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Motherson Sumi Systems Ltd.

BSE: 517334 Sector: Auto
NSE: MOTHERSUMI ISIN Code: INE775A01035
BSE 00:00 | 27 Sep 233.40 8.60
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NSE 00:00 | 27 Sep 233.50 8.80
(3.92%)
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OPEN 224.60
PREVIOUS CLOSE 224.80
VOLUME 1093247
52-Week high 273.00
52-Week low 102.35
P/E 87.42
Mkt Cap.(Rs cr) 73,705
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 224.60
CLOSE 224.80
VOLUME 1093247
52-Week high 273.00
52-Week low 102.35
P/E 87.42
Mkt Cap.(Rs cr) 73,705
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Motherson Sumi Systems Ltd. (MOTHERSUMI) - Director Report

Company director report

To the Members

Your Directors have the pleasure in presenting the 33rd Annual Report together with theaudited financials statements of the Company for the financials year ended March 31 2020.The consolidated performance of the Company and its subsidiaries has been referred towherever required.

FINANCIAL RESULTS

The summarized financials results for the year ended March 31 2020 and for previousyear ended March 31 2019 are as follows: Rs. in Million

Particulars

Standalone

Consolidated
March 31 2020 March 31 2019 March 31 2020 March 31 2019
Gross Revenue from operations 68738 75813 635368 635229
Net Revenue from operations 68738 75813 635368 635229
Other Income 3784 1865 2307 2202
Pro_it before depreciation interest and tax 14803 14593 54320 55686
Less: Depreciation and amortisation expense 2883 2193 27780 20582
Less: Finance Costs 306 176 5986 4232
Less: Exceptional Expenses - - - -
Add: Share of pro_it / (loss) in associates - - 575 1131
Pro_it Before Tax 11614 12224 21129 32003
Less: Provision for Tax 2626 4086 8184 11022
Less: Minority Interest - - 1244 4850
Pro_it after tax 8988 8138 11701 16131
Add: Balance brought forward 29836 27258 69792 59338
Pro_it available for appropriation 38823 35396 81493 75469

OPERATIONS AND PERFORMANCE

On consolidated basis for the financials year 2019_20 your Company achieved totalrevenue of Rs. 635368 million in line with its revenue of Rs. 635229 million of theprevious financials year ended March 31 2019. Net pro_it for the year is

Rs. 11701 million as comparable to the previous year's net pro_it of Rs. 16131million.

On standalone basis for the financials year 2019_20 your Company achieved totalrevenue of Rs. 68738 million resulting in a decrease of about 9% over its total revenueof Rs. 75813 million of the previous financials year ended March 31 2019. The pro_itafter tax for the year ended March 31 2020 is Rs. 8988 million.

The operational performance of the Company has been comprehensively covered in theManagement Discussion and Analysis Report.

The Management Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (the "Listing Regulations") is presentedin a separate section forming part of the Annual Report.

The COVID_19 pandemic represents an unprecedented disruption to the global economy andworld trade as production and consumption are scaled back across the globe due topreventive directives from authorities' world over. COVID_19 outbreak continues to grow inmost of the areas of the world with severe toll on health. The Company has taken aholistic approach to protect the interest of various stakeholders including employeescustomers investors and societies. The Company is in close contact with all our customersand receiving regular updates on plant reopening dates and customer schedules.

The Company has evaluated impact of COVID_19 resulting from (i) the possibility ofconstraints to ful_il its performance obligations under the contract with customers;(ii)revision of estimations of costs to complete the contract because of additionalefforts; (iii) termination or deferment of contracts by customers. The Company hasconcluded that the impact of COVID_19 is not material based on these estimates. Due to thenature of the pandemic the Company will continue to monitor developments to identifysignificant uncertainties relating to revenue in future periods.

To further enhance liquidity in these uncertain times the Board of Directors hasaccorded in-principle approval to raise up to Rs. 10000 million and has delegated toits Committee of Directors to evaluate and decide on various borrowing proposals. From theaforesaid limit the Company has availed a loan of Rs. 5000 million by issue of 5000Rated Listed Secured Redeemable Non-Convertible Debentures ("NCDs") of facevalue of INR 1000000/- each on a Private Placement Basis. The NCDs are listed on BSELimited. The Company is also proactively working to leverage on various government supportschemes to enhance liquidity.

DIVIDEND

On February 28 2020 the Board of Directors announced an interim dividend of Rs. 1.50(Rupee One and Fifty Paisa) per equity share for the Financial Year 2019_20 entailing apay-out of Rs. 5711 million (including dividend tax) i.e. 64% of the standalone pro_itsof the Company and 49% of the consolidated pro_its of the Company.

The interim dividend has been paid to all the eligible shareholders and been taken as_inal dividend for the financials year 2019_20.

CREDIT RATING

Moody's Investor services has assigned Ba1 corporate family rating (CFR) to theCompany.

In addition the Company enjoy following domestic ratings:

Rating ICRA CRISIL India Ratings and Research
Long Term AA+; Rating placed on watch with negative implications CRISIL AA+/Negative (Outlook revised from ‘Stable' and rating reaJirmed) IND AAA/RWN
Short Term AA+; Rating placed on A1+ IND AAA/RWN/IND A1+
watch with negative
implications; A1+
Commercial Papers A1+ A1+ IND A1+
Non-convertible - - IND AAA/RWN
Debentures

RWN - Rating on watch

Further Standard & Poor's Global Ratings ("S&P") has revised itsrating for Samvardhana Motherson Automotive Systems Group B.V. Netherlands (SMRP BV) asubsidiary of the Company for its long term credit at BB and Fitch Ratings("Fitch") has rated SMRP BV at BB (Negative outlook) and revised outstandingsecured bonds of SMRPBV to ‘BB+'.

The revision in various rating inter-alia is due to the novel corona virus (Covid-19)outbreak across the World and its impact on the global auto component industry marketconditions streamline of production lines at various green_ield(s) commenced productionduring financials year under review.

FIXED DEPOSITS

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 and Ind AS 110 – Consolidated FinancialStatements read with Ind AS 28 – Investments in Associates Ind AS 31 –Interests in Joint Ventures and Ind AS 116 – Leases the audited consolidatedfinancials statement is provided in the Annual Report.

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

RE_ORGANIZATION OF THE BUSINESS

The Board of Directors of the Company at its meeting held on January 30 2020 grantedin-principle approval for reorganization of business within the group which will interalia demerge domestic wiring harness business of the Company into a newly formed legalentity with mirror shareholding which shall be listed. Further the Board in principleapproved the proposal to consolidate shareholding in Samvardhana Motherson AutomotiveSystems Group B.V. ("SMRP BV") to become 100% under the Company. The Board ofthe Company has also constituted a sub-committee of directors to oversee said process andcome back to the Board with a de_initive proposal and scheme of reorganization. The Boardof the Company inter-alia has empowered the said committee to evaluate and also to takeall such necessary steps as may be required in this respect.

ACQUISITIONS

(a) During the year Company's step down subsidiary SMR Automotive Australia Pty. Ltd.has further invested in Re-time Pty. Ltd. Accordingly stake of SMR Automotive AustraliaPty. Ltd. has increased from 35% to 71.4% and consequently Re-time Pty. Ltd. has becomethe indirect subsidiary of the Company.

(b) During the year the Company's step down subsidiary PKC Wiring Systems Oy hasacquired Wisetime Oy having principal address at Saaristonkatu 23 FI_90100 Oulu Finland.Accordingly stake of PKC Wiring Systems Oy has increased from existing 19% to 100% andconsequently Wisetime Oy has become 100% indirect subsidiary of the Company. Wisetime Oyis an IT software Company.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATES

The details of changes in Company's subsidiaries joint venture or associate companiesare as following:

1. Companies which became subsidiaries (direct and indirect) during financials year2019_20 are as follows: a. Subsidiary through incorporation:

(i) Motherson PKC Harness Systems FZ_LLC (e_ective from July 7 2019)

b. Subsidiary through acquisition: (i) Re-time Pty. Ltd.; and

(ii) Wisetime Oy.

2. Companies which ceased to be subsidiaries during financials year 2019_20 are:

(i) SMR Automotive Servicios Mexico S.A. de C.V. (liquidated on July 2 2019);

(ii) PK Cables Nederland B.V (dissolved on July 10 2019);

(iii) PKC Netherlands Holding B.V. (dissolved on July 31 2019); and

(iv) Samvardhana Motherson Polymers Management Germany GmbH (merged into MSSL GmbHeffective from August 30 2019).

In accordance with section 129(3) of the Companies Act 2013 the consolidatedfinancials statements of the Company including its subsidiaries associate and jointventure companies form part of the Annual Report. Further a statement containing salientfeatures of the financials statement of the Company's subsidiaries associate and jointventure companies is annexed in Form AOC_1 which forms a part of the Annual Report.Details of subsidiaries of the Company and their performance are covered in ManagementDiscussion and Analysis Report forming part of this Report.

EXPORTS FROM INDIA

The Company's exports during the year were Rs. 9975 million as against Rs. 9878million in the previous financials year. The Company continues to make its efforts towardsachieving higher growth by providing cost competitive quality solutions to its customers.In addition the Company has facilities globally to provide service to the customers aswell as enhance customer relationships.

DIRECTORS

As per provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Laksh Vaaman Sehgal and Mr. Shunichiro Nishimura (nominee of Sumitomo WiringSystems Limited Japan ("SWS")) Directors of the Company retire by rotation inthe ensuing Annual General Meeting. Mr. Laksh Vaaman Sehgal and Mr. Shunichiro Nishimurabeing eligible seek their re-appointment. Accordingly the Board of Directors recommendthe re- appointment of Mr. Laksh Vaaman Sehgal and Mr. Shunichiro Nishimura to the membersof the Company.

The members in 29th Annual General Meeting ("AGM") held on August 31 2016inter-alia appointed Mr. Naveen Ganzu as an Independent Director to hold oJice for _ive(5) consecutive years for a term upto October 13 2020.

Mr. Naveen Ganzu is eligible for re-appointment for a second term of _ive (5)consecutive years. Accordingly pursuant to the provisions of the Companies Act 2013 andListing Regulations based on the recommendation of the Nomination and RemunerationCommittee the Board recommends to the members for the re- appointment of Mr. Naveen Ganzufor second term of _ive (5) consecutive years as mentioned in the notice convening 33rdAnnual General Meeting of the Company through special resolution.

The details of appointment/re-appointment of the Directors of the Company are mentionedin the Explanatory Statement under section 102 of the Companies Act 2013 and annexure tothe Notice of the 33rd AGM.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The Board of Directors has received declarations from all the Independent Directors ofthe Company con_irming that they meet with criteria of independence as prescribed bothunder sub-section (6) of Section 149 of the Companies Act 2013 and under Regulation16(1)(b) read with Regulation 25 of the Listing Regulations. During the year IndependentDirectors of the Company had no pecuniary relationship or transactions with the Companyother than sitting fees commission and reimbursement of expenses incurred by them for thepurpose of attending meetings of the Board of Directors and Committee(s). The details ofremuneration and/ or other bene_its of the Independent Directors are mentioned in theCorporate Governance Report.

KEY MANAGERIAL PERSONNEL

In terms of the provisions of section 203 of the Companies Act 2013 during thefinancials year under review the Company has following Key Managerial Personnel:

(a) Mr. Pankaj Mital Whole-time Director and Chief Operating OJicer;

(b) Mr. G.N. Gauba Chief Financial OJicer;and

(c) Mr. Alok Goel Company Secretary.

MATERIAL CHANGES BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THIS REPORT

There is no other material change(s) and commitments between the end of financials yearand the date of this report.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met six (6) times during the financials year 2019_20 and thedetails of same are given in the Corporate Governance Report forming part of this Report.

The intervening gap between consecutive meetings was not more than one hundred andtwenty (120) days as prescribed by the Companies Act 2013 and the Listing Regulations.

AUDIT COMMITTEE

The Audit Committee of the Board is comprised of Mr. S.C. Tripathi IAS (Retd.)as Chairman Mr. Arjun Puri Mr. Gautam Mukherjee Ms. Geeta Mathur as IndependentDirectors and Mr. Shunichiro Nishimura Mr. Laksh Vaaman Sehgal as Members. Duringthe year all the recommendations made by the Audit Committee were duly accepted by theBoard.

BOARD EVALUATION

The Board carried out an annual evaluation of its performance Board committees andindividual directors. The performance of the Board was evaluated by on the basis ofcriteria such as the board composition and structure effectiveness of board processesinformation and functioning etc.

The performance of the Committees was evaluated on the basis of criteria such as thecomposition of committees effectiveness of committee meetings etc.

The Board carried out the Annual Performance Evaluation for all Board Members as wellas the working of the Board and its Committees based on criteria including such asparticipation and contribution in Board and Committee meetings equal treatment ofshareholders' interest experience and expertise to provide feedback and guidance to topmanagement on business strategy governance risk understanding of the organization'sstrategy internal and external environment etc. with specific focus on the performanceand effective functioning of the Board and Committees for financials year 2019_20.

The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India.

In a separate meeting of Independent Directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive director and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the Independent Directors and meetingof Nomination and Remuneration Committee the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

In adherence to the provisions of Section 134(3)(e) and 178(1) & (3) of theCompanies Act 2013 the Board of Directors upon recommendation of the Nomination andRemuneration Committee approved a policy on Director's appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters. The said Policy extract is covered in Corporate GovernanceReport which forms part of this Report and is also uploaded on the Company's website atwww.motherson.com .

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134(3)(c) of the Companies Act 2013 and subject to disclosures inthe Annual Accounts your Directors state as under :a) That in preparation of the annualaccounts for the financials year ended March 31 2020 the applicable Accounting Standardshave been followed and there are no material departures; b) That the Directors haveselected appropriate Accounting Policies and applied them consistently and made judgmentand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financials year March 31 2020 and ofthe pro_it of the Company for that period; c) That the Directors have taken proper andsuJicient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d) That the Directors haveprepared the annual accounts on a going concern basis; e) That the Directors have laiddown internal financials controls to be followed by the Company and that such internalfinancials controls are adequate and are operating effectively;and f) That the Directorshave devised proper system to ensure compliance with the provisions of all applicable lawsand that such systems are adequate and operating effectively.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

As per section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the Members of the Company in 30th AGM approved the appointment ofM/s. S. R. Batliboi & Co. LLP Chartered Accountants (Firm RegistrationNo.301003E/E300005) as the Statutory Auditors of the Company for a term of 5 (_ive)years i.e. from the conclusion of 30th AGM till the conclusion of 35th AGM of theCompany to be held in the year 2022.

The notes on the financials statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments.

The Auditors Report annexed with this Annual Report does not contain anyqualification reservation or adverse remarks.

During the Financial Year 2019_20 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under section 134(3)(ca) of the Companies Act 2013.

Cost Auditor

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) asCost Auditor for conducting the audit of cost records of the Company for the financialsyear 2019_20.

Pursuant to section 148 of the Companies Act 2013 read with rule 8 of the Companies(Accounts) Rules 2014 the cost accounts and records are duly made and maintained by theCompany as specified by the Central Government under section 148(1) of the Companies Act2013.

During the Financial Year 2019_20 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed 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 (Appointmentand Remuneration of Managerial Personnel) Rules 2014 based upon the recommendations ofthe Audit Committee the Board of Directors had appointed M/s. SGS Associates CompanySecretaries (CP No. 1509) as the Secretarial Auditor of the Company for conducting theSecretarial Audit for financials year ended March 31 2020.

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

During the Financial Year 2019_20 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under section 134(3)(ca) of the Companies Act 2013.

AWARDS & RECOGNITIONS

During the year the Company had received various awards and recognitions which havebeen described in "Awards and Recognition" section forming part of the AnnualReport.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Particulars of loans given Investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by recipient are provided in the standalone financials statement. Please referNote No. 6(a) 6(b) and 7 to the standalone financials statements.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Pursuant to Policy on Related Party Transaction of the Company all contracts/arrangements/ transactions entered by the Company during financials year with relatedparties which were on arm's length basis and were in ordinary course of business wereapproved by the Audit Committee and all contracts/ arrangements/ transactions entered bythe Company during financials year with related parties which were on arm's length basisbut not in ordinary course of business were approved by the Board of Directors. During theyear the Company had not entered into any contract / arrangement/ transaction withrelated parties which could be considered material for which shareholders' approval isrequired in accordance with the policy of the Company on materiality of related partytransactions. Thus provisions of section 188(1) of the Companies Act 2013 are notapplicable to the Company. Pursuant to the provision of applicable Listing Regulationsall related party transactions are placed before the Audit Committee for approvalincluding the transaction under section 188 of the Companies Act 2013 and regulation 23of Listing Regulation i.e. the transactions which are unforeseen and within the limit ofRs. 10 million. Prior omnibus approval of the Audit Committee has been obtained fortransactions which are foreseen and repetitive in nature. The transactions entered in topursuant to omnibus approval are presented to the Audit Committee by way of a statementgiving details of all related party transactions.

The Company has developed a Related Party Transactions Manual Standard OperatingProcedures for purpose of identification and monitoring of such transactions. The policyon Related Party Transactions as approved by the Board is uploaded on the Company'swebsite (as amended from time to time).

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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

The Statement containing the particulars of employees as required under section 197(12)of the Companies Act 2013 read with rule 5(2) and other applicable rules (if any) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedin a separate annexure forming part of this report. Further the report and the accountsare being sent to the members excluding the aforesaid annexure. In terms of section 136 ofthe Companies Act 2013 the said annexure is open for inspection at the registered oJiceof the Company during the working hours. Any member interested in obtaining a copy of thesame may write to the Company.

CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under the Listing Regulations. A separate section onCorporate Governance forming a part of this Report and the requisite certificate from theCompany's Auditors con_irming compliance with the conditions of Corporate Governanceattached to the report on Corporate Governance.

DISCLOSURE REQUIREMENT

Business Responsibility Report:

Pursuant to regulation 34(2)(f) of the Listing Regulations the Business ResponsibilityReport by describing the initiatives taken from an environmental social and governanceperspective in the prescribed format is available as a separate section of the AnnualReport.

Dividend Distribution Policy:

As per regulation 43A of the Listing Regulations the Dividend Distribution Policy ofyour Company is disclosed in the Corporate Governance Report and is also uploaded on theCompany's website.

LISTING OF EQUITY SHARES

Equity shares of your Company are presently listed at the National Stock Exchange ofIndia Limited (NSE) and BSE Limited (BSE).The listing fees for the financials year 2020-21 have been paid to the said Stock Exchanges.

The Company's shares continue to remain listed on NSE and BSE.

INTERNAL CONTROL

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit Reports are presented directly to the Chairman of the Audit Committee and itsmembers. Details about Internal controls and their adequacy are set out in the ManagementDiscussion & Analysis Report which forms part of this report.

RISK MANAGEMENT

The Board of Directors had constituted Risk Management Committee to identify elementsof risk in different areas of operations and to develop policy for actions associated tomitigate the risks. The Committee is responsible for reviewing the risk management planand ensuring its effectiveness. The major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continual basis.

The development and implementation of risk management policy has been covered in theManagement Discussion and Analysis Report which forms part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which impactthe going concern status of the Company and its future operations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the requirements of section 135 of the Companies Act 2013 yourCompany has a Corporate Social Responsibility (CSR) Committee. The CSR Committee comprisesof Mr. V.C. Sehgal (Chairman) Mr. Arjun Puri Independent Director and Mr. Laksh VaamanSehgal Non-Executive Director.

The terms of reference of the Corporate Social Responsibility (CSR) Committee isprovided in the Corporate Governance Report. Your Company has also formulated a CorporateSocial Responsibility Policy (CSR Policy) which is available on the website of the Companyat www.motherson.com.

Annual report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 has been appended as Annexure–C and forms integralpart of this Report.

The Company is inter-alia also performing CSR activities through Swarn Lata MothersonTrust which has been established for the sole purpose of CSR activities. Further theCompany continue to carry out CSR activities as specified under schedule VII to theCompanies Act2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has established a vigil mechanism which incorporates a whistle blowerpolicy in terms of the Companies Act 2013 and the Listing Regulations for Directors andemployees to report their genuine concerns. The objective of the Policy is to create awindow for any person who observes an unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct or ethics policy (hereinafter "Unethicaland Improper Practices") either organizationally or individually to be able to raiseit.

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

Protected Disclosure can be made by a Whistle Blower through an e-mail or dedicatedtelephone line or a letter to the Thought Arbitrage Consultancy or to the Chairman of theAudit Committee. The Whistle Blower Policy is available on the Company's website atwww.motherson. com .

EXTRACT OF THE ANNUAL RETURN

In accordance with section 92(3) and section 134(3)(a) of the Companies Act 2013 andrules framed thereunder an extract of the annual return for the financials year 2019_20in the prescribed Form MGT_9 is attached here with as Annexure–D which is part ofthis Report. The same is also available on the website of the Company atwww.motherson.com.

HUMAN RESOURCES

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

DISCLOSURE UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDERSSAL) ACT 2013

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace 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 InternalComplaints Committee under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Internal Committee composed of internal membersand an external member who has extensive experience in the _ield.

During the Financial Year 2019_20 there were no cases _iled under the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.

GREEN INITIATIVES

In compliance with the MCA Circulars and SEBI Circular dated May 12 2020 Notice ofthe AGM along with the Annual Report 2019_20 is being sent only through electronic mode tothose Members whose email addresses are registered with the Company/ Depositories. Membersmay note that the Notice and Annual Report 2019_20 will also be available on the Company'swebsite www.motherson.com websites of the Stock Exchanges i.e. BSE Limited and NationalStock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively.

ACKNOWLEDGEMENT

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

The Directors also thank the Government of various countries Government of IndiaState Governments in India and concerned Government Departments/ Agencies for theirco-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 theCompany and the collaborator Sumitomo Wiring Systems Limited Japan for their continuoussupport.

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