samvardhana motherson international ltd share price Directors report


To the Members,

Your Directors have the pleasure in presenting the 35th Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2022. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

The summarized financial results for the year ended March 31, 2022 and for previous year ended March 31, 2021 are as follows:

Rs. in Million

Particulars Standalone Consolidated
March 31,2022 March 31,2021 March 31,2022 March 31,2021
Continuing Operations
Revenue from contract with customers 52,970 36,353 628,317 569,513
Other operating revenue 478 339 7,043 4,186
Revenue from operations 53,448 36,692 635,360 573,699
Other Income 7,114 1,104 4,957 2,293
Profit before depreciation, interest and tax 13,132 5,511 49,571 45,882
Less: Depreciation and amortization expense 2,042 1,983 29,582 29,260
Less: Finance Costs 1,411 897 5,426 5,115
Less: Exceptional Expenses 481 199 481 623
Add: Share of profit / (loss) in associates - - 160 849
Profit Before Tax from continuing operations 9,198 2,432 14,242 11,733
Less: Provision for Tax 1,202 491 6,069 (694)
Less: Minority Interest - - 3,077 5,302
Profit after tax from continuing operations 7,996 1,941 5,096 7,125
Discontinued Operations
Revenue from operations 39,735 41,382 39,735 41,382
Other income 207 275 207 275
Profit before tax from discontinued operations 4,846 4,396 4,846 4,396
Tax expenses 1,204 1,129 1,204 1,129
Profit after tax from discontinued operations 3,642 3,267 3,642 3,267
Total Profit from continuing and discontinued operations 11,638 5,207 8,738 10,392
Add: Balance brought forward 32,951 27,725 81,102 70,642
Profit available for appropriation 44,589 32,932 89,840 80,184
Other Comprehensive income from continuing operations 284 (227) 2,218 3,227
Other Comprehensive income from discontinued operations (22) (8) (22) (8)
Total other Comprehensive income from continuing and discontinued operations 262 (235) 2,196 3,219

The Composite Scheme of Amalgamation and Arrangement amongst your Company (the Amalgamated Company), Samvardhana Motherson International Limited (the Amalgamating Company) and Motherson Sumi Wiring India Limited (the Resulting Company) and their respective shareholders and creditors meet the criteria prescribed in Ind AS 105 (Non-current Assets Held for Sale and Discontinued Operations) was considered as discontinued operation.

Accordingly, Domestic Wiring Harness Business has been disclosed as discontinued operation in the financial results for the F.Y. ended March 31, 2022.

The profit available for appropriation for the year ended March 31, 2022 is INR 44,589 million and being carried over as surplus to the Profit & Loss Account as on March 31, 2022.

The Directors are pleased to recommend for approval of the members a payment of dividend of Re. 0.65 (Sixty Five Paise only) per share (face value of Re. 1/- each) on the Share Capital of the Company for the financial year ended March 31,2022 to the equity shareholders.

The dividend, if approved by the members, would involve total cash outflow on account of dividend of INR 2,936 Million resulting in a pay-out of 37% of the standalone profits of the Company and 58% of the consolidated profits of the Company.

The Groups operations have been impacted partially in the periods presented by the outbreak of the COVID-19 pandemic and the consequent lockdown announced by the governments in many of the jurisdictions.

On consolidated basis for the financial year 2021-22, your Company achieved total revenue from operations of INR 635,360 million as compared to the revenue of INR 573,699 million of the previous financial year ended March 31, 2021 from continuing operations. Net profit for the financial year is at INR 5,096 million as compared to the previous years net profit of INR 7,125 million.

On standalone basis for the financial year 2021-22, your Company achieved total revenue from operations of INR 53,448 million as compared to its total revenue of INR 36,692 million of the previous financial year ended March 31, 2021 from continuing operations. The profit after tax for the year ended March 31, 2022 is INR 7,996 million as compared to INR 1,941 million of the previous financial year ended March 31, 2021. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis Report.

The Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations") is presented in a separate section forming part of the Annual Report.

Moodys Investor services has revised and improved the Rating Outlook to Stable from Negative while affirming the Ba1 corporate family rating (CFR) to the Company in April 2021.

In addition, the Company enjoys following domestic ratings:

Rating ICRA CRISIL India Ratings and Research
Long Term ICRA AA+ Stable (Reaffirmed) CRISIL AA+/Stable (Reaffirmed) IND AAA/ Stable
Short Term ICRA A1+ (Reaffirmed) CRISIL A1+ (Reaffirmed) IND AAA/Stable / IND A1 +
Commercial Papers ICRA A1+ (Reaffirmed) CRISIL A1+ (Reaffirmed) IND A1 +
Non-Convertible Debentures - CRISIL AA+ IND AAA/Stable

Standard & Poors Global Ratings ("S&P") has revised its rating for Samvardhana Motherson Automotive Systems Group B.V., Netherlands (SMRP BV), a subsidiary of the Company, for its long term credit from BB+ to BB.

The details of the credit ratings of the Company are available on its website www.motherson.com.

The Company has neither invited nor accepted any deposits from public covered under Chapter V of the Companies Act, 2013, and as such, no amount on account of principal or interest on deposits from public was outstanding or remained unclaimed or unpaid lying with the Company, as on the date of the balance sheet.

There are no deposits invited or accepted by the Company which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

In accordance with the Companies Act, 2013 and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 - Investments in Associates, Ind AS 31 - Interests in Joint Ventures and Ind AS 116 - Leases, the audited consolidated financial statement is provided in the Annual Report.

The performance of the Company on consolidated basis is discussed at length in the Management Discussion and Analysis Report.

The Board of Directors of your Company at its meeting held on July 2, 2020, approved the composite Scheme of Amalgamation and Arrangement amongst your Company ("the Amalgamated Company"), Samvardhana Motherson International Limited ("the Amalgamating Company") ("erstwhile SAMIL") and Motherson Sumi Wiring India Limited ("the Resulting Company") ("MSWIL") and their respective shareholders and creditors ("the Scheme").

The Scheme, inter-alia, had provided to (A) demerge the Domestic Wiring Harness Undertaking or DWH Undertaking (as defined in the Scheme) into the Resulting Company and (B) amalgamate the Amalgamating Company with the Company, by absorption, subsequent to the completion of the demerger referred to in (A). Further, the Scheme was subject to receipt of necessary Statutory and Regulatory approvals under applicable laws including but not limited to approval of BSE Limited and National Stock Exchange of India Limited, approval of requisite majority of the shareholders and creditors of the Company and Honble National Company Law Tribunal, Mumbai Bench ("Honble NCLT").

The Scheme was approved by the Honble NCLT by way of its order dated December 22, 2021. Pursuant to the Scheme, the Domestic Wiring Harness Undertaking or DWH Undertaking (as defined in the Scheme) of the Company has been demerged into MSWIL with effect from January 5, 2022 and erstwhile SAMIL has merged with and into the Company with effect from January 21, 2022.

Accordingly, the Equity Shareholders of the Company were issued and allotted 1 (one) Equity Share of face value of Re.1 (Indian Rupee One) each of MSWIL for every 1 (one) Equity Share of face value of Re. 1 (Indian Rupee One) each of the Company as a consideration for demerger.

Further, in consideration of the amalgamation of erstwhile SAMIL into and with the Company, the Company issued and allotted 51 (Fifty One) equity shares of the Company of Re. 1 each (Rupee One only) for every 10 (Ten) equity shares of erstwhile SAMIL of face value of Rs. 10 each (Rupees Ten only) to the shareholders of erstwhile SAMIL.

Pursuant to the Scheme, the authorised share capital of the Company has increased from INR 630,00,00,000/- (Rupees Six Hundred Thirty Crores only) consisting of 605,00,00,000 (Six Hundred Five Crore) Equity Shares of Re. 1/- (Rupee One) each and 2,50,00,000 (Two Crore Fifty Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each to INR 1230,00,00,000 (Rupees One Thousand Two Hundred and Thirty Crores) consisting of 1230,00,00,000 (One Thousand Two Hundred and Thirty Crores) Equity Shares of Re. 1/- (Rupee One) each.

Further, the details of paid up share capital of the Company prior and post the Scheme are as below:

SI. No. Particulars Share Capital (in INR)
1. Paid- up Share Capital prior allotment (A) 3,15,79,34,237
2. Cancellation of cross-holding consequent to the merger (B) 1,05,57,50,653
3. (A-B) (C) 2,10,21,83,584
4. Allotment of shares pursuant to the Scheme (D) 2,41,54,30,660
5. Paid-up Share Capital post allotment (C+ D) 4,51,76,14,244

Accordingly, as on March 31, 2022, the paid-up share capital of the Company was INR 451,76,14,244/- (Rupees Four Hundred Fifty One Crores Seventy Six Lakhs Fourteen Thousand Two Hundred and Forty Four only) consisting of 451,76,14,244 (Four Hundred Fifty One Crores Seventy Six Lakhs Fourteen Thousand Two Hundred and Forty Four only) Equity Shares of Re. 1/- (Rupee One) each.

During Financial year 2021-22, the Company has raised funds, inter-alia, by issue of Non-Convertible Debentures ("NCDs") on a private placement basis. The key terms of issuance of NCDs are as below:

A) NCDs allotted on November 25. 2021 Series I:

Instrument 5.69% Unsecured Rated Listed Redeemable Non-Convertible Debenture
Amount Raised INR 250 Crores
Face Value INR 10,00,000/- each
Number of Securities 2,500
Maturity Date November 25, 2024
Interest Payment 5.69% Annually (Payable on November 25, 2022, November 25,2023 and November 25,2024)
End Use The proceeds to be utilized for refinancing of existing indebtedness and/or other bonafide business purposes including capital expenditure, operating expenses and/or working capital.
Credit Rating IND AAA/ Stable by India Ratings and Research Private Limited
IS IN INE775A08055
Listed on Stock Exchange BSE Limited
Series II:
Instrument 6.09% Unsecured Rated Listed Redeemable Non-Convertible Debenture
Amount Raised INR 515 Crores
Face Value INR 10,00,000/- each
Number of Securities 5,150
Maturity Date November 25, 2026
Interest Payment 6.09% Annually (Payable on November 25, 2022, November 25, 2023, November 25, 2024, November 25, 2025 and November 25, 2026)
End Use The proceeds to be utilized for refinancing of existing indebtedness and/or other bonafide business purposes including capital expenditure, operating expenses and/or working capital.
Credit Rating IND AAA/ Stable by India Ratings and Research Private Limited
ISIN INE775A08063
Listed on Stock Exchange BSE Limited
B) NCDs allotted on December 8. 2021
Instrument Rated, Listed, Unsecured, Redeemable Non-Convertible Debentures
Amount Raised INR 235 Crore
Face Value INR 10,00,000/- each
Number of Securities 2350
Maturity Date December 8,2024
Interest Payment 5.68% Annually (Payable on December 8, 2022; December 8, 2023 and December 8, 2024)
End Use The proceeds to be utilized for refinancing of existing indebtedness and/or other bonafide business purposes including capital expenditure, operating expenses and/or working capital.
Credit Rating IND AAA by India Ratings and Research Private Limited
ISIN INE775A08071
Listed on Stock Exchange BSE Limited

During the Financial year 2021-22, the Company has raised funds by issue of Commercial Papers, key terms of which are as below:

A) Commercial Paper issued on September 24. 2021

Instrument Listed, Unsecured Commercial Paper
Issue Size INR100 Crore
Maturity Date December 24, 2021
Interest Rate 3.70%
ISIN INE775A14764
Listed on Stock Exchange BSE Limited

The above Commercial Paper was repaid on the maturity date.

The details of changes in Companys subsidiaries, joint venture or associate companies, are as following:

1. Companies which became subsidiaries (direct and indirect) during financial year 2021-22 are as follows:

(a) Subsidiary through incorporation:

Jilin Huakai - PKC Wire Harness Co. Ltd. was incorporated on March 11, 2022 in China as an indirect subsidiary of the Company.

(b) Subsidiary through acquisition:

(i) Samvardhana Motherson Automotive Group B.V., Netherland, an indirect subsidiary of the Company, acquired 75% stake in Plast Met Plastik Metal Sanayi Imalat ve Ticaret Anonim Sirketi on April 29, 2021. SMR Plast Plast Met Molds and Tools Turkey Kalip Imalat Anonim Sirketi has become indirect subsidiary of the Company.

(ii) Samvardhana Motherson Automotive Group B.V., Netherland, an indirect subsidiary of the Company, acquired 75% stake in Plast Met Plastik Metal Sanayi Imalat ve Ticaret Anonim Sirketi on April 29, 2021. SMR Plast Met Automotive Tec Turkey Plastik imalat Anonim ?irketi has become indirect subsidiary of the Company.

(iii) Ningbo SMR Huaxiang Automotive Mirrors Ltd, a step down subsidiary of Samvardhana Motherson Automotive

Systems Group B.V, an indirect subsidiary of the Company, acquired 60% stake in Nanchang JMCG Mekra Lang Vehicle Mirror Co, Ltd. on October 8, 2021. Accordingly, Nanchang JMCG Mekra Lang Vehicle Mirror Co, Ltd has become an indirect subsidiary of your Company.

(c) Subsidiary pursuant to merger:

Samvardhana Motherson International Limited (erstwhile SAMIL) merged with the Company effective from January 21, 2022. Accordingly, upon merger of erstwhile SAMIL, below mentioned subsidiaries of erstwhile SAMIL had become the subsidiaries of Company:

(i) CTM India Limited

(ii) Motherson Molds and Diecasting Ltd.

(iii) Motherson Innovations Tech Ltd.

(iv) Motherson Invenzen XLab Private Limited

(v) Motherson Consultancies Service Limited

(vi) MS Global India Automotive Private Limited

(vii) Samvardhana Motherson Auto Component Pvt. Ltd.

(viii) Motherson Air Travel Agencies Limited

(ix) Samvardhana Motherson Maadhyam International Limited

(x) Motherson Technology Services Limited (formerly MothersonSumi Infotech & Designs Limited) (MTSL)

(xi) Samvardhana Motherson Global Carriers Limited (SMGCL)

(xii) Samvardhana Motherson Hamakyorex Engineered Logistics Limited (Subsidiary through SMGCL)

(xiii) Samvardhana Motherson Finance Service Cyprus Limited

(xiv) Samvardhana Motherson Holding (M) Private Limited

(xv) Samvardhana Motherson Innovative Solutions Limited (SMISL)

(xvi) Samvardhana Motherson Refrigeration Product Limited (Subsidiary through SMISL)

(xvii) Motherson Machinery and Automations Limited (Subsidiary through SMISL)

(xviii) Samvardhana Motherson Auto System Private Limited (Subsidiary through SMISL)

(xix) SAKS Ancillaries Limited (Subsidiary through SMISL)

(xx) Motherson Auto Solutions Limited (through SMISL)

(xxi) Motherson Techno Tools Limited (MTTL) (Subsidiary through SMISL)

(xxii) Motherson Techno Tools Mideast FZE (Subsidiary through MTTL)

(xxiii) Motherson Sintermetal Technology B.V. (Subsidiary through SMISL)

(xxiv) Samvardhana Motherson Virtual Analysis Limited (Subsidiary through MTSL)

(xxv) MSID US Inc. (Subsidiary through MTSL)

(xxvi) MothersonSumi Infotech & Designs KK (Subsidiary through MTSL)

(xxvii) MothersonSumi Infotech and Designs S.G. Pte. Limited (Subsidiary through MTSL)

(xxviii) Motherson Auto Engineering Service Limited (Subsidiary through MTSL)

(xxix) Samvardhana Motherson Health Solutions Limited (Subsidiary through MTSL)

(xxx) SMI Consulting Technologies Inc. (Subsidiary through MTSL)

(xxxi) Motherson Infotek Designs Mid East FZ- LLC (Subsidiary through MTSL)

(xxxii) Motherson Infotech and Solutions UK Ltd (Subsidiary through MTSL)

(xxxiii) Motherson Information Technologies Spain S.L.U. (Subsidiary through MTSL)

2. Companies which ceased to be subsidiaries during financial year 2021-22 are:

(i) SMRC Smart Automotive Interior Technologies USA, LLC, an indirect subsidiary of your Company has been dissolved effective from June 28, 2021; and

(ii) SMP Automotive Technology Management Services (Changchun) Co. Ltd., an indirect subsidiary of your Company has been deregistered effective from May 8, 2021.

3. Companies which became joint venture during financial year 2021-22 are:

Also, upon merger of erstwhile SAMIL, below mentioned joint ventures of erstwhile SAMIL had become joint ventures of Company:

(i) Valeo Motherson Thermal Commercial Vehicles India Ltd.

(ii) Matsui Technologies India Ltd. (Matsui)

(iii) Frigel Intelligent Cooling Systems India Pvt. Ltd. (Joint Venture through Matsui)

(iv) Fritzmeier Motherson Cabin Engineering Pvt. Ltd.

(v) Marelli Motherson Automotive Lighting India Private Limited

(vi) Marelli Motherson Auto Suspension Parts Private Limited

(vii) Motherson Bergstrom HVAC Solution Pvt. Ltd

(viii) Youngshin Motherson Auto Tech Limited

(ix) Anest Iwata Motherson Private Ltd.

(x) Anest Iwata Motherson Coating Equipment Pvt. Ltd.

(xi) Nissin Advanced Coating Indo. Co. Pvt. Ltd.

(xii) AES (India) Engineering Limited

In accordance with section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company and all of its subsidiaries, associate and joint venture companies form part of the Annual Report.

Further, a statement containing salient features of the financial statement of the Companys subsidiaries, associate and joint venture companies is annexed in Form AOC-1, which forms a part of the Annual Report.

Details of subsidiaries of the Company, their performance are covered in Management Discussion and Analysis Report forming part of this Report.

The Companys exports during the year were INR 11,733 million as against INR 8,375 million in the previous financial year from continuing operations. The Company continues to make its efforts towards achieving higher growth by providing cost competitive quality solutions to its customers. In addition, the Company has facilities globally, to provide service to the customers as well as enhance customer relationships.

The Board of Directors met eight (8) times during the financial year 2021-22 and the details of same are given in the Corporate Governance Report forming part of this Annual Report. The intervening gap between two consecutive meetings was not more than one hundred and twenty (120) days as prescribed by the Companies Act, 2013 and the Listing Regulations.

During the financial year 2021-22, following were the changes in the Board of Directors of the Company:

1) Change in director due to cessation / resignation:

i) Mr. S.C. Tripathi, IAS (Retd.) (DIN: 00941922) ceased to be an Independent Director on the Board of the Company with effect from May 19, 2021 due to his sad demise. He was a visionary and an industry stalwart, managing diverse roles across various industries in his long career.

ii) Mr. Takeshi Fujimi (DIN: 08501292) resigned and thus ceased to be a Director from the Board of the Company effective from January 4, 2022.

iii) Mr. Arjun Puri (DIN: 00211590) resigned and ceased to be an Independent Director of the Company effective from January 28, 2022 simultaneously upon his appointment as an Independent Director on the Board of Directors of MSWIL.

iv) Ms. Geeta Mathur (DIN: 02139552) resigned and ceased to be an Independent Director of the Company effective from January 28, 2022 simultaneously upon her appointment as an Independent Director on the Board of Directors of MSWIL.

2) Change in director due to appointment:

i) Ms. Rekha Sethi (DIN: 06809515) was appointed as an Additional and an Independent Director by the Board of Directors in its meeting held on August 10, 2021 for a period of 5 (five) years commencing from August 10,2021 to August 9, 2026. The appointment of Ms. Rekha Sethi as an Independent Director was approved by the shareholders of the Company in 34th Annual General Meeting held on September 17, 2021.

ii) Mr. Norikatsu Ishida (DIN: 09443998) was appointed as an Additional Director, liable to retire by rotation by the Board of Directors

in its meeting held on January 4, 2022. The appointment of Mr. Norikatsu Ishida as a nonexecutive Director, liable to retire by rotation was approved by the shareholders of the Company in their Extra-Ordinary General Meeting held on March 30, 2022.

iii) Mr. Veli Matti Ruotsala (DIN: 09462008) was appointed as an Additional and an Independent Director by the Board of Directors in its meeting held on January 28, 2022 for a period of 5 (five) years commencing from January 28, 2022 to January 27, 2027. The appointment of Mr. Veli Matti Ruotsala as an Independent Director was approved by the shareholders of the Company in their Extra-Ordinary General Meeting held on March 30, 2022.

iv) Mr. Robert Joseph Remenar (DIN: 09469379) was appointed as an Additional and an Independent Director by the Board of Directors in its meeting held on January 28, 2022 for a period of 5 (five) years commencing from January 28, 2022 to January 27, 2027. The appointment of Mr. Robert Joseph Remenar as an Independent Director was approved by the shareholders of the Company in their Extra- Ordinary General Meeting held on March 30, 2022.

As per provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Laksh Vaaman Sehgal (DIN: 00048584), Director of the Company, is liable to retire by rotation in the ensuing AGM. Mr. Laksh Vaaman Sehgal being eligible seeks his re-appointment. Accordingly, the Board of Directors recommend the re-appointment of Mr. Laksh Vaaman Sehgal to the members of the Company.

The Board of Directors has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) read with Regulation 25 of the Listing Regulations. The Board is of the opinion that they are the persons of integrity and possesses relevant expertise and experience.

During the year, Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors, Committee(s) and meeting of the Independent Directors. The details of remuneration and/ or other benefits of the Independent Directors are mentioned in the Corporate Governance Report.

The Audit Committee of the Board for the financial year ended March 31, 2022 was comprised of Mr. Gautam Mukherjee as Chairman, Mr. Naveen Ganzu, Ms. Rekha Sethi, Mr. Veli Mati Ruotsala as Independent Directors and Mr. Shunichiro Nishimura, Mr. Laksh Vaaman Sehgal as non-executive directors. During the year all the recommendations made by the Audit Committee were duly accepted by the Board.

Details on Committees constituted by the Board under the Companies Act, 2013 and the Listing Regulations, their composition as well as changes in their composition, if any, during the year and the number and dates of meetings of such committees held during the year are covered in Corporate Governance Report which forms part of the Annual Report for the Financial Year 2021-22.

In terms of the provisions of section 203 of the Companies Act, 2013, during the financial year under review the Company had following whole-time Key Managerial Personnel:

1. Mr. Pankaj Mital, Whole-time Director and Chief Operating Officer

2. Mr. G.N. Gauba, Chief Financial Officer upto January 28, 2022

3. Mr. Kunal Malani, Chief Financial Officer effective from January 28, 2022

4. Mr. Alok Goel, Company Secretary

(a) The Board of Directors of the Company in its meeting held on October 8, 2021 had approved acquisition of 55% stake in CIM Tools Private Limited (CIM). Further, the shareholders of the Company through Postal Ballot on December 3,2021 granted their approval by way of a special resolution to make investment and/ or provide loan / guarantee in excess of the limits prescribed under Section 186 of the Companies Act, 2013. The closing of said transaction was completed by the Company on April 6, 2022 CIM in turn holds 83% in Aero Treatment Private Limited (ATPL) and 49.99% in Lauak CIM Aerospace (JV with Lauak International, LCA).

(b) The Scheme of Amalgamation and Arrangement as mentioned hereinabove duly approved by Plonble NCLT had, inter-alia, provided for change in name of the Company from Motherson Sumi Systems Limited to Samvardhana Motherson International Limited. The Registrar of Companies approved the change in name of the Company with effect from May 18, 2022 and issued fresh Certificate of Incorporation. Further, the Stock Exchanges, i.e., National Stock Exchange of India Limited and BSE Limited granted their approval to the name change on June 3, 2022 and accordingly, the name and SCRIP ID / Symbol of the Company changed to "Samvardhana Motherson International Limited" and "MOTFIERSON" respectively with effect from June 9, 2022.

In terms of the requirement of the Companies Act, 2013 and Listing Regulations, the Board carried out an annual evaluation of its own performance, Board Committees, individual Directors including the Independent Director and the Chairman of the Company on the basis of the criteria specified as per the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India with the aim to improve the effectiveness of the Board and the Committees.

The criteria for evaluation under different categories depends on the role the person(s)/group(s) plays in the Company. The criteria for every evaluation for the FY 2021-22 was decided at every level depending on the functions, responsibilities, competencies required, nature of business etc., detailed as below:

Person(s)/ Group(s) Evaluation Criteria
Chairman of the Company Leadership, steering skills, impartiality, commitment, ability to keep shareholders interest in mind etc.
Board The board composition and structure, meetings of the Board, effectiveness of board processes and its functions, monitoring effectiveness of Governance practices, evaluation of performance of management and providing their feedback etc.
Committees of the Board The composition of Committees, structure of Committees, effectiveness of Committee meetings, independence of the Committees from the Board, contribution to the decisions of the Board etc.
Executive/ Non-Executive/ Independent Director(s) Criteria for all type of Directors- qualification, experience, knowledge and competencies, fulfilment of functions, commitment and their participation and contribution at the Board meetings and Committee meetings etc.
Additional criteria in case of Independent Directors, i.e, independent from the Company and other Directors, providing independent views and judgement.

In a separate meeting of Independent Directors held during the financial year 2021-22, performance of Non- Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive Directors and nonexecutive Directors. The Independent Directors at their meeting held also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

During the year, Board Evaluation was completed by the Company internally which included the Evaluation of the Board as a whole, Board Committees and Evaluation of the Directors. The exercise was led by the Chairman of the Board whereby the process involved independent discussions with all Board members who gave their feedback and inputs about the performance of the Board, its Committees, Individual Directors, and the Chairman of the Company and effectiveness of the Board/Committee processes.

It was noted that the Board as a whole is functioning as a cohesive body which is well engaged with different perspectives. The Board Members from different backgrounds bring about different complementarities and deliberations in the Board and Committee Meetings. It was also noted that the Committees are functioning well and all important issues are brought up and discussed in the Committees as per its terms of reference as mandated by law.

In the Board Meeting that followed the meeting of the Independent Directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire board, excluding the Independent Directors being evaluated.

Pursuant to Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Committee constituted under the provisions of section 178(1) of the Companies Act, 2013, recommended to the Board of Directors of your Company, a policy on Directors appointment and remuneration, including, criteria for determining qualifications, positive attributes, independence of a Director and other matters. The said policy as approved by the Board of Directors, is uploaded on the Companys website at www.motherson.com. The extract of the said Policy is also covered in Corporate Governance Report which forms part of this Report.

Pursuant to section 134(3)(c) of the Companies Act, 2013 and subject to disclosures in the Annual Accounts, your Directors state as under :-

(a) That in preparation of the annual accounts for the financial year ended March 31, 2022, the applicable Accounting Standards have been followed and there are no material departures;

(b) That the Directors have selected appropriate Accounting Policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2022 and of the profit of the Company for that period;

(c) That 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) That the Directors have prepared the annual accounts on a going concern basis;

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

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

Statutory Auditors

As per section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in 30th AGM approved the appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, (Firm Registration No. 301003E/IE300005), as the Statutory Auditors of the Company for a term of 5 (five) years, i.e, from the conclusion of 30th Annual General Meeting (AGM) till the conclusion of ensuing 35th AGM of the Company. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants are eligible for re-appointment.

The Company has received confirmation from the Statutory Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014.

The Board is of the opinion that continuation of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the Company will be in the interests of the Company and therefore, the members are requested to consider their re-appointment as Statutory Auditors of the Company, for a term of five years, from the conclusion of the ensuing 35th AGM, till the conclusion of 40th AGM to be held in the calendar year 2027, at such remuneration mutually agreed and approved by the Board.

The notes on the financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments.

The Auditors Report annexed with this Annual Report, does not contain any qualification, reservation or adverse remarks.

During the Financial Year 2021-22, the Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3)(ca) of the Companies Act, 2013.

Cost Auditor

The maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records have been prepared and maintained by the Company for the financial year 2021-22.

As per recommendation of the Audit Committee, the Board of Directors has appointed M/s. M.R. Vyas & Associates, Cost and Management Accountants (Registration No. 101394) as Cost Auditor for conducting the audit of cost records of the Company for the financial year 2021-22.

During the Financial Year 2021-22, the Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3)(ca) of the Companies Act, 2013.

Secretarial Auditor

In terms of section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, based upon the recommendations of the Audit Committee, the Board of Directors had appointed M/s. SGS Associates, Company Secretaries (CP No. 1509) as the Secretarial Auditor of the Company, for conducting the Secretarial Audit for financial year ended March 31, 2022.

The Report given by the Secretarial Auditor is annexed herewith and forms integral part of this Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

During the Financial Year 2021-22, the Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3)(ca) of the Companies Act, 2013.

During the year, the Company had received various awards and recognitions, which have been described in "Awards and Recognition" section, forming part of the Annual Report.

Particulars of loans given, Investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by recipient are provided in the standalone financial statement. Please refer Note No. 6(a), 6(b) and 7 to the standalone financial statements.

Pursuant to Policy on Related Party Transaction of the Company, all contracts/ arrangements/ transactions entered by the Company during financial year with related parties which were on arms length basis and were in ordinary course of business were approved by the Audit Committee. During the year, the Company did not enter into any contract / arrangement/ transaction with related parties which could be considered material for which shareholders approval is required in accordance with the policy of the Company on materiality of related party transactions. Thus, provisions of section 188(1) of the Companies Act, 2013 are not applicable to the Company.

Pursuant to the provision of applicable Listing Regulations, all related party transactions are placed before the Audit Committee for approval including the transaction under section 188 of the Companies Act, 2013 and Regulation 23 of Listing Regulations. Prior omnibus approval of the Audit Committee has been obtained for transactions which are foreseen and repetitive in nature and where the need for related party transaction cannot be foreseen, Audit Committee granted omnibus approval for such transactions having value upto rupees one crore per transaction. The transactions entered into pursuant to omnibus approval were presented to the Audit Committee on quarterly basis by way of a statement giving details of all related party transactions.

The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board and amended from time to time is uploaded on the Companys website.

Your Directors draw attention of the members to Note No. 40 to standalone financial statement which sets out related party disclosures.

Approval of Related Party Transactions pursuant to SEBI Listing Regulations

The Securities and Exchange Board of India ("SEBI") notified SEBI (Listing Obligation and Disclosure Requirements) (Sixth Amendment) Regulation, 2021 on November 9, 2021 which were effective from April 1, 2022. The amended provisions of Regulation 23 of Listing Regulations defines a "material related party transaction" as transaction to be entered into individually or taken together with previous transactions during a financial year by the Company, which exceeds INR 1,000 crore or 10% of annual consolidated turnover of the listed entity, whichever is lower, as per last audited financial statements of the listed entity. Further, such "material related party transactions" require prior approval of shareholders.

In respect of above, the shareholders of the Company at its Extra-ordinary General Meeting held on March 30, 2022 granted their approval for entering into contract(s) / agreements(s) / arrangement(s) / transaction(s), between the Company and/or its subsidiaries and/or its joint ventures on the one hand, with following counter- parties:

(1) Motherson Sumi Wiring India Limited; and

(2) SEI Thai Electric Conductor Co., Ltd., Thailand for purchase of copper.

The shareholders of the Company in the said meeting had approved aforesaid related party transactions, as more particularly mentioned in the said notice for the meeting held on March 30, 2022 read with the explanatory statement attached thereto pursuant to section 102 of the Companies Act, 2013.

The Notice convening the said meeting along with the voting results can be viewed on the website of the Company at www.motherson.com.

Information under section 134(3)(m) of the Companies Act, 2013, read with rule 8(3) of Companies (Accounts) Rules, 2014 is given in Annexure- A to this Report.

Disclosure pertaining to remuneration and other details as required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-B to this Report.

The Statement containing the particulars of employees as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable rules (if any), is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of section 136 of the Companies Act, 2013 the said annexure is open for inspection at the registered office of the Company during the working hours for a period of twenty-one days before the date of the AGM. Any member interested in obtaining a copy of the same may write to the Company.

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under the Listing Regulations. A separate section on Corporate Governance, forming a part of Annual Report and the requisite certificate from the Companys Auditors confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Business Responsibility and Sustainability Report:

Securities and Exchange Board of India (SEBI) vide its circular dated May 10, 2021, made Business Responsibility and Sustainability Report (BRSR) mandatory for the top 1,000 listed companies (by market capitalization) from F.Y. 2022-2023, while disclosure is voluntary for F.Y. 2021- 2022.

The Company on voluntary basis has provided BRSR, in lieu of the Business Responsibility Report which indicates the Companys performance against the principles of the National Guidelines on Responsible Business Conduct. This would enable the shareholders to have an insight into environmental, social and governance initiative of the Company.

The BRSR describing the initiatives taken by your Company from an environmental, social and governance perspective, in the prescribed format is available as a separate section of the Annual Report.

Dividend Distribution Policy:

As per regulation 43A of the Listing Regulations, the extract of Dividend Distribution Policy of your Company is disclosed in the Corporate Governance Report and the said Policy is also uploaded on the Companys website.

The Equity shares of your Company are presently listed at the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

NCDs issued and allotted by your Company are listed on BSE Limited (BSE).

The listing fees for the financial year 2022-23 has been paid to the said Stock Exchanges. The Companys equity shares continue to remain listed on NSE and BSE while its NCDs remain listed on BSE.

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit Reports are presented directly to the Chairman of the Audit Committee and its members.

Details about Internal controls and their adequacy are set out in the Management Discussion & Analysis Report which forms part of this report.

The Board of Directors had constituted Risk Management Committee to assist the Board with regard to the identification, evaluation and mitigation of strategic, operational, external environment and cyber security risks and in fulfilling its corporate governance oversight responsibilities and to develop policy for actions associated to mitigate the risks. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continual basis.

On recommendation ofthe RiskManagementCommittee, the Board of Directors of your Company in their meeting held on November 10, 2020 adopted the amended Risk Management Policy for the Company. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

During the period under review, no such order is passed by any Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations other than the orders mentioned herein above.

In accordance with the requirements of section 135 of the Companies Act, 2013, your Company has a Corporate Social Responsibility (CSR) Committee. The CSR Committee comprises of Mr. Vivek Chaand Sehgal Chairman, Ms. Rekha Sethi, Independent Director and Mr. Laksh Vaaman Sehgal, Non-Executive Director.

The terms of reference of the Corporate Social Responsibility (CSR) Committee is provided in the Corporate Governance Report. Your Company has also formulated a Corporate Social Responsibility Policy (CSR Policy). The Board of Directors in its meeting held on May 26,2022 amended its CSR Policy considering the changes made by Ministry of Corporate Affairs. The amended CSR Policy is available on the website of the Company at www. motherson.com.

Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure-C and forms integral part of this Report.

The Company is, inter-alia, also performing CSR activities through Swarn Lata Motherson Trust which has been established for the sole purpose of CSR activities. Further, the Company continue to carry out CSR activities as specified under schedule VII to the Companies Act, 2013.

The Company has established a vigil mechanism which incorporates a whistle blower policy in terms of the Companies Act, 2013 and the Listing Regulations for Directors and employees to report their genuine concerns. The objective of the Policy is to create a window for any person who observes an unethical behaviour, actual or suspected fraud, or violation of the Companys Code of Conduct or ethics policy (hereinafter "Unethical and Improper Practices"), either organizationally or individually, to be able to raise it and to provide for adequate safeguards against victimization of whistle blower and also to provide for direct access to the chairperson of the audit committee.

Thought Arbitrage Consultancy has been appointed by the Board of Directors as an independent external ombudsman under this Whistle-blower mechanism.

Protected Disclosure can be made by a Whistle Blower through an e-mail or dedicated telephone line or a letter to the Thought Arbitrage Consultancy or to the Chairman of the Audit Committee. The Whistle Blower Policy is available on the Companys website at www.motherson.com.

In accordance with the provisions of Section 92(3) read with section 134(3)(a) of the Companies Act, 2013 and Rules framed thereunder, an annual return in the prescribed format for the financial year 2021-22 is available on the website of the Company at www.motherson.com.

Your Company has complied with the secretarial standards with respect to General and Board Meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.

The relations with the employees and associates continued to remain cordial throughout the year. The Directors of your Company wish to place on record their appreciation for the excellent team spirit and dedication displayed by the employees of the Company.

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee composed of internal members and an external member who has extensive experience in the field.

During the Financial Year 2021-22, there was one complaint filed under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which after enquiry was found non-sustainable.

Notice of the AGM along with the Annual Report 2021- 22 is being sent only through electronic mode to those Members whose email addresses are registered with the Company/ Depositories. Members may note that the Notice and Annual Report 2021-22 will also be available on the Companys website www.motherson.com. websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively. The above are in compliance with General Circular No. 14/2020 dated April 8, 2020 read with General Circular No. 17/2020 dated April 13, 2020, General Circular No. 20/2020 dated May 5, 2020, General Circular No. 22/2020 dated June 15, 2020, General Circular No. 33/2020 dated September 28, 2020, General Circular No. 39/2020 dated December 31, 2020, General Circular No. 02/2021 dated January 13, 2021, General Circular No. 20/2021 dated December 08, 2021 and General Circular No. 2/2022 dated May 5, 2022 issued by the Ministry of Corporate Affairs.

Your Board of Directors would like to place on record their sincere appreciation for the wholehearted support and contributions made by all the employees of the Company as well as customers, suppliers, bankers, investors and other authorities. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

The Directors also thank the Government of various countries, Government of India, State Governments in India and concerned Government Departments/ Agencies for their co-operation, support and look forward to their continued support in the future.

Last but not the least the Board of Directors wish to thank all the stakeholders of the Company and Sumitomo Wiring Systems Limited, Japan for their continuous support.