholders of the company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company. None of the employees listed in the said Annexure is related to any Director of the company.

Directors Responsibility Statement

The Board of Directors of the Company confirms that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure:

- Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made 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 of the company for that period.

h Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared on an ongoing concern basis.

Directors

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Mr. B C Prabhakar retires by rotation and being eligible, offers himself for re-appointment.

Mr. P C Bhalerao was appointed a director in casual vacancy created by resignation of Mr. Larry Dowers and he holds office upto the date of ensuing Annual General meeting up to which Mr.Larry Dowers would have held office. In accordance with the provisions of the Companies Act, 1956, Mr. P C Bhalerao retires with effect from the date of the Annual General Meeting. The appointment of Mr. P C Bhalerao as Director liable to retire by rotation is proposed.

Mr.Satish Sekhri who was appointed as an Additional Director on 18th November 2010, holds office only up to the ensuing Annual General Meeting and his appointment has been proposed for the approval of the members.

Auditors

M/s. Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of ensuing AGM and are eligible for Reappointment.

The company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under section 224(1B) of the companies Act, 1956.

Acknowledgements

Your directors take an opportunity to thank the financial institutions, Banks, Central & State Governments Authorities, Regulatory Authorities, Stock Exchanges and the stake holders for their continued co-operation and support to the company.

Your directors wish to place on record their appreciation for the continued co-operation and support received from, the Kalyani Group, Pune, and Arvin Meritor Inc., USA.

For and on behalf of the Board of Directors

Place : Mysore B.N. Kalyani

Date : 18th November 2010 Chairman