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AX1 GUN FACTORY

AX1 gun factory located on Valhi road (NH-2) at a distance of 10 kms from kola railway station on

way to Jhansi is the youngest member of the Weapons, Vehicles and equipment group ordnance of

factories .In view of the importance given to ordnance production in the wake of the Indo-Pak war of

the 1965 and the Bangladesh Liberation war of 1971, it was seen that the load for ordnance factory,

Kola was much more than its capacity. It was then decided by the government to then establish a new

factory which should be self contained unit for production of field guns. While designing the factory,

the approach followed was that ordnance should be manufactured in this factory right from

preparation of desired grade of steel to final assembly , proof and the issue. With the advantage of a

large area of land being available, the layout of AX1 Gun factory was designed very scientifically.

The shops were planned in one row in the order of the initial operation to the last operation.

AXI gun factory has a unique capacity of manufacturing various types of field guns commensurate

with various countries defense needs. The factory has set up with all types of the latest and

sophisticated production processing equipments right from melting, forging to finish machining with abuilt in superlative degree of excellence in quality.

The factory believes in producing stores of highest international quality which is revealed from the

fact that the factory has implemented international quality management system in all spheres of its

production activities. The factory is also having a NABL accredited lab to ensure that all the

measurement devices and instruments used in production activities are calibrated to international

standards.

During the year under review, the Company achieved the following

financial results:

(Rs. Crore)

2012-13 2011-12

Total Income 13482 13094

Profit before tax 1227 833

Provision for taxation 425 261

Net Profit 802 572

During the year under review, your Companystotal income increased by

around 3% to Rs. 13482 crore from Rs. 13094 crore in the previous year.

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There was an increase of 4% in total gun production in almost all

segments. During the year, the raw material prices were stable and this

contributed to the margins of the Company despite depreciation of

rupee. This apart, your Company could achieve improved results, due to

improved operating efficiencies and cost reduction measures which the

Company has undertaken over a period of time.

Two interim dividends of Rs. 3 each per share (30% each) for the year

ended 30th September, 2013 were declared by the Board of Directors on

25-07-2013 and on 24-10-2013. The Board of Directors is now pleased to

recommend a final dividend of Rs. 24 per share (240%) on the paid- up

equity share capital of the Company, for consideration and approval of

the shareholders at the Annual General Meeting. With this, the total

dividend for the entire year works out to Rs. 30 per share (300%). The

total amount of dividends aggregates to Rs. 12.72 crore.

The Directors recommend that after making provision for taxation,

debenture redemption reserve and proposed dividend, an amount of Rs.

758.82 crore be transferred to General Reserve. With this, the

Companys Reserves and Surplus stands at Rs. 3640.90 crore.

Industrial Relations

Overall, the industrial relations in all our manufacturing units have

been harmonious as well as cordial, except in Kanpur unit wherein the

unions resorted to various forms of work stoppages and strikes which

affected the production to a large extent and in domlur unit on

certain issues. Both production and productivity were maintained at the

desired satisfactory levels throughout the year.

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Exports

The Companys exports stood at Rs. 1 293 crore for the year ended 30th

September, 201 3 as against Rs. 1281 crore for the previous year.

It was a very challenging year for the Company with the global markets

showing very clear signs of a slowdown resulting in over supply and

prices going on a downward spiral. In spite of these factors, export

revenues posted a nominal growth of 1% over the previous year.

Deposits

2 deposits aggregating Rs. 0.70 lakh remain unclaimed as at the close of

the year ended 30th September, 201 3.

Awards received during the year

During the year, the Company won the A Z Power Award for customer

satisfaction for the 1 0th time in the last 13 years. AX1 was also

awarded the Highest Export Award by the All India

weapons Industries Association yet another time during the

period under review.

Balance Sheet of AX1

---------------- in Rs. Cr. ---------------

Sep 13 Sep 12 Sep 11 Sep 10

12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 4.24 4.24 4.24 4.24

Equity Share Capital 4.24 4.24 4.24 4.24

Share Application Money 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00

Reserves 2,853.56 2,293.53 1,686.44 1,357.18

Revaluation Reserves 0.00 0.00 0.00 0.00

Net worth 2,857.80 2,297.77 1,690.68 1,361.42

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Secured Loans 1,433.34 1,209.30 541.95 189.75

Unsecured Loans 198.09 306.96 410.54 103.04

Total Debt 1,631.43 1,516.26 952.49 292.79

Total Liabilities 4,489.23 3,814.03 2,643.17 1,654.21

Sep '12 Sep '11 Sep '10 Sep '09

12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 5,062.51 3,831.82 3,367.90 2,734.33

Less: Accum. Depreciation 2,148.71 1,860.44 2,038.99 1,800.77

Net Block 2,913.80 1,971.38 1,328.91 933.56

Capital Work in Progress 414.65 1,135.25 497.72 286.24

Investments 424.71 72.69 77.67 148.57

Inventories 1,645.59 1,526.02 1,110.68 650.47

Sundry Debtors 1,454.09 1,308.09 811.49 580.03

Cash and Bank Balance 61.10 55.98 52.27 59.60

Total Current Assets 3,160.78 2,890.09 1,974.44 1,290.10

Loans and Advances 298.33 269.14 142.29 405.59

Fixed Deposits 0.00 1.26 0.52 0.29

Total CA, Loans & Advances 3,459.11 3,160.49 2,117.25 1,695.98

Deferred Credit 0.00 0.00 0.00 0.00

Current Liabilities 2,488.51 2,318.22 1,202.25 966.41

Provisions 234.53 207.56 176.13 443.73

Total CL & Provisions 2,723.04 2,525.78 1,378.38 1,410.14

Net Current Assets 736.07 634.71 738.87 285.84

Miscellaneous Expenses 0.00 0.00 0.00 0.00

Total Assets 4,489.23 3,814.03 2,643.17 1,654.21

Contingent Liabilities 404.11 551.10 918.85 513.34

Book Value (Rs) 6,738.28 5,417.81 3,986.38 3,210.03

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