GNA Axles Limited 27Th Annual Report 2019-20 Across the Pages

GNA AXLES LIMITED 27th Annual Report 2019-20 ACROSS THE PAGES CORPORATE OVERVIEW STATUTORY REPORTS The World of GNA Axles 2-3 Notice 17 Our Journey of Creating Excellence 4-5 Management Discussion and Analysis 32 Our Diversified Product Suite 6-7 Business Responsibility Report 36 From the Managing Director’s Desk 8-9 Directors’ Report 40 Financial Performance 10-11 Corporate Governance Report 55 Building Value by Expanding Outreach 12-13 Staying Ahead through Our Core Strengths 14 FINANCIAL STATEMENTS Transforming Aspirations into Reality 15 Standalone 64 Board of Directors 16 Consolidated 91 Corporate Information 16 Please find our online version at http://gnagroup.com/investor-relations/ Investor Information Disclaimer: This document contains statements about expected future CIN : L29130PB1993PLC013684 events and financials of GNA Axles Limited, which are forward-looking. By their nature, forward-looking statements require the Company to make BSE Code : 540124 assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward- NSE Symbol GNA looking statements may not prove to be accurate. Readers are cautioned, not to place undue reliance on forward-looking statements as a number Bloomberg Code : GNA:IN of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. AGM Date September 15, 2020 Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in AGM Mode : Video Conferencing (VC) the Management Discussion and Analysis section of this Annual Report. and Other Audio Visual Means (OAVM) RESILIENCE, FOR US, TRANSLATES AS THE ABILITY TO SWIFTLY ADAPT TO UNCERTAINTIES by realIgnIng strategIes. We also vIeW It as a catalyst of sustaInable groWth. OUR PERSEVERANCE AND COMMITMENT IN THE FACE OF ADVERSITY HAS ALLOWED US TO MOVE FORWARD TO EXPLORE EVENTFUL ENDEAVOURS, desPIte turbulent cIrcumstances. The economy experienced a tumultuous year with increased market uncertainties. However, GNA consistently demonstrated its capability to deliver the best-in-class products and par-excellence services to a burgeoning clientele. Our solid foundation, up-to-the-minute technologies and operational proficiency has enabled us to explore new business avenues and provide our customers a world-class experience. With prudent strategies, we continue to focus on creating greater value for our stakeholders with a long-term perspective. Key Performance Indicators 2019-20 ` 90,901.58 Lacs ` 12,450.43 Lacs Annual Turnover EBITDA 13.70% ` 5,275.48 Lacs 5.80% EBITDA Margin PAT PAT Margin Note: EBITDA: Earnings before Interest, Taxes, Depreciation, and Amortisation, PAT: Profit after Tax THE WORLD OF GNA AXLES Incorporated in 1993 and headquartered in Mehtiana, Punjab, GNA Axles Limited (‘GNA’ or ‘The Company’) is one of the largest manufacturers of automotive transmission components globally. GNA manUFACTURES AND SUPPLIES A WIDE ARRAY OF REAR AXLE SHAFTS, OTHER SHAFTS AND SPINDLES FOR LIGHT COMMERCial VEHICLES (LCVS), MEDIUM COMMERCial VEHICLEs (‘MCVs’) AND HeavY COMMERCial VEHICLEs (‘HCVs’), oTHER TRANSPORT VEHICLES SUCH AS BUSES AND FOR OFF-HIGHWAY APPLICatiONS. GNA has strong manufacturing prowess with one of the largest integrated plants. The Company’s world-class manufacturing facilities are located at Mehtiana (Hoshiarpur) and Gulabgarh Jattan (Kapurthala) in Punjab. Over the years, the Company has positioned itself as a major supplier in the automotive components market with reliable offerings, best-in-class service and a colossal clientele. 2 GNA Axles Limited 1 Corporate Overview 2 Statutory Reports 3 Financial Statements 26+ years 25.92 lac units 2.73 lac units experience rear axle shafts manufactured other shafts manufactured in 2019-20 in 2019-20 5.18 lac units 1,272 spindles manufactured driven employees as in 2019-20 on march 31, 2020 Annual Report 2019-20 3 OUR JOURNEY OF CREATING EXCELLENCE 1994 2002-2003 2007 2009 Accorded with Set foot in the global Commissioned Started with the the Certificate grounds by exporting 66 kVA dedicated export of spindles for business its world-class electricity supply line commencement products to USA and for Unit I Europe 1993 1995 2004 2008 GNA Axles Limited Commenced the Installed 13” Up Invested in forging laid the grounds of supply of fully- setter with new heat technology for rear existence finished and ready-to- treatment shop axle shafts with direct assemble mechanised drive screw press axle shafts to OEMs of supported by robots the likes of Mahindra & Mahindra Limited 4 GNA Axles Limited 1 Corporate Overview 2 Statutory Reports 3 Financial Statements 2013 Introduced the Lasco extrusion press, supported by robots and the electric heat treatment furnace at 2016 2018 2020 Unit II. Commissioned Launched Initial Commissioned a new [ ] direct drive screw press Public Offering and machine shop for off- for heavy axle shaft got listed on NSE and highway axle shafts forgings supported by BSE robots at Unit I 2012 2015 2017 2019 Commissioned Unit Commissioned Started with the Started setting up II with the facility for 66 kVA dedicated construction of the the SUV plant commercial vehicle electricity supply line new forging shop and axle shafts and for Unit II machining line for spindles machining SUV axles Annual Report 2019-20 5 OUR DIVERSIFIED PRODUCT SUITE With comprehensive knowledge, extensive experience and continual innovation, we have created a diversified product portfolio. REAR AXLE SHAFTS GNA primarily manufactures and supplies a varied range of high-quality rear axle shafts for on- highway and off-highway vehicles. The Company manufactures various axle shafts that range from 5 kg to 65 kg with a capacity to manufacture up to 165 kg input weight. Rear axle shafts contributed to 82.26% of the total revenue and 76.62% of the components manufactured in 2019-20. 25.92 Lac Units Manufactured in 2019-20 OTHER SHAFTS The Company manufactures various other shafts 3.60 MPPA including the drive shafts, power take-off shafts, hydraulic lift shafts and transmission shafts. These Axle Shafts Capacity shafts are a part of transmission assembly for any automobile. Other shafts contribute to 4.57% ` 69,233 Lacs of the total revenue and 8.08% of components Contribution to the Total Revenue manufactured in 2019-20. 2.73 Lac Units Manufactured in 2019-20 SPINDLES GNA manufactures spindles to cater the needs of on- 0.70 MPPA highway vehicular segments. Spindle acts as a part of Spindles Capacity axle housing assembly for an automobile contributing to 13.17% of the total revenue and 15.30% of components manufactured in 2019-20. ` 3,847 Lacs Contribution to the Total Revenue 5.18 Lac Units Manufactured in 2019-20 0.80 MPPA Spindles Capacity ` 11,083 Lacs Contribution to the Total Revenue Note: Units in pieces, MPPA: Million pieces per annum 6 GNA Axles Limited 1 Corporate Overview 2 Statutory Reports 3 Financial Statements Annual Report 2019-20 7 FROM THE ManaGING DIRECTOR’S DESK dear shareholders, We undertook all the necessary measures to ensure the safety and well-being of our people. I’m truly pleased to present the Annual Report for the financial year 2019-20 before all of you. The end of 2019-20 was a period of significant external challenges, 2019-20 witnessed a global pandemic that transfigured even before the Covid-19 crisis. Global markets witnessed our lifestyle, altering the way we live, work, and interact. slackened demand and low consumer sentiment. Covid-19 had a severe impact on the social and economic Weakening of the macroeconomic environment, liquidity activities across the world. The Company continued to crunch and policy uncertainties majorly contributed navigate through the challenges by demonstrating its to volatility in the Indian economy. The crucial macro resilience and quickly adapting to the emerging realities. indicators such as GDP growth, Index of Industrial Production (IIP) growth, consumer price index along with automobile sales remained subdued during the year. 8 GNA Axles Limited 1 Corporate Overview 2 Statutory Reports 3 Financial Statements Despite the turbulent scenario, the Company delivered a the industry. Our success is reliant on the knowledge, satisfactory performance during the year. The Company innovation, and commitment of our talent pool. During reported a Total Revenue of ` 910 Cr and Profit after Tax the year, we undertook several initiatives to up skill our of ` 52.75 Cr. The slowdown in the domestic tractor and workforce to stay ahead in the markets in which we CV industry impacted our business. Further, imposition of operate. We also pride ourselves on being a responsible nationwide lockdown to contain the pandemic impacted organisation that is committed to improving the quality of our manufacturing operations and performance. life of communities we live and work within. However, the anticipated demand revival in both the Looking ahead, we will continue to serve our customers tractor and CV segments, in the domestic market, under with quality and commitment. We aim to strengthen the current financial year, poses more opportunities in the our manufacturing prowess and execution capabilities long-term. Post the lockdown, the Company has been to deliver innovative products. We optimistically move experiencing good demand from the domestic tractor towards the coming year as we see ourselves reaping segment on the

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