Federal-Mogul Goetze (India) Ltd Directors Report.

Your Directors are pleased to present the 66th Annual Report and Audited Financial Statement of Accounts for the financial year ending 31st March, 2021.

Financial Results (Rs. In Lakhs*)

Particulars 1st April 2020 to 31st March 2021 1st April 2019 to 31st March 2020
Income from Operations 108,685.54 106,639.22
Other income 2,371.05 2,476.05
Total Income 111,056.59 109,115.27
Operating profit before finance charges, depreciation and exceptional item 12,532.32 12,654.72
Finance Charges 242.22 482.00
Depreciation 7,958.60 8,862.75
Exceptional items 4,275.00 -
Net Profit before tax 56.50 3,309.97
Provision for the Taxation:
Current Tax 1,454.56 1,242.33
Less: Deferred Tax (1,474.68) (916.02)
Profit after tax 76.62 2,983.66
Other comprehensive income (net of taxes) 243.14 (912.04)
Total Comprehensive income 319.76 2,071.63
Profit brought forward from last year 42,041.89 39,970.26
Surplus / (loss) carried forward to Balance sheet 42,361.65 42,041.88

OPERATIONS

During the financial year, the Gross sale of the Company was Rs. 108,685.54 lakhs as against Rs. 106,639.22 lakhs for the financial year ended 31st March 2020. The Total income of the Company was Rs. 111,056.59 lakhs as against Rs. 109,115.27 lakhs for the financial year ended 31st March 2020.

During the year under review, the Company made a net profit after tax of Rs. 319.76 lakhs as against the net profit after tax of Rs. 2,071.63 lakhs for the financial year ended 31st March 2020.

No amount is proposed to be transferred to general reserves. An amount of Rs. 319.76 lakhs is proposed to be retained in the Statement of Profit and Loss.

In view of requirement of funds for the operations of the Company, no dividend is recommended for the financial year ended 3151 March, 2021.

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings held and attended by directors/members and composition of Audit Committee of the Company are set out in the Corporate Governance Report which forms part of this Report as Annexure-1. The report, inter alia includes the list of credit ratings obtained along with any revisions thereto for all debt instruments of such entity or any fixed deposit programme or any scheme or proposal of the entity involving mobilization of funds.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2021 and of the profit and loss of the Company for the financial year ended 31st March 2021;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming the independence as per the criteria prescribed under section 149(6) of Companies Act, 2013 read with the Schedules and Rules made thereunder as well as Regulation 16(1)(b) and 25 (8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee, adopted a policy for selection and appointment (including the criteria for determining qualifications, positive attributes, independence of directors) and remuneration of Directors including Independent Directors, Key Managerial Personnel, Senior Management Personnel and other employees. The Nomination & Remuneration Policy is attached as Annexure - 2.

EXPLANATIONS OR COMMENTS ON AUDITORS QUALIFICATION/ RESERVATION/ ADVERSE REMARKS/ DISCLAIMER

There is no reservation or observation or qualification or adverse remark or disclaimer of Auditors including Secretarial Auditors of the Company in their report.

MATERIAL CHANGES

During the period under review, the Company witnessed the following:

1 .Post closure of the Tendering period/Open offer, one of the members of the promoter group of the Company

1. e. IEH FMGI Holdings LLC held 12,145,391 Equity shares of the Company (i.e. 21.83%).

Vide three separate Notices for Offer for Sale, IEH FMGI Holdings LLC divested 1,10,84,844 Equity shares (i.e. 19.93%) and as on 3151 March, 2021, the promoter alongwith the promoter group held 5,28,00,298 Equity shares (i.e. 94.91%).

Vide Notice for Offer for Sale dated 23rd April, 2021, IEH FMGI Holdings LLC divested 1,10,76,201 Equity shares of the Company constituting 19.91% of the issued and paid-up equity share capital of the Company and consequently, the public shareholding in the Company increased to 25% in compliance with the requirement of minimum public shareholding as mandated under rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 read with Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

2. In the matter of Federal-Mogul Goetze (India) Limited v/s Additional Labour Commissioner (Administration) & Appellate Authority and Others, the Honble Supreme Court of India on May 13, 2021, upheld the increase in retirement age of workmen at Bangalore plant from 58 years to 60 years. The Management of your Company has since filed a Review Petition before the Honble Supreme Court of India [Refer Note No. 37(b) to the financial statement].

No other material change, which could affect the financial position of the Company, occurred between the end of the financial year of the Company and the date of the Board Report.

LOANS AND INVESTMENTS

During the Financial Year ended 31st March, 2021; no Loan, Investment and Guarantee u/s 186 of the Companies Act, 2013 was made by the Company.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2020-2021, the Company has entered into related party transactions in terms of the Companies Act, 2013 read with rules made thereunder and regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which were in the ordinary course of business and on arms length basis.

During the financial year 2020-2021, there were no transactions with related parties which qualified as material transactions in accordance with the Companys Policy under the Securities and Exchange Board of India (Listing O b l i g a t i o n s a n d D i s c l o s u re Requirements) Regulations, 2015 and accordingly, the disclosure of Related Party Transactions in Form AOC-2 is not applicable. Pursuant to Regulation 33 (3)(g) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the disclosure of Related Party Transactions will be uploaded on the website of your Company (www.federalmogulgoetzeindia.net) on half yearly basis.

The transaction with promoter/ promoter group entities holding 10 percent or more shareholding are disclosed as notes to the financial statement (Note No. 12), other than which there are no other transactions.

SECRETARIAL STANDARDS

The Directors state that that applicable Secretarial Standards i.e. SS-1 and SS-2 relating to "Meeting of the Board of Directors" and "General Meetings" respectively have been duly followed by the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with rules made thereunder, is set out herewith as Annexure-3 to this Report.

RISK MANAGEMENT POLICY

The Company operates in an environment which is affected by various risks, some of which are controllable while some are outside the control of the Company. Therefore, pursuant to the requirements of the Companies Act, 2013 and Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Risk Management Committee. The Company has also developed and implemented the Risk Management Policy covering the process of identifying, assessing, mitigating, reporting and review of critical risks impacting the achievement of Companys objectives or threaten its existence.

The Risk Management Committee of the Company presently consisting of Mr. Vinod Kumar Hans as Chairman (Managing Director), Dr. Khalid Iqbal Khan (Whole-time Director-Legal & Company Secretary), Mr. Manish Chadha (Whole-time Director-Finance & CFO) and Mr. K. N. Subramaniam (Independent Director) as members, periodically reviews the robustness of the Risk Management Policy. The periodical update on the risk management practices and mitigation plan of the Company and subsidiary are presented to the Audit Committee and Board of Directors. The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved. More details on Risk Management indicating development and implementation of Risk Management Policy including identification of elements of risk and their mitigation are covered in Management Discussion and Analysis section, which forms part of this Report.

There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Risk Management Policy of the Company.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 the Company in its Board Meeting held on 29"1 July 2016 had approved the Dividend Distribution Policy and the same is available on Companys website and can be accessed at http://www.federalmogulgoetze india. net/web/index.html.

CORPORATE SOCIAL RESPONSIBILITY

The Board of Directors at its meeting held on 09 th May 2014 approved the Corporate Social Responsibility (CSR) Policy for the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 read with rules made thereunder, on the recommendations of the CSR Committee. The Company has constituted Corporate Social Responsibility (CSR) Committee. Presently, the committee comprises the following members :-

1) Mr. Vinod Kumar Hans, Chairman

2) Dr. Khalid Iqbal Khan, Member

3) Mr. KN Subramaniam, Member

4) Mr. K C Sundareshan Pillai, Member

5) Ms. Nalini Jolly, Member

The Corporate Social Responsibility Committee is required to institute a transparent monitoring mechanism for implementation of CSR projects or programs or activities undertaken by Company. Pursuant to the provisions of Companies Act, 2013, the Company is required to spend atleast 2% of the average profits of the company during the previous 3 financial years on CSR activities. Therefore, the Company has incurred the total allocated budget of Rs. 198.17 lakhs on the CSR activities approved by CSR Committee and the Board of Directors.

The activities and initiatives undertaken by the Company during the financial year 2020-21 on CSR activities have been detailed in the Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy on Corporate Social Responsibility and Annual Report on CSR activities are attached herewith as Annexure- 4 & 5 to this Report.

In accordance with the provisions of section 135 of the Companies Act 2013, the Board has approved an amount of Rs. 110.60 lakhs for spending on CSR activities during the financial year 202122.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Presently, the Board consists of nine (9) directors comprising of Mr. K.N. Subramaniam, Chairman and Nonexecutive Independent Director; Mr. Vinod Kumar Hans, Whole-time Managing Director; Dr. Khalid Iqbal Khan, Whole Time Director-Legal & Company Secretary; Mr. Manish Chadha, CFO & Finance Director, Mr. Rajesh Sinha, Whole-time Director; Mr. Sunit Kapur, Non-Executive Director; Mr. Stephen Shaun Merry, Non-Executive Director, Mr. K C Sundareshan Pillai, Non-executive Independent Director and Ms. Nalini Jolly, Non-Executive Woman Independent Director.

In accordance with Article 109 of the Articles of Association of the Company, Mr. Vinod Kumar Hans and Mr. Rajesh Sinha are retiring by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

Dr. Khalid Iqbal Khan was re-appointed as Whole-time Director - Legal & Company Secretary for a further period of three years.

The Company has received the declaration from all the independent directors of the Company that they meet the legal criteria of independence.

SUBSIDIARY AND ASSOCIATE COMPANY

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts of Companies) Rules, 2014, a statement containing salient features of financial statement of subsidiary i.e. Federal-Mogul TPR (India) Limited forms part of the consolidated financial statements attached as Annexure-6. The financial statements of the subsidiary company and related information are available for inspection at the Registered Office of the subsidiary company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiary and all other documents required to be attached to this report have been uploaded on the website of your Company (www.federalmogulgoetzeindia.net).

The performance and financial position of the subsidiary company i.e. Federal- Mogul TPR (India) Limited have been explained in its Board Report, which forms part of annual report.

PUBLIC DEPOSITS

As at 31st March, 2021 your Company had no unclaimed fixed deposits. No fresh/ renewed deposits were invited or accepted during the financial year.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

FORMAL ANNUAL EVALUATION BY BOARD

In terms of provisions of the Companies Act, 2013 read with Rules made thereunder and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, had evaluated the effectiveness of the Board. Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year ended 31st March 2021. The evaluation of the Directors was based on various aspects which, inter alia, included the level of participation in the Meetings, knowledge and skills, understanding of their roles and responsibilities, business of the Company along with the ethics and integrity. The evaluation of the Board and committees was inter alia based on the aspects like Structure of the Board or Committee, processes being followed to achieve the objectives, effectiveness, fulfillment of roles and responsibilities, efficiency and direction etc.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has an Audit Committee headed by a Non-executive Independent Director, inter-alia, to oversee the Companys financial reporting process, disclosure of financial information, performance of statutory and internal auditors, functions, internal control systems, related party transactions, investigation relating to suspected fraud or failure of internal audit control, to name a few, as well as other areas requiring mandatory review as per Regulation 18(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The powers of the Audit Committee, inter- alia, include seeking information from any employee, directing the Companys internal Audit function, obtaining outside legal or other professional advice and investigating any activity of the Company within the Committees terms of reference.

The Company has a well-defined internal control system, which aims at protection of Companys resources, efficiency of operations, compliances with the legal obligations and Companys policies and procedures.

MANAGEMENT DISCUSSION AND ANALYSIS:

(a) Industry structures and developments

Automotive Industry, globally, as well as in India, is one of the key sectors of the economy. Demographically and economically, Indias automotive industry is well-positioned for growth, servicing both domestic demand and, increasingly export opportunities. Due to its deep forward and backward linkages with several key segments of the economy, automotive industry has a strong multiplier effect and acts as one of the drivers of economic growth.

The auto industry is highly competitive, consisting of organized as well as unorganized sectors and is highly fragmented with a significant number of small and medium-sized companies because of which the business rules are changing to meet the tough competition prevailing in the industry. Innovation, technological upgradation and cost saving hold the key to success to meet the expectations of the exigent competitive circumstances. The Indian auto component industry has been navigating through a period of challenges.

During the financial year 2020-21, the industry produced a total 22,652,108 vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle as against 26,362,282 in April-March 2020, registering a de-growth of (-14) percent over the same period last year.

The domestic sale of Passenger Vehicles decline by 2.2 percent in April-March 2021 over the same period last year. The overall Commercial Vehicles segment decline by 20.8 percent in April-March 2021 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) decline by 28.4 percent and Light Commercial Vehicles decline by 17.3 percent in April-March 2021 over the same period last year.

Three Wheelers domestic sales decline by 66.1 percent in April- March 2021 over the same period last year. Within the Three Wheelers, Passenger Carrier & Goods Carrier sales decline by 74.5 percent and 26.4 percent respectively in April-March 2021 over April-March 2020.

Two Wheelers domestic sales registered de-growth at 13.2 percent in April-March 2021 over April-March 2020. Within the Two Wheelers segment, Scooters declined by (-) 19.5 and Motorcycles decline by 10.6 percent, while Mopeds decline by

3.1 percent in April-March 2021 over April-March 2020.

In April-March 2021, overall automobile exports de-growth by 13.1 percent. Two Wheelers Segments sales decline by 6.9 percent and Three wheelers decline by 21.7 percent, while Passenger Vehicles decline 38.9 percent and Commercial Vehicles decline by 16.6 percent in April- March 2021 over the same period last year.

A structural slowdown in the industry even before the pandemic, combined with the impact of COVID-19 in 2020-21, Fiscal year 2020-21 was an unprecedented year full of COVID-led challenges, but the industry showed great resilience and made considerable recovery during the unlock phase and prefer personal mobility, pent-up demand and fill up of dealer network inventory of BSVI vehicles made recovery in second half of year. Further, global shortage of semiconductor chips affecting the auto industry parts supply chain.

(b) Opportunities and Threats

The parent company continues to support the Company with its technical expertise. With widely recognized brands, superior technology, strong distribution network and a committed team of employees, the Company is well positioned to take advantage of the opportunities and withstand the market challenges. The Company strives to create sustainable profitable growth by using superior technology and maintaining product quality and offering wide range of products at competitive prices, which will give it a competitive edge in the market.

Major regulatory interventions, such as the accelerated transition to BS VI, adoption of electric vehicles, safety rules and stringent vehicle standards are leading to a shift in vehicle technology. This is creating significant challenges and your Company perceives these challenges as potential opportunities.

Your Company competes with many independent manufacturers and distributors of component parts. Management continues to develop and execute initiatives to meet the challenges of the industry and to achieve its strategy for sustainable global profitable growth.

There are limited sets of customers in our business, that is, the automobile manufacturers. Competition is intense, as we compete with suppliers both in the organized and unorganized segments. Technical edge, specialization, innovation and networking will determine the success of the Company in this competitive environment. Further, the policies of the Government play a key role in the development of the automobile sector. Your Company has been employing the practices to proactively map the impact of its activities on its performance and profitability from economic environment and social perspectives.

(C) Segment wise or product wise performance

The Company deals principally in only one segment i.e. automotive components. Therefore, segment-wise performance is not applicable. The Company is inter alia engaged in the manufacturing and sale of Pistons, Piston rings, Pins, valve seats and guides the performance whereof is as under:

Rs. In lakhs*

Details of finished goods sold 31st March 2021 31st March 2020
Pistons, Piston rings and pistons pins 93,040.22 91,883.61
Valve train and Structural components 12,721.78 11,614.69

(d) Outlook

The automobile sector continues to be cautious, while 2021 started on an optimistic note, the second wave of the pandemic casts a shadow on recovery speed during first quarter of FY22, The auto sector is expected to bounce back but the pace could be slower compared with the previous year as the infection spread has penetrated deeply in rural market and immediate buying might not be seen. The recovery in vehicle production is set to be gradual and not necessarily linear. The Management expects positive growth in Indian automobile industry during the year 2021-22.

The Indian Meteorological Department has forecasted normal monsoon and decent harvesting in agriculture crops, which is a critical factor for the overall economic growth, including the automobile sector. Focus of the Government on the investment in infrastructure sector and low interest rates and under discussion incentive based vehicle scrappage policy are expected to give boost to the automobile sector. However, continue rise on raw material prices of steel, aluminum, cooper and precious metals and increasing fuel prices are likely to impact the growth of the automobile sector. Therefore, its going to be a mixed year for the auto component industry ahead.

The Company will endeavor to revitalize in near future as consumers regain confidence and vehicle demand increases. To remain competitive in the challenging and demanding environment, the benchmark has to be high in anticipation of the stated and unstated need of the customers and markets.

(e) Risks and concern

The Company operates in an environment, which is affected by various risks, some of which are controllable while some are outside the control of the Company. However, the Company has been taking appropriate measures to mitigate these risks on a continuous basis. Some of the risks that are potentially significant in nature and need careful monitoring are listed hereunder:

Pandemic: Significant deterioration in demand due to COVID-19 has emerged as a major business risk.

Economic slowdown: Slowdown in the Indian and global economy due to the outbreak of COVID-19 is likely to adversely impact the auto industry in the medium and short-term.

Raw material prices: Our profitability and cost effectiveness may be affected due to change in the prices of raw materials and other inputs.

Foreign Currency Risks: Exchange rate fluctuations may have an adverse impact on the Company.

Technical Intensive Industry: The automobile industry is a technical intensive industry and thus faced with a constant demand for new designs, knowledge of nascent technology to meet market requirements.

Increasing competition: Increasing competition in the auto equipment sector, may put some pressure on the market share.

(f) Adequacy of Internal Control Systems

The Company has an Audit Committee headed by a non-executive independent director, inter-alia, to oversee the Companys financial reporting process, disclosure of financial information, performance of statutory and internal auditors, functions, internal control systems, related party transactions, investigation relating to suspected fraud or failure of internal audit control, to name a few, as well as other areas requiring mandatory review as per provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with the stock exchanges. The powers of the Audit Committee, inter-alia, include seeking information from any employee, directing the Companys internal Audit function, obtaining outside legal or other professional advice and investigating any activity of the Company within the Committees terms of reference.

The Company has a well-defined internal control system, which aims at protection of Companys resources, efficiency of operations, compliances with the legal obligations and Companys policies and procedures.

(g) D iscussion on financial performance with respect to operational performance.

The required information forms part of the Boards Report and the members may refer the same.

(h) Significant changes in Financial Ratios

The key financial ratios are given as below:

Ratio FY 2020-21 FY 2019-20 Explanation to significant change wherever applicable
Debtors Turnover 4.93 5.17 -
Inventory Turnover 6.07 5.45 Better production planning improved inventory holding period.
Interest Coverage Ratio 2.57 7.52 Low Volume/mix during the year, due to Auto sector slow down.
Current Ratio 1.83 1.90 -
Debt Equity Ratio - - -
Operating Profit Margin (%) 0.56 2.21 Due to lower business volume and mix impacted the profits during the year.
Net Profit Margin (%) (0.29) 1.90 Due to lower business volume and one off impacting profitability.
Fixed assets turnover ratio 2.11 2.01 -
Working capital turnover ratio 4.56 5.47 Due to lower business volumes.

The details of return on net worth at standalone and consolidated levels are given below:

Particulars Standalone 2021 Standalone 2020 Consolidated 2021 Consolidated 2020
Return on net worth (%) 0.50 2.81 1.27 3.97

(i) Material developments in Human Resources / Industrial Relations front, including number of people employed With the acquisition of Federal-Mogul by Tenneco, the focus of Learning and Development was primarily on identifying and building synergies in the L&D processes and programs. Skill building in technical and functional areas continued to remain a priority and internal trainers capability building was done through Train The Trainer programs to drive this agenda. The union settlements in Bhiwadi plant concluded successfully.

Training and development has always been our priority; but due to Pandemic, most of the trainings have been online.

The total number of salaried and hourly employees (permanent) as on 31st March, 2021 stood at 3133.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company for the financial year 202021, are prepared in compliance with applicable provisions of the Companies Act, 2013, Indian Accounting Standards

(Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Consolidated Financial Statements have been prepared on the basis of Audited Financial Statements of the Company and its subsidiary company, as approved by their respective Board of Directors.

AUDITORS AND AUDITORS REPORT

At the 62nd AGM of the Company, M/s. Walker Chandiok & Co., LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013), New Delhi were appointed as the Statutory Auditors as per section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, to hold office till the conclusion of the 67th AGM of the Company to be held in the calendar year 2022.

The written consent to such appointment and a certificate from M/s Walker, Chandiok & Co., LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013), have been received to the effect that the appointment is in accordance with the conditions prescribed under Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and they satisfy the criteria specified under Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.

The Board has duly examined the Statutory Auditors Report to the accounts, which is self-explanatory.

COST AUDITORS

The Board, on the recommendation of the Audit Committee has approved the appointment of M/s. Sanjay Gupta & Associates, Cost Accountants, as Cost Auditor, for the financial year ending March 31, 2022. The Cost Auditors will submit their report for the financial year ending 31st March 2022 on or before the due date.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with rules made thereunder, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the forthcoming AGM.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed thereunder, the Company had appointed M/s. Deepika Gera, Company Secretaries, New Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2021.

ANNUAL SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Report does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed as Annexure-7 to this report. The Board has reappointed M/s. Deepika Gera, Company Secretaries, New Delhi, as Secretarial Auditor of the Company for FY 2021-2022.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Annual Secretarial Compliance Report for the financial year ended 31st March, 2021 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from Practicing Company Secretary, M/s Surinder Vashishtha & Associates and was accordingly submitted to both the stock exchanges i.e BSE Limited and National Stock Exchange Limited.

CORPORATE GOVERNANCE REPORT

The Company is committed to good corporate governance practices. The Board endeavors to adhere to the standards set out by the Securities and Exchange Board of India (SEBI), corporate governance practices and, accordingly, has implemented all the major stipulations prescribed.

A detailed corporate governance report in line with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 201 5 regarding the corporate governance practices followed by the Company and a certificate of compliance from Mr. Surinder Vashishtha, Proprietor of Surinder Vashishtha & Associates, Company Secretary, forms part of this Report as Annexure-8.

EXTRACT OF ANNUAL RETURN

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link: https://www.federalmoaulaoetzeindia.net/.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as per Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives of the Company is attached as Annexure - 9.

COMMITTEES OF DIRECTORS

The Company has following committees of Directors:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee;

5. Share Transfer Committee;

6. Risk Management Committee.

The composition of Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee has been disclosed in corporate governance report forming the part of this report.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 (12) OF THE COMPANIES ACT, 2013

Pursuant to Section 134(3)(ca), no incident of fraud has been reported by the Auditors of the Company under section 143(12) of the Companies Act, 2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAl) ACT, 2013

The Company has in place an anti-sexual harassment Policy and an Internal Complaints Committee in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under the policy. The following is a summary of sexual harassment complaints received and disposed off during the year 20202021.

No. of complaints received: Nil

No. of complaints disposed off: Nil

During the year, the Company carried out awareness programmes on prevention of sexual harassment at work place.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Directors place on record their deep appreciation for the contribution made by the employees of the Company at all levels. Our industrial relations continue to be cordial.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure - 10 & 11 to this Report.

HUMAN RESOURCES

The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees, continued to receive top priority.

The union settlements in plant of the Company located at Bhiwadi was concluded successfully during the FY 2020-21.

The total number of permanent salaried and hourly paid employees, as at March 31,2021 stood at 3133.

SAFETY, HEALTH AND ENVIRONMENT PROTECTION

The Company sustained its initiatives to maintain a pollution free environment by reduction/ elimination of waste, optimum utilization of power and preventive maintenance of equipments and machineries to keep them in good condition. Safety and health of the people working in and around the manufacturing facilities is the top priority of the Company and we are committed to improve this performance year after year.

ACKNOWLEDGMENT

Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Bank(s), Customers, Dealers, Vendors, promoters, shareholders, Government Authorities and all the other business associates during the year under review. The Directors also wish to place on record their deep sense of gratitude for the committed services of the Executives, staff and workers of the Company.

For and on behalf of the Board of Directors

Federal-Mogul Goetze (India) Limited

(Vinod Kumar Hans) (Khalid Iqbal Khan)
Whole-time Managing Director Whole-time Director-Legal &
Date: 28th June, 2021 DIN:03328309 Company Secretary
Place: Gurugram DIN: 05253556