AFFLUENCE

  NOTICE

  GNA AXLES LIMITED

Regd. Office: GNA HOUSE, 1-C Chhoti Baradari Part � II, Opposite Medical College, Garha Road Jalandhar 144001.

Notice is hereby given that 21ST  Annual General Meeting of the shareholders of GNA Axles Limited will be held on Monday, the 21st day of July 2014 at 11:00 A.M at the Registered Office of the Company at  Jalandhar   to transact the following Business:-

ORDINARY BUSINESS

1.      To receive, consider and adopt the Audited Balance Sheet of the Company as on 31st March, 2014 and Profit and Loss Account for the year ended on that date together with the reports of Auditor's and Directors thereon.

2.      To appoint a Director in place of  S. Jasvinder Singh (DIN 01831572), who retires by rotation and being eligible offers himself for reappointment.

3.       To appoint a Director in place of S. Kulwin Seehra (DIN 03522812), who retires by rotation and being eligible offers himself for reappointment.

4.      To appoint a Director in place of S. Gursaran Singh (DIN 00805558), who retires by rotation and being eligible offers himself for reappointment.

5.       To appoint M/s G.S Syal and Co. Chartered Accountants, the retiring Auditors as the Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting, on such remuneration as agreed upon by the Board of Directors and Auditors in connection with the audit of the Company for the year ending 31st March 2015. 

SPECIAL BUSINESS:

6.      To consider and if thought fit to pass the following Resolution with or without modification(s), as Special Resolution:

�RESOLVED that in supersession of the resolution passed under Section 293(1)(d) of the Companies Act, 1956 at the Extra- Ordinary General Meeting of the Company held on December  12, 2011 and pursuant to Section 180(1)(c) and other applicable provisions, if any, of the Companies Act, 2013, as amended from time to time, the consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the �Board� which term shall include any committee thereof for the time being exercising the powers conferred on the Board by this Resolution) for borrowing from time to time, any sum or sums of monies, which together with the monies already borrowed by the Company (apart

from temporary loans obtained or to be obtained from the Company's bankers in the ordinary course of business), may exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that the total outstanding amount so borrowed shall not at any time exceed the limit of Rs. 500 crore.�

�RESOLVED FURTHER that the Board be and is hereby authorized and empowered to arrange or settle the terms and conditions on which all such monies are to be borrowed from time to time as to interest, repayment, security or otherwise howsoever as it may think fit and to do all such acts, deeds and things, to execute all such documents, instruments and writings as may be required.�

7.      To consider and if thought fit to pass the following Resolution with or without modification(s), as Special Resolution:

�RESOLVED that in supersession of the resolution passed under Section 293(1)(a) of the Companies Act,1956, at the Extra- Ordinary General Meeting of the Company held on December 12, 2011 and pursuant to Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013, as amended from time to time, the consent of the Company be and is hereby accorded to the creation by the Board of Directors of the Company (hereinafter referred to as the �Board� which term shall include any committee thereof for the time being excerising the powers conferred on the Board by this Resolution) of such mortgages, charges and hypothecations as may be necessary on such of the assets of the Company, both present and future, in such manner as the Board / Committee of the Board may direct to secure rupee term loans/foreign currency loans, debentures, bonds and other instruments of an outstanding aggregate value not exceeding Rs.  500.00 crore together with interest thereon at the agreed rates, further interest, liquidated damages, premium on pre-payment or on redemption, costs, charges, expenses and all other moneys payable by the Company to the Lending Agencies under their respective Agreements / Loan Agreements / Debenture Trust Deeds entered / to be entered into by the Company in respect of the said borrowings.�

�RESOLVED FURTHER that the Board be and is hereby authorized to finalize with the Lending Agencies the documents for creating the aforesaid mortgages, charges and/or hypothecations and to accept any modifications to, or to modify, alter or vary, the terms and conditions of the aforesaid documents and to do all such acts and things and to execute all such documents as may be necessary for giving effect to this Resolution.�

8.      To consider and if thought fit to pass the following Resolution with or without modification(s), as Special Resolution:

�RESOLVED THAT pursuant to provisions of section 14 and all other applicable provisions of Companies Act, 2013 read with Companies (Incorporation) Rules 2014 (including any statutory modifications(s)  or re- enactments thereof, for time being in force)the draft regulations contained in the Articles of Association submitted to this meeting be and are hereby approved and adopted in substitution, and to the entire exclusion, of the regulations contained in the existing Articles of Association of the Company�.

9.      To consider and if thought fit to pass the following Resolution with or without modification(s), as Special Resolution:

�RESOLVED THAT pursuant to provisions of section 188(1)(b), 188(3) of the Companies Act 2013 read with  rule 15 of the Companies (Meetings of Board and its Powers), Rules, 2014, approval of the shareholders be and is hereby given / the action of the Board of Directors be and is hereby ratified to purchase the 256 square yards of Property out of total 512 square yards of property situated at M-41, Greater Kailash Delhi for a total amount of Rs. 5,00,00,000/- (Five Crores Only) from Mr. Rachhpall Singh Chairman of the Company.�

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all the acts and things necessary to conclude the above transaction .�

By order of the Board

                                                                                          FOR GNA AXLES LIMITED

Place: Jalandhar                                                                               Gursaran Singh

Dated: 20.06.2014                                                                          (Managing Director)

Notes:

1.      A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING.

2.      Member desiring any information as regards to the accounts of the Company are requested to write to the Company atleast one week in advance so as to enable the management to keep information ready, as far as possible, at the meeting.

3.      Members are requested to please notify any change in their address immediately to the Company at its registered office.

4.      Members are requested to bring their copies of Annual Report to the Meeting.

5.      The copies of the relevant documents can be inspected at the Registered Office of the Company on any working day between 10:30 AM to 12:30 PM.

EXPLANATORY STATEMENT

The following Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (�Act�) sets out all material facts relating to item no 6 and item no 7 of the notice.

At the Extra-ordinary General Meeting of the Company held on December 12, 2011, the Members had, by way of Ordinary Resolutions and in pursuance of the provisions of Section 293(1)(a) and (d) of the Companies Act, 1956, approved of:

(i) borrowing monies on behalf of the Company (apart from temporary loans obtained or to be obtained from the Company's bankers in the ordinary course of business) 100.00 crores in excess of paid up Capital and free reserves of the Company at any point of time; and

(ii) creation of a mortgage or charge for the said borrowings, as security by way of mortgage / hypothecation on the Company's assets in favour of lending agencies and trustees for the amounts borrowed i.e. upto Rs. 100.00 crores in excess of paid up share capital and free reserves of the Company, including interest, charges, etc. payable thereon, as the documents for the said purpose could contain the power to take over the management of the Company, in certain events.

Under Section 180 of the Act, the above powers of the Board are required to be exercised only with the consent of the company by a Special Resolution. The Ministry of Corporate Affairs (�MCA�) has vide its General Circular No 4/2014 dated March 25, 2014 clarified that the Ordinary Resolutions passed under Sections 293(1)(a) and 293(1)(d) of the Companies Act, 1956 would be sufficient compliance of Section 180 of the Act until September 11, 2014.

The approval of the Members for the said borrowings and creation of a mortgage or charge for the said borrowing is therefore now being sought, by way of a Special Resolutions, pursuant to Section 180(1)(c) and 180(1)(a) of the Act respectively.

The Directors commend the Resolutions at Item Nos. 1 and 2 of the accompanying Notice for the approval of the Members of the Company.

None of the Directors and Key Managerial Personnel of the Company or their respective relatives is concerned or interested in the passing of the Resolutions at Item Nos. 6 and 7.

The Board commends the Special Resolution set out at Item No. 6 and 7  of the Notice for approval by the shareholders.

EXPLANATORY STATEMENT

The following Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (�Act�) sets out all material facts relating to item no 8.

The existing AoA are based on the Companies Act, 1956 and several regulations in the existing AoA contain references to specific sections of the Companies Act, 1956 and some regulations in the existing AoA are no longer in conformity with the Act.

The Act is now largely in force. On September 12, 2013, the Ministry of Corporate Affairs (�MCA�) had notified 98 Sections for implementation. Subsequently, on March 26, 2014, MCA notified most of the remaining Sections  However, substantive sections of the Act which deal with the general working of companies stand notified. With the coming into force of the Act several regulations of the existing AoA of the Company require alteration or deletions in several articles. Given this position, it is considered expedient to wholly replace the existing AoA by a new set of Articles. The new AoA to be substituted in place of the existing AoA are based on Table �F' of the Act which sets out the model articles of association for a company limited by shares.

None of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or interested, financially or otherwise, in the Special Resolution set out at Item No. 8 of the Notice.

The Board commends the Special Resolution set out at Item No. 8 of the Notice for approval by the shareholders.

EXPLANATORY STATEMENT

The following Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (�Act�) sets out all material facts relating to item no 9.

The Board of Directors in its meeting held on 26th April 2014 has, subject to the approval of the shareholders in the General Meeting, approved the purchase of property measuring 256 square yards situated at M-41 greater Kailash New Delhi from S. Rachhpall Singh � the Chairman of the Company at an agreed price of Rs. 5,00,00,000/- (Rupees Five Crores Only). This facility shall be used by the Company's executive as rest house and will be beneficial to the Company. As per the provisions of section 188 of the Companies Act 2013 read with rule 15 of the Companies (Meetings of Board and its Powers) Rules 2014 this transaction is required to be ratified by the shareholders of the Company within a period of three months after its approval by the Board.

None of the Directors / Key Managerial Personnel except S. Rachhpall Singh himself and S. Gursaran Singh and S. Jasvinder Singh being relatives of S. Rachhpall Singh are concerned or interested in this resolution.

The Board commends the Special Resolution set out at Item No. 9 of the Notice for approval by the shareholders.

                                                                                                By order of the Board

                                                                                          FOR GNA AXLES LIMITED

Place: Jalandhar                                                                               Gursaran Singh

Dated: 20.06.2014                                                                          (Managing Director)

                                            DIRECTORS REPORT

Dear Members,

The Directors of your Company have pleasure in presenting their 21ST  Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2014

FINANCIAL PERFORMANCE

                                                                                                              Amount (Rs in Lacs)

SALES TURNOVER:

During the year under review, your company has registered a turnover (including exports)  of Rs.  40157.86 lac as compared to Rs 34606.64 lacs showing a decrease of  16.04 % over the previous year turnover. The export (including indirect exports) of the Company also decreased from Rs. 14333.10 lacs  to Rs. 11733.48   lac, showing an increase of   22.16 % . PROFITS

The Company earned profit before depreciation, Financial costs and tax of Rs. 5101.67 lac as against Rs. 4396.46 lac in the previous year. After providing for depreciation of Rs. 1736.21  lac, (Previous year Rs. 1362.51 lac), Financial costs of Rs. 1518.77  lac (previous year Rs. 1270.80  lac), current tax Rs. 391.00 lac (Previous year Rs.  4861455.69 .00 lac) the net profit worked out to Rs. 1455.69  lac as compared to Rs. 1277.16  lac in the previous year.

RESOURCES UTILISATION:

i)          Fixed Assets: The Net fixed assets as at 31st March, 2014 were Rs. 16906.47  lac as compared to Rs. 13653.62  lac in the previous year.

ii)                 Current Assets:. The net current assets as on 31st March, 2014 were Rs. 2442.63 lac as against Rs. 551.28 lac in the previous year. Inventory level was at Rs.  6124.62 Lacs  as against the previous year level of Rs. 5294.93 Lac.

INTERNAL CONTROL SYSTEM:

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organisation is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organisation. Your Company has also implemented SAP owing to which there has been a drastic change in the accounting as well as internal control systems of the Company and it has strengthened the inventory control, planning and its  implementation in the working of your Company.

MANAGEMENT DISCUSSION ANALYSIS AND PERCEPTION OF RISK and CONCERN:

The year under review has been a tough year for the economy both globally and domestic. of our Country. The industry continue to grow below the longer trend. The macro environment continued to remain tough. The economy of the country which was structurally weak and suffering from lower growth as it entered the fiscal year 2013-2014 continued to struggle with these factors during the whole year with GDP growth estimated to be 4.9 %.

There have been some signs of recovery shown by the economy by the end of year 2013-2014. The reduction in the trade deficit due to reduction in imports and moderation of WPI to 5.9 % were the main reasons for this silver lining. Now, we also expect an improvement in the economy as there has been a new Government formed in the centre with a majority of its own, one can expect a speedy decisions making.

The demand in the Commercial Vehicles and Construction equipment segments was contracted which effected the growth of the Company. There  has been a spectacular growth in the Indian Tractor market which was over 20% in the year 2013-2014 owing to a very good monsoon and healthy growth in the agriculture segment.  This growth in the Tractor / agriculture  segment coupled with increase in exports of the Company has has helped the Company to cross the 400.00 crore turnover mark for the first time in its history.

There have been risks associated with businesses at the operational level and the Company takes steps to mitigate these risks through internal controls and processes.

GNA Axles is an Original equipment Manufacturer supplier and our relationship with our customers is of paramount importance and it also affects our growth. We are focusing on increasing our customer base so as to mitigate the risk of loosing revenues if our customer moves out. Another risk that is associated with our business is the risk of increase in the input cost. The increases in the input cost, if not passed on, can lead to shrinkage in the margins. The available of credit and liquidity  and the exchange rate fluctuations also effects the business of the Company. As of now, the company is on a firm footing and is well positioned to service its debt.

There have been great expectations from the new Government but the new policy changes and its impact in the Indian Economy will take some time. We are confident that the auto component industry alongwith the Auto Sector as a whole will be able to perform better in the current Financial Year. We hope that we will continue to make new relationships both in the domestic and export markets and FY 2014-2015 will be a year in which we will be able to have spectacular growth and create value for our stakeholders.

HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Company continues to lay emphasis on building and sustaining an excellent organisation climate based on human performance. Performance management is the key word for the Company. Pursuit of proactive policies for industrial relations has resulted in peaceful and harmonious situation on the shop floors of both the plants of the Company.

SUBSIDIARIES:

The Company does not have any subsidiary Company.

PUBLIC DEPOSITS:

The Company has not accepted any Public deposits during the year ended 31st March 2014.

DIVIDEND:

In view of the ongoing and future expansions and to conserve the funds for expansions your Directors do not recommend any Dividend for the Financial Year 2013-2014

DIRECTORS:

S. Jasvinder Singh (DIN 01831572), S. Kulwin Seehra (DIN 03522812) and S. Gursaran Singh (DIN 00805558)  Directors of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting of the Company, pursuant to the Articles of Association of the Company and being eligible offer themselves for re appointment.

CORPORATE GOVERNANCE:

Though your Company is not a listed Company ,it has tried its best to comply with requirements of the Corporate Governance.

Your Company always performs to achieve optimum results at all levels by adhering to good Corporate Governance practices such as following:Fair and Transparent business principles and practices Effective Management control by the Board Accountability for Performance. Delegation of Authority and Assignment of Responsibility Monitoring of Executive Performance by the Board Compliance of Laws and Ethics Transparent and timely disclosure of financial and management information

AUDIT COMMITTEE:

At present the audit committee of the Company consists of S. Ranbir Singh, S. Gurdeep Singh and S. Kulwin Seehra with S. Gurdeep Singh as its Chairman. The Company will reconstitute its audit committee once the appointment of the independent Directors is made.  

CSR COMMITTEE

The Company will be constituting CSR Committee of the Board during the year after the appointment of Independent Directors.

 AUDITORS:

M/s. G.S. Syal and Co., Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting, and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

The Company has received certificate from the Auditors to the effect that their appointment, if made, would be within the provisions laid down u/s 141 of the Companies Act, 2013.

AUDITORS' REPORT:

Auditors' Report and Notes on Accounts are self-explanatory and do not call for any explanation.

COST AUDITORS:

The Cost Auditors Report for the Financial year 2013-2014 will be forwarded to the Central Government as required under law. The Company has not appointed Cost Auditors for the FY 2014-2015 because the Industry in which the Company is operating has  been excluded by the Central Government from the purview of cost audit.

SECRETARIAL AUDITORS

As per the provisions of section 204 of the Companies Act 2013, the Board of Directors in its meeting held on 20th June 2014 has appointed M/s H.K and Associates, Companies Secretaries Jalandhar as Secretarial Auditors of the Company for the FY 2014-2015.

STATEMENT OF PARTICULARS OF EMPLOYEES u/s 217(2A):

None of the employees of the Company was In receipt of the remuneration as specified under section 217 (2A) of the Companies Act 1956.      

TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION

Information required by section 217 (1)(e) of Companies Act 1956, as amended with regard to conservation of energy, technology etc is given as annexure to this report in the prescribed forms.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section-217(2AA) of the Companies Act, 1956, the Directors confirm that -

a)         in the preparation of the annual accounts, the applicable accounting standards have been followed;

b)         appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on 31st March, 2014;

c)         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; and

d)                 the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:               Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep sense of appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

Date: 20th June 2014                         FOR AND ON BEHALF OF THE BOARD

Place : Jalandhar

RANBIR SINGH            GURSARAN SINGH

DIRECTOR               MANAGING DIRECTOR

ANNEXURE TO DIRECTORS REPORT

INFORMATION PURSUANT TO SECTION 217 (1) (E) OF THE COMPANIES ACT � 1956, (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES, 1988  FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31.03.2014.

 CONSERVATION OF ENERGY

Adequate measures have been taken for energy conservation and thereby to reduce energy cost. The Company has also set up a separate wing for energy conservation. Further the Company has constituted a Quality Council  to look after various improvement activities in the work area, one of which is the Energy Conservation. The main tasks of which are given below:Regular auditing of Oil, and Power conservation. Implementing the latest technology to reduce energy losses. Minimizing idle running hours of equipments. Regular monitoring and bench marking of energy equipments.

With the help of the above efforts there was reduction in fuel, and oil consumption resulting in reduction in the cost of production.

                                    PARTICULARS OF ENERGY CONSUMPTION

                                                FORM � A

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

A.  Power and fuel consumption

      1.Electricity

        (a) Purchased                              Current year                    Previous year

              Units (No)                             3,43,15,351                         2,89,35,170        

            Total amount (Rs.)                24,34,59,233                       18,73,25,263                                                                    

               Rate/unit                                  7.09                                      6.47                                                    

        (b) Own Generation

               i)Through diesel generator

                 Units (No.)                          6,48,910                                 7,71,517                                                                                                                                 

                Units per ltr. Of diesel oil    3.04                                        3.47                                                                                          

                 Cost /unit  (Rs.)                  17.76                                      12.28                                                                                                                  

               ii)Through steam turbine/generator

                   Units                                            NA                                          NA

                   Units per ltr. Of fuel oil/gas         NA                                          NA     

                   Cost/units                                     NA                                          NA

      2.Coal(specify quality and where used)

          Quantity ( tonnes)                                 NA                                          NA                 

          Quantity(tonnes)                                   NA                                          NA

           Total cost                                             NA                                          NA

           Average rate                                         NA                                          NA

      3.Furnace oil

         Quantity (MT)                                        576.748                                   792.820                                                                                                                      

         Total amount (Rs.)                                 2,52,57,455                             34364357                                                                                                                  

         Average rate (Rs.)                                  43,792.88                                43344.46                                                                                                                    

      4.Others/internal generation

         Quantity                                                      NA                                                 NA

          Total cost                                                   NA                                                 NA     

          Rate/unit                                                    NA                                                 NA

B.     Consumption per unit of production

  Products (Pieces)                                                     19,50,825            19,02,966                                                    

  Electricity (Unit/Pc)                                                    17.59                                  15.61                                                                  

  Furnace oil (MT /Pc)                                                0.0002                                     0.0004                                                             

  Coal (specify quality)                                                NA                                          NA

  Others(specify)                                                         NA                                          NA

 B. TECHNOLOGY ABSORPTION, RESEARCH and DEVELOPMENT

The Company has started purchasing electricity through open access system through Indian Energy Exchange which has resulted and will further result in reducing the cost of electricity. As result of ongoing improvements the company has been absorbing and localizing the latest technology in production and process with the help of importation of machinery and allied equipments. Initiative planning and absorbing new technology has been taken by the R and D team of the Company by visiting and participating in various trade shows and exhibitions in various parts of India and across the Globe. Further Quality Council is looking after other process improvement activities. For sustainable development and business growth, our focus and objectives are towards a clean environment at the work place and the surroundings. Attempts are made to reduce, reuse, and recycle, for elimination of waste resulting in efficient use of available resources.FOREIGN EXCHANGE EARNING AND OUTGO

I.                   FOREIGN EXCHANGE EARNINGS AND OUTGO :

�         Continued efforts/ initiatives made with a focus on development of new products as well as product extension of the existing lines.

�         Mobilization/ Gearing up of the existing as well as new markets keeping in view the ongoing expansions.

Total Foreign Exchange earned and used :

(Rs. In Lac)

                                                                   2013-2014                                           2011-2012

Earnings in Foreign Exchange                        13991.07                                       11291.60                                               

Foreign Exchange Outgo                                3038.06                                                987.07                                                                                                     

  FOR AND ON BEHALF OF THE BOARD

RANBIR SINGH            GURSARAN SINGH

DIRECTOR               MANAGING DIRECTOR

Dated: 20th June 2014

Place : Jalandhar