Automotive Axles Ltd

To the Members,

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:

(' in million)

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 '10/- 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 DistributionX20Policy.pdf

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.

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.

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

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

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.

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) NonExecutive 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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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