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Directors Report of Motherson Sumi Systems Ltd.

Mar 31, 2016

The Directors have the pleasure in presenting the 29th Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2016.

Financial Results

The summarized financial results for the year ended March 31, 2016 and for the previous year ended March 31, 2015 are as follows:

Rs. in Million

Particulars Standalone Consolidated

March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015

Gross Revenue from operations 59,009 54,811 391,102 352,665

Net Revenue from operations 53,120 49,850 383,952 346,731

Other Income 2,083 858 3,209 3,764

Profit before depreciation, interest and 11,685 9,612 37,752 32,203 tax

Less: Depreciation and amortisation exp. 2,008 2,071 11,357 9,206

Less: Finance Costs 222 303 2,706 3,178

Less: Exceptional Expenses -- -- 291 1,648

Add: Share of profit / (loss) in associates -- -- (2) 4

Profit Before Tax 9,455 7,238 23,396 18,175

Less: Provision for Tax 2,336 2,089 5,836 5,256

Less: Minority Interest -- -- 4,823 4,294

Profit after tax 7,119 5,149 12,737 8,625

Add: Balance brought forward 11,628 9,776 20,231 15,003

Profit available for appropriation 18,747 14,925 32,968 23,628

Operations and Performance

On consolidated basis for the year 2015-16, your company achieved total revenue of Rs.383,952 million resulting in a growth of about 11% over its revenue of Rs.346,731 million of the previous financial year ended March 31, 2015. Net profit for the year at Rs.12,737 million was higher by 48% over the previous year''s net profit of Rs.8,625 million.

On standalone basis for the year 2015-16, your company achieved total revenue of Rs.53,120 million resulting in a growth of about 7% over its total revenue of Rs.49,850 million of the previous financial year ended March 31, 2015. The profit after tax for the year ended March, 2016 at Rs.7,119 million was higher by 38% from the previous financial year ended March 31, 2015 at Rs.5,149 million.

The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis, which forms part of this Directors'' Report.

Share Capital

During the year, your Company has issued 440,959,680 equity shares of face value of Rs.1/- each on account of the issue of Bonus Shares in the ratio of one share against two shares held.

After the allotment of Bonus Shares, the paid-up capital of the Company has been increased to Rs.1,322,879,040/- divided into 1,322,879,040 equity shares of Rs.1/- each.

Dividend

On March 16, 2016, the Board of Directors announced an interim dividend of Rs.2.50 (250%) per equity share for the Financial Year 2015-16, entailing a pay-out of Rs.3,926 million (including dividend tax) i.e. 55% of the standalone profits of the Company and 30% of the consolidated profits of the Company.

The interim dividend has been paid to all the eligible shareholders and be taken as final dividend for the financial year 2015-16.

Credit Rating

The Company continues to enjoy "A1 " rating by ICRA for its commercial paper / short-term debt program of Rs.1,500 million.

CRISIL has assigned its Corporate Credit Rating of ''CCR AA-'' and a short term rating of ''CRISIL A1 '' for its Commercial Paper Program of Rs.1,500 million.

During the year ICRA upgraded long terms rating to [ICRA]AA from [ICRA]AA- and short term rating to [ICRA]A1 from [ICRA]A1 for Rs.11,451 million Line of Credit (LOC).

The strong credit ratings by leading agencies reflect the Company''s established market position in the automotive components industry, its well-diversified customer base across geographies and product segments and its healthy relationships with leading global original equipment manufacturers (OEMs).

Fixed deposits

The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or unpaid deposit lying with the Company.

Consolidated Financial Statements

Your Directors have the pleasure in attaching the consolidated financial statements which form a part of the Annual Report. These consolidated financial statements are prepared in accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates and Accounting Standard -27 on Financial Reporting of Interests in Joint Venture.

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

Subsidiaries, Joint Ventures and Associate Companies

During the year under review, details of the companies which have either become or have ceased to be Company''s subsidiaries, joint ventures or associate companies are as following :

1. The following Companies which have been incorporated during the year as subsidiaries during the financial year 2015-16 :

- SMP Automotive Systems Alabama Inc.

- Motherson Innovations Company Limited

- Motherson Innovations Deutschland GmbH

- Samvardhana Motherson Global (FZE)

2. The following companies have ceased to be subsidiaries of the company on account of merger with Samvardhana Motherson Innovative Autosystems de Mexico, S.A. de C.V. during the financial year 2015-16 :

- Samvardhana Motherson Real Estate Unit de Mexico, S.A. de C.V.

- SMIA de Mexico Administrative Services, S.A. de C.V.

3. The company has exited from its joint venture with WOCO Franz Josef Wolf Holding GmbH during the financial year 2015-16 and as a consequence the following companies have ceased to be joint venture :

- Woco Motherson Elastomer Ltd.

- Woco Motherson Advanced Rubber Technologies Ltd.

- Woco Motherson Limited (FZC)

In accordance with section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company including its subsidiaries, associate and joint venture companies, which form part of the Annual Report. Further, a statement containing salient features of the financial statement of the Company''s subsidiaries, associate and joint venture companies in Form AOC-1, which form a part of the Annual Report.

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

Exports

The Company''s exports during the year were Rs.7,746 million as against Rs.7,412 million in the previous financial year. 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.

Post Balance Sheet Event

Samvardhana Motherson Automotive Systems Group B.V. (SMRP BV), a subsidiary of the Company has successfully completed its issue of Bonds third time and the same are listed on the Irish Stock Exchange. On June 16, 2016, SMRP BV has issued U.S.$ 300 million 5.5-year non-call 3 year senior secured Notes offering at 4.875% per annum, due on December 2021 (the 2016 Notes). The 2016 Notes have been rated BB by S&P and are jointly and severally guaranteed on a senior secured basis by certain of its subsidiaries.

The proceeds from the issuance of the 2016 Notes will be utilised to repay existing third party indebtedness and for general corporate purposes, including to make certain capital expenditures.

Directors and Key Managerial Personnel

During the year Maj. Gen. Amarjit Singh (Retd.), Independent Director has resigned from the Directorship of the Company w.e.f. July 28, 2015. The Board, while accepting the resignation placed on record the contribution made by Maj. Gen Amarjit Singh (Retd) during his long tenure as Board member since 2003.

The Board appointed Mr. Naveen Ganzu as an Additional Director (Independent category) of the Company w.e.f. October 14, 2015. Detailed profile of Mr. Ganzu is given in Notice of the ensuring General meeting, seeking to appoint him as Independent Director for a period of 5 years.

As per provisions of the Companies Act 2013, Ms. Noriyo Nakamura, Director of the Company, who will retire by rotation in the ensuing Annual General Meeting being eligible, seek re-appointment. The Board of Directors recommends her re-appointment.

Brief resume of the above Directors, nature of their expertise in functional areas and the name of the public companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations"), are given as Annexure to the Notice convening the Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under SEBI Listing Regulations.

Pursuant to the provision of Section 203 of the Companies Act, 2013, Mr. Pankaj Mital as whole-time Director and Mr. G.N. Gauba as Chief Financial Officer & Company Secretary are Key Managerial Personnel of the Company. There has been no change in the Key Managerial Personnel during the year.

Board Evaluation

The Board has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which 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 director being evaluated.

Policy on Directors'' appointment and remuneration

The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013, adopted by the Board are covered in Corporate Governance Report which forms part of this Report.

Directors'' responsibility statement

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 the preparation of the annual accounts for the financial year ended 31st March, 2016, 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 31st March, 2016 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.

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

Auditors and Auditors'' Report Statutory Auditors

At the Annual General Meeting held on August 25, 2014 M/s. Price Waterhouse Chartered Accountants LLP, [(M/s. Price Waterhouse converted into a Limited Liability Partnership (LLP)], were appointed as Statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.- 012754N/N500016), as statutory auditors of the Company, is placed for ratification to the shareholders.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Further, during the year, in the course of the performance of their duties as auditor, no fraud were reported by them which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company.

Cost Auditor

The Board of Directors has appointed M/s. M.R. Vyas and Associates, Cost and Management Accountants as Cost Auditor for conducting the audit of cost records of the Company for the financial year 2015-16.

Secretarial Auditor

The Board of Directors has appointed M/s. SGS Associates, Company Secretaries in practice to conduct Secretarial Audit for the financial year 2015-16.

The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith which form a part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Audit Committee

The Audit Committee comprises Mr. S.C. Tripathi, IAS (Retd.) (Chairman), Mr. Arjun Puri, Mr. Gautam Mukherjee, Ms. Geeta Mathur as Independent Directors and Mr. Toshimi Shirakawa, Mr. Laksh Vaaman Sehgal as other Members.

Awards & Recognitions

During the year, the Company received various awards and recognitions, which have been mentioned in ''awards and recognition'' section, forming parts of annual report.

Number of Meetings of the Board

The Board of Directors met eight times during the financial year 2015-16, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

Particulars of Loans given, Investment made, Guarantee given and Securities provided

Particulars of loans given, investment made, guarantees given and securities provided along with the purpose for which loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (please refer to Note 13, 15, 17, 21 and 33 to the standalone financial statement).

Particulars of contracts or arrangements with related parties

All contracts/ arrangements/ transactions entered by the Company during financial year with related parties were on arm''s length basis and were in the ordinary course of business. During the year, the Company had not entered 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.

As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, all Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee has obtained for the transactions which are of foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit Committee 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 is uploaded on the Company''s website.

Your Directors draw attention of the members to Note 46 to the financial statement 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) of Companies (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 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as Annexure -B.

The Statement containing particulars of employees as required under section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in a separate annexure forming part of this report. Further in terms of Section 136 of the Act, the Report and accounts are being sent to the members excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during the working hours and any member interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request.

Corporate Governance

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges.

A separate section on Corporate Governance, forming a part of the Director''s Report and the certificate from the Company''s auditors confirming compliance of conditions on Corporate Governance as stipulated in SEBI Listing Regulations, is included in the Annual Report.

Listing of Equity Shares

Equity shares of your Company are listed presently at National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The listing fees for the year 2016-17 have been paid to the said Stock Exchanges.

Equity shares of your Company were also listed with Delhi Stock Exchange Limited (DSE) and Ahmedabad Stock Exchange Limited (ASE). Since there was no trading of the Company''s shares in DSE and ASE for last several years and considering the fact that the investors have access to online dealings with the Company''s shares across the country through the extensive networking of NSE and BSE, accordingly, the Company had filed application for voluntarily delisting of its equity shares from DSE and ASE under Clause 6(A) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulation, 2009.

The Company has received approval from ASE for voluntary delisting of its shares. Since the Securities and Exchange Board of India (SEBI) vide its order dated November, 19, 2014 has withdrawn the recognition granted to DSE, therefore shares of your Company deemed to be delisted from DSE. The Company''s shares, however, continue to remain listed on NSE and BSE.

Internal Control

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 function reports to the Chairman of the Audit Committee.

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

Risk Management

The board of directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company.

The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, 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 impact the going concern status of the Company and its future operations.

Shifting of the Registered Office of the Company

The Company decided to shift its Registered Office from New Delhi to Mumbai. Accordingly, shareholders of the Company have passed special resolution through postal ballot, as per result declared on March 28, 2016 in term of requirement under Section 110 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Management and Administration) Rules, 2014 for shifting of the Registered Office of the Company from the Union Territory of Delhi to the State of Maharashtra.

Further, the Company had filed Application in respect of transfer of its Registered Office from the NCT of Delhi to the state of Maharashtra before the Regional Director, Northern Region. The matter was heard on July 4, 2016 and the order is awaited.

Corporate Social Responsibility (CSR)

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. V. C. Sehgal (Chairman), Mr. Arjun Puri, 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) which is available on the website of the Company at http://www.motherson.com/investor- overview.html.

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.

Further the Company would focus CSR activities in the following area :

- Skill Development

- Kitchen to Garden Program for Aerobins

- Waste management & sanitation

- Health and wellness

The Company is also proposing for CSR activities through Foundation / Trust which will be established by Group promoter and Associate Company for CSR activities at group level.

Vigil Mechanism/ Whistle Blower Policy

The Company has established a vigil mechanism (which incorporates a whistle blower policy in terms of listing agreement) 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 behavior, actual or suspected fraud, or violation of the Company''s code of conduct or ethics policy (hereinafter "Unethical and Improper Practices"), either organizationally or individually to be able to raise it. 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 email, or dedicated telephone line or a letter to the Thought Arbitrage Consultancy or to the Ethics Officer. All protected disclosure concerning financial / accounting matters and complaints pertaining to "C" level officers / KMP can be addressed to Chairman of the Audit Committee for Investigation. Other details of the policy on Whistle Blower as approved by the Board is uploaded on the Company''s website.

Extract of the Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in Form MGT-9 is annexed herewith as Annexure -D to this report.

Human resources

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.

Acknowledgment

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 and other authorities.

The Directors also thank the Government of various countries, Govt. of India, State governments in India and concerned Government Departments/Agencies for their co-operation.

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

For and on behalf of the Board

for Motherson Sumi Systems Limited

Place : Noida V. C. Sehgal

Date : July 5, 2016 Chairman


Mar 31, 2015

To the members,

The Directors have the pleasure in presenting the 28th Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2015.

Financial Results

The summarized financial results for the year ended March 31, 2015 and for the previous year ended March 31, 2014 are as follows:

Rs. in Million

Particulars Standalone Consolidated

March 31, 2015 March 31, 2014 March 31, March 31, 2014 2015

Gross Revenue from operations 54,811 50,025 351,786 309,974

Net Revenue from operations 49,850 45,245 345,852 304,279

Other Income 858 1,083 4,643 3,106

Profit before depreciation, interest and tax 9,612 9,531 32,203 27,077

Less: Depreciation and amortisation exp. 2,071 1,530 9,206 8,172

Less: Finance Costs 303 417 3,178 2,943

Less: Exceptional Expenses -- -- 1,648 --

Add: Share of profit / (loss) in associates -- -- 4 (2)

Profit Before Tax 7,238 7,584 18,175 15,960

Less: Provision for Tax 2,089 2,233 5,256 4,994

Less: Minority Interest -- -- 4,294 3,316

Profit after tax 5,149 5,351 8,625 7,650

Add: Balance brought forward 9,776 7,605 15,003 10,597

Profit available for appropriation 14,925 12,956 23,628 18,247

Operations and Performance

On consolidated basis for the year 2014-15, your company achieved total revenue of Rs. 345,852 million resulting in a growth of about 14% over its revenue of Rs. 304,279 million of the previous financial year ended March 31, 2014. Net profit for the year at Rs. 8,625 million was higher by 13% over the previous year''s net profit of Rs. 7,650 million.

On standalone basis, your company achieved total revenue of Rs. 49,850 million resulting in a growth of about 10% over its total revenue of Rs. 45,245 million of the previous financial year ended March 31, 2014. The profit after tax for the year ended March 31, 2015 at Rs. 5,149 million was lower by 4% from the previous financial year ended March 31, 2014 at Rs. 5,351 million.

The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis, which forms part of the Directors'' Report.

Dividend

The Directors are pleased to recommend for approval of the members payment of dividend of Rs. 3/- per share on the share capital of the Company for the financial year ended March 31, 2015 (previous year Rs. 2.50 per share) to the equity shareholders.

The dividend, if approved by the members would involve total cash outflow of Rs. 3,184 million, including dividend tax, resulting in a payout of 62% of the standalone profits of the Company and 37% of the consolidated profits of the Company.

Transfer to Reserves

The Company proposes to transfer Rs. 60 million to the General Reserve out of the current year Profit.

Credit Rating

The Company continues to enjoy "A1 " rating by ICRA for its Commercial Paper / Short-Term Debt Program of Rs. 1,500 million. During the year, CRISIL has assigned its Corporate Credit Rating of ''CCR AA-'' and a short term rating of ''CRISIL A1 '' for its Commercial Paper Program of Rs. 1,500 million.

Further, the Company''s long term rating was upgraded to [ICRA] AA- from [ICRA]A with outlook "Positive" for Rs. 1,145.1 crore Lines of Credit (LOC) .

The strong credit ratings by leading agencies reflect the Company''s established market position in the automotive components industry, its well-diversified customer base across geographies and product segments and its healthy relationships with leading global original equipment manufacturers (OEMs).

Fixed Deposits

The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or unpaid deposit lying with the Company.

Consolidated Financial Statements

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates and Accounting Standard - 27 on Financial Reporting of Interests in Joint Venture in Consolidated Financial Statements, your Directors have the pleasure in attaching the Consolidated Financial Statements which form a part of the Annual Report.

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

During the year under review, name of the companies which have become / ceased to be Company''s subsidiaries, joint ventures or associate companies are as below :

1. Companies which have become subsidiaries (direct and indirect) during the financial year 2014-15 :

- Samvardhana Motherson Polymers Management Germany GmbH

- Samvardhana Motherson Plastic Solutions GmbH & Co. KG

- MSSL Consolidated Inc.

- MSSL Wiring System Inc.

- MSSL Overseas Wiring System Ltd.

- Alphabet de Mexico, S.A. de C.V.

- Alphabet de Mexico de Monclova, S.A. de C.V.

- Alphabet de Saltillo, S.A. de C.V.

- MSSL Wirings Juarez, S.A. de C.V.

- Samvardhana Motherson Innovative Autosystems B.V. & Co. KG

- Samvardhana Motherson Innovative Autosystems Holding Company BV

- SM Real Estate GmbH

- Kunstsoff-Technik Trier de Mexico S.A de C.V. (name changed to Samvardhana Motherson Innovative Autosystems de Mexico, S.A. de C.V.)

- Property Holdings Trier de Mexico S.A. de C.V. (name changed to Samvardhana Motherson Real Estate Unit de Mexico, S.A. de C.V.)

- Administrative Services Trier de Mexico S.A. de C.V. (name changed to SMIA de Mexico Administrative Services, S.A. de C.V.)

2. Companies which ceased to be subsidiaries during the financial year 2014-15 :

- MSSL Handels GmbH (liquidated on July 23, 2014)

- SMP Tecnologia Parachoques S.A. de C.V.*

- SMP Shock Absorber Fabrication Mexico S.A. de C.V.*

* Merged into SMP Automotive Systems Mexico S.A. de C.V. retrospectively as on 01.04.2014.

3. No Company has become / ceased to be a joint venture or associates during the financial year 2014-15.

In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, associate and joint venture companies, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of the Company''s subsidiaries, associate and joint venture companies in Form AOC-1, which form a part of the Annual Report.

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

Exports

The Company''s exports during the year were Rs. 7,412 million as against Rs. 6,975 million in the previous financial year. 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 mainly in Europe, to constantly service the customers as well as scan the market for growth.

Strategic Acquisition

During the year 2014-15, the Company has made the following acquisition :

Acquisition of Wiring Harness Business of Stoneridge Inc. :

During the year, the Company entered into Asset Purchase Agreement with Stoneridge Inc. for purchase of Wiring harness business on May 26, 2014. The transaction which included manufacturing facilities located in Portland (USA ) , and in Mexico at Chihuahua Saltillo and Monclova as well as an engineering and administrative center located at Warren, ( Ohio, USA ) was completed on August 1, 2014.

Acquisition of assets of Minda Schenk Group, Germany :

The Company through its step down subsidiary, has purchased assets from the administrator of Minda Schenk Plastic Solutions GmbH, Germany with effect from October 1, 2014, pursuant to a Trade Agreement signed by MSSL Advanced Polymers s.r.o. (Company''s 100% sept down subsidiary) and Daimler AG.

This Company is engaged in the business of interior & exterior plastic parts with presence in Germany.

Acquisition of assets of Scherer & Trier group, Germany :

The Company through its step down subsidiaries, has acquired the assets of Scherer & Trier group (S&T), Germany from its administrator on January 30, 2015.

This Company is engaged in the business of Extrusion Profiles & Hybrid parts and presence in Germany and Mexico.

Post Balance Sheet Event

The Company has exited from the following Joint Venture companies with Woco Franz Josef Wolf Holding GmbH, Germany (Woco) on May 28, 2015 :

- Woco Motherson Elastomer Ltd.

- Woco Motherson Advanced Rubber Technologies Ltd.

- Woco Motherson Limited (FZC),

Directors and Key Managerial Personnel

As per provisions of the Companies Act 2013, Mr. Toshimi Shirakawa and Mr. Laksh Vaaman Sehgal, Directors of the Company, retire by rotation in the ensuing Annual General Meeting and being eligible, seek re-appointment. The Board of Directors recommends their re-appointment.

Brief resume of the above Directors, nature of their expertise in functional areas and the name of the public companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, are given as Annexure to the Notice convening the Annual General Meeting.

During the year under review, the members approved the appointment of Ms. Noriyo Nakamura as a non-executive Director who is liable to retire by rotation and of Maj. Gen. Amarjit Singh (Retd.), Mr. S.C. Tripathi, IAS (Retd.), Mr. Arjun Puri, Mr. Gautam Mukherjee and Ms. Geeta Mathur as Independent Directors who are not liable to retire by rotation. The members had also re-appointed Mr. Pankaj Mital as Whole-time Director designated as Chief Operating Officer of the Company.

Pursuant to the provision of Section 203 of the Companies Act, 2013, the appointment of Mr. Pankaj Mital as whole-time Director and Mr. G.N. Gauba as Chief Financial Officer & Company Secretary were formalized as the Key Managerial Personnel of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Policy on Directors'' Appointment and Remuneration

The policy of the Company on directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013, adopted by the Board are covered in Corporate Governance Report which forms part of this Report.

Further, the policy also indicates the manner of performance evaluation of Independent Directors, Board, committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors.

Directors'' Responsibility Statement

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 the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable Accounting Standards have been followed and their 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 31st March, 2015 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.

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.

Auditors and Auditors'' Report Statutory Auditors

At the Annual General Meeting held on August 25, 2014 M/s. Price Waterhouse Chartered Accountants LLP [M/s. Price Waterhouse converted into a Limited Liability Partnership (LLP)], were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2017. In terms of the provision of Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.- 012754N/N500016), as Statutory Auditors of the Company, is placed for ratification by the shareholders.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Further, during the year, in the course of the performance of their duties as auditor, no fraud were reported by them which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company.

Cost Auditor

The Board of Directors has appointed M/s. M.R. Vyas and Associates, Cost and Management Accountants as Cost Auditor for conducting the audit of cost records of the Company for the financial year 2014-15 only for Rubber Compound/Rubber component, as applicable.

Secretarial Auditor

The Board of Directors has appointed M/s. SGS Associates, Company Secretaries in Practice to conduct Secretarial Audit for the financial year 2014-15.

The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith which form a part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Audit Committee

The Audit Committee comprises Mr. S. C. Tripathi, IAS (Retd.) (Chairman), Mr. Arjun Puri, Mr. Gautam Mukherjee, Ms. Geeta Mathur as Independent Directors and Mr. Toshimi Shirakawa, Mr. Laksh Vaaman Sehgal as other Members.

Awards & Recognitions

During the year, the Company has been awarded "Company of the year" from Business Standard. Further, the Company has also received various awards and recognitions, some of which are given below:

Wiring Harness Division (WHD):

The division has been awarded following appreciations by Customers during the year:

- WHD has received "Superior Performance in Human Relations", "Award for Overall Excellence" and "Certificate of Appreciation for Design and Development" from Maruti Suzuki.

- WHD has received "Supplier of the Year - Silver (Wiring harness)", "Best Performer Service Parts" and "Best Kaizen Award" from Toyota.

- WHD has received "Certificate of Appreciation for Supporting Due Date Delivery Operation" from Honda Motor Private Ltd.

- WHD has received "Best Supplier Overall Performance" and "Special Citation of Distinction" from Tata Motors Limited and "GM Supplier Quality Excellence Award" from General Motors.

- WHD has received "Award for New Development" from Suzuki Motorcycle and "Appreciation Award for Quality and Velocity in the supply of NPI Proto Harness" from Caterpillar.

Polymer Division (MATE):

Polymer division of the Company has been awarded with following appreciations by Customers during the year:

- MATE received "Toyota Regional Contribution Award" and "Supplier of the Year - Gold (Polymer)" and "Zero Defect Supplies" from Toyota.

- MATE received "Bronze Award in the Category of Spare Parts" from Honda Motor Private Ltd., "Bronze Award for Delivery" and "Best Kaizen - Delivery" from Honda Cars India Limited.

Number of Meetings of the Board

The Board of Directors met five times during the financial year 2014-15, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

Particulars of Loans Given, Investment Made, Guarantee Given and Securities Provided

Particulars of loans given, investment made, guarantees given and securities provided along with the purpose for which loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (please refer to Note 14, 15, 17 and 33 to the standalone financial statement).

Particulars of Contracts or Arrangements with Related Parties

All contracts/ arrangements/ transactions entered by the Company during financial year with related parties were on an arm''s length basis and were in the ordinary course of business. During the year, the Company had not entered 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.

As per listing agreement, all related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee has been obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit Committee 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 has been uploaded on the Company''s website.

Your Directors draw attention of the members to Note 45 to the financial statement 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) of Companies (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 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as Annexure - B.

The Statement Containing Particulars of employes as required under section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in a separate annexure forming part of this report. Further in terms of Section 136 of the Act, the Report and accounts are being sent to the members excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during the working hours and any member interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request.

Corporate Governance

A separate section on Corporate Governance, forming a part of the Director''s Report and the certificate from the Company''s Auditors confirming compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement, is included in the Annual Report.

Listing

Equity shares of your Company are listed at National Stock Exchange of India Limited, BSE Limited, Delhi Stock Exchange Limited and Ahmedabad Stock Exchange Limited. The listing fees for the year 2014-15 have been paid to the said Stock Exchanges except Delhi Stock Exchange Limited (DSE) as the Securities and Exchange Board of India (SEBI) on November, 19, 2014 has withdrawn the recognition granted to DSE.

Internal Control

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 function reports to the Chairman of the Audit Committee.

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

Risk Management

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee comprising Ms. Geeta Mathur, Independent Director, Mr. L. V. Sehgal, Non-executive Director, Ms. Noriyo Nakamura, Non-executive Director, Mr. Pankaj Mital, Whole-time Director & Chief Operating Officer (COO) , Mr. Bimal Dhar, CEO, SMP and Mr. G. N. Gauba, CFO & Company Secretary.

The Risk Management Committee has been entrusted with the responsibility to assist the Board Members about the risk assessment and its minimization procedures.

Details of the Risk Management is set out in the Management Discussion & 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 would impact the going concern status of the Company and its future operations.

Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The CSR Committee comprises of Mr. V.C. Sehgal (Chairman), Mr. Arjun Puri, Independent Director and Mr. L.V. Segal, non-executive Director. The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board and has been uploaded on the Company''s website.

The Company has identified the following focus areas for CSR activities which are specified in Schedule VII of the Companies Act, 2013

i) Skill Development and Vocation based education;

ii) Livelihood enhancement;

iii) Waste management and Sanitation;

iv) Environmental sustainability;

v) Women and youth empowerment;

vi) Disaster relief; and

vii) National Missions projects

The Company is in the process of further formalizing the CSR spend. The Company has contributed Rs. 1.5 million on promotion of girls education during the year as against Rs.117 million required to be spent in accordance with Section 135 of the Act.

The Annual Report on CSR activities is annexed herewith and marked as Annexure - C.

Vigil Mechanism/ Whistle Blower Policy

The Company has established a vigil mechanism (which incorporates a whistle blower policy in terms of listing agreement) 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 behavior, actual or suspected fraud, or violation of the Company''s code of conduct or ethics policy (hereinafter "Unethical and Improper Practices"), either organizationally or individually to be able to raise it. 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 email, or dedicated telephone line or a letter to the Thought Arbitrage Consultancy or to the Ethics Officer or to the Chairman of the Audit Committee. The policy on vigil mechanism and whistle blower policy may be access on the Company''s website.

Extract of the Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in Form MGT-9 is annexed herewith as Annexure - D to this report.

Human resources

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.

Acknowledgement

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 and other authorities.

The Directors also thank the Government of various countries, Govt. of India, State Governments in India and concerned Government Departments/Agencies for their co-operation.

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

For and on behalf of the Board for Motherson Sumi Systems Limited

Place : Noida V. C. Sehgal

Date : June 10, 2015 Chairman


Mar 31, 2014

To the members,

The Directors have the pleasure in presenting the 27th Annual Report together with the audited accounts of the Company for the fi nancial year ended March 31, 2014.

Financial Results

The summarized financial results for the year ended March 31, 2014 and for the previous year ended March 31, 2013 are as follows:

Rs. in Million

Particulars Standalone Consolidated

March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Gross Revenue from operations 50,025 47,676 309,974 258,788

Net Revenue from operations 45,245 43,041 304,279 253,124

Other Income 1,083 915 3,106 3,215

Profit before depreciation, interest and tax 9,531 8,485 27,077 17,982

Less: Depreciation and amortisation exp. 1,530 1,453 8,172 7,145

Less: Finance Costs 417 535 2,943 2,495

Add: Share of profit / (loss) in associates - - (2) 8

Profit Before Tax 7,584 6,497 15,960 8,350

Less: Provision for Tax 2,233 1,801 4,994 3,835

Less: Minority Interest - - 3,316 70

Profit after tax 5,351 4,696 7,650 4,445

Add: Balance brought forward 7,605 4,785 10,597 8,120

Profit available for appropriation 12,956 9,481 18,247 12,565

Operations and Performance

On consolidated basis for the year 2013-14, your company achieved total revenue of Rs. 304,279 million resulting in a growth of about 20% over its revenue of Rs. 253,124 million of the previous fi nancial year ended March 31, 2013. Net Profit for the year at Rs. 7,650 million was higher by 72% over the previous year''s net Profit of Rs. 4,445 million.

On standalone basis for the year 2013-14, your company achieved total revenue of Rs. 45,245 million resulting in a growth of about 5% over its total revenue of Rs. 43,041 million of the previous fi nancial year ended March 31, 2013. The Profit after tax for the year ended March, 2014 at Rs. 5,351 million was higher than 14% from the previous fi nancial year ended March 31, 2013 at Rs. 4,696 million.

The Company has reported the best ever revenues and earnings for the year both on consolidated as well on standalone basis.

The operational performance of the Company has been comprehensively covered in the Management discussion and analysis, which forms part of the Directors'' Report.

Share Capital

During the year, your Company has issued 293,973,120 equity shares of Rs. 1/- each on account of the issue of Bonus Shares in the ratio of one share against two shares held. Since its initial public offering in 1993, this is sixth time the Company has rewarded its shareholders through a bonus issue.

After the allotment of Bonus Shares, the paid-up capital of the Company has been increased to Rs. 881,919,360 divided into 881,919,360 equity shares of Rs. 1/- each.

Dividend

The Directors are pleased to recommend for approval of the members a payment of dividend of Rs. 2.50 per share on the enhanced share capital of the Company for the fi nancial year ended March 31, 2014 (previous year Rs. 1.33 per share adjusted for bonus issue during 2013-14 or Rs. 2/- per share on pre bonus issue) to the equity shareholders.

The dividend, if approved by the members would involve total cash outfl ow on account of dividend including dividend tax of Rs. 2,580 Million resulting in a payout of 48.20% of the standalone Profits of the Company and 33.71% of the consolidated Profits of the Company.

Credit Rating

ICRA has revised long term rating of Company''s Line of Credit facilities to ''AA-'' from ''A '' and Company''s Issuer rating to ''IrAA-'' from ''IrA ''. Outlook on the long-term rating is retained as "Positive". ICRA has also reaffi rmed the ''A1 '' rating for Rs. 1500 million CP/ STD Programme of the company. During the year, CRISIL has assigned its Corporate Credit Rating of ''CCR AA-'' and a short term debt rating of ''CRISIL A1 '' for its commercial paper program of Rs. 1,500 million. The strong credit ratings by leading agencies refl ect the Company''s established market position in the automotive components industry, its well-diversifi ed customer base across geographies and product segments and its healthy relationships with leading global original equipment manufacturers (OEMs).

Fixed deposits

The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or unpaid deposit lying with the Company.

Consolidated Financial Statements

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard – 23 on Accounting for Investments in Associates and Accounting Standard –27 on Financial Reporting of Interests in Joint Venture in Consolidated Financial Statements, your Directors have the pleasure in attaching the Consolidated Financial Statements which form a part of the Annual Report.

The performance of the Company on consolidated basis is discussed at length in the Management discussion and analysis.

Subsidiary Companies

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, statement of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. A Statement containing the desired details of the company''s subsidiaries is enclosed in the Annual Report. The Consolidated Financial Statements presented by the Company include the fi nancial results of its subsidiary companies. The annual accounts of the subsidiary companies and the related detailed information shall be made available to the holding and subsidiary investors seeking such information at any point of time. Any shareholder of the Company/ its subsidiaries interested in obtaining the annual accounts of the subsidiaries may write to the Company Secretary at the Registered Offi ce of the Company. The annual accounts of the subsidiary companies shall also be kept for inspection by any investor in a Registered Offi ce of the Company. In the opinion of the management, the consolidated accounts present a full and fair picture of the state of affairs and fi nancial condition and they are accepted globally.

Details of subsidiaries of the Company and their performance are covered in Management discussion and analysis Report forming part of the Annual Report.

Exports

The Company''s exports during the year were Rs. 6,975 million as against Rs. 5,632 million in the previous fi nancial year. 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 mainly in Europe, to constantly service the customers as well as scan the market for growth.

Post Balance Sheet Events

1. Acquisition of Wiring Harness business of Stoneridge Inc.

The Company has signed an agreement to acquire the Wiring harness business of Stoneridge Inc. through asset purchase at transaction value of US $ 65.7 million. This acquisition is expected to close during July - Sep. 2014, subject to customary closing conditions. The acquired business has a turnover of approx. USD 300 Million.

The transaction includes six manufacturing facilities located in Portland, Indiana; Chihuahua, Mexico; Saltillo, Mexico; and Monclova, Mexico; as well as an engineering and administrative center located in Warren, Ohio.

2. New Structure – SMR and SMP combined Samvardhana Motherson Automotive Systems Group B.V., Netherlands (SMRP) (formerly known as Samvardhana Motherson B.V.), Company''s subsidiary and joint venture with Samvardhana Motherson International Limited acquired shareholding of Samvardhana Motherson Refl ectec Group Holdings Limited (SMR) from Samvardhana Motherson Group Holdings Limited, Cyprus in share exchange deal on June 13, 2014. This has resulted in combining SMR Group and SMP Group into one reporting entity.

3. Issuance of new Senior Secured Notes

Samvardhana Motherson Automotive Systems Group B.V., Netherlands (SMRP, BV), Company''s subsidiary and joint venture with Samvardhana Motherson International Limited, has announced an offering of €500,000,000 new 4 1/8% Senior Secured Notes due 2021 (the "Senior Secured Notes"), proceeds of which shall be utilized for prepayment of existing borrowings as well for general corporate purposes including fi nancing of capital expenditure. The proposed offering does not involve any corporate guarantee from the parent company. SMRP, BV has announced the closing of its offering on July 10, 2014.

Directors

The company had, pursuant to the provision of clause 49 of the Listing Agreement entered into with stock exchanges, appointed Maj. Gen. Amarjit Singh (Retd.), Mr. S.C. Tripathi, IAS (Retd.), Mr. Arjun Puri and Mr. Gautam Mukherjee as an independent Director on the Board of the Company.

On January 31, 2014 Board appointed Ms. Noriyo Nakamura as a director in casual vacancy caused by resignation of Mr. Hideaki Ueshima and further Ms. Geeta Mathur appointed as an Additional Director w.e.f. January 31, 2014 (Designated as an Independent Director). Mr. Hideaki Ueshima Director of the company has resigned earlier w.e.f. December 23, 2013. As per provisions of the Companies Act 2013, Mr. Pankaj Mital, Director of the Company, who will retire by rotation in the ensuing Annual General Meeting being eligible, seek re-appointment. The Board of Directors recommends his re-appointment. Your Directors while welcoming Ms. Geeta Mathur and Ms. Noriyo Nakamura on the Board of the Company and placed on record, their appreciation for the valuable services rendered by Mr. Hideaki Ueshima during his tenure as a Director of the Company. Brief resume of the above Directors, nature of their expertise in functional areas and the name of the public companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, are given as Annexure to the Notice convening the Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confi rming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Directors'' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and subject to disclosures in the Annual Accounts, we state as under :- a) That in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure were made for the same; b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 fi nancial year and of the Profit of the Company for year ended on that date;

c) That the Directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 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.

Auditors and Auditors'' Report

M/s. Price Waterhouse, Chartered Accountants, (Registration No.- 012754N), Statutory Auditors of the Company, hold offi ce till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualifi ed for re-appointment. The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments.

Awards & Recognitions

During the year, the Company received various awards and recognitions, some of which are given below:

Wiring Harness Division (WHD):

The division has been awarded with following appreciations by Customers during the year:

- MARUTI-SUZUKI has conferred the following awards:

- Focused Cost Down

- "Overall Gold Award" for outstanding performance.

- Shield awarded for "Consistent High Quality"

- Shield awarded for "System Audit"

- Shield awarded for "Inner Part Localization"

- Shield awarded for "E- Nagare Schedule Adherence"

- WHD has received the ''Spare Parts Gold Award'' in the category of Quality and also got the award for being "Winner" in the "Quality Circle Competition 2013- 2014" from Honda Cars India Ltd.

- WHD has received Overall Best Vendor" for being the "Best supplier Quality" & "Best Supplier Award" for the year 2013- 14 from Tata Motors Limited.

- WHD has also received "Best Supplier Award – 2013" for the year 2013-14 from Eicher Motors Limited and New Holland.

Polymer Division (MATE):

Polymer division of the Company has been awarded with following appreciations by Customers during the year:

- MATE received "Supplier of the Year Gold Award" from Toyota for outstanding performance in the category of "Quality, Cost and Delivery"

- MATE received "Overall Best Supplier Award" from Tata Motors for overall outstanding performance.

- MATE received "Certifi cate of Appreciation in Safety and Timely Capacity Enhancement" Award from Maruti Suzuki.

- MATE received "Value Engineering Award" from Hyundai.

- MATE received "Best Support in New Model Development" award from Honda Cars.

The Company has also been the winner of "Quality Co-Creation Competition (Best Practices)" hosted by Mahindra & Mahindra and Q.C.I.D.M. Supplies performance Award hosted by JCB.

Corporate Governance

A separate section on Corporate Governance, forming a part of the Director''s Report and the certifi cate from the Company''s auditors confi rming compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement, is included in the Annual Report.

Listing

The shares of your Company are listed at National Stock Exchange of India Limited, BSE Limited, Delhi Stock Exchange Limited and Ahmedabad Stock Exchange Limited. The listing fees for the year 2014-15 have been paid to the said Stock Exchanges.

Particulars of employees

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of the employees are set out in the annexure to the Directors'' Report. However, having regard to the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the shareholders of the company excluding the statement of particulars of employees under section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the registered offi ce of the Company.

Energy conservation, technology absorption and foreign exchange earning and outgo

Information under section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

Human resources

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.

Acknowledgement

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 and other authorities.

The Directors also thank the Government of various countries, Govt. of India, State governments in India and concerned Government Departments/Agencies for their co-operation.

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

For and on behalf of the Board for Motherson Sumi Systems Limited

Place : Noida V. C. Sehgal

Date : July 22, 2014 Chairman


Mar 31, 2013

To the members,

The Directors have the pleasure in presenting the 26th Annual Report together with the audited accounts of the Company for the financial year ended 31st March, 2013.

Financial Results

The summarized financial results for the year ended March 31, 2013 and for the previous year ended March 31, 2012 are as follows:

(Rs. in Million)

Particulars Standalone Consolidated

Year ended Year ended Year ended Year ended March 31, 2013 March 31, 2012 March 31, 2013 March 31, 2012

Gross Revenue from operations 47,676 38,879 258,788 151,381

Net Revenue from operations 43,041 35,718 253,124 147,766

Other Income 915 931 3,215 1,445

Profit before depreciation, interest and tax 8,485 6,115 17,982 10,370

Less: Depreciation 1,453 1,172 7,145 3,796

Less: Interest 535 598 2,495 1,649

Less: Exceptional Items - - - 809

Profit Before Tax 6,497 4,345 8,350 4,118

Less: Provision for Tax 1,801 1,173 3,835 2,153

Less: Minority Interest - - 70 -631

Profit after tax 4,696 3,172 4,445 2,596

Add: Balance brought forward 4,785 3,098 8,120 7,072

Profit available for appropriation 9,481 6,270 12,565 9,668

OPERATIONS AND PERFOR MANCE

On consolidated basis, your Company achieved total revenue of Rs. 253,124 Mn resulting in a growth of about 71.30% over its revenue of Rs. 147,766 Mn of the previous financial year ended March, 2012. Net profit for the year at Rs. 4,445 Mn was higher than 71.22% over the previous year''s net profit of Rs. 2,596 Mn.

On standalone basis for the year 2012-13, your Company achieved total revenue of Rs. 43,041 Mn resulting in a growth of about 20.50% over its total revenue of Rs. 35,718 Mn of the previous financial year ended March, 2012.The profit after tax for the year ended March, 2013 at Rs. 4,696 Mn was higher than 48.05% from the previous financial year ended March, 2012 at Rs. 3,172 Mn.

The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis Report, which forms part of the Directors'' Report.

SHARE CAPITAL

During the year, your Company has issued 195,982,080 equity shares of Rs. 1/- on account of the issue of Bonus Shares in the ratio of one share against two shares held.

After the allotment of Bonus Shares, the paid-up capital of the Company has been increased to Rs. 587,946,240/- divided into 587,946,240 equity shares of Rs. 1/- each.

DIVIDEND

Based on the Company''s performance, the Directors have recommended payment of dividend of Rs. 2/- per share on the capital of 587,946,240 equity shares of Rs. 1/- each for the financial year ended March 31, 2013 (previous year Rs. 2.25 per share on the capital of 391,964,160 equity shares of Rs. 1/- each) to the equity shareholders. The dividend, if approved by the members would involve total cash outflow on account of dividend (including dividend tax) of Rs. 1376 Mn resulting in a payout of 29.3% of the standalone profits of the Company and 31% of the consolidated profits of the Company.

AWARDS & RECOGNITIONS

During the year, the Company received various awards and recognitions, some of which are given below:

Wiring Harness Division (WHD):

The division has been awarded with following appreciations by Customers during the year:

- MARUTI-SUZUKI has conferred the following awards :

- "Overall Gold Award" for outstanding performance.

- Shield for incoming quality improvement

- Shield for VA-VE (Value Addition - Value Engineering)

- Shield for Inner plant location

- WHD has received the ''Gold Award'' in the category of Quality and also got the award for being "Winner" in the "Quality Circle Competition 2012- 2013" from Honda Cars India Ltd.

- WHD has received "Award" and "Certificate of Excellence" for being the "Best Supplier Quality" for the year 2012-13 from General Electric.

Polymer Division (MATE) :

Units of MATE have been awarded with following appreciations by Customers during the year:

- MATE Noida received "Gold Award" for outstanding performance in the category of "Quality, Cost & Delivery " and first prize in "Kaizen Competition" from Honda Cars India Ltd.

- MATE received "Certificate of Appreciation" from Mahindra & Mahindra for best "Kaizens" & "Poka-yoke" in the category of quality.

- MATE Bangalore received Silver award for "Supplier of the year" and "Certification" for achieving targets in Quality, Cost & Delivery from Toyota Kirloskar Motor Limited.

- MATE Chennai Unit III received "Merit Award" for "Best Cooperation" from Hyundai Motor India Limited.

- MATE Manesar received award for "Timely Capacity Enhancement" and "Certification" in the category of"Safety" from Maruti Suzuki India Limited.

The Company has also been the winner of "Best activity in Quality month" host by the Toyota motors.

CREDIT RATING

The Company continues to enjoy "A1 " rating by ICRA for its commercial paper / short-term debt program of Rs. 1,500 Mn and working capital facilities of Rs. 6,000 Mn.

FIXED DEPOSITS

The Company has neither invited nor accepted any deposits from the public during the year. There is no unclaimed or unpaid deposit lying with the Company.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company Maj. Gen. Amarjit Singh (Retd.) and Mr. Arjun Puri, Directors of the Company retire by rotation and being eligible, offer themselves for reappointment.

During the year Mr. S.C. Tripathi, IAS (Retd.), Mr. Satya Pal Talwar and Mr. Gautam Mukherjee have been appointed as Additional Directors of the Company w.e.f. September 10, 2012. Further Mr. Satya Pal Talwar has resigned from the Directorship of the Company w.e.f. May 23, 2013 on account of health reasons.

Mr. Yoshiki Kishimoto has also resigned from the Directorship of the Company w.e.f. October 16, 2012.

Your Directors while welcoming Mr. S.C. Tripathi, IAS (Retd.) and Mr. Gautam Mukherjee on the Board of the Company and placed on record, their appreciation for the valuable services rendered by Mr. Yoshiki Kishimoto and Mr. Satya Pal Talwar during their tenure as a Director of the Company.

Brief resume of the above Directors, nature of their expertise in functional areas and the name of the public companies in which they hold the Directorship and the Chairmanship/Membership of the Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, are given as Annexure to the Notice convening the Annual General Meeting.

None of the Directors of your Company are disqualified as per provision of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures as required under various provisions of the Act and Clause 49 of the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 and subject to disclosures in the Annual Accounts, we state as under :-

a) That in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure were made for the same;

b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and of the profit of the Company for year ended on that date;

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, 1956 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.

AUDITORS AND AUDITORS'' REPORT

The Auditors of the Company M/s. Price Waterhouse, Chartered Accountants, (Registration No.-012754N), retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re- appointment. The Company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limit under section 224(1B) of the Companies Act 1956.

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

Your Directors have appointed M/s. M.R. Vyas & Associates, Practicing Cost Accountants as Cost Auditor for auditing Cost Records of the Company for the financial year 2012-13 and 2013-14. The Cost Audit Report for the financial year 2012-13 will be filed in due course.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard - 21 on Consolidated Financial Statements read with Accounting Standard - 23 on Accounting for Investments in Associates and Accounting Standard -27 on Financial Reporting of Interests in Joint Venture in Consolidated Financial Statements, your Directors have the pleasure in attaching the Consolidated Financial Statements which form a part of the Annual Report.

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

SUBSIDIARY COMPANIES

Pursuant to the provision of Section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular dated February 8, 2011 has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. A Statement containing the desired details of the company''s subsidiaries is enclosed in the Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

The annual accounts of the subsidiary companies and the related detailed information shall be made available to the holding and subsidiary investors seeking such information at any point of time. Any shareholder of the Company/ its subsidiaries interested in obtaining the annual accounts of the subsidiaries may write to the Company Secretary at the Registered Office of the Company. The annual accounts of the subsidiary companies shall also be kept for inspection by any investor in a Registered Office of the Company. In the opinion of the management, the consolidated accounts present a full and fair picture of the state of affairs and financial condition and they are accepted globally.

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

EXPORTS

The Company''s exports during the year were Rs. 5,632 Mn as against Rs. 4,493 Mn in the previous financial year. 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 mainly in Europe, to constantly service the customers as well as scan the markets for growth.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, forming a part of the Director''s Report and the certificate from the Company''s auditors confirming compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement, is included in the Annual Report.

LISTING

The shares of your Company are listed at National Stock Exchange of India Limited, BSE Limited, Delhi Stock Exchange Limited and Ahmedabad Stock Exchange Limited. The listing fees for the year 2013-14 have been paid to the said Stock Exchanges.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particulars of the employees are set out in the annexure to the Directors'' Report.

However, having regard to the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the shareholders of the company excluding the statement of particulars of employees under section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the registered office of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information under section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

HUMAN RESOURCES

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.

ACKNOWLEDGEMENT

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 and other authorities.

The Directors also thank the Government of various countries, Government of India, State Governments in India and concerned Government Departments/Agencies for their cooperation.

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

For and on behalf of the Board

for MOTHERSON SUMI SYSTEMS LIMITED Place : Noida V. C. Sehgal

Date : July 31, 2013 Chairman

 
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