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Automotive Axles Ltd.

BSE: 505010 Sector: Auto
NSE: AUTOAXLES ISIN Code: INE449A01011
BSE 00:00 | 27 May 1506.75 -61.90
(-3.95%)
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1502.00

HIGH

1570.25

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1485.00

NSE 00:00 | 27 May 1508.20 -58.70
(-3.75%)
OPEN

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HIGH

1570.00

LOW

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OPEN 1502.00
PREVIOUS CLOSE 1568.65
VOLUME 1925
52-Week high 1768.00
52-Week low 1169.05
P/E 30.62
Mkt Cap.(Rs cr) 2,277
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1502.00
CLOSE 1568.65
VOLUME 1925
52-Week high 1768.00
52-Week low 1169.05
P/E 30.62
Mkt Cap.(Rs cr) 2,277
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Automotive Axles Ltd. (AUTOAXLES) - Director Report

Company director report

To the Members

Your Directors have the pleasure in presenting the 40th Annual Report on the businessand operations of your Company together with the Audited Statements of Accounts for thefinancial period ended March 31 2021:

Financial Highlights

Particulars 2020-2021 2019-2020
Total Revenue 9126.48 9596.81
Profit before depreciation & tax 661.68 971.76
Less : Depreciation and amortization expenses 360.03 372.22
Tax expenses 74.35 188.20
Profit for the year after tax 227.30 411.34
Other comprehensive income/(Loss) for the year net of tax 5.96 (5.04)
Total comprehensive income for the year 233.26 406.30
Balance of Profit from Previous Year 4593.84 4658.87
Less: Dividend 12.08 385.36
Dividend Distribution tax on Dividend - 79.21
Effect of adoption of Ind AS 116 (net of taxes) - 6.76
Profit available for appropriation 4815.02 4593.84

Dividend

The Board at its meeting held on May 14 2021 is pleased to recommend a dividend of '4.50/- per Equity Share of the face value of '10/- each for the financial year ended March31 2021 subject to the approval of shareholders at the ensuing Annual General Meeting tobe held on Tuesday August 10 2021.

The total amount of Dividend aggregates to '68 million.

The register of members and share transfer books will remain closed from August 5 2021to August 10 2021 (both days inclusive) for the payment of final dividend to theshareholders of the Company for the year ended on March 31 2021.

The Dividend will be paid to members within 30 days from the date of declaration ofdividend whose names appear in the Register of Members as on August 4 2021.

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

Pursuant to provisions of the Companies Act 2013 the declared dividends whichremained unpaid or unclaimed for a period of seven years shall be transferred by theCompany to the Investor Education and Protection Fund (IEPF) established by the CentralGovernment.

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

Accordingly the Company has sent notice to the respective shareholders who have notclaimed their dividend for seven consecutive years or more and the newspaper advertisementstating the same has been published in the newspapers.

In terms of the provisions of the Companies Act 2013 and Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 a sum of'117150/- which is unpaid/unclaimed dividends pertaining to the FY 2012-13 wastransferred to the Investor Education and Protection Fund during the year.

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

Performance of the Company

The total income for the financial year under review was '9126.48 million as against '9596.81 million for the previous financial year. The Profit before tax (PBT) was '301.65million for the financial year under review as against ' 599.54 million for the previousfinancial year.

Share Capital

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

Deposits

Your Company has not accepted any deposits under Chapter V of the Companies Act 2013during 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 StockExchange of India Limited. There are no arrears on account of payment of listing fees tothe Stock Exchanges.

Directors & Key Managerial Personnel:

As on March 31 2021 there were seven (7) Directors on the Board of your Companyconsisting of four (4) Independent Directors one (1) Executive Director and two (2)NonExecutive Directors of whom one is the Chairman.

There were no changes in the Board during the year except for the ratification of theappointment of Mr. Srinivasan Kumaradevan as a Wholetime Director for a period of 5 yearswith effect from August 14 2019.

However after the closure of the financial year Mr. Kenneth James Hogan (DIN:0009161738) was appointed as an Additional Director of the Board based on nominationreceived from the Meritor Heavy Vehicle System LLC one of the promoters and also on therecommendation of Nomination & Remuneration Committee of the Company in place of Mr.Chrishan Anton Sebastian Villavarayan (DIN: 03020467) who resigned from the Board witheffect from May 14 2021. The Board places its appreciation for Mr. Chrishan AntonSebastian Villavarayan's valuable contributions during his tenure. Mr. Hogan holds theoffice upto the ensuin g An nual General meeting and his appointment is being sought to beregularised at the ensuing Annual General Meeting.

In terms of the provisions of the Companies Act 2013 Dr. B. N. Kalyani of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence and that there has been nochange in the circumstances which may affect their status as independent director duringthe year as prescribed under sub-section (6) of Section 149 of the Companies Act 2013 andSecurities 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 theData bank maintained by the Indian Institute of Corporate Affairs of Independent directorsas 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 theBoard 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 evaluationframework. Pursuant to these provisions the Company has developed a framework for theBoard evaluation. The framework includes evaluation on various parameters such asinformation flow Board dynamics decision making company performance and strategy Boardand committee's effectiveness and peer evaluation.

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

During the year 2020-21 Independent Directors met on February 5 2021 discussed andreviewed 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 betweenthe Company management and the Board Members.

• Overall performance of the Company.

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

Familiarization program for the Board Members

Your Company has in place a structured induction and familiarization programme for allits Directors including Independent Directors and new appointee(s) to the Board. Throughsuch programs the Directors are briefed on the background of your Company their rolesrights responsibilities nature of the industry in which it operates business modeloperations ongoing events etc.

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

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

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

Directors' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement your Directors make the followingstatements:

(a) i n the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

(b) we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at March 31 2021 and of the profit of thecompany for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 andthat such internal financial controls are adequate and were operating effectively;

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

Auditors & Auditors' Report

a. Statutory Auditors

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

The Auditors' Report does not contain any qualification reservation or adverseremarks.

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-appointmentof M/s PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for theFinancial Year 2021-22.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act 2013 and the rulesmade there under and based on the recommendations of the Audit Committee CS Pracheta MPracticing Company Secretary has been appointed to conduct Secretarial Audit of theCompany's secretarial and other related records for the Financial year 2020-21.

The Secretarial Audit Report for the financial year ended March 31 2021 in form MR-3is appended to this report under Annexure - A

Explanation for observations made under Secretarial Audit Report:

One of our employees has traded 100 number of shares during the trading window closureperiod during March 31 2020 to May 28 2020 which is not material and made inadvertentlyand has been reported to Sock Exchanges on May 7 2021. Going forward we will strengthenour reporting mechanism.

Internal Financial Control

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.

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

Corporate Governance

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

The Companies Act 2013 and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 have strengthened thegovernance regime in the country and your Company is in compliance with the governancerequirements provided under the law both in letter and spirit. The Board also exercisesits fiduciary responsibilities in the widest sense of the term.

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

A Certificate from CS. Pracheta M. Practicing Company Secretary confirming compliancewith the conditions of Corporate Governance as stipulated under the aforesaid Regulation34(3) Schedule V (E) of Securities and Exchange Board of India (Listing Obligations andDisclosure 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 inthe Corporate Governance Report. The maximum interval between any two meetings did notexceed 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 thecorporate governance practices and are in compliance with the requirements of theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand 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 theyear is detailed in the corporate governance report of the Company which forms a part ofthis Board's Report.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134 of theCompanies 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 Rule5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 theratio of remuneration of each Director to the median of the employees' remuneration astatement containing the names of top ten employees in terms of remuneration drawn andevery employee who is employed throughout the financial year and was in receipt of aremuneration of '102 lacs per annum or more and of every employee who is employed part ofthe financial year was in receipt of remuneration of '8.50 lacs or more per month isappended as Annexure - C.

Annual Return 2020-21

The copy of Annual Return for the financial year ending March 31 2021 is available athttp://www.autoaxle.com/ Annual_Return.aspx.

Particulars of Loans Guarantees or Investment under section 186 of the Companies Act2013

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 areprimarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with aloan to any other body corporate or persons and has not made any investment in thesecurities of any other body corporate.

Policy on Directors' Appointment & Remuneration

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. On March 31 2021 the Board consist of seven members one of whom isexecutive or whole-time director two are non executive directors and four are independentdirectors out of whom one is an Independent Woman Director.

The Nomination and Remuneration Policy of the Company has been formulated in accordancewith the Act and Listing Regulations. The Policy is designed to guide the Board inrelation to appointment and removal of directors Key Managerial Personnel and SeniorManagement and recommend to the Board on remuneration payable to them. Policy enables theCompany to retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage. The current policy isavailable on Company's website at 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 inthe ordinary course of business and on the arm's length basis.

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

For transactions with Meritor HVS (India) Limited the Company has obtainedshareholders' approval at their 37th Annual General Meeting held on August 13 2018 fortransaction value annually of ' 30000 million p.a for a period of five (5) financialyears starting from April 1 2019.

Further all transactions entered into pursuant to the omnibus approval so granted arereviewed and a statement giving details of all related party transactions is placed beforethe 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 andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 your Company has formulated a Policy on Related Party Transactions which is alsoavailable on Company's website at www.autoaxle.com/Policy.aspx.

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

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

Risk Management System

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

The processes and practices of risk management of the Company encompass riskidentification classification and evaluation. The Company identifies all strategicoperational and financial risks that the Company faces by assessing and analysing thelatest trends in risk information available internally and externally and using the sameto plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by theCompany and monitor the development and deployment of risk mitigation action plans and thestatus is updated to the members of the Audit Committee and the Board of Directors onquarterly 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 theCompanies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014.During the year the Company has spent ' 7.99 million on various CSR activities.

The Annual Report on CSR activities that includes details about the CSR policydeveloped and implemented by the Company and CSR initiatives taken during the year isappended 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 ManagementDiscussion and Analysis (MDA). MDA for the year under review as stipulated underSecurities 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 (ListingObligations and Disclosure Requirements) Regulations 2015 Management Discussion

and Analysis Report is presented in a separate section forming part of the AnnualReport.

Business Responsibility Report

A detailed Business Responsibility Report in terms of the provisions of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is available as a separate section in the Annual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 of the Companies Act 2013 andRegulation 22 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015. Under the policy the Directors and Employeesare free to report any violation of the applicable laws and regulations and the code ofconduct 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 saidmechanism.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

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

In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. The Company has also constituted InternalCommittee as required under the said enactment. During the year under review there wereno cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

Significant or Material Orders

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

Material Changes and Commitments if any affecting the Financial Position of theCompany

There were no adverse material changes or commitments occurred after March 31 2021which 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 Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.

Awards and Recognition

During FY 2020-21 your company received recognitions from the followingbodies/customers as listed below:

1. The Machinist Super Shop Floor Award-2020 received during November 2020.

2. Got certified by Union of Japanese Scientists & Engineers (JUSE) through QualityCircle Forum of India (QCFI) for Implementing best 5S practices & re-certified by QCFI& JUSE in November 2020

3. Bagged Twenty-Two Gold Awards during CII Mysuru Chapter Convention on QualityConcept Kaizens competition (CCQC-2020) in September 2020

4. Won 04 Excellence and 01 Par Excellence award in NCQC-2020 Allied Case StudyPresentation competition during National Convention on Allied Concepts held duringDecember 2020

5. Bagged Silver Award in Challengers Trophy competition held by Confederation ofIndian Industry (CII) as a further part of 37th CII Kaizen Competition during November2020

6. Bagged 2 Silver Awards in 6th Annual 6-Sigma Competition conducted by NationalInstitution of Quality & Reliability December 2020.

Maintenance of Cost records

The maintenance of cost records as specified by the Central Government undersub-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 thecompany 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 financialinstitution during the year under review Rule (8) subrule (4) clause (xii) of Companies(Accounts) Rules2014 is not applicable.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciationfor the employees at all levels for their hard work cooperation and dedication during theyear. Your Directors sincerely convey their appreciation to customers shareholdersbankers business associates regulatory and government authorities for their continuedsupport.

Your Directors wish to place on record their appreciation for the continuedco-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 14 2021 Chairman

.