Motherson Sumi Systems Ltd


BSE: 517334 | NSE: MOTHERSUMI | ISIN: INE775A01035 
Market Cap: [Rs.Cr.] 32,560 | Face Value: [Rs.] 1
Industry: Auto Ancillaries

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Management Discussions and Analysis

OVERVIEW

MSSL has emerged as an industry leader in providing full system solutions to the globalautomotive industry. The Company has expanded globally through a mix of organic andinorganic growth with focus to be a globally preferred supplier. The company hasoutperformed the industry year on year by increasing content per car.

MSSL has been considered as the preferred supplier among OEMs with its ability toprovide end to end solutions, from global manufacturing capability and competitivefootprint to core expertise in all aspects of design, research, engineering anddevelopment. This strength has laid the foundation for ability to capitalize on theupcoming opportunities and to master the challenges that lie ahead.

The year started with clear direction of improving operations of Samvardhana MothersonPeguform (SMP) (acquired on 23 November, 2011) and further enhancing the performance ofexisting business. The Company has performed exceptionally well and delivered strongresults with focus on achieving its Vision 2015.

HIGHLIGHTS

Some of the major accomplishments during 2012-13 are as follows:

1. The Company achieved record turnover of Rs.252 Bn (equivalent to US$ 4.6 Bn).

2. Exponential Growth in sales of 72% on consolidated basis and 20% on standalonebasis. Even without considering Revenue of SMP total sales grew by 22% on consolidatedbasis.

3. Profit before Interest Depreciation and Tax (PBIDT) has substantially increased by79% on consolidated basis and 36% on standalone basis.

4. Profit before Tax (PBT) registered tremendous growth of 103% on consolidated basisand 50% on standalone basis.

5. Profit after Tax (PAT) has significantly improved by 71% on consolidated basis and48% on standalone basis.

6. Samvardhana Motherson Reflectec (SMR) has delivered strong results, recordedsubstantial improvement in profitability along with highest ever annual sales of Rs.69,538Mn (Euro 993 Mn). SMR has delivered strong growth in EBITDA by 61% at Rs.4,511 Mn (Euro 64Mn), PBT by 109% at Rs.2,036 Mn (Euro 29 Mn) and PAT by 179% at Rs.1,074 Mn (Euro 15 Mn).

7. SMP has achieved turnover of Euro 1.8 Bn and various measures initiated postacquisition has resulted in significant improvement in profitability EBITDA at 3.8% ofsales and Adjusted PBT of Rs.180 Mn (before exchange fluctuation on long term loans) inits first full year of acquisition under the Samvardhana banner.

8. MSSL continues to deliver consistent and progressive returns to the shareholders,bonus share in the proportion of 1:2 allotted during the year and dividend of Rs.2 pershare recommended on expanded capital , dividend payout ratio of 31% (Previous year 39.5%)of the consolidated profits after tax.

9. MSSL is achieving synergies through horizontal and vertical integration, suppliedWiring Harnesses of Rs.2,248 Mn (Previous year Rs.1,465 Mn) (excluded in the reportedconsolidated sales of the company) to SMR during 2012-13.

10. The company incurred capital expenditure (on consolidated basis) of Rs. 10,895 Mnmainly for expansion of capacities:

- Wiring Harness division has set-up two new units in Noida (India) and overseas atMexico and Thailand where production already started during the year.

- SMR has started commercial production and supplies from new facilities in Brazil,Thailand and Pune (India) for mirror manufacturing and vertical integration.

- Polymer division has set up new Interior plant in Castellbisbal (Spain), the ramp-upof commercial production and supplies have started during 2012-13. SMP has set up newfacility at Puebla (Mexico) and incurred major capital expenditure at Atibaia (Brazil) forenhancing paint shop capabilities. The impact of these initiatitves has started yieldingresults towards the end of financial year. In India the new facility with robotic paintshop at Ford Supplier Park, Chennai for serving new business from FORD started commercialproduction.

INDIAN VEHICLE & COMPONENT MARKET

The Indian auto component industry faced challenges during 2012-13 with the growth ratesqueezing on account of economic slowdown. The demand was restrained by higher interestrates, inflation, fuel prices, volatile commodity market, industrial unrest and adverseforex fluctuations. The Indian vehicle market, after a few years of consistent goodperformance, witnesseds a distinct slowdown in growth. While passenger vehicle segment sawwitnessed an overall volume growth rate of single digit for consecutive two years i.e. 4%in 201213 and 5% in 2011-12, the sale of Commercial Vehicles declined by 4% afterregistering impressive growth in the last two years. Industrial unrest, high interestrates and slowdown in infrastructure projects contributed to lower demand for commercialvehicles. Two wheelers volume growth was subdued at 2% in comparison with 16% during2011-12.

Figures in Thousand
Segment 2012-13 2011-12 2010-11
Passenger Vehicle
Numbers 3,241 3,124 2,987
Growth Rate 4% 5% 27%
Commercial Vehicle
Numbers 873 912 753
Growth rate -4% 21% 33%
Two Wheelers
Numbers 15,759 15,454 13,376
Growth Rate 2% 16% 27%
Source: ACMA Report

With the Government now focusing on policy decisions, interest rates and growth, thereis an expectation of an improvement in the demand situation. The automobile industry isalso expected to witness a surge and in spite of the current dismal performance the mediumto long-term outlook remains positive with India emerging as a small car hub and all majorglobal players now having base in India for manufacturing, global sourcing as well asengineering.

GLOBAL CAR PRODUCTION

Vehicle Production:

FY 2012-13

Region (in numbers) Apr - Jun Jul - Sep Oct - Dec Jan - Mar
Europe 4,409,933 4,929,691 4,626,678 4,825,894
Middle East/Africa 366,949 447,918 389,932 409,894
North America 3,682,959 3,971,075 3,795,112 3,984,362
South America 1,161,736 1,035,971 1,138,610 1,026,153
Asia (Excluding India) 9,055,340 9,046,430 9,615,310 9,590,380
India 884,396 895,519 934,631 1,010,538
Grand Total 19,561,313 20,326,604 20,500,273 20,847,221

MSSL has performed well in this challenging environment as it has consistentlyincreased its content per car and built trust with customers which reflects in the neworders that the company has received. The company's ability to support customers globallyas full system solutions provider makes it a preferred supplier to the global automobilemanufacturers. The company has improved its financial performance by continuouslyimproving operational efficiencies across the organization.

SEGMENT PERFORMANCE - AUTOMOTIVE / NON AUTOMOTIVE

The Company has organized its business in two reportable operating segments i.e.Automotive and Non - Automotive. The following table shows business augmentation withrespect to segment disclosure during 2012-13:

(Rs. in Million)
2012-13 2011-12 Growth %
Consolidated
Automotive 246,098 141,500 74%
Non Automotive 6,155 5,522 11%
Total 252,253 147,022 72%
Standalone
Automotive 39,083 32,111 22%
Non Automotive 3,330 3,178 5%
Total 42,413 35,289 20%

In automotive segment the company supplies to all the leading automobile manufacturersglobally. The main products offered by the company in this segment are Wiring Harness,High Tension Cords, Wire, Plastic Components, Rubber Components, Cockpit Assembly, Mouldfor wiring harness components and mould parts, Plastic Molded Components, Brass Terminals,Thermo-Formed Products, Polyurethane Molded Products, Blow Molded Products, HVAC Module,Compressors, Body Control Modules, Meters Clusters, Interior Mirrors, Exterior Mirrors,Bumper Systems, Plastic Components for vehicle exteriors, dashboards and vehicle interiortrims.

The contribution of automotive segment in the company's revenue has increased to 98% onconsolidated basis and 92% on standalone basis from 96% and 91% respectively in 2012-13.The growth in the automotive segment and variety of products offered by the Company hascontributed to significant increase in sales by 74% on consolidated basis and 22% onstandalone basis, compared to previous year.

In non automotive segment, MSSL is one of the largest suppliers of wiring harnesses tomanufacturers of material handling equipments and industrial forklifts. MSSL alsomanufactures and assembles water purifiers for HUL in India. The company offers variety ofproducts like Pen-Stamp Assembly, Plastic Components for white goods, Household Wires,Plates, Aerobin, Re-Timer light device, Premium embossed travel case, USB recharging cableto its customers from individual parts to full system solutions.

MSSL sales in this segment contributed growth in revenues by 11% on consolidated basisand 5% on standalone basis. The Company is able to achieve growth by adding customers fromdiversified industries across the globe. The contribution of non-automotive segment in thecompany's revenue is 2% on consolidated basis and 8% on standalone basis.

SALES PERFORMANCE

MSSL has outpaced the market growth during 2012-13 at both domestic and global front.The consolidated sales grew by 72% to the record level of Rs.252 Bn (equivalent to USD 4.6Bn) whereas standalone sales registered a strong growth of 20%.

Sales performance of the company during the year 2012-13 on consolidated and standalonebasis is as follows:

Rs. in Million
2012-13 2011-12 Growth %
Consolidated
Customers within India 45,672 38,226 19%
Customers Outside India 206,581 108,796 90%
Net Sales 252,253 147,022 72%
Standalone
Customers within India 36,616 30,409 20%
Customers Outside India 5,797 4,880 19%
Net Sales 42,413 35,289 20%

MSSL has strengthened its customer base and global presence with the acquisition of SMP(in 2011) and SMR (in 2009). The Company offers wide range of value added products andintegrated solutions to its customers. The Company has presence in 25 countries andconducts its operations from over 126 manufacturing facilities supported by technicalcenters located globally.

The Company's sale to customer outside India has got strong momentum with SMP and itgrew by 90% on consolidated basis while on standalone basis it grew by 19%. The companyhas substantially expanded its customer base globally and further reinforces itsrelationship with existing customers.

On the domestic front, the company witnessed a healthy growth of 19% on consolidatedbasis and 20% on standalone basis despite continuing volatile and depressed marketconditions in the Indian automotive market in 2012-13. The Company is considered as apreferred supplier in the segments dealt with and offer full system solution in eachproduct category to the customers.

REVENUES

MSSL has transformed from a wiring harness manufacturer to a single service interfacefor multiple customer needs. The product profile has been expanded to add new productranges to suit customer needs across various industries in different geographies. MSSL hasbecome a;

- Leading full service supplier of differentiated high quality interior & exteriorpolymer products for the automotive and related Industries globally.

- Leading global suppliers of rear view mirrors to the automotive industry.

- Largest manufacturers of automotive wiring harnesses for passenger cars in India

MSSL also supplies plastic components and modules to the automotive industry. Otherproduct range comprises rubber components for automotive & industrial applications,high precision machined metal parts, injection molding tools, Brass Terminals,Thermo-Formed Products, Polyurethane Molded Products, Blow Molded Products, HVAC Systems,Compressors, Body Control Modules, Meters Clusters, Aerobin, Re-Timer light device,Premium embossed travel case, USB recharging cable and Vehicle Electronics.

MSSL revenues are well diversified geographically by customer and vehicle segment. TheCompany is serving to all major automobile manufacturers across the globe. Along withautomotive industry, the Company is also supplying to major industry segments in the nonautomotive sectors like earthmoving and material handling equipments, agriculture and farmequipment, medical diagnostics, white goods etc.

During the year, the consolidated revenues of MSSL increased by 72% to Rs.252,253 Mnand on a standalone basis, the revenues increased by 20% to Rs.42,413 Mn.

Rs. in Million

2012-13 2011-12 Growth %
Consolidated
Polymer Components* 142,048 56,993 149%
Mirrors 69,469 56,611 23%
Wiring Harness 37,651 30,540 23%
Rubber/Metal machined & other products 3,085 2,878 7%
Total 252,253 147,022 72%
*Includes Sale of SMP 127,843 45,279 182%
Rs. in Million
2012-13 2011-12 Growth %
Standalone
Wiring Harness 31,826 25,688 24%
Polymer Components 10,194 9,303 10%
Rubber/Metal machined & other products 393 298 32%
Total 42,413 35,289 20%

POLYMER

The Polymer Division of the company specializes in developing and manufacturing widerange of products for both vehicle exteriors as well as interiors. Extensive portfolio ofproducts offered consists of comprehensive variety of integrated modules, injectionmoulded components, slush moulded components, blow moulded components and assemblies. TheCompany is well positioned to leverage the global trend of using more plastic content incars, adding more features for comfort and also to upgrade the quality standards withtime.

With 49 molding facilities across globe in India, Brazil, China, Mexico, Sharjah,Germany, Portugal, Slovakia, South Africa, Spain and Czech Republic, Polymer divisioncontributed 56% to the Company's consolidated revenues in 2012-13. Now it is amongst thelargest plastic component and module suppliers to the automotive industry in Europe andIndia.

Samvardhana Motherson Peguform (SMP) is an established Global Tier 1 manufacturer ofpolymer-based automotive modules specializing in high quality interior and exteriorproducts for automotive and related industries. The company is a full systems solutionsprovider in plastic parts from design & concept development, product development tosimulation, test and model constructions and prototyping to fully integrated massproduction modules.

SMP has 25 facilities including 8 module centers and 17 production facilities and 7engineering centers in 7 countries. These facilities are full systems solutions providerin polymer processing. The company has a strong history of innovation and many firsts inthe European automotive market. SMP has 317 patents & has filled for further 51patents. SMP is one of the largest suppliers of door panels and instrument panels alongwith being one of the leading suppliers of bumpers in Germany and also holds a leadingposition in cockpit assemblies in Spain. SMP is expanding its business base in China,Brazil and Mexico to support its customer across the globe.

MSSL is pursuing horizontal and vertical integration of SMP's operations and products,by sourcing raw materials, inputs like wiring harnesses and smaller plastic parts etc.from its group companies. The objective is to expand the business significantly thoughimproved quality and engineering capabilities coupled with combined customer base andgeographic footprint.

MSSL Global RSA Module Engineering Limited and Vacuform 2000 Pty Limited, subsidiariesof MSSL in South Africa, specialize in manufacturing of molded parts, thermo-formedproducts, polyurethane molded products and blow molded products majorly for automotiveindustry. The Company has consolidated its position in South Africa by broadening itscustomer base and is aggressively expanding operations by setting up new facility atDurban. The Company expects to reap the full benefits of existing opportunities and futuregrowth in the coming years.

Motherson Automotive Technologies Engineering (MATE), a division of MSSL, iscontinuously upgrading and expanding its facilities for increasing customer requirements.MATE manufactures wide range of injection-molded components, assemblies, blow moldedcomponents, integrated modules and high precision plastic parts especially connectors,fuse boxes and junction boxes for wiring harnesses. It also has a well-established toolroom which develops molds for a wide range of applications from high precision componentsto complicated automobile parts with specialization in wiring harness components.

MATE has 12 manufacturing facilities in India spread over Noida, Manesar, Pune,Bengaluru, Chennai and Puducherry. This division has established itself as a leadingmodule supplier to the car manufacturers in India. It will continue to witness healthygrowth because of expanding customer base and diversified product portfolio.

MATE units have been awarded with appreciation in the categories of Quality, Cost,Delivery, Development, Management, Vendor Performance and Supply by various customers.

The Polymer division of the company has registered a record growth of 149% onconsolidated basis and 10% on standalone basis during 2012-13.

Rs. in Million
Polymer 2012-13 2011-12 Growth %
Consolidated
Customers Within India 10,308 9,411 10%
Customers Outside India 131,740 47,582 177%
Total 142,048 56,993 149%
Standalone
Customers Within India 9,365 8,507 10%
Customers Outside India 829 796 4%
Total 10,194 9,303 10%

• The current year figures include the results of SMP (acquired on November 23,2011) for twelve months whereas previous year figures include the results from date ofacquisition, hence not comparable.

SMP performance has also been discussed in detail in the"Performance ofCompanies" Subsidiary Section.

Markets outside India

On consolidated basis sales to the customers outside India has grown considerably andcontributed a turnover of Rs.132 Bn. In addition to the revenues being contributed by SMPand MATE, this business is operated through the Company's subsidiaries namely MSSLPolymers GmbH (MSP-G), MSSL Tooling FZE (MTL), Global Environment Management FZC (GEM),MSSL Advanced Polymers s.r.o. (MSP-CZ), MSSL Global RSA Module Engineering Ltd. andVacuform 2000 Pty Ltd.

Domestic

During the year, Polymer Division achieved an increase of 10% in its domestic revenueson consolidated basis. The division is focusing on adding new value added modules thatrequire specialized engineering abilities. SMP's business of interior and exteriorproducts for automotive industry is complementary to existing polymer processing business.It gives the division access to advanced production technologies and product range toexpand the operations with the existing customer base.

Outlook

The status of capacity expansions initiated during previous year is as follows:

- MATE has completed the new facility and robotic paint shop at Ford Supplier Park,Chennai mainly for serving new business from FORD. The new facility started commercialproduction during 2012-13.

- MATE has set up new robotic paint shop and ramped up the commercial production andsupplies from new facility at Tapukara, Rajasthan for catering new businesses from Maruti,Honda and other customers.

- SMP has completed setting up of new Interior plant in Castellbisbal, Spain, theramp-up of commercial production and supplies started during 2012-13.

- SMP has incurred expenditure for enhancing molding capabilities at Atibaia, Brazil,and the same has started yielding results from fourth quarter.

- SMP has set up of new plant at Puebla, Mexico to enhance molding capabilities andconsolidate its existing business, commercial production and supplies started during2012-13.

During 2012-13, the Polymer Business started expanding capacity at the followinglocations:

- SMP is setting up a second facility at Schierling, Germany (close to existingfacilities at Neustadt ) for manufacturing of plastic components to meet new ordersreceived from the existing customers.

- SMP is setting up a new facility at Foshan, China for serving new orders receivedfrom the existing customers.

- SMP is setting up Engineering Centre at Noida to provide technological support toexpand the business in domestic market.

- SMP is setting new paint shops and/or other facilities at Oldenburg and Polinya tobring about improvements in operations, more particularly in the paint shop.

- MATE is setting up a new facility at Sanand, Gujarat to meet increasing demand fromcustomers.

- MSSL Global RSA Module Engineering Ltd. is setting up a new facility at Durban, SouthAfrica for manufacturing of molded parts like bumpers, instrument panels and door trimsfor serving increasing customer base.

AUTOMOTIVE MIRRORS

Samvardhana Motherson Reflectec (SMR), the mirror division of the company constitutes28% share of the total business portfolio of MSSL. SMR, a subsidiary of Motherson SumiSystems Ltd, is a global Tier I supplier of rear view vision systems to all the leadingautomobile OEMs, including Ford, General Motors, Hyundai Kia, PSA, Renault/Nissan, Suzuki,Fiat, Toyota, Tata JLR, Volvo, BMW, Daimler and Volkswagen. SMR enjoys approximately 22%market share of the total global exterior mirror sales as assessed by the Company.Principal business activities of SMR include designing, manufacturing, producing andsupplying exterior & interior mirrors for the international automotive industry. SMRdevelops and produces a wide range of exterior mirrors from basic, manually adjustedmirrors to high-value mirrors with integrated systems such as camera-based detectionsystems, side turn indicator lamps and assist system signal lights. SMR's interior mirrorsproduct line consists mainly of prismatic mirrors and it also develops high-value interiormirrors with features such as integrated displays and microphones and garage door openers.

SMR has a sustained focus on research and development. SMR has over 600 patents and itsinnovations include several industry firsts, such as the first turn signal in exteriormirrors for Mercedes Benz in 1998; the first interior mirror with multiple functions forMercedes Benz in 1999; the first LIN-bus system in exterior mirrors for Jaguar in 2001;the first camera-based blind spot detection system for Volvo in 2004; the first LED lightguide style turn signal for Audi Q7 in 2005; the first side-looker LED turn signal forHyundai in 2005; a combined unique power telescopic and power folding mirror for Ford in2007; the first lamps in exterior mirrors to project logos on the ground for

European SUVs in 2011; and the first one-piece exterior mirror glass reflector with anintegrated blind spot detector section for North-American SUVs in 2011.

SMR has presence in 14 countries with 20 production facilities and 7,000 full-timeemployees as on March 31, 2013. Focus on technology and innovation has enabled SMR tomaintain a leadership position in exterior mirrors and to expand its product portfolio tointerior mirrors of various types and blind spot detection cameras, as well as enablingfurther expansion into new product segments.

Rs. in Million
Polymer 2012-13 2011-12 Growth %
Consolidated
Customers Within India 2,963 2,545 16%
Customers Outside India 66,506 54,066 23%
Total 66,469 56,611 23%

SMR performance has also been discussed in detail in the "Performance ofCompanies" in the Subsidiary Section.

Outlook

SMR strategy to focus on vertical integration of selective high potential items, likeglass, actuators and wiring harnesses has started giving cost advantage and competitiveedge to the business.

The status of capacity expansions initiated during the previous year is as follows:

- The Company's 2nd plant at Hungary which was inaugurated during previous year hascontributed significantly towards growth in supplies to European OEMs. During the yearthere is a ramp up in commercial production and supplies for new orders awarded fromEuropean customers post acquisition started from this new facility.

- SMR Greenfield plant at Brazil inaugurated during December 2011 started commercialproduction and supplies to customers, further ramp up in production will be during2013-14. This would give the footprint in South America which is a large automotivemarket.

- SMR has completed a new mirror assembly facility along with a dedicated Glass plantat Thailand for in-house glass requirement. Both mirror assembly and glass plant facilitywas commissioned during 2012-13 and supplies to customers have been started.

- SMR has completed a new plant at Pune (India) to cater to the requirement of westernIndia based customers. Commercial production and supplies from this facility startedduring the year and now have been stabilized.

During 2012-13, SMR started expanding the capacities at the following locations:

- SMR is expanding its footprint in China, a new facility plant is under constructionat Langfang. Commercial production from this facility will commence from 2013-14.

- SMR new facility at Yancheng, China is under Construction for capacity expansion tosupport new orders. Existing plant at Yancheng will also move to a bigger and new facilityin 2013-14 with enhanced capacities.

- New paint shop was installed at Spain to improve the quality & efficiency and tocreate more capacities as well.

- SMR has also enhanced the capacities at the Mexico facility along with a dedicatedGlass plant for in-house glass requirement to cater to the growing markets in Americas.

- SMR is setting up a new facility at Michigan, USA to cater to growth coming up inNorth American market. Commercial production will start from 2014-15.

WIRING HARNESSES

The Company's wiring harness business maintained its leadership position and dominantmarket share with leading automobile companies in India.

The Company is a leading supplier of wiring harnesses to nearly all OEMs in India andtogether with its Joint Ventures enjoys more than 65% market share of the passenger carsegment in India as assessed by the Company. The comprehensive design capabilities fromthe vehicle designing stage and extensive product portfolio facilitate continuous gain ofmarket share and rapid growth in revenue than the overall industry.

The high degree of backward integration for key inputs of the product like wires,connectors, terminals & fuse boxes, tube clamps & binders, grommets & seals,caps & sleeves etc enables the Company to further enhance the growth. Merger of SMIELwith the Company was completed during the year. SMIEL manufactures high precision plasticparts specially connectors, fuse boxes and junction boxes for wiring harnesses. It alsohas a well-established tool room which develops molds for a wide range of applicationsfrom high precision components to complicated automobile parts with specialization inwiring harness components. It has further strengthened capabilities for indigenization,in-house development and manufacturing of components for wiring harness.

Superior quality end product, consistent just-in-time product supply and customerservice continues to be areas of competitive advantage for the wiring harness business.The customer base of Wiring Harness spans the entire spectrum of the automotive industryand includes passenger cars and MUVs, two wheelers, commercial vehicles, tractors and farmequipment, earth moving and material -handling equipment, electrical & electronics andmedical systems.

The Company is expanding its presence globally by setting up new production facilitiesin key markets in order to support new business and growth. The division currentlyoperates with 40 manufacturing facilities & 7 design centers serving a large number ofmajor automotive, heavy duty and industrial customers worldwide.

The Company with its subsidiaries and joint ventures has its wiring harnessmanufacturing and support spread across India, Sharjah, Ireland, Sri Lanka, Italy, JapanUnited Kingdom, Mexico, Thailand and Korea. These locations have been strategicallyselected to give logistical support to serve major customer destinations. The combinationof design, range, quality, infrastructure, technology and proximity helps MSSL emerge as acomplete service provider in the Field of wiring harness

Rs. in Million
Wiring Harness 2012-13 2011-12 Growth %
Consolidated
Customers Within India 32,240 26,110 23%
Customers Outside India 5,411 4,430 22%
Total 37,651 30,540
Standalone
Customers Within India 27,082 21,748 25%
Customers Outside India 4,744 3,940 20%
Total 31,826 25,688 24%

Domestic Market

The Company outperformed the domestic market and registered healthy growth of 25% onstandalone basis and 23% on consolidated basis in revenues.

The division endeavors to take its vision forward of becoming a globally preferredsolution provider demonstrated from the appreciation and awards received from itscustomers in the categories of Quality, Cost, Delivery, Development, Management, VendorPerformance and Supply to name a few.

Outside India

Exports from India recorded growth of 20% at Rs.4.74 Bn on standalone basis mainlydriven by expanded customer base. It also includes sale of wiring harness of Rs.1,184 Mn(Previous Year Rs.873 Mn) to various locations of SMR. The total sale wiring harnessoutside India on a consolidated basis registered a strong growth of 22% at Rs.5.41 Bnmainly on account of increase in demand from existing and new customers.

During 2012-13, the Company started progressively supplying major portion of wiringharness requirement of automotive mirrors to various locations of SMR. On consolidatedbasis the Company supplied wiring harness of Rs.2,248 Mn to SMR (Previous year Rs.1,465Mn) which has been knocked off and excluded from the reported sales of the Division.

Outlook

The Company has aggressively expanded its customer base both domestically and in theinternational market over the years and maintained healthy relationship with thecustomers. The prospects of the segment remain encouraging with increasing demand for morefeatures and functionality in vehicles, which is the driving force for change intraditional electrical distribution system.

The Company has set up new facilities in Mexico, Thailand and Korea in order to gainentry into new markets, expand product offerings and broaden its customer base globally.The new markets will provide opportunity to explore new business relationships andadditional growth prospects. The cost of main raw material, copper continues to bevolatile in the international market, which remains a challenge.

The status of capacity expansions initiated during previous year is as follows:

- Two new plants set up at Noida and Pathredi for adding production capacities to meetthe increasing requirements of domestic and export market, commercial production fromthese plants started during 2012-13.

- New wire plant set up at Noida with production capacity of 50,000 kms wire per monthfor in-house requirement. The commercial production and supplies from this facilitycommenced during 2012-13.

- New facility set up at Mexico for manufacturing of wiring harness for meeting wiringharness requirement within the group and supplies to non automotive customers in local andUSA market. The commercial production and supplies from this facility commenced from thesecond half of 2012-13 in a phased manner.

- New facility set up at Thailand for manufacturing of wiring harness for leading OEMsin the region. This will give the footprint in South East Asia which is a large automotivemarket. Commercial production and supplies from this plant started from fourth quarter of2012-13.

MACHINED METAL COMPONENTS, RUBBER COMPONENTS AND OTHERS

Metal Machining business is done by Motherson Innovative Engineering Solutions (MINES),a division of MSSL, which has its facility at Bengaluru. In addition to this, the Companyhas a subsidiary Motherson ORCA Precision Technologies GmbH (MOPT) at Donaueschngen,Germany.

The Rubber Components business is conducted through subsidiary of the Company MothersonElastomers Pty Ltd in Australia, MAE division of MSSL in Chennai and three joint ventureswith WOCO in India and Sharjah.

Rs. in Million
Rubber/ Metal Machined Components 2012-2013 2011-2012 Growth %
Consolidated
Customers Within India 179 160 12%
Customers Outside India 2,906 2,718 7%
Total 3,085 2,878 7%
Standalone
Customers Within India 169 153 10%
Customers Outside India 224 145 54%
Total 393 298 32%

Domestic & Outside India

During the year, the division achieved growth of 12% in its domestic revenue and 7% inrevenue outside India on consolidated basis.

Performance of these businesses namely rubber, metal, fuses and fuse related componentshas been discussed in details under "Performance of Subsidiaries and JointVentures".

Outlook

- MINES has expanded its production facility at Bengaluru, India and enhanced thecapacities for meeting increased demand from customers. The commercial production andsupplies from this facility started during 2012-13.

- The Division is setting up new facility at Mexico for manufacturing machined parts tomeet demand from the existing customers. This will also open new growth opportunities andgive the footprint in South America which is a large automotive market.

FINANCIAL REVIEW

MSSL has again delivered consistent performance and outperformed the market with recordrevenues and profitability. The consolidated financial performance is impressive in termsof profitability along with healthy growth in standalone results. The Consolidatedperformance has got momentum with transformation of SMR, delivering strong improvement inprofitability and SMP started showing significant improvement in operations.

The summary of the financial position and results of the company on consolidated andstandalone basis is as follows:

Consolidated

Rs. in Million
Financial Position 2012-13 2011-12 % change
Net Fixed Assets 56,629 51,380 10%
Other Assets:
- Inventory 26,036 22,496 16%
- Trade Receivables 29,400 30,127 -2%
- Cash & Bank Balance 5,944 4,557 30%
- Other Assets 10,266 12,002 -14%
Total Assets 128,275 120,562 6%
Liabilities (other than Loans) 52,320 50,795 3%
Net Assets 75,955 69,767 9%
Source of Funding:
Net Worth 19,912 15,739 27%
Reserve on Amalgamation and Consolidation 2,978 2,978 -
Minority Interest 4,025 5,027 -20%
26,915 23,744 13%
Loans Outstanding:
- Payable within one year 8,328 4,734 76%
- Short Term Loans 13,553 11,678 16%
- Long Term Loans 27,159 29,611 -8%
Total Loans 49,040 46,023 7%
Capital Expenditure (Net of disposals) 10,895 10,337 5%

 

Rs. in Million
Results 2012-13 2011-12 Growth %
Sales 252,253 147,022 72%
Other Operating Income 3,917 2,054 91%
Cost of Goods Sold 164,838 95,435 73%
Employee Cost 42,827 23,170 85%
Other Expenses 29,413 19,844 48%
PBIDT (*) 19,092 10,627 80%
Exchange Fluctuation Loss /(Gain) on Long Term Loans 1,279 391 227%
Exceptional Expenditure / (Income) Net - 809 -100%
PBT 8,342 4,116 103%
PAT 4,516 1,965 130%
Concern Share after adjusting Minority Interest 4,445 2,596 71%
EPS - Diluted (Rs.) 7.6 4.4* 71%

*Excludes foreign exchange fluctuation on Long Term Loans, exceptional income / expenseand Non Operating Income.

# EPS of previous year has been restated on account of Bonus Shares allotted during2012-13, in the proportion of 1 share for every two shares held.

• The Current year figures include the results of SMP (acquired on November 23,2011) for twelve months whereas previous year figures include the results from date ofacquisition, hence not comparable.

During the year under review, the Company's consolidated sales hit a new record levelof Rs.252,253 Mn, registering a strong growth of 72% in comparison to the previous yearsales of Rs.147,022 Mn. Without considering sales of SMP Group, the Company sales grew by22% from Rs.101,743 Mn during previous year to Rs.124,410 Mn.

The major raw materials used by Polymer Division of the Company are polypropylenes,polycarbonates and various grades of nylons and resins. These include decorative (leather,textile and foils), chrome, fasteners, wiring harnesses, electronics, electrical parts,die-casting, plastic and metal parts. The major raw material used in the manufacture oftools and molds is alloy steel.

The key raw material for the company's wiring harness business is copper. There issubstantial movement in prices of copper. Average price for copper during 2012-13 was USD7,855 /MT in comparison with previous year average price of USD 8,485 /MT. However thecompany has arrangements with its major customers for passing on the price impact.

The main inputs for the company's mirror business are glass actuators, powerfolds,glass, electro-chromatic glass ("EC glass"), wiring harnesses, electronics,electrical parts, die casting, plastic parts and resins.

Employee cost on aggregate comprise the second largest cost after raw material. Itincludes salaries & wages, contribution to provident fund, gratuity funds, employeepension schemes and expenses incurred on staff welfare. Employee costs have increased by85% in 2012-13 in absolute terms, higher than growth in the sales volume of the company,mainly due to recruitments for new start up facilities & capacity expansion in India,Brazil, Mexico, Thailand and South Africa.

Profit before Interest Depreciation and Tax (PBIDT) substantially increased by 80% atRs.19,092 Mn fromRs.10,627 Mn during 2012-13. The Company was able to maintain strongprofitability despite severe cost pressure due to adverse movement in forex market andvolatile commodity markets.

Profit before Tax (PBT) doubled toRs.8,342 Mn as againstRs.4,116 Mn during previousyear, registering a record growth of 103%.

Profit after Tax (PAT) concern share significantly improved by 71% at K4,445 Mn asagainstRs.2,596 Mn during the previous year.

During the year, the company incurred exchange fluctuation loss ofRs.1,279 Mn onaccount of long term loans including mark to the market (Previous year exchange gainofRs.391 Mn).

Standalone

Rs. in Million
Financial Position 2012-13 2011-12 % change
Net Fixed Assets 15,057 13,432 12%
Other Assets:
Inventory 5,420 4,652 17%
Trade Receivables 5,464 5,428 1%
Cash & Bank Balance 658 202 225%
Investments 5,132 3,704 39%
Other Assets 2,673 2,852 -6%
Total Assets 34,404 30,270 14%
Liabilities (other than Loans) 8,889 8,018 11%
Net Assets 25,515 22,252 15%
Source of Funding:
Net Worth 14,578 11,192 30%
Reserve on Amalgamation and Consolidation 1,663 1,663 -
16,241 12,855 26%
Loans Outstanding:
- Payable within one year 915 725 26%
- Short Term Loans 3,263 4,273 -24%
- Long Term Loans 5,095 4,399 16%
Total Loans 9,273 9,397 -1%
Capital Expenditure (Net of disposals) 3,089 3,625 -15%

 

Rs in Million
Results 2012-13 2011-12 Growth %
Sales 42,413 35,289 20%
Other Operating Income 804 586 37%
Cost of Goods Sold 25,296 21,517 18%
Staff Cost 4,393 3,454 27%
Other Expenses 5,491 5,012 10%
PBIDT (*) 8,037 5,892 36%
Exchange Fluctuation
Loss /(Gain) on Long
Term Loans 290 552 -47%
PBT 6,497 4,345 50%
PAT 4,696 3,172 48%
EPS - Diluted (K) 7.9 5.4* 46%

*Excludes foreign exchange fluctuation on Long Term Loans, Dividend Income and otherNon Operating Income.

# EPS of previous year has been restated on account of Bonus Shares allotted during2012-13, in the proportion of 1 share for every two shares held.

• The Current year figures include the results of SMP (acquired on November 23,2011) for twelve months whereas previous year figures include the results from date ofacquisition, hence not comparable.

During the year, the company standalone revenue significantly grew by 20% to Rs.42,413Mn.

PBIDT registered a remarkable growth of 36%, increased to Rs.8,037 Mn from Rs.5,892 Mnduring previous year.

PBT amounted to Rs.6,497 Mn, up from Rs.4,345 Mn during previous year, recording asubstantial growth of 50%.

During the year, the company incurred exchange fluctuation loss of Rs.290 Mn on accountof long term loans (Previous year exchange loss of Rs.552 Mn).

CASH FLOW

Rs. in Million
2012-13 2012-13
Consolidated Standalone
Operating profit before working capital changes 19,541 8,106
Change in working Capital (including taxes paid and exceptional) 4,681 2,106
Cash flow from operating activities 14,860 6,000
Cash flow from Investing activities (10,790) (3,559)
Cash flow from financing activities (2,558) (1,988)
Net Increase/(Decrease) in Cash & Cash Equivalents 1,512 453
Net Cash and Cash equivalents at the beginning of the year 4,429 190
Cash and cash equivalents as at current year closing 5,941 643

CAPITAL EXPENDITURE

During the year, the Company incurred capital expenditure of Rs.10,895 Mn and Rs.3,089Mn on consolidated and standalone basis respectively. Significant portion of thisexpenditure has been funded from internal accruals. The Company invested significantamount during past years in capacity expansion and expanding to new geographies such asMexico, Brazil, Thailand and South Africa. Now the Company is focused on leveraging thecapacities to foster higher growth with relatively lower outlay of capital. We estimatecapital expenditure of Rs.7,000 Mn to Rs.8,000 Mn during 2013-14, the details of which aredescribed in various sections.

PERFORMANCE OF COMPANIES

The financial performance and brief of the Company's subsidiaries is as follows:

Samvardhana Motherson B.V. (SMP), Netherlands

(Consolidated with its Subsidiaries & Joint Venture)

Introduction: SMP specializes in developing, producing and distributing Polymerinterior and exterior systems for the global automotive market. It has productionfacilities and engineering centers in 7 countries across the globe.

Area of Business & Industry Segment: It specializes in providing complete systemssolutions in plastic parts from design and concept development, product development tosimulation, test and model constructions and prototyping to fully integrated massproduction modules.

Financial Position:

Euro in Million
SMP - Consolidated* 2012-13 2011-12 % change
Net Fixed Assets 341 328 4%
Goodwill on Acquisition 24 18 28%
Other Assets:
- Inventory 169 152 11%
- Trade Receivables 168 217 -23%
- Cash & Bank Balance 33 28 19%
- Other Assets 55 76 -28%
Total Assets 789 819 -4%
Liabilities
(other than Loans) 383 402 -5%
Net Assets 406 417 -3%
Source of Funding:
Net Worth (44) (31) -42%
Minority Interest 41 56 -27%
(3) 25 -112%
Loans Outstanding:
- Payable within one year 125 32 291%
- Short Term Loans 18 65 -72%
- Long Term Loans 266 295 -10%
Total Loans 409 392 4%
Capital Expenditure (Net of disposals) 60 32 119%

#As per financials prepared under Indian GAAPs for the purpose of consolidation.

*including debt taken for acquisition of SMP and guaranteed by MSSL & SMIL in theratio of shareholding.

Performance in 2012-13:

Euro in Million
SMP - Consolidated* 2012-13 2011-12 Growth %
Sales 1,826 677 170%
PBIDT (*) 69 9 667%
Depreciation 47 13 262%
Exchange Fluctuation Loss /(Gain) on Long Term Loans* 13 (4) 425%
Exceptional Expenditure / (Income) Net - 11 -
Profit/(Loss) before tax (10) (21) 52%
Profit/(Loss) after tax (22) (24) 8%
MSSL share after adjusting Minority Interest (16) (12) -33%

*Excludes/represents foreign exchange fluctuations loss / (gain) on US$ loansguaranteed by shareholders .

#As per financials prepared under Indian GAAPs for the purpose of consolidation.

• The Current year figures include the results for twelve months whereas previousyear figures include the results from date of acquisition (November 23, 2011), hence notcomparable.

The company has initiated series of actions post acquisition in an endeavor to turnaround SMP into profitable venture. These includes streamlining of operations,restructuring of manufacturing facilities in stress, rationalization of cost at otherfacilities, upgrading of facilities and focus on removing inefficiencies from the system,integration of IT activities, sharing of best practices between all facilities, improvingthe operating cash flow, restructuring of management and identify opportunities forvertical Integration.

During first whole financial year 2012-13, SMP registered turnover of Euro 1,826 Mn andEBITDA of Euro 69 Mn. The growth is mainly supported by increase in revenue in Germany andChina.

SMP is serving its customers in different geographies. Germany continued to be themajor contributor in turnover with 48% share. Revenue contribution from other regions wasSpain 33%, China 10%, Brazil 6% and Mexico 4%.

After acquisition of SMP, the Company has identified four hot spots incurringoperational losses. The management has taken series of actions in terms of improvingquality, cost rationalization and improving overall performance. As a result there issignificant improvement in the performance of these plants.

The actions initiated post acquisition resulted in improvement of EBITDA % at 3.8%during 2012-13 in comparison with 1.32% during 2011-12. Adjusted PBT (i.e. before foreignexchange fluctuation on Long Term Loans) for the first year is positive at Euro 3 Mn.

Samvardhana Motherson Reflectec Group Holdings Limited (SMR), Jersey (Consolidated withits Subsidiaries & Joint Venture)

Introduction: SMR is a subsidiary of Motherson Sumi Systems Ltd and specializes in themanufacturing of automotive mirrors. It has production facilities and engineering centersin 14 countries across the globe.

Area of Business & Industry Segment: It specializes in developing, producing anddistributing rear vision systems for the global automotive market.

Financial Position:

Euro in Million
SMR - Consolidated* 2012-13 2011-12 % change
Net Fixed Assets 184 165 12%
Other Assets:
- Inventory 96 81 19%
- Trade Receivables 153 133 15%
- Cash & Bank Balance 27 20 35%
- Other Assets 35 37 -5%
Total Assets 494 436 13%
Liabilities (other than Loans) 203 193 5%
Net Assets 291 243 20%
Source of Funding:
Net Worth 96 78 23%
Reserve on Consolidation 20 20 -
Minority Interest 8 7 14%
124 105 18%
Loans Outstanding:
- Payable within one year 40 25 60%
- Short Term Loans 66 44 50%
- Long Term Loans 61 69 -10%
Total Loans 167 138 22%
Capital Expenditure (Net of disposals) 42 57 -26%

Performance in 2012-13:

Euro in Million
SMR - Consolidated* 2012-13 2011-12 Growth %
Sales 993 860 15%
PBIDT (*) 64 43 49%
Depreciation 27 21 29%
Exchange Fluctuation Loss /(Gain) on Long Term Loans 1 2 50%
Exceptional Expenditure / (Income) Net - - -
PBT 29 15 93%
PAT 15 6 150%
MSSL share after adjusting Minority Interest 8 3 167%

*Excludes foreign exchange fluctuation on Long Term Loans & exceptional income /expense.

#As per financials prepared under Indian GAAPs for the purpose of consolidation.

SMR's revenue registered growth of 15% at € 993 Mn for the fiscal year ended March31, 2013 from € 860 Mn for the fiscal period ended March 31, 2012. There issignificant increase in sales across all geographical locations as a result of launch ofnew customer programs. SMR sales in Europe has increased with ramp up of production at 2ndplant at Hungary

Europe is major contributor in turnover of the Company with 46%, and revenuecontribution from other geographies was Asia Pacific 32% (including India 4.3%) andAmericas 22%.

SMR profitability substantially improved with stabilization of operations at newfacilities set up during previous year. SMR has delivered strong growth in EBITDA of 49%at Euro 64 Mn as compared to Euro 43 Mn during previous year. PBT has significantlyincreased by 93% at Euro 29 Mn in comparison with Euro 15 Mn during previous year. PAT hasgrown up by 150% at Euro 15 Mn as compared to Euro 6 Mn.

MSSL Mideast (FZE)

Introduction: MSSL (ME) is a 100% subsidiary of Motherson Sumi Systems Ltd andspecializes in the manufacturing of wiring harness. It is located in SAIF Zone Sharjah,UAE.

Area of Business & Industry Segment: It supplies wiring harness to leadingmanufacturers of material handling equipment, construction equipment, agriculturalmachines, garbage handling trucks etc. The Company is strategically located for cateringto the European & the U.S market.

The company also supplies wiring harness for automotive mirrors to various locations ofSMR.

Certifications: ISO/TS 16949:2012

Performance in 2012-13: The Company registered a healthy growth of 25% in revenues,Euro 35 Mn as compared to Euro 28 Mn in the previous year. The Company is able to expandits customer base in Europe and also ramp up supplies of wiring harness to variouslocations of SMR, accomplishing group strategic goal of vertical backward integration. In2012-13, the Company supplied wiring harness of Euro 14.6 Mn to SMR (Previous year Euro8.9 Mn). During employee morale building exercise MSSL Mideast succeeded to chronicle itsname in "The Guinness Book of World Records", achieved in the categoriesof"Largest Hopping Race", "Largest High Five Chain", "LargestBarefoot Race" and "Most number of people wearing Paper Hat". With thesefour records the company has won eight records till date.

MSSL (GB) LTD.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and islocated in New Castle, UK.

Area of Business & Industry Segment: MSSL (GB) supplies wiring harness and relatedmodules to niche segments in UK.

Performance in 2012-13: During the year, the Company changed its accounting year endfrom December to March. The Company achieved revenue of GBP 15 Mn in fifteen months ascompared to GBP 10 Mn during the previous year and recorded a healthy growth.

Motherson Electrical Wires Lanka Private Limited

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited and islocated in Sri Lanka.

Area of Business & Industry Segment: The Company specializes in the manufacturingof wires for automotive applications. It supplies wires to different manufacturinglocations of the Group. The Company has been awarded with "Global CommerceExcellence" award from Sri Lankan Govt. for supporting the country during economicshut down with its performance in exports.

Certifications: ISO 9001:2008

Performance in 2012-13: MWL achieved revenue of US$ 29 Mn as compared to US$ 33 Mn ofthe previous year. In year 2012-13, the company distributed a total dividend of USD 5 Mn.

MSSL Tooling (FZE)

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited and islocated in Sharjah, UAE.

Area of Business & Industry Segment: The Company specializes in the manufacturingof high quality plastic molded components, Injection Molded Precision Tool & PlasticParts. The Company has also facilities for post molding operations and assembly. MTLsupplies to Tier 1 customers and supports the polymer business in Europe. The Companyserves the auto components, pharmaceuticals, construction-anchors industry.

Certifications: ISO/TS 16949:2009, ISO 9001:2008, ISO 14001:2004

Performance in 2012-13: The Company achieved a growth in revenue by 9% to Euro 5.9 Mnin 2012-13 , as compared to Euro 5.4 Mn of the previous year. The Company is in theexpanding mode in terms of infrastructure and existing business. The Company has received"Quality Performance" rating from its major customers Continental AutomotiveCorporation and ZFLS.

MSSL Polymers GmbH

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and islocated in Germany.

Area of Business & Industry Segment: The Company serves the automotive sector. Theproduct range includes parts for steering columns, airbags, seat belts, reflectors andside rear view and tail lamps etc.

Certifications: ISO/TS 16949:2009, ISO 14001:2005

Performance in 2012-2013: During the year, the Company has changed its reporting periodfrom December to March and reported figures for 15 months to align its financial with theparent company. The revenue of the Company remained flat at Euro 7 Mn as compared to theprevious year Euro 6 Mn.

MSSL Advanced Polymers s.r.o

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and islocated in Dolni Redice, Czech Republic.

Area of Business & Industry Segment: The Company supplies products to leadingEuropean automotive Tier-I suppliers. The product range includes connecting door rods,plastic parts safety belts, connectors, sensing elements, covers, parts for pneumaticdispatch, visible parts for roof rays, plastic parts for fuel tanks etc.

Certifications: ISO/TS 16949:2009, ISO 14001:2005

Performance in 2012-13: During the year, the Company has changed its reporting periodfrom December to March and reported figures for 15 months to align its financial with theparent company. The Company has generated revenue of Euro 12 Mn in fifteen months ascompared to Euro 8 Mn during previous year and registered a healthy growth. In 201213, theCompany supplied plastic components of Euro 3.3 Mn (Previous year Euro 0.7 Mn) to variouslocations of SMR. The Company has also started supplies to SMP and is identifying furtheropportunities for vertical integration. The Company has received "Q1" awardletter from FORD for quality and continuous improvement in the products supplied.

MSSL Global RSA Module Engineering Ltd.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and islocated at Automotive Supplier Park, Rosslyn, South Africa in the heart of Gauteng'sautomotive industry.

Area of Business & Industry Segment: The Company is manufacturing molded parts likeBumpers, Interior Trims and fully robotic paint shop for painting body colour matchedparts for leading OEMs. The Company is expanding its base at South Africa by setting upnew facility at Durban, South Africa for manufacturing of molded parts like bumpers,instrument panels and door trims for serving increasing customer base. The Company hasestimated total project cost of ZAR 250 Mn (approx.) for Durban Plant for "Phase1".

The automotive and components industry in South Africa is well placed for investmentopportunities. Vehicle manufacturers such as Ford, BMW, Nissan, Toyota and Volkswagen haveproduction plants in South Africa. Companies with production plants in South Africa arewell placed to take advantage of the low production costs, coupled with access to newmarkets as a result of trade agreements with the European Union and the Southern AfricanDevelopment Community free trade area. South Africa's automotive industry is a source forthe manufacture and export of vehicles and components to the global automotive industry.The component industry contributes approximately 2% of the country's GDP and lookingforward to strong growth as export potential continues to increase. The Company expects toreap the full benefits of existing opportunities and future growth.

Certifications: TS16949: 2009 and ISO 14001

Performance in 2012-13: The Company achieved strong momentum in sales in its secondyear of operations and registered a phenomenal growth of 106% in revenue at ZAR 225 Mn ascompared to ZAR 109 Mn in previous year.

MSSL Japan Limited

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited and islocated in Nagoya-Shi, Japan.

Area of Business & Industry Segment: The Company supplies wiring harness for heavycommercial vehicles.

Performance in 2012-13: The Company ramped up supplies and achieved revenue of JPY1,810 Mn during year as compared to JPY 1,560 Mn in the previous year.

MSSL Mexico, S.A. De C.V.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited and islocated at San Luis Potosi, Mexico.

Area of Business & Industry Segment: MSSL has set up a new facility at Mexico formanufacturing of wiring harness. This facility will be used mainly for meeting wiringharness requirement within the group and supplies to non automotive customers in local andUSA market. This facility is strategically located for supplying just in time andproximity with the customers in USA market.

Performance in 2012-13: The Company started commercial production during the secondhalf of 2012-13. Mass production will start from 2013-14. The Company has contributed tothe group revenue for MXN 6 Mn.

MSSL WH System (Thailand) Co.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited and islocated at Hemaraj Eastern Seaboard Industrial Estate, Rayong Province, Thailand.

Area of Business & Industry Segment: The Company has set up a new facility atThailand for manufacturing of wiring harness for leading OEMs.

Performance in 2012-13: In the first year of manufacturing, the company achieved anominal turnover of THB 188k. The ramp up of production and supplies to customers willstart from 2013-14. Thailand is a regional manufacturing hub and supplier for many of theworld's largest auto makers. Thailand's auto industry is the most developed and largest inSoutheast Asia, with a combined capacity to produce more than 1 Mn vehicles per year. TheCompany expects to reap the full benefits of existing opportunities and future growth.

MSSL GmbH

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limited. MSSLGmbH is located in Gelnhausen near Frankfurt, Germany.

Area of Business & Industry Segment: The Company supplies plastic components toTier 1 customers and also acts as the holding company and corporate office providingsupport to the European entities.

Performance in 2012-13: During the year, the Company changed its reporting period fromDecember to March and reported figures for 15 months to align its financial with theparent company. The Company achieved a total turnover of Euro 1.9 Mn including serviceincome in fifteen months as compared to Euro 2.5 Mn during previous year.

MOTHERSON ORCA PRECISION TECHNOLOGY GmbH

Introduction: The Company is a 95.1% subsidiary of Motherson Sumi Systems Ltd. and islocated in Germany.

Area of Business & Industry Segment: The Company serves automobile and autocomponent manufacturers and tier 1 customers. The product range includes precision turnedparts for fuel injection, fuel pump, emission controls, pressure sensors, air conditionsystems etc. The Company has ramp up production for New GHP 2 Project with ContinentalRoding during last quarter of 2012-13.

Certifications: ISO/TS 16949

Performance in 2012-13: During the year, the Company changed its reporting period fromDecember to March and reported figures for 15 months to align its financial with theparent company. The Company achieved revenue of Euro 15 Mn in fifteen months as comparedto Euro 14 Mn in the previous year. The Company is setting up new facility at Mexico formanufacturing machined parts to meet demand from existing customers. This would also opennew growth opportunities and give the footprint in South America which is a largeautomotive market.

Motherson Elastomer Pty Ltd

Introduction: The Company is an 80% subsidiary of Motherson Sumi Systems Ltd. and islocated in Bendigo, Victoria in Australia.

Area of Business & Industry Segment: The Company manufactures orbitread tyrecompounds, conveyor belting rubber compounds, automotive component rubber compounds,weather strips, glass runs, boot and hood seals, tank straps, rubber flares, bondedcomponents, suspension bushes, engine and transmission mounts, bump stops, large enginegaskets, silent blocs, industrial mountings and couplings, auto and truck suspensioncomponents. MEPL caters to the automotive, mining, tyre retreaders, construction, defenseand rail industries. It is one of the largest non tyre related mixing plants in Australia.

During the year, MEPL expanded its existing rubber compounding business into rubbercalendaring which is basically producing rubber sheets with exact thickness and width thatis critical for few industries and operations.

Certifications: ISO/TS 16949:2009, ISO 9001:2008, ISO 14001:2004

Performance in 2012-13: During the year, the company achieved a turnover of AUD 22 Mnas compared to AUD 25 Mn in the previous year. There is marginal reduction in revenues onaccount of slowdown in demand from major customers. Market conditions are showing signs ofslow recovery. The Company is focused on improving capacity utilization and build growthin other sectors like construction and public transport.

Global Environment Management (FZE)

Introduction: The Company is a joint venture between Motherson Sumi Systems Ltd. and E-Compost Pty Ltd, Australia. It is located at the SAIF Zone, Sharjah, UAE.

Area of Business & Industry Segment: The Company has a 100% subsidiary in Australiafor marketing its key product Aerobin in Australia. The product re-cycles household andgarden wastes into beneficial compost without any use of electricity or chemicals whichhelps in avoiding dumping of household waste into landfill. The Aerobin is now availablein Europe, USA, Japan and Australia.

Performance in 2012-13: During the year, the Company has changed its accounting yearend from December to March. The revenue of the Company remains flat at AUD 1 Mn ascompared to the last year. The company is foraying into new global markets with the launchof 200 Litre Aerobin and expecting good future prospects with a growing awareness of theenvironmental benefits of home composting verses the more traditional waste disposalsolutions.

Vacuform 2000 (Pty) Limited

Introduction: The Company is a 51% subsidiary of Motherson Sumi Systems Limited,incorporated in South Africa and having its manufacturing facility at Rosslyn, SouthAfrica.

Area of Business & Industry Segment: The Company specializes in manufacturing ofVacuum-forming, thermo-formed products, polyurethane molded products and blow moldedproducts majorly for automotive industry. The company supplies components to all theleading automotive OEMs present in the region. The Company is a BBBEE entity registeredlevel 2 and enjoys benefits of preferential procurement, privileges and support fromautomotive, financial & other Institutions.

Certifications: TS16949: 2009 and ISO 14000

Performance in 2012-13: During the year, the Company has changed its accounting yearend from June to March. The Company registered a strong growth in revenue by 173% andachieved revenue of ZAR 82 Mn as compared to ZAR 30 Mn in previous year.

Motherson Wiring System (FZE)

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and islocated in SAIF Zone, Sharjah, UAE.

Area of Business & Industry Segment: The Company's principal activities consist ofproviding building on lease at UAE to group companies and receiving rental income for thesame.

MSSL Ireland Pvt. Ltd.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limitedlocated at Enniscorthy, Ireland.

Area of Business & Industry Segment: The Company provides design services, mainlyto wiring harnesses customers. It also provides logistics support services to MSSL andMSSL Mideast, enabling them to supply online to customers in Europe.

Performance in 2012-13: During the year, the Company changed its accounting year endfrom December to March and reported figures for fifteen months. The Company achieved aturnover of Euro 0.4 Mn including service income in fifteen months as compared to Euro 0.3Mn during previous year.

MSSL (S) Pte Ltd.

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Ltd and islocated in Singapore.

Area of Business & Industry Segment: It provides support to MSSL and its groupcompanies mainly for international purchasing. The company is also a holding company forthe group investments in MSSL Australia Pty Ltd., MSSL Japan, MSSL Mexico, S.A. De C.V.,MSSL WH System (Thailand) Co., Ltd and MSSL Korea WH Limited.

MSSL Australia Pty. Ltd.

Introduction: MSSL Australia is an 80% subsidiary of Motherson Sumi Systems Ltd.located at Australia.

Area of Business & Industry Segment: The Company is a holding company and corporateoffice providing support to the Australian entities.

In year 2012-13, the company distributed a total dividend of AUD 2 Mn.

MSSL Investment Pty. Ltd.

Introduction: The Company is an 80% subsidiary of Motherson Sumi Systems Ltd. throughMSSL Australia Pty. Ltd. located at Australia.

Area of Business & Industry Segment: The Company's principal activities consist ofproviding land and building on lease at Bendigo to its fellow subsidiary MothersonElastomers Pty Ltd. The Company is receiving rent income from one of the group company.

MSSL s.r.l. Unipersonale

Introduction: The Company is a 100% subsidiary of Motherson Sumi Systems Limitedlocated at Pontedera, Italy. During the year, the Company changed its reporting periodfrom December to March and reported figures for 15 months to align its financial with theparent company.

Area of Business & Industry Segment: The Company provides engineering, design andprototype services, mainly to wiring harnesses customers in Europe.

MSSL Mauritius Holdings Ltd.

The Company is a 100% subsidiary of Motherson Sumi Systems Ltd. and is located inMauritius. The Company is holding investments In Woco Motherson Limited (FZC), MSSLIreland Pvt. Limited, Global Environment Management (FZC), Samvardhana Motherson GlobalHoldings Ltd., MSSL Global RSA Module Engineering Limited and Vacuform 2000 (Pty) Limited.During the year, the Company changed its accounting year end from December to March.

MSSL Handels GmbH

The company is a 100% subsidiary of Motherson Sumi Systems Ltd. and is located inAustria. It provides support to MSSL by coordinating with the customers. The Company islooking at various options to restructure the operations of MSSL Handels GmbH with othercompanies within the group or otherwise consider for closure.

The summary of financial highlights and brief of the JV companies is as follows:

Figures Rs. in Million

MSSL Holding Capital Employed Net Sales Profit after tax Capital Expenditure
2012-13 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

2012-13

2011-12
Kyungshin Industrial Motherson Ltd. 50% 1,487 1,353 8,200 6,892 600 411

27

38
WOCO Motherson Ltd. (FZC) 33.33% 104 123 300 311 52 70

6

3
WOCO Motherson Elastomer Ltd. 33.33% 228 243 355 374 24 27

13

29
WOCO Motherson Advanced Rubber Technologies Ltd. 33.33% 375 341 641 578 122 113

16

34
Calsonic Kansei Motherson Auto Products ltd. 49% 713 482 2,623 1,889 38 42

5

7
Ningbo SMR Huaxiang Automotive Mirrors Co. Ltd. 50%* 1,684 1,150 4,125 2,252 215 121

41

51
Celulosa Fabril S.A. (include its 100% subsidiary Modulos Rivera Alta S.L.U.) 50%** 1,387 1,852 3,286 1,191 40 27

91

227

* Held by Company through its subsidiary Samvardhana Motherson Reflectec (SMR)

** Held by Company through its subsidiary Samvardhana Motherson Peguform (SMP)

Kyungshin Industrial Motherson Limited (KIML)

Introduction: KIML is a joint venture between Kyungshin Corporation (KIC), South Koreaand Motherson Sumi Systems Ltd. The company manufactures wiring harnesses at threelocations in Chennai (India).

Area of Business & Industry Segment: The Company is a single source of wiringharness for Hyundai Motor India Ltd. for its complete range of cars manufactured in India.It caters exclusively to Hyundai Motors. The Company has the facility of conveyorised massproduction of wiring harness.

Certifications: ISO/TS 16949:2009, ISO 14001:2004, QUALITY 5 STAR

Performance in 2012-13: KIML recorded a growth of 19% at turnover of Rs 8,200 Mn ascompared to Rs 6,892 Mn in the previous year. KIML is 100% supplier of wiring harnesses toHyundai Motors India Ltd. since the inception.

The company has been awarded "Hyundai Mobis-National top performer for ServiceParts Supply" at Supplier Convention 2013 and "Quality Excellence" awardfor the year 2012 by Hyundai Motor India Ltd.

The Company's Quality Circle "Brammas" won 2nd prize at Q Quest 2013, 14thNational Convention on Quality Management by AUTVS.

WOCO Motherson Ltd. (FZC)

Introduction: The Company is a joint venture between Motherson Sumi Systems Ltd. andWOCO Group of Germany. The company is located at the Sharjah Airport International FreeZone, Sharjah, UAE.

Area of Business & Industry Segment: WML specializes in liquid silicone rubberinjection Molding. The product range includes products for automotive applications,medical equipment applications, measuring and control technology and kitchen appliances.

Certifications: ISO/TS 16949:2009, ISO 14001: 2004

Performance in 2012: WML achieved a turnover of Euro 4 Mn as compared to Euro 5 Mn inthe previous year. In calendar year 2012, the company distributed a total dividend of Euro1 Mn.

WOCO Motherson Elastomer Ltd.

Introduction: The Company is a joint venture between Motherson Sumi Systems Ltd. andWOCO Group of Germany and is located in Noida, India.

Area of Business & Industry Segment: The Company manufactures and exports injectionmolded rubber components back to the Joint Venture Partner. WMEL products cater to theautomotive, industrial and the construction sector.

During the year the company achieved a successful start up of manufacturing of steeringwheel damper for Maruti Suzuki India Ltd. and Nissan.

Certifications: ISO/TS 16949- 2009, ISO 14001- 2004.

Performance in 2012-13: The Company recorded revenue of Rs 355 Mn as compared to Rs 374Mn of the previous year. There is marginal reduction in revenues on account of slowdown indemand from major customers.

WOCO Motherson Advanced Rubber Technologies Ltd.

Introduction: The Company is a joint venture between Motherson Sumi Systems Ltd. andWOCO Group of Germany and is located at Kandla, Special Economic Zone.

Area of Business & Industry Segment: The Company focuses on European automotive andauto component manufacturing. The range includes pedal parts and solid silicon articlesfor acoustic applications besides manufacturing and exporting rubber, rubber to metal andrubber to plastic bonded parts as well as thermoplastic elastomer parts primarily forautomotive industry.

The company also added Radiator mount, Spring pad, Grommet to its manufacturing lineduring the year.

Certifications: ISO/TS 16949:2009, ISO 14001- 2004

Performance in 2012-13: The revenue of the Company stands at Rs.641 Mn as compared toRs 578 Mn of the previous year.

The Company has three joint ventures with WOCO, Germany, the company is underdiscussion with the joint venture partner for long term plans and options available.

Calsonic Kansei Motherson Auto Products Limited

Introduction: The Company is a joint venture between Motherson Sumi Systems Ltd. andCalsonic Kansei, Japan. The manufacturing units are located in Manesar and Chennai inIndia.

Area of Business & Industry Segment: The Company specializes in the manufacture ofclimate- control systems including HVAC modules, compressors, body control modules andmeters clusters for the automotive industry.

Performance in 2012-13: The Company achieved revenue of Rs 2,623 Mn as against Rs 1,889Mn in the previous year registering a strong growth of 39%. New facility has been set upat Manesar for body control modules for serving increasing customer base and demand. TheCompany has also started construction of new plant at Bawal, Haryana for manufacturingcompressors, commercial production will start by end of this year and the amount ofinvestment will be around K1,161 Mn. The Company will be supplying compressors to existingcustomer base and major OEMs.

INTERNAL CONTROL SYSTEMS

The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation, complying with applicable statutes, safeguarding assets from unauthorizeduse, executing transactions with proper authorization and ensuring compliance of corporatepolicies. The Company has appointed internal auditors to carry out both system andfinancial audit of the Company's activities. The audit findings are reviewed by the AuditCommittee in their meetings on regular intervals, the details of which have been providedin the corporate governance report. Suggestions for improvement are considered and theAudit Committee follows up on corrective action. The Company has also identified variousbusiness risks and laid down the procedures for mitigation of same.

HUMAN RESOURCE

One of the most important, albeit undervalued, assets of a company is its humancapital. It is the real fuel and energy behind a company's growth and success. Theinherent diversity in terms of demographics, geographical background, skills, educationand experience of its employees makes human capital a solid force to reckon with.Realizing the importance of this asset, MSSL places immense emphasis on nurturing andgrowing it.

Focusing on developing its employees has given MSSL a strong and diverse workforce overthe years. The company places a lot of importance on hiring and retention of the besttalent. Most organizations show signs of recognizing the importance of human capital butonly at the highest levels. However, MSSL realizes the strength of its entire workforceand works towards tangible ways of nurturing and growing it. MSSL's in-house skill-basedtrainings, rewards & recognitions programs, succession planning, and fostering anenvironment of innovation and creativity go a long way in strengthening the performanceand enhancing the competencies of its workforce. This also helps instill a sense ofownership and belongingness amongst the employees and also develops a stronger commitmenttowards the company's broader business objectives.

MSSL recognizes that measuring the effectiveness of its human capital as well as thestrategic risks and rewards of a strong and competent workforce are imperative to gain acompetitive edge and sustain long term growth.

Engaged employees feel a strong emotional bond to the organization that employs them.This is the key to MSSL's success. Skill management is stressed upon and is an ongoingprocess. Employees assess and are given the opportunity to upgrade their existing skillsas per the requirement and for effective implementation of their jobs. The focus is onSkill-up and Multi skilling programs for the employees. MSSL provides an environment toits employees to take higher responsibilities and stretch assignments from very earlystages of their career. In the manufacturing units, for each activity there is a persondeclared as the owner of that activity, who takes the onus of maintaining and improvingthe activity. Thus a sense of ownership is built in each employee at every level.

In MSSL, the potential of people is utilized for the improvement of product quality andproductivity of employees. Quality Circle is one of the most important employeeparticipation methods in MSSL. The winners in the annual Samvardhana Motherson QualityCircle

Convention were Vijay Quality Circle from MSSL. SMG has 515 quality circles operatingwithin the Group, its subsidiaries and joint ventures. Quality Circle Teams of MSSL alsoparticipated in external competition and won accolades. It was a moment of pride whenNavoday Quality Circle from SAKS Ancillaries Ltd. was adjudged as Winners in 9th QualityCircle Competition organized by Automotive Component Manufacturers Association of India(Northern Region) in New Delhi on 21st July'2012.

Quest Quality Circle from MSSL Bengaluru won Gold Award in the Bengaluru ChapterConvention of Quality Circles organized by Quality Circle Forum of India 2012 on Sunday,30th September 2012 at Bengaluru. Quest Quality Circle was adjudged as 2nd Runners-up inthe regional round QCC 2012-13 organized by Toyota Kirloskar Suppliers' Association on15th October 2012. This circle also won the 'PAR EXCELLENCE AWARD' in the 26th NCQCcompetition, held on 19th December 2012 at Kanpur. Challenge Quality Circle (Sector 84,DTA) & Adarsh Quality Circle (Sector 84, EOU) won Gold Awards in Chapter Convention onQuality Concepts (CCQC-2012) organized by Quality Circle Forum of India on 6th October2012. Sunrise Quality Circle of MSSL Noida was adjudged as "WINNERS" in HMSISupplier's NH Circle Competition organized by Honda Motorcycle & Scooter India Pvt.Ltd. on 11th October 2012. Kirti Quality Circle from Noida C-14 was adjudged as Winner inQuality Circle Competition 2012-13 at Annual Suppliers Convention 2013 organized by HondaCars India Ltd. on 30th March 2013.

10th Annual SMG South Zone Quality Circle Convention was organized on 1st March 2013 atSRM Hotel Management Auditorium, Chennai. MSSL Chennai hosted the competition. 18 teamsfrom MSSL, MSEW, KIML, MAE, CKM & SMR participated. In this competition, 2nd Runner'sup tittles were grabbed by Quest of MSSL Bengaluru & Force of MSSL Chennai.

In AUTVS QQUEST 2012 events conducted by Anna University Quality forum held on 23rdFebruary 2012 "C3" quality Circle from KIML won the 3rd Prize. In thiscompetition 24 Quality Circle teams participated from different companies like LUCAS TVS,RANE, BRAKES INDIA, WHEELS INDIA, SRF, SFL etc.

The organization adopts various welfare measures for employees to enhance their senseof belongingness to the organization. The Company arranges to give to its employees andtheir families insurance against disease/ accident. To increase employee motivation, thecompany organizes extra- curricular activities which involve employee's participationoutside the ambit of their jobs. There are cultural programs and competitions, annual daycelebrations, painting competition for the children of employees, picnics, culturalactivities and quality circles, where maximum employee participation is solicited. Teamsare also identified to participate in the global skill Olympics organized by SWS, acollaborator.

With the global reach and expanse of MSSL, strengthening the "WE" feelinghelps in developing synergies amongst employees. MSSL today has more than 120 facilitiesspread across 25 countries in five different continents and has strength of more than52,000 employees at the close of the financial year 2012-13. Working with people from 25different countries is a challenge due to the huge diversity in the workforce. Each regionhas its own methodology of work and exposure to different methodologies of work across theglobe has helped diversify the outlook of the company and efforts are made to adopt thebest practices from each area in its work culture. A better work culture within theorganization translates into better delivery to customers which results in satisfiedcustomers.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

Every workplace is strewn with its share of inherent risks that stem from variousfactors. Identifying and mitigating such risks is of prime importance at MSSL as itrecognizes the financial impact as well as the long term business impact of workplaceaccidents. Environment, Health and Safety (EH &S) management is considered to be oneof the most important parameters for MSSL's growth, profitability and long terms successand relationships. In addition to integrating its environmental concerns with its businesspolicies, MSSL also lays immense emphasis on managing its employees' health and safety andconsiders it to be one of the most important measures of growth and corporateresponsibility.

The overall responsibility of employee health and safety at MSSL rests with the HumanResources department. The HR team conducts EHS Program across the organization throughformal safety trainings and workshops. The Program aims to educate the employees about thevarious safety programs and raise awareness about MSSL's health and safety policies. Atthe operational level though, departmental heads and supervisors ensure adequate safetyand security in their respective departments and units, most of which are accredited withISO 14001 certification. However, every employee at MSSL is committed to meeting thehighest standards of corporate citizenship within the realms of the company's vision andCorporate Social Responsibility codes. As an organization, MSSL takes responsibility ofmanaging its global environmental footprint as well as creating a positive impact on thecommunities where it does business.

To re-affirm its commitment towards EHS, MSSL observed a Safety Week from 4th March2013 - 10th March 2013 across all of its units. The main objective of the week was to"Make the workplace Safe, Secure & Injury Free". The week saw a series ofprograms and activities including safety training sessions for staff, bus drivers,ambulance drivers, forklift drivers etc. Similar safety awareness training was alsoimparted to external contractors' services such as the canteen, housekeeping &security personnel. Mock drill sessions were carried out for fire fighting. Otheractivities carried out during the week included display of safety banners, distribution ofsafety badges, a quiz competition on safety measures as well as a safety march for theworkers on the shop floor of various units. All external contractors were also given abrief about safety norms. In addition, Advanced Fire Fighting Technique cylinders weremade available to all units.

A safe and healthy workplace being one of the highest priorities for MSSL, safetyaudits are carried out at regular intervals in all the units. A training module, designedfor new employees, gives an insight into the safety norms to be followed and be aware of.Work permits to employees are issued which cover all aspects of safety before, during andafter the work.

MSSL's commitment to the environment is grounded in its core values. Global EnvironmentManagement, a MSSL subsidiary, is dedicated to developing products for improving theenvironment. Its first product, Aerobin, is a technological breakthrough in home andgarden waste management that allows households to effectively recycle organics at home.The product helps the average household divert 50% of its waste away from landfill, intocompost. Aerobin composts aerobically, a decomposition process that does not emitdangerous greenhouse gases as when organic waste is decomposed aerobically in a landfill.This reduces household carbon emissions and contributes to environmental sustainability.The organic compost and diluted Leachate produced by the Aerobin can be used as a naturalsoil conditioner in the garden also.

MSSL also conducts various conservation drives, such as reducing paper wastage andusing the best pollution control equipment. A special team, called the 'Green Team', hasbeen created to take green initiatives such as using environmental friendly products etc.the Company is also fueling a tree plantation movement in its units with the objective ofpromoting a green and pollution free environment.

The aim is to ensure that EHS risks and impacts are managed effectively and to identifyopportunities to reduce risks and contribute to continuous improvement. MSSL willcontinuously enhance its environmental, occupational health and safety performance in itsactivities, products and services through a structured MSSL management framework.

CORPORATE SOCIAL RESPONSIBILITY - CSR

Motherson Sumi Systems Limited is one of the largest auto ancillary companies acrossthe globe. The company believes in carry out its corporate social responsibility in partsand where necessary. The target group is varied ranging from victims of natural disaster,to underprivileged children and children with special needs. The company's HR departmentfacilitates volunteering activity as a link between employees and the community.

With the recent natural disaster in Uttarakhand, a state in India where millions losttheir life to torrential rains and cloud burst which have triggered floods and landslides,the company has facilitated the involvement of the employees of the company to do theirbit.

MSSL understands the overall social responsibility it has towards the communities whereit does business. And for a business to take responsibility for its actions, it must befully accountable. MSSL believes that it is not only accountable to its shareholders butalso to the society in which it operates. With a true corporate vision, the Companyembraces a wider community rather than just its shareholders, customers and suppliers.

In line with its corporate philanthropy principles, the Company aims to empower thesecommunities' at large, and underprivileged children in particular. It provides aid toseveral organizations working for the betterment of underprivileged children. MSSL isassociated with a number of NGOs and institutions working in the fields of primaryeducation and overall development of underprivileged children. It provides support toorganizations that take care of children without paternal care and children of families indifficult circumstances. Donations of essential items from the company or through NGOs tothe underprivileged takes place at regular intervals.

MSSL also supports an NGO that works for the cause of children with special needs. TheCompany extends its support to these special children by organizing sale-cum-exhibitionsof the products made by these children of the NGO. The Company also provides scholarshipsto needy children who have an aim and ambition in life and also extends its support toorphanages and old age homes. In addition, MSSL particularly supports institutions thattake care of the underprivileged girl child.

Various programs have been incorporated in-house where employees are encouraged to comeforward directly or indirectly for the cause of these children. The company represents thecause of underprivileged children through its greeting cards and a fixed amount is setaside for organizations working for Child Relief.

The Company, in partnership with an NGO, organized a program where its employees cameforward in large numbers to donate old/ new clothes, utensils, footwear, dry ration,magazines, school material, books and toys. These were then donated to underprivilegedvillagers under the 'Cloth for Work' scheme.

Blood donation camps, in association with Rotary Blood Bank, are also organized in theCompany premises at regular intervals. MSSL employees have always come forward in hugenumbers for this noble cause.

The Company lays special emphasis on using environment friendly products. Itcontinuously strives to strike a symbiotic balance with the environment and focuses toimbibe such green initiatives, such as tree plantation drives, in all aspects of itsbusiness activities.

The Company tries to integrate business, environment and social factors in its day today functioning and make it a continuous process to leave a positive and long-lastingimpact on the society where it operates.

OPPORTUNITIES AND FUTURE PROSPECTS

The global marketplace is showing signs of a slowdown and the automotive sector isfacing increased downward pressures from issues such as rising input costs, labourproblems, increasing auto finance rates, runaway inflation, soaring fuel costs, risinggovernment debt and the Euro Zone crisis. Incidentally, this is also the perfect time forMSSL to invest in developing capabilities that allow it to achieve and sustain a leadingposition in various markets around the world.

With demand for vehicles declining in most mature markets, global automakers areturning their attention even more strongly towards the expanding middle class in the BRICS(Brazil, Russia, India, China, South Africa) region, the new economic powerhouse.. Theautomakers continue to shift their production facilities from high-cost regions such asNorth America and the European Union to lower-cost regions such as China, India and SouthAmerica. According to a study by CSM Worldwide, China and South America together areprojected to represent more than 50% of growth in global light vehicle production in theauto industry from 2008 to 2015.

India is uniquely positioned to become the new production base for the globalautomotive industry as it has large untapped automotive markets, a deep talent pool andlow cost of production. The global automobile majors are looking to leverage India'scost-competitive manufacturing practices and are assessing opportunities to export SUVs toEurope, South Africa and Southeast Asia. India can emerge as a supply hub to feed theworld demand for SUVs.

Car makers from across the world are planning to set up their manufacturing plants inIndia with huge investments in the future. The local supplier base is also well developedand quality conscious. This makes it an ideal export hub to other emerging marketsincluding Africa, Eastern Europe, and South-East Asia as well as enables it to serve thedomestic Asian markets.

Also, manufacturers are developing models that are designed keeping particularly Indianconsumers in mind. A global ultra-luxury car maker plans to launch an exclusive 'IndiaEdition' car in 2013. The Indian small and light commercial vehicle segment is expected tomore than double by 2015-16 and grows at 18.5% CAGR over the next five years.

OEMs across the globe are eyeing India as it provides huge opportunities for bothmature and emerging markets which have fundamentally different consumer needs andpreferences, competitive dynamics, and economic returns.

In the last year MSSL has focused on building its capacities for growth. This year theCompany will continue this strategy of expansion and continue to make investments inexpanding and upgrading its facilities across the globe to cater to the changing andincreased requirements of its customers. MSSL works very closely with its customers andthe capabilities of the company are aligned to customer requirements. The aim is always tosupport all the requirements of the customers at all times.

MSSL has over 120 facilities spread across 25 countries. These include a network ofmanufacturing bases, design centers, logistics centers, marketing support and sourcinghubs across diversified geographical base. MSSL always aims to localize its production toachieve cost parity and to be near major customers across the world to build a stronglogistics network. The philosophy of increasing content per car has a huge potential forthe Company at all times to come.

   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
Bosch 42,063.44 44.22 6.68 18.50 14.9 19.6 0.03
Motherson Sumi 32,559.75 60.82 17.17 14.40 32.5 29.2 0.65
Exide Inds. 13,421.50 27.56 3.62 11.94 13.7 20.3 0.00
Amara Raja Batt. 8,194.98 22.74 6.01 10.82 30.3 40.2 0.07
WABCO India 6,784.08 59.21 8.98 19.04 16.7 22.5 0.00
Amtek Auto 5,305.42 18.68 1.11 6.51 5.3 5.3 1.17
Sundaram Clayton 2,874.68 59.26 8.37 8.22 12.3 10.9 1.40
Amtek India 2,675.79 11.53 1.20 7.06 7.8 7.6 1.65
Federal-Mogul Go 1,453.06 69.65 3.46 10.44 5.0 8.5 0.49
Suprajit Engg. 1,426.80 31.79 7.16 10.63 26.2 27.5 0.62
Bosch Chassis 1,238.98 0.00 3.07 0.00 -8.2 -6.1 0.08
Banco Products 967.04 18.18 2.48 6.09 10.7 12.4 0.41
Automotive Axles 921.41 71.66 3.29 6.47 4.6 8.1 0.19
Wheels India 907.87 31.95 2.50 6.51 12.8 14.9 1.62
Sona Koyo Steer. 755.06 31.40 2.83 4.06 13.0 15.7 1.15

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Key Information

Key Executives:

Vivek Chaand Sehgal , Chairman  

Toshimi Shirakawa , Director  

Amarjit Singh , Director  

Arjun Puri , Director  


Company Head Office / Quarters:
2nd Floor F-7 Block B-1,
Mohan Co-operative Indl Estate,
New Delhi,
New Delhi-110044
Phone : 91-011-40555940
Fax : 91-011-40555940
E-mail : investorrelations@motherson.com
Web : http://www.motherson.com
Registrars:
Karvy Computershare Pvt Ltd
Plot No 17-24
Vittal Rao Nagar
Madhapur
Hyderabad-500081

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