Directors Report of Sona BLW Precision Forgings Ltd.

Mar 31, 2025

The Board of Directors takes immense pleasure in presenting 29^th (twenty-ninth) Annual Report of Sona BLW Precision
Forgings Limited (Company or Sona Comstar) along with the audited standalone and consolidated financial statements for
the Financial Year ended on 31^st March, 2025.

1. FINANCIAL AND OPERATIONAL HIGHLIGHTS

Financial Year	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	32,327.98	28,931.09	35,545.35	31,847.82
Other Income	1,407.78	401.71	1,269.16	239.48
Total Income	33,735.76	29,332.80	36,814.51	32,087.30
Total expenses	25,827.74	22,953.52	28,638.31	25,287.08
Profit before exceptional items and tax	7,908.02	6,379.28	8,176.20	6,800.21
Less: Exceptional Items	192.85	87.16	192.85	87.16
Profit before tax	7,715.17	6,292.12	7,983.35	6,713.05
Less: Total Tax Expenses	1,918.29	1,447.32	1,986.47	1,535.30
Profit for the period/year	5,796.88	4,844.80	5,996.88	5,177.75
Other comprehensive (loss)/ income for the period/ year	6.08	-8.55	42.58	27.92
Total comprehensive income for the period/year	5,802.96	4,836.25	6,039.46	5,205.67
Earnings per share (Basic) (in INR)	9.57	8.27	9.92	8.83
Earnings per share (Diluted) (in INR)	9.57	8.27	9.92	8.83

Standalone

The standalone revenue (revenue from operations
plus foreign exchange (net)) increased by 11.7% to INR
32,327.98 million for Financial Year 2024-25 from INR

28,931.09 million for Financial Year 2023-24, primarily
driven by ramp-up of sales volume for electric vehicle
(EV) programs in North American, European and
Indian market. Profit before exceptional items and tax
in Financial Year 2024-25 was INR 7,908.02 million
as compared to INR 6,379.28 million in Financial Year

2023- 24, reflecting an increase of 24.0% from the
previous year. Profit after tax (PAT) in the Financial Year

2024- 25 was INR 5,796.88 million as compared to INR
4,844.80 million in Financial Year 2023-24, reflecting an
increase of 19.7% from the previous year.

Consolidated

The consolidated revenue (revenue from operations
plus foreign exchange (net)) increased by 11.6% to INR
35,545.35 million for Financial Year 2024-25 from INR
31,847.82 million for Financial Year 2023-24, primarily
driven by ramp-up of sales volume for electric vehicle
(EV) programs in North American, European and
Indian market. Profit before exceptional items and tax
in Financial Year 2024-25 was INR 8,176.20 million as
compared to INR 6,800.21 million in Financial Year
2023-24, reflecting an increase of 20.2% from the
previous year. Profit after tax (PAT) in the Financial Year

2024-25 was INR 5,996.88 million as compared to INR
5,177.75 million in Financial Year 2023-24, reflecting an
increase of 15.8% from the previous year.

2. PERFORMANCE OF THE COMPANY AND
INDUSTRY OVERVIEW

In Financial Year 2024-25, your Company maintained
its growth trajectory, achieving new revenue and
profitability milestones. Consolidated revenue, EBITDA,
and profits (before tax and exceptional items) reached
INR 35,545.35 million, INR 9,753 million, and INR
8,176.20 million, respectively. The EV business, which
saw a revenue increase of 38% over the previous
financial year, was a major driver of overall growth, due
to the ramp-up and initiation of several new programs.
However, the Non-EV business had a moderate revenue
growth of 1%.

The Company showcased resilience and adaptability
amid a changing global environment. Despite
ongoing supply chain challenges and geopolitical
tensions impacting material availability, the Company
successfully managed its supply chain. Global light
vehicle production continued its recovery, fuelled by
inventory restocking throughout the year as supply
chains became more stable. As a result, global
automotive sales remained robust, supported by
stabilised supply chains and the increasing availability
of battery electric vehicles (BEVs).

The global auto sector remained focused on managing
production and inventory levels in response to regional
demand patterns, which include slower growth in
key markets. Despite facing lower demand in certain
markets, and other macroeconomic concerns in
areas such as geopolitics, government policies and
regulations, your Company maintained a steady
supply of its products, ensuring its customers must not
experience any disruptions in their production lines.

In addition to sustaining revenue growth throughout the
year, your Company advanced its business development
efforts, securing 32 new programs in Fiscal 2025,
including 4 new EV programs. As of 31^st March, 2025
your Company has 58 EV programs, with 15 in serial
production, 16 under the production ramp-up phase
and 27 set to begin serial production in Fiscal 2026 or
later, based on customer schedules. These new order
wins have expanded your Company’s 10-year net order
book by 7%, now totaling INR 242 billion.

In technology development, your Company took
significant leaps by introducing three new products.
It commercialised the In-cabin Sensor, it’s very first
product based on mmWave Radar technology, for
passenger vehicle applications. It was followed by
another product from this technology, the Zone
monitoring Sensor, for industrial applications. Later, the
Company achieved another significant breakthrough by
developing a new product using its precision forming
technology, steering bevel box. The introduction of
these products will add new revenue streams for the
Company in future.

Your Company has updated its Vision Statement last
year to expand its focus beyond the automotive sector
to broader mobility areas. Since then, the Company
have been exploring many new mobility areas to enter,
and it took a significant step in this direction during this
year by signing an agreement to acquire the Railway
Equipment Division of Escorts Kubota Limited, marking
an entry into the railway sector. Railway Equipment
Division has remained a market leader in brake systems
for various types of rolling stock and has been a long¬
term partner of Indian railways and major private railway
OEMs. It is also one of the top suppliers of couplers,
suspension systems and friction products for railway
applications. India has the second-largest railway
network in Asia and the fourth-largest globally. With
the increasing capex and budgetary support from
the government for expanding the railway network,
along with the various modernisation initiatives, the
railway component market in India offers a significant
opportunity. Moreover, railway is among the greenest
and cleanest modes of transport, which aligns with our
orientation for sustainable mobility. With this acquisition,
the Company entered into the railway mobility sector
and the rapidly growing railway component market,
contributing more to greener mobility solutions.

The Company has reinforced its commitment to ESG
by publishing its third annual sustainability report this
year. In partnership with the Catch Foundation, the

Company has planted over 45,000 diverse tree species,
transforming previously barren land into a thriving
Miyawaki dense forest. Based on the proprietary scoring
algorithm, the Bluesky Sustainable Business LLP and
InGovern Research Services Pvt. Ltd. (Implementing
Agency) have assessed the CSR Programs of the
Company with an Exemplary Category of Performance
of CSR Activity. Furthermore, the introduction of a three-
stage air purification system in the Tool & Die shop has
resulted in a 98% reduction in carbon monoxide levels,
substantially enhancing worker health and safety.

There were many other significant developments for
the Company during the year. This year, for the first
time, the Company participated in a global exhibition,
CES (Consumer Electronics Show) in Las Vegas, where
it showcased a range of products that emphasise
its focus on mobility technology and demonstrated
one of the breakthrough innovations, a 180-degree
field of view short-range radar sensor. The Company
remains committed to supporting a sustainable and
technologically advanced mobility ecosystem. On
the employee satisfaction front, it once again earned
the Great Place To Work® Certification™. This coveted
recognition reinforces your Company’s standing as
one of the India’s leading automotive technology
employers. On the corporate governance side, the
Company received a Certificate of Appreciation for
Excellence in Corporate Governance from the Institute
of Company Secretaries of India (ICSI) and the CSR
Times Bronze Award. These awards are a testament to
the Company’s exemplary governance practices, which
have consistently contributed to sustainable growth,
financial success, and our reputation as a responsible
corporate entity.

For the future outlook of the industry, S&P Global
Mobility forecasts global light vehicle sales to reach

89.6 million units in the calendar year 2025 and witness
a 1.7% growth over the previous year. The auto industry
continues to navigate tariff impacts, still-high interest
rates, affordability challenges, elevated new vehicle
prices, uneven consumer confidence, energy price and
supply concerns, and risks in auto lending.

5. MANAGEMENT DISCUSSION AND
ANALYSIS

A detailed analysis of your Company’s performance is
discussed in the Management Discussion and Analysis
Report for the Financial Year 2024-25, pursuant to the
provisions of Regulation 34(2)(e) and Schedule V of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“Listing Regulations”), forming an
integral part of this Annual Report.

1. ACQUISITIONS, INVESTMENTS AND
OTHER CORPORATE DEVELOPMENTS

1.1 Acquisition of Escorts Kubota Limited’s Railway
Business

During the Financial Year 2024-25, your Company
entered into a Business Transfer Agreement dated

23^rd October, 2024 (BTA) read with the Amended
and Restated Business Transfer Agreement dated
10^th February, 2025 with Escorts Kubota Ltd. (Escorts)
for acquisition of its Railway Business, as a going
concern, on slump sale basis, for an enterprise value
of INR 16,000 million (Indian rupees sixteen thousand
million), subject to the terms of the BTA.

The Railway Business of Escorts has one of the
most extensive product portfolios amongst railway
component suppliers in India. It is amongst the leaders in
brakes, couplers, suspension systems, and friction and
rubber products. Additionally, it has a strong pipeline
of new products, which includes HVAC systems,
electrical control panels, vacuum evacuation systems,
and automatic plug doors. The Railways Business has a
long growth runway as new products move across the
R&D chain.

Over the last five years, it has grown revenue at 19%
CAGR and EBIT at 18% CAGR. Railway Business reported
revenue of approx. INR 9,500 million and approx. EBIT
of INR 1,790 million in the Financial Year 2023-24. The
acquisition of the Railway Business is expected to be
earnings accretive for the Company right from the first
year and offers significant growth opportunities.

In this connection, we would like to inform that the
transaction has been closed on 1^st June, 2025.

4.2 Purchase of land in Faridabad

Your Company has also entered into an agreement
with Escorts Kubota Limited (Escorts) for purchase of
plot of land measuring 33,423 (thirty three thousand
four hundred twenty three) square yards equivalent
to 27,945.885 (twenty seven thousand nine hundred
forty five point eight eight five) square meters forming
part of the industrial plot bearing no. 115 and half of
plot no. 114 located in Sector 24, Faridabad, Haryana,
adjacent to the land of Railway business of Escorts , for
total consideration of INR 1,100 million (Indian rupees
eleven hundred million), which will support the future
expansion of the business of the Company.

4.3 Investment in ClearMotion Inc.

During the Financial Year 2024-25, Comstar Automotive
USA LLC, a wholly owned subsidiary of the Company
in USA, has made an investment of USD 3,999,900,
(US dollars three million nine hundred and ninety-nine
thousand nine hundred only) in Clear Motion Inc. (“Clear
Motion”) in the form of Preferred Stock Series B .

Clear Motion is a US based company engaged into
the business of manufacturing of active suspension
systems for application in passenger vehicles.

4.4 Certification under Production-Linked Incentive
Scheme

During the Financial Year 2024-25, your Company has
received certifications for more products i.e. Traction
Motor for electric three wheelers, Hub Wheel Integrated

Motor for electric two wheelers, under the Production-
Linked Incentive (PLI) Scheme for Automobile and
Auto Component Industry in India from the Ministry of
Heavy Industries.

4.5 Inauguration and commencement of production in the
new Plant in Manesar, Haryana

During the Financial Year 2024-25, your Company has
inaugurated its new plant in Manesar (Haryana). This is
the Company’s second plant for the Driveline Business
in IMT Manesar (Haryana), which will assist in catering
to the growing demand for the driveline products of
the Company.

4.6 Inauguration of new manufacturing Plant in Mexico

During the Financial Year 2024-25, Sona BLW Edrive
Mexicana, S.A.P.I. De C.V., a wholly owned subsidiary of
the Company in Mexico, inaugurated its manufacturing
plant in the Fipasi Industrial Park, Silao, Mexico. This
strategic expansion underscores the Company’s
commitment to meeting the growing demand for high-
quality driveline solutions for Battery Electric Vehicles
(“BEVs”) in North America. The new facility specialises
in producing differential assemblies and reduction
gears meticulously designed for BEVs.

4.7 MOU with TiHAN - IIT Hyderabad for connected,
autonomous and electric technologies for Automated
Guided Vehicles (AGVs), Drones, electric vertical take¬
off and landing (EVTOLs)

During the Financial Year 2024-25, your Company has
signed a memorandum of understanding (MOU) with
NMICPS Technology Innovation Hub on Autonomous
Navigation Foundation at IIT Hyderabad (TIHAN-IITH)
at CES 2025 in Las Vegas, USA. The MOU will enable
Sona Comstar and TIHAN-IITH to co-operate, synergise
strengths and support each other in the areas of
Connected, Autonomous and Electric Technologies for
AGVs, Drones and EVTOLs.

This collaboration marks a significant milestone in
advancing groundbreaking research and development
(R&D) in autonomous vehicle technologies. With
TiHAN-IITH’s expertise in autonomous navigation
and the Company’s leadership in mobility technology
and world-class manufacturing, this partnership will
enhance innovation and facilitation of a faster transition
to future mobility applications.

4.8 Signing of MOU with the ePlane Co. to develop
powertrain for eVTOLs and Drones

During the Financial Year 2024-25, your Company has
signed a memorandum of understanding with Ubifly
Technologies Private Limited (The ePlane Co.) at
Chennai for enabling Sona Comstar and The ePlane
Co. to co-operate in the areas of eVTOLs and Drones.
The parties will collaborate on the development
of powertrains for eVTOLs and Drones, including

gearboxes, motors, inverters, and related components
and systems.

The Urban Air Mobility Space in India is poised to
launch several eVTOLs in the coming years. The ePlane
Co. is a pioneer in the field of eVTOLs with several
used cases including Air Ambulances, Charter Flights
and Aerial Cargo. Its recent approval from DGCA puts
them in the forefront of indigenous private companies.
Your Company is a global leader in mobility space
with a strong focus on EPIC technologies and proven
capabilities in electric powertrains including Motor,
Inverter and Gearbox.

This collaboration is aimed to strengthen the partnership
between the two companies and pave a way for deeper
engagement in the upcoming eVTOL and Drone
programs, and deliver truly “Made in India” products.

4.9 Re-classification of Singapore VII Topco III Pte. Ltd.
from Promoter to Public category

During the year under review, your Company has
received a request from Singapore VII Topco III Pte.
Ltd (Singapore VII) under Regulation 31A of the Listing
Regulations, for re-classification of Singapore VII from
“Promoter” to “Public” category.

The Board of Directors of the Company in their meeting
held on 23^rd January, 2025, considered and approved
the request made by Singapore VII and the Company
has taken the requisite action by submitting the re¬
classification application with the stock exchanges for
its approval under the Listing Regulations.

The Company has received no objection confirmation
from both the stock exchange(s) i.e. BSE Ltd. and
National Stock Exchange of India Limited (NSE), for re¬
classification of Singapore VII from Promoter to Public
category and the intimation of the same was filed with
both the stock exchange(s) on 3^rd March, 2025.

5. SUBSIDIARIES AND ASSOCIATES

As on 31^st March, 2025, the Company has 6 (six) directly
held subsidiaries, 9 (nine) step-down subsidiaries and
2 (two) associate companies, the details of which are
enumerated in Form MGT-7, which is available on the
website of the Company at https://sonacomstar.com/
investor/annual-reports-and-returns.

Pursuant to Section 129(3) of the Companies Act, 2013
(Act), the Company has prepared the consolidated
financial statements, which forms part of this Annual
Report. Further, a separate statement containing salient
features of Financial Statements of all subsidiaries and
associates has been enumerated/shown in Form AOC-1,
which forms part of this Report.

In accordance with Section 136 of the Act, the Audited
Financial Statements, including the Consolidated
Financial Statements and related information of the
Company and Audited Financial Statements of each
of its subsidiaries, are available on the website of

the Company at https://sonacomstar.com/investor/
subsidiary-companies-financial-statements

Your Company does not have any material subsidiary as
of 31^st March, 2025.

The policy for determining material subsidiaries framed
in accordance with the provisions of the applicable
laws and amendments thereof, as approved by the
Board, is uploaded on the Company’s website and can
be accessed at https://sonacomstar.com/flles/policv/
policy-fo r-determining-material-subsidiaries-policy-
f3dEtf.pdf

>. TRANSFER TO RESERVES

The Board of Directors of the Company do not propose
to transfer any amount to reserves.

''. DIVIDEND

The Board of Directors at their meeting held on 30^th
April, 2025 have recommended the payment of INR
1.60 (One Indian rupee and sixty paisa only) per equity
share of Company having face value of INR 10/- (Indian
rupees ten only) each as final dividend for the financial
year ended on 31^st March, 2025. The payment of final
dividend is subject to the approval of the shareholders
at the ensuing Annual General Meeting of the Company.

During the year under review, the Board of Directors
of the Company at their meeting held on 23^rd January,
2025 has declared an interim dividend of INR 1.60 (One
Indian rupee and sixty paisa only) per equity share
of the Company having face value of INR 10/- (Indian
rupees ten only) each. The interim dividend was paid to
the shareholders on 15^th February, 2025.

The total dividend for the Financial Year 2024-25,
including the proposed final dividend, amounts to INR
3.20 (Three Indian rupee and twenty paise) per equity
share of INR 10/- (Indian rupees ten only) each of the
Company and the tabular representation of the dividend
recommended / declared for the financial year under
review and the previous financial year are as follows:

Dividend on Equity Shares	For the Financial Year ended on 31st March, 2025	For the Financial Year ended on 31st March, 2024
	Dividend per Equity Shares (INR)	Dividend per Equity Shares (INR)
Interim dividend	1.60	1.53
Final dividend	1.60*	1.53
Total dividend	3.20	3.06

*The Board has recommended final dividend of INR 1.60 for
Financial Year 2024-2025 to the shareholders of the Company for
their approval in the ensuing AGM of the Company.

In view of the changes made under the Income Tax
Act, 1961, by the Finance Act, 2020, dividend paid
or distributed by the Company shall be taxable in the
hands of the shareholders. The Company, accordingly,
makes the payment of the final dividend after deduction
of tax at source, as applicable.

The abovesaid dividend declared is in accordance with
the Dividend Distribution Policy of the Company.

The Dividend Distribution Policy containing the
requirements mentioned in Regulation 43A of the
Listing Regulations and the same is available on the
Company’s website at https://sonacomstar.com/flles/
policv/dividend-distribution-policv-policv-oW38wX.pdf

8. TRANSFER OF UNCLAIMED DIVIDEND TO
INVESTOR EDUCATION AND PROTECTION
FUND

During the year under review, no amount was required to
be transferred to the Investor Education and Protection
Fund by the Company.

9. CHANGE IN SHARE CAPITAL OF THE
COMPANY

9.1 Fund raising through Qualified Institutions Placement

During the financial year under review, your Company
made a Qualified Institutions Placement (QIP) of INR
24,000 million (Indian rupees twenty four thousand
million) by issuing 34,782,608 (Thirty-four million seven
hundred eighty-two thousand six hundred eight only)
equity shares to Qualified Institutional Buyers (QIBs) at
an issue price of INR 690 (Indian rupees six hundred
and ninety) per equity share, including a premium of Rs
680 (Indian rupees six hundred and eighty) per equity
share, in compliance with the SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2018 (SEBI
ICDR Regulations), the Act and other applications laws.

The net proceeds from the QIP shall be utilised for the
objects of the Company as specified below and have
been clearly stated in the placement document and
notice seeking shareholder’s approval as well:

a. Repayment / pre-payment, in full or in part,
of certain outstanding borrowings availed by
our Company;

b. Payment of balance consideration in relation to the
acquisition of Novelic;

c. Pursue strategic investments and organic and
inorganic growth opportunities;

d. Purchase of fixed assets, including, equipment
and machinery;

e. General corporate purposes.

Details of utilisation of funds of QIP

Pursuant to the provisions of regulation 32 of the Listing
Regulations, the Company obtains monitoring agency
report on the utilisation of the net proceeds of the QIP
on a quarterly basis and places the said report before
the Audit Committee and Board of Directors in their
respective quarterly meetings. The monitoring agency
report and statement of deviation/variation report are

filed with the stock exchange(s) and uploaded on the
website of the Company on a quarterly basis.

Details on the utilisation of funds raised through QIP
during the financial year is mentioned in the quarterly
Statement of Deviation or Variation Report uploaded
on the website at https://sonacomstar.com/investor/
statement-of-deviation-or-variation

9.2 Employee Stock Option Plan (ESOP) Allotment

As on the date of this report and during the year under
review, your Company has allotted 487,589 (Four
hundred and eighty-seven thousands five hundred
eighty nine only) equity shares of the Company having
face value of INR 10 /- (Indian rupees ten only) each fully
paid up, to the eligible employees of the Company upon
exercise of vested options, as granted to them, under
the Sona BLW Precision Forgings Limited -Employee
Stock Option Scheme 2020 (ESOP Scheme-2020)
and Employee Stock Option Scheme 2020 (ESOP
Scheme-2023).

As a result of above allotment of equity shares under QIP
and upon exercise of ESOPs, the paid-up share capital
of the Company increased from INR 5,864,477,780
(Indian rupees five billion eight hundred sixty-four
million four hundred seventy seven thousand seven
hundred eighty only) consisting of 586,447,778 (Five
hundred eighty-six million forty four hundred seven
thousand seven hundred seventy eight only) to INR
6,217,179,750 (Indian rupees six billion two hundred
seventeen million one hundred seventy nine thousands
seven hundred fifty only ) consisting of 621,717,975 (Six
hundred twenty one million seven hundred seventeen
thousands nine hundred seventy five only) equity
shares having face value of Rs. 10/ - each fully paid-up.
The Equity Shares issued under ESOP Scheme -2020
and ESOP Scheme -2023 shall rank pari-passu with
the existing equity shares of the Company including
dividend entitlement.

During the year under review, your Company has not
issued any sweat equity shares or equity shares with
differential rights as to dividend, voting or otherwise.

10. CHANGE IN NATURE OF BUSINESS

During the financial year under review, there was no
change in the nature of Company’s business.

11. CORPORATE GOVERNANCE

Your Company continues to benchmark its governance
framework and practices against the highest standards
of industrial excellence including national as well as
international benchmarks for corporate governance.
This approach reflects the Company’s core value
system, which is deeply embedded in its organisational
culture, ethical compliance and relationships with
stakeholders, including shareholders, employees,
customers, regulators, and the community at large.

In pursuit of excellence, your Company remains
unwavering in its commitment to adopting and
maintaining the highest standards of corporate
governance. These standards are aligned with the
provisions of the Act, the rules made thereunder, and
the guidelines issued by the Securities and Exchange
Board of India (SEBI), particularly under the Listing
Regulations, as amended from time to time. Your
Company recognises that robust corporate governance
is fundamental to the effective management of its
business, ensuring transparency, accountability, and
the creation of long-term value for its stakeholders.

As a recognition of its continued efforts towards
fostering exemplary governance standards, your
Company was conferred with the “Certificate of
Appreciation for Excellence in Corporate Governance”
by the Institute of Company Secretaries of India (ICSI)
during the financial year under review. This prestigious
accolade stands as a testament to the Company’s
steadfast adherence to ethical practices, compliance
with regulatory frameworks, and commitment to the
principles of good governance.

The report on the Corporate Governance as stipulated
in Regulation 34 of the Listing Regulation along with
a Certificate from the Practicing Company Secretary
regarding compliance with the conditions of Corporate
Governance as stipulated under Schedule V of the
Listing Regulations forms part of this Annual Report as

Annexure-A.

The Certificate on Corporate Governance of the
Company obtained from M/s. PI & Associates, firm of
Practising Company Secretaries, as required under the
Listing Regulation is attached as Annexure -B.

12. DIRECTORS AND KEY MANAGERIAL
PERSONNEL

12.1 Board Diversity

Your Company recognises the benefits of having a
diverse Board and considers increasing diversity at
Board level as an essential element in maintaining
a competitive advantage. Your Company believes
that a truly diverse Board will leverage differences
in thought, perspective, knowledge, skill, regional
and industry experience, cultural and geographical
background, age, race and gender, which will ensure
that the Company retains its competitive advantage
and contribute towards driving business results, make
corporate governance more effective, enhance quality
and responsible decision-making capability, ensure
sustainable development and enhance the reputation
of the Company.

The Policy to promote Diversity on the Board of
Directors (Diversity Policy) adopted by the Board, in
compliance with Regulation 19(4) read with Part D of

the Schedule II of the Listing Regulations, sets out its
approach to diversity.

The Board Diversity Policy is available on the website of
the Company at https://sonacomstar.com/policies-and- |
codes

2.2 Board of Directors

As on 31^st March, 2025, the Board comprised of 9
(nine) directors, including 6 (six) independent directors
(including 2 (two) women independent directors), 2
(two) executive directors, and 1 (one) non-executive
director. The brief profile of each director is available
on the website of the Company at https://sonacomstar.
com/board-of-directors

The Board holds the opinion that the Independent
Directors of the Company (including those appointed
during the year) possesses requisite qualifications,
experience, expertise, proficiency and holds highest
standards of integrity. In terms of the requirements
under the Listing Regulations, the Board has identified
key skills, expertise and core competencies required
for appointment of director on the Board, including
Independent Directors, details of which are provided as
part of the Corporate Governance Report forming part
of this Report.

2.3 Appointment of Directors

During the period under review, the composition of
the Board of Directors of your Company changed
to strengthen its governance framework, diversity,
expertise and enhance its strategic oversight
capabilities. The restructuring of the Board was
undertaken in compliance with the provisions of
the Act, the Listing Regulations, and based on the
recommendations of the Nomination and Remuneration
Committee (NRC) and consequent approval of the Board
thereon, the details of the same are specified below:

a. Appointment of Mr. Pradip Manilal Kanakia (DIN:
00770347) as an Independent Director of the w.e.f.

1^st July, 2024 for a period of 5 (five) consecutive
years. Also, being an expert in accounting,
auditing and financial, he was also appointed
as Chairperson of Audit Committee w.e.f. 5^th
July, 2024.

Mr. Kanakia is a dual qualified Chartered
Accountant of both in England & Wales and India
and he has held leadership positions with Price
Waterhouse and KPMG. He possesses requisite
skills and expertise in accounting, auditing,
reporting, strategy, transformation, performance
management, systems and processes and
controls, compliance and governance.

b. Appointment of Mr. Karamendra Daulet Singh
(DIN:00110827), as an Independent Director of

the Company w.e.f. from 24^th October, 2024 for a
period of 5 (five) consecutive years.

Mr. Karamendra is a dual-qualified lawyer, qualified
to practice both in England and India. He possesses
requisite skills and core expertise, amongst others,
include cross border transactions and Mergers
and Acquisitions and have an in-depth knowledge
with respect to various corporate related matters,
including regulatory and taxation frameworks.

c. Appointment of Mr. Vineet Mittal (DIN:00058552),
as an Independent Director of the Company w.e.f.
from 24^th January, 2025 for a period of 5 (five)
consecutive years.

Mr. Mittal, a distinguished alumnus of Harvard
Business School, is a serial entrepreneur known for
his remarkable success in the fields of Information
Technology (IT) services and Green Energy. He
possesses requisite skills and expertise in the
field of Sustainability, Regulatory Compliance
and Stakeholders Management, Information
Technologies/Cyber Security, Corporate
Governance, and Risk Management.

d. Appointment of Mr. Vikram Verma Vadapalli
(DIN:03631259), as a Whole Time Director in the
Company w.e.f. from 24^th January, 2025 for a
period of 3 (three) consecutive years.

Mr. Verma holds bachelor’s degree in technology in
mechanical engineering from Karnataka Regional
Engineering College, Surathkal (now renamed
as National Institute of Technology, Surathkal),
and brings with him more than 40 years of rich
experience in organisational strategy, new product
development, business development, strategic
procurement, operations, and people development
in the automotive industry. Mr. Verma has been
associated with Sona Group for more than 35 years.
He joined the Company in 2007 as Chief Engineer
(Projects). Prior to this, Mr. Verma was leading the
plant operations at JTEKT India Limited (Formerly
known as Sona Koyo Steering Systems.) Later, in
2011, Mr. Verma was appointed as an Executive
Director and CEO of the Company. In 2019, after
the acquisition of Comstar, the erstwhile business
of the Company was rechristened as ‘Driveline
Business’, and Mr. Verma was appointed as CEO of
Driveline Business.

The appointment of Mr. Pradip M Kanakia,
Mr. Karam Daulet Singh, Mr. Vineet Mittal and
Mr. Vikram Verma Vadapalli as the Directors of
the Company for the term as mentioned above
was subsequently approved by the shareholders
of the Company through the resolutions passed
with the requisite majority by way of postal ballot
via remote e-voting on 30^th August, 2024, 29^th
November, 2024, and 28^th February, 2025 (for both
Mr. Vikram Verma Vadapalli and Mr. Vineet Mittal),
respectively. Details of the same are provided in

the Report of Corporate Governance, forming part
of this Annual Report.

12.4 Re-appointment of Independent Directors

a. The NRC, based on the performance evaluation
of Mrs. Shradha Suri and taking into account the
external business environment, the business
knowledge, acumen, experience, more than 87%
attendance in the Board’s meetings held during
her tenure, her association with the automobile
industry and association with ACMA and CII and
the substantial contribution made by Mrs. Suri
during her tenure, has recommended to the Board
that the continued association of Mrs. Shradha Suri
as an Independent Director would be beneficial to
the Company.

Based on the above and her performance
evaluation, the Board at its meeting held on 30^th
April, 2025 has recommended the re-appointment
of Mrs. Shradha Suri as an Independent Director
to the shareholders for the second consecutive
term of 5 (five) years commencing from 5^th August,

2025 to 4^th August, 2030. The Company has
received the requisite notice from a member in
writing proposing her candidature for appointment
as an Independent Director under section 160 of
the Act. The notice is available on the website of
the Company at https://sonacomstar.com/investor/
notice-of-candidature.

b. The NRC, based on the performance evaluation of
Mr. Jeffrey Mark Overly and taking into account his
expertise, 100% attendance in the Board and its
Committee meetings and substantial contribution
made by him during despite being in different time
zone his tenure, has recommended to the Board
that the continued association of Mr. Jeffrey as
an Independent Director would be beneficial to
the Company.

Based on the above and his performance
evaluation, the Board at its meeting held on 30^th
April, 2025 has recommended the re-appointment
of Mr. Jeffrey as an Independent Director for the
second consecutive term of 5 (five) years to the
shareholders commencing from 12^th February,

2026 to 11^th February, 2031. The Company has
received the requisite Notice from a member in
writing proposing his candidature for appointment
as an Independent Director under section 160 of
the Act. The notice is available on the website of
the Company at https://sonacomstar.com/investor/
notice-of-candidature.

Mrs. Shradha Suri and Mr. Jeffrey Mark Overly have
confirmed that they are not disqualified from being
appointed as Independent Directors of the Company
under the Act and the Listing Regulations. They have
also submitted their written consent to act as directors
of the Company in accordance with the provisions of
Act and rules made thereunder.

In compliance with the applicable provisions of the Act
and the Listing Regulations, each of the directors has
disclosed their interest in other entities and related
parties, which were duly noted by the Board of Directors.

The proposed appointments are in consonance with
all the statutory and regulatory requirements, and
the requisite documentation and filings have been
completed as mandated under the Act and the Listing
Regulations. As per the provisions of the Act, the
Independent Directors are not liable to retire by rotation.

The brief profiles of all the directors are also available
on the Company’s website at https://sonacomstar.com/
board-of-directors.

12.5 Retirement/Resignation of Directors

During the financial year under review, following
directors of the Company have retired/resigned from
the Company:

a. Mr. B.V.R Subbu (DIN: 00289721), Independent
Director of the Company retired w.e.f. 4^th July, 2024
due to completion of his tenure as Independent
Director of the Company.

b. Resignation of Mr. Prasan Abhaykumar Firodia
(DIN: 00029664), Independent Director of the
Company, w.e.f. 23^rd October, 2024, due to his
increased professional and personal commitments.

c. Resignation of Mr. Amit Dixit (DIN: 01798942),
Nominee and Non-Executive Director of the
Company w.e.f. 11^th December, 2024, as per
the requirement of regulation 31A of the Listing
Regulations for re-classification of Singapore VII
Topco III Pte. Ltd. from promoter to public category.

In compliance with the Listing Regulations, Mr. Prasan
Abhaykumar Firodia and Mr. Amit Dixit confirmed that
there are no other material reasons other than those
provided in their resignation letter, which were filed with
the stock exchanges and uploaded on the website of
the Company.

12.6 Retirement by rotation and subsequent re¬
appointment

Mr. Vivek Vikram Singh (DIN: 07698495), Managing
Director & Group CEO of the Company is liable to retire
by rotation at the ensuing AGM and being eligible has
offered his candidature for re-appointment.

Brief resume, nature of expertise, and disclosures as
stipulated under Secretarial Standard 2 and Regulation

36 of the Listing Regulations, is appended as an
Annexure to the Notice of the ensuing AGM.

12.7 Demise of Mr. Sunjay Kapur, Non-Executive Chairman

The Board is deeply saddened by the untimely passing
of Mr. Sunjay Kapur, Non-Executive Chairman of the
Board on 12^th June, 2025 and expressed its thoughts
and condolences with the family of Mr. Kapur at this
time of grief. The visionary leadership, unwavering
commitment, and exemplary guidance of Mr. Kapur has
left an indelible mark on the Board and Company.

Throughout his tenure, Mr. Kapur was instrumental in
steering the Company through significant milestones.
His strategic insights and ethical values served as the
foundation of corporate governance and set the course
for sustained growth and innovation for the Company.

Beyond his professional accomplishments, Mr. Kapur
will be remembered for his humility, integrity, and
ability to inspire those around him. His contribution to
the Company and the automotive industry community
is immeasurable.

may his soul rest in eternal peace!

In recognition of his unparalleled contributions and
enduring impact, the Board of Directors in its meeting
held on 23^rd June, 2025 designated Late Mr. Sunjay Kapur
as ‘Chairman Emeritus’ of the Company posthumously.

12.8 Appointment of Mr. Jeffrey Mark Overly, as
Chairperson of the Company.

The Board of Directors of the Company appointed
Mr. Jeffrey Mark Overly, Independent Director
(DIN:09041143), as the Chairperson of the Board of
Directors of the Company w.e.f. 23^rd June, 2025.

Mr. Overly has been on the Board of the Company for
almost 5 years now and has an excellent attendance
record attending all the Board and Committees meetings
held during his tenure, contributing significantly to the
deliberations and decision making of the Board and
its committees.

12.9 Appointment of Mrs. Priya Sachdev Kapur as a Non¬
Executive Director

The Board of Directors, on the recommendation of
the Nomination and Remuneration Committee (NRC),
has approved the appointment of Mrs. Priya Sachdev

Kapur (DIN: 02406685), as an Additional Non-Executive
Director of the Company, w.e.f. 23^rd June, 2025, subject
to approval of the shareholders of the Company.

12.10 Key Managerial Personnel

As on 31^st March, 2025, the key managerial personnel
(“KMP”) of the Company as per Section 2(51) and
Section 203 of the Act are as follows:

Name of the KMP	Designation
Mr. Vivek Vikram Singh	Managing Director and Group Chief Executive Officer
Mr. Vikram Verma Vadapalli*	Whole Time Director and Chief Executive Officer- Driveline Business
Mr. Rohit Nanda	Group Chief Financial Officer
Mr. Ajay Pratap Singh	Senior Vice President- Group General Counsel, Company Secretary and Compliance Officer

*Mr. Vikram Verma Vadapalli was appointed as KMP of the
Company w.e.f. 24^th January, 2025.

13. DECLARATION BY INDEPENDENT
DIRECTORS

Your Company has, inter-alia, received requisite
declarations from all the Independent Directors
confirming that they:

- meet the criteria of independence as prescribed
under the Section 149(6) of the Act read with Rule 5
of the Companies (Appointment and Qualification
of Directors) Rules, 2014, and Regulation 16(1)
(b) of the Listing Regulations. There has been no
change in the circumstances affecting their status
as Independent Directors of the Company.

- have complied with the Code of Conduct for Board
of Directors and Senior Management Personnel
(“Code”) of the Company during the Financial Year
2024-25.

The Board of Directors of the Company have taken on
record the declarations and confirmation submitted by
the Independent Directors.

None of the directors of the Company are disqualified
from being appointed as Directors under Section
164(1) and 164(2) of the Act read with Rule 14(1)
of the Companies (Appointment and Qualification
of Directors) Rules, 2014 (including any statutory
modification(s) and/or re-enactment(s) thereof for the
time being in force) or are debarred or disqualified by
SEBI, Ministry of Corporate Affairs (MCA) or any other
such statutory authority.

The Independent Directors are also required to
undertake an online proficiency self-assessment test
conducted by IICA within a period of 2 (two) years from
the date of inclusion of their names in the data bank,
unless they meet the criteria specified for exemption.

All the Independent Directors of the Company are
exempted from the requirement of undertaking the
online self-assessment test, except Mr. Pradip Manilal
Kanakia, who has successfully completed the online
proficiency self-assessment test.

The Company has received a certificate from M/s. PI &
Associates, a firm of Company Secretaries in Practice,
certified that none of the Directors on the Board of
the Company have been debarred or disqualified
from being appointed or continuing as Directors of
companies by SEBI/Ministry of Corporate Affairs or any
such statutory authority, the Certificate is attached as
Annexure - C to this Annual Report.

Lead Independent Director

Mr. Jeffrey Mark Overly, Independent Director,
Chairman of the Board and Chairman of Nomination
and Remuneration Committee, Risk Management
Committee and Environment, Social and Governance
Committee was appointed as the Lead Independent
Director by the Board of the Company effective from
5^th July, 2024 in place of Mr. B.V.R. Subbu post his
retirement from the Board of the Company. The role and
responsibilities of the Lead Independent Director are
provided in the Corporate Governance Report forming
part of this Annual Report.

14. REMUNERATION OF DIRECTORS, KEY
MANAGERIAL PERSONNEL AND SENIOR
MANAGEMENT

The remuneration paid to the Directors, Key Managerial
Personnel and Senior Management is in accordance
with the Nomination and Remuneration Policy of the
Company formulated in accordance with Section 178
of the Act and Regulation 19 read with Schedule II of
the Listing Regulations. Further, details of the same are
given in the Corporate Governance Report, which forms
part of this Annual Report.

The Managing Director and Group CEO and the Whole
Time Director of the Company have not received any
remuneration or commission from any of the subsidiary
companies. The Company does not have any holding
company as of 31^st March, 2025.

Singapore VII Topco III Pte. Ltd. (Singapore Topco),
the erstwhile holding company and earlier one of the
promoter of the Company had adopted an exit return
incentive plan (“ERI Plan”) pursuant to which Singapore
Topco has rewarded certain identified employees of the
Company and/or its subsidiaries (including each of Key
Managerial Personnel and Executive Director(s) who
are not promoters of the Company) with cash rewards
based on certain disposition event(s) in relation to its
interest in the Company. These cash rewards have been
paid to such employees entirely by Singapore Topco
(without any recourse or liability to the Company).

None of the promoters, directors of the Company,
having significant influence, is beneficiary of the ERI

Plan. The Board of Directors and Shareholders of the
Company had approved the ERI Plan, in their respective
meeting held on 6^th August, 2021 and 9^th September,
2021, respectively, in compliance with regulation 26(6)
of the Listing Regulations. Accordingly, during the
Financial Year 2024-25, Singapore Topco paid part of
cash rewards to the identified employees (including
the Whole Time Director, Managing Director and Group
CEO) of the Company. The intimation for the same was
also filed with the stock exchanges and website of
the Company.

The Remuneration Policy of the Company is available
on the website of the Company at https://sonacomstar.
com/policies-and-codes

15. DISCLOSURE UNDER RULE 5(1) AND 5(2)
OF THE COMPANIES (APPOINTMENT
AND REMUNERATION OF MANAGERIAL
PERSONNEL) RULES, 2014

The percentage increase in remuneration, ratio of
remuneration of each director and key managerial
personnel (“KMP”) to the median of employees’
remuneration, as required under Section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, are provided in a separate Annexure - D1 forming
part of this Annual Report.

The statement containing the names of top 10 (ten)
employees in terms of remuneration drawn and the
particulars of employees as required under section
197(12) of the Act read with rule 5(2) and 5(3) of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is attached as
Annexure- D2, forming part of this Annual Report.

16. BOARD EVALUATION

Based on the recommendation of the Nomination and
Remuneration Committee (“NRC”), your Company has
adopted the Policy for Evaluation of the Performance
of the Board of Directors, which was duly approved by
the Board of Directors. In terms of the requirements
of the Act and the Listing Regulations read with the
Guidance note on Performance Evaluation” issued by
the SEBI on 5^th January, 2017, the Board has carried
out an annual evaluation of its own performance and
that of its committees as well as the performance of its
Chairperson and individual directors. The Nomination
and Remuneration Committee (NRC) also carried out
the performance evaluation of individual directors.

The Independent Directors also carried out performance
evaluation of non-independent directors, board as a
whole and Chairperson of the Board taking into view of
executive and non-executive directors of the Company.

The detailed elaboration of the above performance
evaluation has been specified under the Corporate
Governance Report attached as Annexure - A of
this report.

17. FAMILIARISATION PROGRAMME FOR
INDEPENDENT DIRECTORS

The Company has designed a Familiarisation Programme
for its Independent Directors, which is imparted at the
time of the appointment of an Independent Director on
the Board as well as during the year. The Programme
aims to provide insights into the Company to enable
the Independent Directors to understand its business
in depth and to assist them in performing their role as
Independent Directors of the Company.

The familiarisation programme inter alia, includes
briefing on:

a. role, responsibilities, duties and obligations as a
member of the Board.

b. corporate presentation explaining the business
and business model of the Company.

c. technology roadmap.

d. matters relating to governance.

Through one-to-one interaction with the senior
management, the new independent directors are
acquainted to the company’s business, industry, and
key policies followed by site visits to company facilities.

Independent directors receive regular updates on
the company’s performance, strategic initiatives, and
industry trends. Your Company has also organised
training sessions on ethical compliance comprising
of Prevention of Money Laundering Act, 2002 and
Anti-Bribery & Corruption Policy, Governance & Trade
Embargo, Corporate Governance, Anti-Trust Issues,
Regulatory Updates, and other relevant topics. These
sessions ensure that independent directors are aware
of their roles, rights, and responsibilities as specified in
various provisions of the applicable laws.

Further, participation in board and committees
meetings allows independent directors to engage with
the company’s operations and contribute to strategic
discussions including update on performance, financial
update, operational update, technology update, ESG
update, business development update.

The details of the training and familiarisation program
are provided in the Corporate Governance Report
and is also available on the website of the Company
at https://sonacomstar.com/files/policy/familiarisation-
programme- policv-0zjWbw.pdf .

Further, at the time of appointment as an independent
director, the Company issues a formal letter of
appointment outlining his / her role, function, duties
and responsibilities as enumerated under various
provisions of applicable laws. The draft format of the
letter of appointment is available on our website, at
https://sonacomstar.com/investor/appointment-re-
appointment-of-independent-directors.

18. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any
statutory modification(s) and/or re-enactment(s) thereof
for the time being in force), the Directors of the Company
state that:

i. in the preparation of the annual accounts for the
financial year ended on 31^st March, 2025, the
applicable accounting standards were followed,
and there are no material departures from
the same;

ii. the Directors have selected such accounting
policies and applied them consistently and made
judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the
state of affairs of the Company as at 31^st March,
2025 and of the profits of the Company for the
financial year ended on 31^st March, 2025;

iii. proper and sufficient care has been taken for the
maintenance of adequate accounting records
in accordance with the provisions of the Act
for safeguarding the assets of your Company
and for preventing and detecting fraud and
other irregularities;

iv. the annual accounts for the financial year ended
on 31^st March, 2025, have been prepared on a
going concern basis;

v. proper internal financial controls as laid down by
the Directors were followed and that such internal
financial controls are adequate and operating
effectively; and

vi. proper systems have been devised to ensure
compliance with the provisions of all applicable
laws and that such systems are adequate and
operating effectively.

19. DISCLOSURE ON COMPANY’S POLICY
ON DIRECTORS’ APPOINTMENT AND
REMUNERATION AS PER SECTION 178 OF
THE ACT

The remuneration policy for directors, key managerial
personnel, senior management personnel and other
employees (NRC Policy) of the Company was adopted
by the Board based on the recommendation of the
Nomination & Remuneration Committee (NRC). The
NRC Policy sets out detailed procedure of appointment
along with the criteria to pay equitable remuneration
to the Directors, KMP and other employees of the
Company and to harmonise the aspirations of human
resources with the goals of the Company.

While formulating NRC Policy relating to the
remuneration of the directors, key managerial personnel
and other employee, the Board has ensured that:

a) the level and composition of remuneration is
reasonable and sufficient to attract, retain and
motivate directors of the quality required to run the
Company successfully;

b) relationship of remuneration to performance
is clear and meets appropriate performance
benchmarks; and

c) remuneration of the directors, key managerial
personnel and senior management involves a
balance between fixed and incentive pay reflecting
short and long-term performance objectives
appropriate to the working of the company and
its goals.

The salient features of the NRC Policy of the Company
are as follows:

a) The NRC shall consider the ethical standards of
integrity and probity, qualification, expertise and
experience of the person for appointment as
Director, KMP and accordingly recommend to the
Board his/her appointment to the Board.

b) The NRC shall consider qualifications and
appointment for Independent Directors as per the
provisions of the Act.

c) The Company shall ensure that the person
appointed as Director/ Independent Director
is not disqualified under the Act, and rules
made thereunder.

d) The Director/ Independent Director/ KMP/SMP
shall be appointed as per the procedure laid down
under the provisions of the Act, and rules made
there under, or any other enactment for the time
being in force.

e) The term/ tenure of the Directors shall be governed
as per provisions of the Act and the Rules made
thereunder, the SEBI Regulations and such other
applicable laws, as may, be amended, replaced,
substituted, re-enacted from time to time.

f) In case of re-appointment of Director(s), the Board
shall take into consideration, the performance
evaluation of director, engagement of the director
and contribution in the deliberations of the Board.

This Policy is available on the website of the
Company at https://sonacomstar.com/policies-
and-codes

20. EMPLOYEE STOCK OPTION SCHEMES

a. SONA BLW PRECISION FORGINGS LIMITED-
EMPLOYEE STOCK OPTION SCHEME-2020

In terms of the SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 as amended, from time
to time, the Nomination and Remuneration Committee
of the Board of Directors administer and monitor “Sona
BLW Precision Forgings Limited-Employee Stock Option
Scheme-2020” (ESOP Scheme-2020) of your Company.

The Nomination and Remuneration Committee has
been designated as the Compensation Committee
under the ESOP Scheme-2020. During the period under
review, a total of 24,704 (Twenty-four thousand seven
hundred and four only) equity shares of the Company

having face value of INR 10 /- (Indian rupees ten only)
each fully paid up, were allotted pursuant to exercise
of options by the employees of the Company under the
ESOP Scheme-2020. The last and final vesting under
the ESOP Scheme-2020 occurred on 1^st October, 2023.

b. SONA BLW PRECISION FORGINGS LIMITED-
EMPLOYEE STOCK OPTION PLAN-2023 (ESOP
SCHEME- 2023)

The shareholders of the Company has approved the
ESOP Scheme-2023 in their 27^th Annual General
Meeting held on 19^th July, 2023 and have authorised
Nomination & Remuneration Committee (“NRC”)
of the Board of the Company for administration,
implementation and grant of Options under the ESOP
Scheme- 2023.

During the period under review, a total of 462,885 (Four
hundred and sixty-two thousand eight hundred and
eighty-five only) equity shares of the Company having
face value of INR 10 /- (Indian rupees ten only) each fully
paid up were allotted pursuant to exercise of options
by the employees of the Company under the ESOP
Scheme-2023.

Pursuant to amendments in the regulation 46 of
the Listing Regulations, the ESOP Scheme - 2023 is
available on the website of the Company at https://
sonacomstar.com/investor/employee-benefit-scheme

The required disclosures under the SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021
(“SEBI SBEB Regulations”) with regard to the ESOP
Scheme - 2020 and ESOP Scheme -2023 are available
on the Company’s website at https://sonacomstar.com/
investor/annual-reports-and-returns

The Company has received a certificate from M/s. PI
& Associates, Secretarial Auditors of the Company as
required under Regulation 13 of the SEBI (SBEB)
Regulations, confirming the implementation of ESOP
Scheme-2020 and ESOP Scheme -2023 in accordance
with the SEBI (SBEB) Regulations. The Certificate is
available for inspection during the AGM of the Company.

21. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS MADE UNDER SECTION
186 OF THE ACT

Pursuant to Section 186 of the Act, disclosure on
particulars relating to loans, advances, guarantees
and investments form part of the standalone financial
statements provided in Note No. 42 to the standalone
financial statements of the Company.

22. DIVIDEND DISTRIBUTION POLICY

The Company has formulated and published a
Dividend Distribution Policy, which provides for
the parameters to be considered for declaring/
recommending dividend, circumstances under which
the shareholders may, or may, not expect dividend. The
policy is available on the website of the Company at
https://sonacomstar.com/files/policy/dividend-
distribution-policv-policv-oW38wX.pdf

23. SUCCESSION PLANNING

The Company has implemented a well-structured
succession planning for the Board members and Senior
Management and key employees of the Company.
The Nomination and Remuneration Committee plays a
pivotal role in identifying successors to the members
of the Senior Management and invests substantial
time with the Managing Director & Group CEO on
succession planning.

The Company has a succession planning policy in place
which intends to achieve the following:

• The business of the Company is not affected
on account of interruptions caused due to
superannuation or voluntary retirement or
resignation or death or permanent incapacitation
or sudden exit of any member of the Board,
Executive Directors, Senior Management and
other key employees covered under this Policy;

• To identify and create a talent pool of high
potential personnel, who can be considered for
appointment at the Board, Executive Directors,
Senior Management and other critical positions
and to groom them to assume such roles in the
Company, whenever the need arises;

• To ensure timely and high-quality replacements
for those personnel who are currently holding
positions as above said.

The succession planning policy of the Company as
approved by the Board of Directors of the Company
is available on the website of the Company at
https://sonacomstar.com/files/policy/succession-
planninq-policv-policv-SYOpD5.pdf

24. DEPOSITS

During the year under review, the Company has not
accepted any deposit within the meaning of Sections 73
and 74 of the Act read with the Companies (Acceptance
of Deposits) Rules, 2014.

25. MATERIAL CHANGES AND COMMITMENT
AFFECTING THE FINANCIAL POSITION
OF THE COMPANY OCCURRED BETWEEN
THE END OF THE FINANCIAL YEAR TO
WHICH THIS FINANCIAL STATEMENTS
RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments
affecting the financial position of the Company, which
have occurred between the end of the Financial Year
2024-25 and the date of this Annual Report.

26. RELATED PARTY TRANSACTIONS

The Company has in place a process for approval
of related party transactions and on dealings with
related parties.

Transactions with related parties were reviewed and
approved by the independent directors of the Audit
Committee of the Company and are in accordance with

the Policy on Related Party Transactions, formulated
and adopted by the Company in accordance with the
applicable laws. An omnibus approval from the Audit
Committee is obtained for the repetitive related party
transactions at the beginning of every financial year.

During the year under review, the Audit Committee has
reviewed and accorded its approval/ratification on the
related party transactions to be entered in the Financial
Year 2025-26 in line with the requirements of SEBI
circular no. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/18
dated 14^th February, 2025 on “Industry Standards on
Minimum information to be provided for review of the
audit committee and shareholders.”

The Board of Directors, during the year under review,
has amended the Policy on Related Party Transactions
as required under the Listing Regulations, which is
available on the website of the Company at https://
sonacomstar.com/policies-and-codes

All contracts/arrangements/transactions entered into
by the Company during the year under review with
related parties were in the ordinary course of business
and on arm’s length basis in terms of provisions of the
Act. Further, there are no contracts or arrangements
entered into under Section 188(1) of the Act, hence
no justification have been separately provided in
that regard.

The details of the related party transactions as per
Indian Accounting Standards (IND AS) - 24 are set out
in Note No. 36 to the standalone financial statements of
the Company.

The Company in terms of Regulation 23(9) of the
Listing Regulations have disclosed the statement of
related party transactions on a consolidated basis for
the half year ended on 30^th September, 2024 and 31^st
March, 2025 to the Stock Exchanges and website of
the Company at https://sonacomstar.com/investor/
financial-information

During the year under review, there were no transactions
for which consent of the Board was required to be taken
in terms of Section 188(1) of the Act and accordingly,
no disclosure is required in respect of the related party
transactions in Form AOC-2 under Section 134(3)(h) of
the Act and rules framed thereunder.

Further, there were no material related party transactions
in terms of the Listing Regulations requiring approval of
the Members during the year under review.

!7. NUMBER OF MEETINGS OF THE BOARD

During the year under review, 8 (eight) meetings of
the Board of Directors were held. The details of the
meetings of the Board of Directors held and attended by
the Board of Directors during the Financial Year 2024¬
25 has been elaborated in the Corporate Governance
Report which forms the part of this Annual Report.

The Board of Directors met quarterly and the gap
intervening between 2 (two) meetings was within the time
prescribed under the Act and the Listing Regulations.

The details and attendance of meetings of the Board, its
committees and Annual General Meeting are mentioned
in the Corporate Governance Report, which forms part
of this Annual Report.

28. AUDITORS AND AUDIT REPORT

a. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act,
and the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the Board of
Directors of the Company at their meeting held on 30^th
April, 2024, on the recommendation made by the Audit
Committee, has appointed M/s PI & Associates (CP Firm
Registration No. P2014UP035400), as the Secretarial
Auditors of the Company to undertake the Secretarial
Audit for Financial Year 2024-25, based on consent
received from M/s. PI & Associates.

As a matter of good corporate governance, the
Company voluntarily follows the practice of conducting
secretarial audit on a quarterly basis and reports of
the same are placed before the meeting of the Audit
Committee and the Board of Directors of the Company
on a quarterly basis.

The Secretarial Auditors’ Report for the Financial Year
2024-25 does not contain any qualification, reservation
or adverse remark and is annexed to this Annual Report
as Annexure- E.

Pursuant to a recent amendment in the Listing
Regulations, every listed entity and its material unlisted
subsidiaries incorporated in India shall undertake
Secretarial Audit by a Secretarial Auditor who shall
be a Peer Reviewed Company Secretary. Further,
the Company can appoint a Secretarial Audit firm as
Secretarial Auditor for not more than two terms of 5(five)
consecutive years, with the approval of its shareholders
in its Annual General Meeting.

In this regard, the Board of Directors in their meeting
held on 30^th April, 2025, based on the recommendation
made by the Audit Committee and subject to the
approval of shareholders in the ensuing AGM, have
appointed M/s. PI & Associates (Firm Registration No.
P2014UP035400), a peer reviewed firm of Company
Secretaries in Practice, as the Secretarial Auditors of the
Company for first term of 5 (five) consecutive financial
year, to undertake the Secretarial Audit from Financial
Year 2025-26 to Financial Year 2029-30, based on
consent received from M/s. PI & Associates.

Annual Secretarial Compliance Report

As per the Regulation 24A(2) of the Listing Regulations,
the Secretarial Auditors of the Company has provided
the report on the applicable compliances of the
Company for the Financial Year 2024-25. The Annual
Secretarial Compliance Report obtained from the
Secretarial Auditor of the Company has been submitted
to the Stock Exchanges and is available on the website
of the Company at https://sonacomstar.com/investor/
annual-reports-and-returns.

Secretarial Audit of Material Unlisted Indian Subsidiary

There was no material unlisted Indian subsidiary of
the Company as on 31^st March, 2025 and as such
the requirement under Regulation 24A of the Listing
Regulations regarding the secretarial audit of material
unlisted Indian subsidiary is not applicable to the
Company for the Financial Year 2024-25.

b. Statutory Auditors

M/s. Walker Chandiok & Co. LLP, Chartered Accountants
(FRN No. 001076N/N500013) was re-appointed as
Statutory Auditors of the Company for the second
term of 5 (five) consecutive years to hold office from
the conclusion of this 26^th Annual General Meeting till
the conclusion of 31^st Annual General Meeting of the
Company in terms of the provisions of Section 139 and
141 of the Act.

The Statutory Auditor’s Report on standalone and
consolidated Financial Statement for Financial Year
2024-25, does not contain any qualification, reservation,
adverse remarks or observation and the same forms
part of this Annual Report.

c. Cost Auditors

As per the section 148 of the Act and Cost (Records
and Audit) Rules 2014, the Company is required to
maintain cost audit records and conduct the cost audit,
therefore the Board of Directors of the Company, based
on the recommendation of the Audit Committee at
their meeting held on 30^th April, 2024 has appointed
M/s. Jayaram & Associates, Cost Accountants (Firm
Registration No. 101077), as the Cost Auditors of
the Company for the Financial Year 2024-25 and the
shareholders of the Company has ratified the fees of
the Cost Auditor in 28^th Annual General Meeting of the
Company held on 28^th June, 2024.

During the Financial Year, the Cost Auditors of the
Company provided the Cost Audit report for the
Financial Year 2023-24 in the Form CRA-3 and the
Company has filed the Cost Audit Report with the
Ministry of Corporate Affairs in Form CRA-4 within the
prescribed time.

The Cost Audit Report for the Financial Year 2023¬
24 does not contain any qualification, reservation or
adverse remark.

Further, the Board of Directors of the Company, based
on the recommendation of the Audit Committee at
their meeting held on 30^th April, 2025 has appointed
M/s. Jayaram & Associates, as the Cost Auditors of
the Company for the Financial Year 2025-26 under
section 148 of the Act, M/s. Jayaram & Associates,
Cost Accountants (Firm Registration No. 101077), being
eligible, have consented to act as the Cost Auditors of
the Company for the Financial Year 2025-26.

The remuneration proposed to be paid to the Cost
Auditors for the Financial Year 2025-26, is subject to
ratification by the members of the Company at the
ensuing 29^th AGM, would not exceed INR 375,000

(Indian rupees three hundred seventy-five thousand
only), excluding taxes and out-of-pocket expenses,
if any.

d. Internal Auditors

The Board of Directors had in their meeting held on 30^th
April, 2025 have appointed M/s. BDO India LLP (Firm
Registration No. MCA: AAB-7880), as Internal Auditors
of the Company for the Financial Year 2025-26.

29. INTERNAL CONTROL SYSTEM

The Company has in place an internal control system,
which is commensurate with its size, scale and
complexities of its operations. M/s. BDO India LLP (Firm
Registration No. MCA: AAB-7880), was appointed as
Internal Auditors of the Company for the Financial Year
2024-25.

The main thrust of internal audit is to test and review
controls, appraisal of risks and business processes,
besides benchmarking controls with best practices in
the industry.

The Audit Committee of the Board of Directors actively
reviews the adequacy and effectiveness of the internal
control systems and suggests improvements to
strengthen the same. The Audit Committee of the Board
of Directors are periodically apprised of the internal audit
findings and corrective actions are taken accordingly.
Significant audit observations and corrective actions
taken by the management are presented to the Audit
Committee of the Board. For more details, refer to the
‘internal control systems and its adequacy’ section in
Management’s Discussion and Analysis Report, which
forms part of this Annual Report.

30. REPORTING OF FRAUD

During the year under review, none of auditors have
reported any instances of fraud committed in the
Company by its officers or employees as specified
under Section 143 (12) of the Act.

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

The information on conservation of energy, technology
absorption, foreign exchange earnings and outgo as
required under Section 134 (3)(m) of the Act read with
Rule 8(3) of the Companies (Accounts) Rules, 2014
is provided in the Annexure-F forming part of this
Annual Report.

32. CORPORATE SOCIAL RESPONSIBILITY
(CSR)

Your Company continued to focus on innovation,
generation of employment through skill development
and promoting education through high standard
projects in the domains of education, supporting
innovative start-ups and skill development. During the
Financial Year 2024-25, your Company made special
efforts in promoting green initiative through plantation

of 45,767 saplings, including native species and
Beema Bamboo (CVSP Miyawaki Method) at Manesar,
Haryana, by collaborating with Catch Foundation. The
CSR initiatives of the Company focused under the CSR
intervention ‘Sona Comstar Samridh Bharat Program’
(for promotion of innovation), ‘Sona Comstar Saksham
Bharat Program’ (promotion of skill development
and education) during the year under review and
‘Sona Comstar - Swachh Bharat Program’ (focus on
environmental sustainability).

During the Financial Year 2024-25, the Company
has spent INR 97,135,667 (Including amount of INR
32,546,027, which is transferred to the unspent CSR
Account for the ongoing projects, as per Section 135(6)
of the Act, on 28^th April, 2025) on the CSR projects
comprising of 2% of average net profit of Company
for the last three financial year. The amount spent
includes the administrative expenses and the amount
spent on the conduct of impact assessment, towards
CSR expenditure.

Your Company has in place a CSR Committee, which
functions in accordance with the applicable provisions
of the Act and such other matters as prescribed by the
Board from time to time. The detailed terms of reference
of the CSR Committee, attendance at its meetings and
other details have been provided in the Corporate
Governance Report.

Your Company’s annual report on the CSR activities
undertaken during the Financial Year ended 31^st March,
2025, in accordance with Section 135 of the Act and
the Companies (Corporate Social Responsibility Policy)
Rules, 2014 (“CSR Rules”) is attached as Annexure- G
to this Annual Report.

Your Company has engaged M/s. InGovern Research
Services Private Limited and Bluesky Sustainable
Business LLP, an Independent Agency, on voluntarily
basis to conduct the impact assessment of the CSR
initiatives undertaken for the Financial Year 2024-25.
The impact assessment report is attached as Annexure
-H of this report.

Further, the Group Chief Financial Officer of the
Company has certified that CSR spend of the Company
for Financial Year 2024-2025 have been utilised for the
purpose and in the manner approved by the Board of
Directors of the Company.

During the year under review, the Company has
voluntarily engaged M/s. BDO India LLP for conducting
audit of CSR expenditure made by the Company in
both the Financial Year 2023-24 and 2024-25. The
audit report was presented before the CSR Committee
in its meeting held on 23^rd January, 2025 and on 23^rd
June, 2025 respectively. The CSR Committee made
suggestions for improvising the CSR practices while
making selection of new projects.

33. AWARDS AND RECOGNITIONS

We are happy to inform you that your Company has
received the following recognitions/awards during the
period under review:

S. No.	Award Category	Awarded By
1	Best Performer Award	Japanese OEM of OHVs
2	Supplier Excellence Award - Partner Level Performance - 2023	North American Tier-1 Supplier for OHVs
3	Supplier Excellence Award - Quality Performance - 2024	North American Tier 1 Supplier for PVs, CVs, OHVs, and Evs
4	Special Appreciation Award - Target	Indian OEM of OHVs
5	Great Place To Work Certificate	Great Place To Work® Institute India
6	CSR Times Award - Bronze	CSR Times
7	Make in India Award	European OEM of OHVs
8	Certificate for Appreciation for Excellence in Corporate Governance	Institute of Company Secretaries of India (ICSI)
9	Best Supplier Award - Forging and Casting	Global OEM of OHVs
10	Business Partner of the Year - Farm Division	Indian OEM of PVs, CVs, OHVs, and EVs

34. RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Act and Regulation
17(9) of Listing Regulations, the Company has
formulated and adopted a Risk Management policy
with an objective of identification and categorisation
of potential risks, its assessment and mitigation and to
monitor these risks.

The Board has entrusted the Risk Management
Committee (RMC) with overseeing the processes of
identification, evaluation and mitigation of risks. The
RMC inter alia periodically reviews the organisational
risks that are spread across operational, financial,
technological and environmental spheres and provides
guidance to the management team.

Your Company is committed to protect the interests of
its customers, stakeholders, investors, shareholders,
employees and each person or entity with whom it
is associated. Towards this goal, your Company will
further strengthen the internal processes and evaluate
even more innovative ways to blunt the risk impact.
The details of the RMC along with its charter are set
out in the Corporate Governance Report, forming part
of this Annual Report. The Company has designated
Mr. Rohit Nanda, Group CFO as the Chief Risk Officer of
the Company.

The Risk Management Committee of the Company has
been entrusted by the Board with the responsibility of
reviewing the risk management process in the Company.

Mitigation plans of significant risks are well
integrated with functional and business plans and are
reviewed on a regular basis by the Executive Board
Meeting periodically.

The Risk Management Policy of the Company is
available on the website of the Company at https://
sonacomstar.com/files/policy/risk-management-policy-
policy-NTCFLh.pdf

In addition to this the Enterprise Risk Management
(ERM) Framework is also available of the website of the
Company at https://sonacomstar.com/files/policy/erm-
framework-policy-CZEnft.pdf

35. VIGIL MECHANISM

Your Company is committed to highest standards
of professionalism, honesty, integrity, transparency
and ethical behaviour. Pursuant to the provisions of
Section 177(9) & (10) of the Act read with Rule 7 of
the Companies (Meetings of Board and its Powers)
Rules, 2014, and the Listing Regulations, the Board of
Directors has approved the Policy on vigil mechanism/
whistle blower and Code of Conduct and Business
Ethics which provides a mechanism to its directors,
employees, vendors, customers, business partners/
associates or any third party and other stakeholders
to raise concerns about any wrongdoing in the
Company and provide for adequate safeguards against
victimisation of employees and other persons who avail
this mechanism.

Your Company’s Whistle Blower Policy is also
applicable to our associates who partner with us in
our organisational objectives. The Company has taken
adequate measures to create awareness amongst its
employees on the Code of Conduct and Governance
Policies including but not limited to spreading of
awareness through regular learning sessions.

During the year under review, the Company also
launched e-learning modules on the Code of Conduct
and Business Ethics, Prohibition of Insider Trading,
POSH and Anti-Trust Compliance which also includes
training on Whistle Blower mechanism of the Company.
The details of the training programs are provided in the
BRSR Report.

The Company has also designated an email id that is
[email protected], where the whistle
blower can report the concerns or wrong doings.

The mechanism under the policy has been appropriately
communicated within the Company across all levels.
A quarterly report on the whistle-blower complaints,
as received, is placed before the Audit Committee for
its review.

During the year under review, the Company has not
received any complaints under the said mechanism.

The Whistle Blower Policy is available on the website of
the Company at the link: https://sonacomstar.com/files/
policv/whistle-blower-policv-policv-MUwqe2.pdf

Your Company discourages bribery and corruption
in any form and has adopted an Anti-Bribery and
Corruption Policy, which is available on the website at
https://sonacomstar.com/files/policy/anti-bribery-and-
corruption-policv-policv-8i68Y7.pdf

36. CYBER SECURITY AND DATA PRIVACY

36.1 Cyber Security

During the financial year under review, your Company
has been awarded the prestigious ISO 27001
certification, an internationally recognised standard for
Information Security Management Systems (ISMS). This
certification demonstrates the Company’s unwavering
commitment to safeguarding the confidentiality,
integrity, and availability of information assets through
the implementation of stringent security controls and
best practices.

By achieving this milestone, the Company affirms
its compliance with global standards for information
security and reinforces its dedication to fostering trust
among clients, partners, and stakeholders.

With increasing digitalisation, rise in corporate cyber¬
crimes, high cost of data breaches and evolving
regulations, businesses are placing greater focus on
detecting, preventing, and combating information
security threats. The Company identified its information
security risks and is committed to safeguarding
business information from internal and external threats.
Guided by the provisions of the Information Technology
Act, 2000, other applicable regulations as well as
international standards, the Company has established
robust policies and processes on information security.

The Company has implemented an Information
Security policy, which provides management direction
and guidance to ensure availability, integrity and
confidentiality of information and information systems
across locations.

36.2 Data Privacy

During the financial year under review, the Company
has further strengthened its Data Privacy Framework
in alignment with the provisions of the Digital Personal
Data Protection Act, 2023 (DPDP), as well as the General
Data Protection Regulation (GDPR) of the European
Union. This framework has been meticulously designed
to ensure compliance with statutory and international
regulatory requirements governing the protection,
handling, and safeguarding of personal information,
including sensitive personal data, pertaining to its
employees, directors, customers, and vendors.

In furtherance of this initiative, the Company has
conducted extensive training programs for its
employees, aimed at enhancing their understanding
and awareness of data privacy principles, regulatory

obligations, and best practices under both the DPDP,
and GDPR. These training sessions emphasised the
importance of maintaining the confidentiality, integrity,
and security of personal data, thereby fostering a culture
of accountability and vigilance across the organisation.
This accomplishment highlights our proactive approach
to managing risks and ensuring the secure handling of
sensitive data including the personal information and
personal sensitive information of employees, directors,
vendors and customers of the Company.

37. EXTERNAL AUDIT OF COMPLIANCE
SYSTEM

During the financial year under review, in accordance
the recommendation of the Audit Committee, the
Company undertook a comprehensive audit of its Legal
Risk Management System (LRMS), a key compliance
tool utilised by your Company. This audit was conducted
by M/s. BDO India LLP (BDO), a reputed independent
professional services firm. The purpose of the audit
was to evaluate the efficacy of the LRMS in ensuring
robust compliance management and to identify areas
for enhancement.

The findings and recommendations from the audit were
presented by the BDO team to the Audit Committee. The
report highlighted critical observations and provided
actionable suggestions to strengthen the reporting
mechanisms and overall functionality of the LRMS.
These insights have been instrumental in enhancing
the Company’s compliance framework and ensuring
alignment with regulatory and ethical standards.

In response to the observations outlined in the audit
report, the Company has made necessary updates and
amendments to LRMS. These updates aim to reflect the
improvements required for a more robust compliance
structure and to align the policies with best practices as
identified through the audit process.

38. ANNUAL RETURN

In accordance with the provisions of Section 92(3)
read with Section 134(3)(a) of the Act and Rule 12 of
the Companies (Management and Administration)
Rules, 2014, the Annual Return of the Company in the
Form MGT-7 is available at: https://sonacomstar.com/
investor/annual-reports-and-returns

39. COMPLIANCE WITH SECRETARIAL
STANDARDS

During the year under review, the Company have
complied with all the applicable provisions of Secretarial
Standards issued by the Institute of Company
Secretaries of India.

40. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND
COMPANY’S OPERATIONS

No significant and material order has been passed by
any regulator or court or tribunal, which might impact
the ‘going concern’ status and Company’s operations
in future.

41. HUMAN RESOURCES

At Sona Comstar, excellence is not just about our
products, technology, or delivery, it is woven into our
operations and practices. Human resources are central
to all processes and practices and we remain committed
to prioritise our people and thus work for their safety,
their development and well-being. This commitment
has ensured and we re-certified with improved scoring
on all parameters as a ‘Great Place to Work’ for the
third year consecutively, underscoring the strength and
impact of our initiatives.

We nurture a collaborative culture that breaks silos—
enabling cross-functional learning and building strong
internal and external partnerships. Diversity and
inclusion are integrated into our ethos, where every
voice is respected, and individuality is celebrated. This
inclusive approach has helped build a workplace that
inspires creativity, resilience, and collective success.

Our HR practices are built on a foundation of
collaboration, care and continuous improvement, which
ensures we provide a conducive environment to foster
innovation and success. We prioritise teamwork, both
within departments and external partners, creating a
culture of shared achievement and mutual growth. Our
assessment & rewards strategy is mature and rewards
achievement of such collective goals.

Innovation is embedded in our DNA, and we
cultivate a mindset of continuous improvement in
the organisation. By embracing latest technological
advancements and encouraging creative thinking, we
consistently challenge status quo. Our commitment to
developing our workforce—especially in engineering
and technical capabilities—is exemplified through a
range of comprehensive training, mentorship programs
and hands-on experience. We are working to ensure
continuity and sustainability by harnessing online
platforms where materials are generated, stored, train
and assess relevant employees. We have developed
trainings & content repositories for technical functions
to assist and aid skill acquisition and will be available
to support anywhere, anytime, anyone learning
methodology on a pull model.

Employee engagement is one of the key pillars of
our success, and we take deliberate steps to engage
people to foster involvement and ownership. Through
multiple initiatives like QCC, Suggestions/Kaizens,
Cross-Functional Teams and engagement by way of
sports activities and cultural activities. This participative
approach also drives innovation and instils a sense of
pride and commitment among our employees, as they
see their contributions leading to tangible outcomes
and thus engages everyone positively.

At Sona Comstar, Total Quality Management (TQM)
and Safety First are not mere concepts; they underpin
every process and initiative. Our steadfast commitment
to safety and continuous improvement ensures that
we provide a secure, healthy work environment, all the
while delivering exceptional value and results to our
customers and stakeholders.

42. POLICY ON PREVENTION OF SEXUAL
HARASSMENT OF WORKMEN
AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013

As per the requirements of the Sexual Harassment
of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 (POSH), the Company has
formulated a comprehensive gender neutral Policy
on Prevention of Sexual Harassment at Workplace for
prevention, prohibition (POSH Policy) and redressal
of sexual harassment at workplace and an Internal
Committee (IC) has also been set up to redress any
such complaints received.

This POSH Policy aims to provide protection to not
just women employees against sexual harassment at
workplace, but it also includes employees of all genders
and provide them a mechanism for the prevention and
redressal of complaints of sexual harassment.

The Company’s goal is to create an open and safe
workplace for every employee to feel empowered,
irrespective of gender, sexual orientation, and other
factors, and contribute to the best of their abilities.
Company is committed to providing a safe and
conducive work environment to all of its employees
and associates. Further, the POSH Policy also gives
shelter to contract workers, probationers, temporary
employees, trainees, apprentices of the Company and
any person visiting the Company at its office.

During the year, the Company has organised
sensitisation and awareness programs, inductions
for new joiners, through e-learning modules for all
employees, trainees, creating standees and posters
to sensitise all employees to conduct themselves in a
professional manner.

During the year under review, the IC in Driveline
Business, (in Gurgaon and Manesar at Haryana) was re¬

constituted and the list of new members were placed
before the Audit Committee for its information and
noting. Further a new IC was constituted for the Railway
Business, w.e.f. 1^st June, 2025.

During the year under review, no complaints have been
received by the Company under the POSH.

Details of Complaints received and redressed during
the Financial Year 2024-25:

(a) number of complaints of sexual harassment
received in the year: None

(b) number of complaints disposed off during the
year: None

(c) number of cases pending for more than ninety
days: None

Policy for prevention of Sexual Harassment at workplace
(‘POSH Policy’) of your Company can be viewed at the
link: https://sonacomstar.com/files/policy/posh-policy-
policy-s7HMW2.pdf along with that the Company has
also published the procedure prescribed for filing of
complaint under POSH which can be accessed at https://
sonacomstar.com/files/policy/procedure-prescribed-
for-filinq-of-complaint-under-posh-policy-W29f5C.pdf.

The Company is in compliance with the provisions
relating to the Maternity Benefit Act 1961.

43. SUSPENSION OF SECURITIES OF THE
COMPANY

The securities of the Company have not been
suspended from trading in any of the stock exchanges.

44. BUSINESS RESPONSIBILITY &
SUSTAINABILITY REPORT

A detailed Business Responsibility & Sustainability
Report (“BRSR”) in terms of the provisions of Regulation
34 of the Listing Regulations is attached herewith as
Annexure- I to the Annual Report.

Sustainability Report

During the period under review, your Company
released its third Sustainability Report for the fiscal year
2023-24. This report underwent an external assurance
process conducted by Grant Thornton Bharat LLP,
ensuring its accuracy and compliance with established
standards. Furthermore, the report was prepared in
strict accordance with the Global Reporting Initiative
(GRI) Standards, which are internationally recognised
guidelines for sustainability reporting. This adherence
to GRI Standards reflects the organisation’s commitment
to transparency, accountability, and responsible
reporting on its sustainability performance.

45. PROCEEDINGS UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016

No application has been made under the Insolvency
and Bankruptcy Code, 2016. Hence, the requirement
to disclose the details of the application made or any
proceeding pending under the said Code during the
year along with its status as at the end of the financial
year is not applicable.

46. INVESTOR RELATIONS

Your Company has consistently upheld the highest
standards of corporate governance, demonstrating a
strong commitment to excellence and transparency in
all its operations. As a forward-thinking organisation,
the Company prioritises building strong relationships
with its stakeholders, especially investors and analysts,
by adhering to best practices in investor relations.
This commitment is evident through our proactive
and transparent communication strategies, which help
in maintaining a robust relationship of trust with the
investment community. The Company has designated
Mr. Amit Mishra, as the Head of Investor Relation.

During the financial year under review, the Company
engaged with its investors and analysts in a timely
and comprehensive manner. Following each quarterly
meeting of the Board of Directors, the Company
conducted investor/analysist calls. These calls served
as a platform for management to present the Company’s
financial and operational performance while addressing
any questions or concerns from participating investors
and analysts. These initiatives highlight our dedication
to timely and transparent communication.

In addition to the quarterly investor calls, the Company
has undertaken several initiatives to foster meaningful
engagement with the investment community. These
efforts include hosting meetings with investors and
analysts and facilitating plant visits to provide first hand
insight into the Company’s operations and capabilities.
In keeping with our commitment to transparency,
detailed information about these interactions has
been made publicly available on our website and duly
disclosed to the stock exchanges in compliance with
the Listing Regulations.

Further, during the financial year, as part of our
stakeholder-centric approach, the Board of Directors
initiated a focused effort to strengthen relationships
with the Institutional Investors. The Board held a
structured meeting with the Company’s top four active
Institutional Investors to gain direct insight into their
perspectives and gather constructive feedback on
the Company’s performance, governance practices,
and overall strategy. This initiative reinforced the
Company’s commitment to stakeholder engagement
and provided valuable input for the Board’s strategic
decision-making.

The Company remains committed to following best
practices in corporate governance and investor
relations, ensuring that the principles of transparency,
accountability, and trust are embedded at all levels
of operation. These initiatives reflect our unwavering
commitment to safeguarding shareholder interests and
fostering long-term value creation for all stakeholders.

47. CAUTIONARY STATEMENTS

The Annual Report including those which relate to
the Directors’ Report, Management Discussion and
Analysis Report may, contain certain statements on
the Company’s intent, expectations or forecasts that
appear to be forward-looking within the meaning
of applicable securities laws and regulations while
the actual outcome of those statements may, differ
materially from what is expressed herein. The Company
bears no obligations to update any such forward looking
statements. Some of the factors that could affect the
Company’s performance could be the demand and
supply for Company’s product and services, changes in
Government regulations, tax laws, forex volatility etc.

48. ACKNOWLEDGEMENT

Your Board of Directors place on record sincere
gratitude and appreciation for all the employees of the
Company. Our consistent growth was made possible
by their hard work, cooperation, and dedication during
the year.

The Board of Directors acknowledges and places on
record their sincere appreciation to all stakeholders,
customers, vendors, Central and State Governments,
and all other business partners, for their continued co¬
operation and for the excellent support received from
them. We look forward to continued support of all these
partners in the future.

The Board also wishes to place on record its appreciation
to the esteemed investors for showing their confidence
and faith in the management of the Company.

By order of Board of Directors
For SONA BLW Precision Forgings Limited

Vivek Vikram Singh

Managing Director and
Group CEO

Place: Gurugram Vikram Verma Vadapalli

Date: 23^rd June, 2025 Whole Time Director

---

Mar 31, 2024

The Board of Directors takes pleasure in presenting the Twenty-Eighth (28^th) Annual Report of Sona BLW Precision Forgings Limited (Company or Sona Comstar) along with the audited Financial Statements (Standalone and Consolidated) for the Financial Year ended on 31^st March 2024.

1. FINANCIAL HIGHLIGHTS & PERFORMANCE

The financial performance of the Company (Standalone and Consolidated) for the Financial Year ended 31^st March 2024 is as under:

	Standalone		Consolidated
	2023-2024	2022-2023	2023-2024	2022-2023
Revenue from Operations	28,931.09	24,686.24	31,847.82	26,755.95
Other Income	401.71	430.74	239.48	115.88
Total Income	29,332.80	25,116.98	32,087.30	26,871.83
Total expenses	22,953.52	20,137.10	25,287.08	21,747.09
Profit before exceptional items and tax	6,379.28	4,979.88	6,800.21	5,124.74
Less: Exceptional Items	87.16	33.69	87.16	33.69
Profit before tax	6,292.12	4,946.19	6,713.05	5,091.05
Less: Total Tax Expenses	1,447.32	1,065.29	1,535.30	1,138.08
Profit for the period/year	4,844.80	3,880.90	5,177.75	3,952.97
Other comprehensive (loss)/ income for the period/ year	-8.55	14.47	27.92	74.82
Total comprehensive income for the period/year	4,836.25	3,895.37	5,205.67	4,027.79
Earnings per share (Basic) (in INR)	8.27	6.64	8.83	6.76
Earnings per share (Diluted) (in INR)	8.27	6.63	8.83	6.75

Standalone

The standalone revenue (revenue from operations plus foreign exchange (net)) increased by 172% to INR 28,931.09 million for Financial Year 2024 from INR 24,686.24 million for Financial Year 2023, driven by ramp-up of sales volume for some of the new contracts especially in the electric vehicle (EV) segment in North American and European market and growth in sales in the Indian passenger and commercial vehicle market. Profit before exceptional items and tax in Financial Year 2024 was INR 6,379.28 million as compared to INR 4,979.88 million in Financial Year 2023, reflecting an increase of 28.1% from the previous year. Profit after tax (PAT) in the Financial Year 2024 was INR 4,844.80 million as compared to INR 3,880.90 million in Financial Year 2023, reflecting an increase of 24.8% from the previous year.

Consolidated

The consolidated revenue (revenue from operations plus foreign exchange (net)) increased by 19.0% to INR 31,847.82 million for Financial Year 2024 from INR 26,755.95 million for Financial Year 2023, primarily driven by the start and ramp-up of sales volume for some of the new contracts especially in the EV segment in North American and European market and growth in sales in the Indian passenger and commercial vehicle market. Profit before exceptional items and tax in Financial Year 2024 was INR 6,800.21 million as compared to INR 5,124.74 million in Financial Year 2023, reflecting an increase of 32.7% from the previous

year. Profit after tax (PAT) in the Financial Year 2024 was INR 5,177.75 million as compared to INR 3,952.97 million in Financial Year 2023, reflecting an increase of 31.0% from the previous year.

2. PERFORMANCE OF THE COMPANY AND INDUSTRY OVERVIEW

In Fiscal Year 2024, your Company continued its growth momentum by scaling new revenue and profitability benchmarks. Its consolidated revenue, EBITDA and Profits (before tax and exceptional items) were INR 31,847.82 million, INR 9,020.97 million and INR 6,800.21 million, respectively. The EV business that witnessed revenue growth of 32% over the prior year led the overall revenue growth. One of the key contributors to the EV business growth was the ramp-up and start of various new programmes. Non-EV business also achieved 15% revenue growth.

This performance was achieved against the headwinds of high inflation, geopolitical issues, rising interest rates and widespread strikes in US automotive factories in the global markets, and lower electric two-wheeler production due to vehicle homologation for new battery standards, pricing fallout and lower demand for a few electric two-wheelers OEMs after FAME II subsidy reductions in the domestic market. Global light vehicle production during the Fiscal 2024 recovered notably from the easing of supply chain-related challenges and the growing accessibility of battery electric vehicles (BEVs).

Although the industry continued to witness some major headwinds in various aspects, such as geopolitical, government policies and regulations, and inflationary trends in raw materials, your Company did not experience any interruption in the ability to supply systems and components and ensured that customers did not experience any disruption to their production lines. Apart from maintaining the revenue growth momentum during the year, your Company continued to drive business development and won 39 new programmes during the Fiscal 2024, of which 12 were for EV Programs. As of 31^st March 2024, your Company has 54 EV programs, out of which 27 EV programs are under serial production or in a ramp-up phase, and 27 programs will undergo serial production in the Fiscal 2025 or later, depending upon customers'' production schedules. With these new order wins, your Company''s 10-year net order book stands at INR 226 billion.

The future of mobility is shifting towards higher and higher levels of automation, making vehicles more and more intelligent. As per findings from a Capgemini analysis, the ADAS sensor market is projected to reach a value of USD 75 billion by the calendar year 2030. Additionally, a report from McKinsey indicates that the combined sectors of ADAS and AD are anticipated to contribute between $300 billion and $400 billion to the passenger car market by the year 2035. During the year under review, the Company has completed the acquisition of NOVELIC and added a new business vertical of Sensors and Softwares.

With this acquisition, your Company expanded our technology landscape and modified our vision statement to replace the word ‘auto technology'' with ‘mobility technology'' to include all forms of future mobility. Aligning with the updated vision, it revamped its technology roadmap for the E.P.I.C. mobility (electric, personalised, intelligent and connected). In this new roadmap, we added eight new products in the future products category and we already won a programme for one of these - an integrated motor controller -during the year itself.

Continuing our focus on ESG, we published our second sustainability report this year and set targets for many sustainable development goals. One of the most important targets is to achieve a 45% revenue share from electric vehicles by 2026. We improved the emissions intensity (Scope 1 and 2) by more than 10% in relation to the revenue, compared to previous year. Moreover, the company has been rated (core) as low ESG risk with a score of 14.4 and it is ranked in the top 9% companies rated by Sustainalytics (as on date of publishing this report).

This was an eventful year for your Company. We participated in the Bharat Mobility Global Expo 2024, where we showcased our entire technology portfolio, including the recently added sensor products, which were well-liked by our customers. Even on the employee satisfaction front, once again we earned the Certification for Great Place To Work from the Great

Place to Work® Institute. The coveted recognition reinforces your Company''s standing as one of India''s leading automotive technology employers. On the Corporate Governance, the company received the prestigious Golden Peacock Award for Excellence in Corporate Governance in 2023. This award is a testament to the Company''s exemplary governance practices which have consistently contributed to the Company''s sustainable growth, financial success, and reputation as a responsible corporate entity.

For the future outlook, S&P Global Mobility forecasts global light vehicle sales to reach 88.3 million units in the calendar year 2024 and witness a 2.8% growth over the previous year. The auto industry continues to navigate stickier interest rates, improving supply chains, the affordability squeeze, lofty new vehicle prices, patchy consumer confidence, energy price/supply concerns, and ongoing electrification growing pains.

5. MANAGEMENT DISCUSSION AND

ANALYSIS

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report for the Financial Year 2023-24, pursuant to the provisions of Regulation 34 and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), and is attached as a separate statement forming part of this Annual Report.

X. ACQUISITIONS, INVESTMENTS AND

OTHER CORPORATE DEVELOPMENTS

Certification under Production-Linked Incentive (PLI) Scheme

Your Company has received certifications for its 2 (two) hub wheel motors for electric two-wheelers under the Product Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India from the Ministry of Heavy Industries, for availing the benefits/incentive under PLI Scheme.

Collaboration with Equipmake

Your Company has signed a technology licensing agreement (Agreement) with Equipmake, a UK-based technology company that has developed high-performance electric powertrains. Under the Agreement, Equipmake will license certain patented spoke motor and inverter technology in the power range of 100kW to 440kW to Sona Comstar to manufacture and sell EV Powertrains, subsystems, and components for electric cars, buses, commercial vehicles and offroad vehicles.

Incorporation of Wholly Owned Subsidiary in Mexico

During the Financial Year 2023-24, your Company has incorporated a wholly owned subsidiary “Sona BLW eDrive Mexicana, S.A.P.I. DE C.V.” in Silao Mexico, mainly for manufacturing and assembly of bevel gears, differential assemblies and/or any other activities ancillary and incidental thereto. The Plant has been

inaugurated on 20^th April 2024. This strategic expansion underscores the Company''s commitment to meeting the growing demand for high-quality driveline solutions for battery electric vehicles (BEVs) in North America.

Acquisition of 54% stake in NOVELIC d.o.o. Beograd -Zvezdara, in Serbia (NOVELIC)

During the Financial Year 2023-24, your Company has completed the acquisition of 54% share capital and voting rights in NOVELIC on 04^th September 2023, through acquisition 51% of its share capital and voting rights from the existing shareholders and 3% of the share capital and voting rights by way of fresh issuance of Capital, as per the terms of the definitive documents executed in this regard.

NOVELIC is the world''s leading self-sustaining provider of mmWave radar sensors, perception solutions, and full-stack embedded systems. Since past ten years of market presence, NOVELIC has built an extensive portfolio of mmWave radar sensors and perception solutions that enable off-the-shelf and customised products focused on autonomous driving and automation. NOVELIC also does full cycle development of electronics and software services based on its hardware-in-loop (HIL) systems, control systems, ECU hardware/software platform, annotation tools and other in-house platforms.

I nvestment in Captive solar power plant for setting up captive power generating facility in Haryana, Maharashtra and Chennai

The Board of your Company in its meeting held on 25^th October 2023, has approved the investment in special purpose vehicle (SPVs) for setting up captive power generating facility in the state of Haryana and Maharashtra, for solar capacity of 14.85 MWp and 4.00 MWp respectively. The Company will invest total INR 75 million in SPV for Haryana and Maharashtra. The SPV will be funded partly by equity and partly by debt capital. The Company will hold 26% in the form of the equity share capital of the SPVs and remaining 74% of the equity share capital will be held by the Clean Max Enviro Energy Solutions Private Limited (CleanMax), through its group companies.

In this regard, your Company has acquired 26% of equity shares of CleanMax Calypso Private Limited, for setting up captive power generating facility in the state of Haryana, for solar capacity of 14.85 MWp for its operations Gurgaon and Manesar, Haryana, on 25^th January 2024. Further, your Company has executed definitive documents with CleanMax for investment of 26% equity share of CleanMax Nova Private Limited for setting up captive power generating facility in the state of Maharashtra, for solar capacity of 4.00 MWp for its operations at Chakan Plant, Pune, Maharashtra.

The Board your Company in its meeting held on 30^th April 2024 has approved the investment of INR 8.30 million into a special purpose vehicle (SPV), in terms of the Electricity Act, 2003 and Rule and

Regulations issued thereunder, proposed to be incorporated by Cleantech (Cleantech), as developer, for the purpose of setting up a group captive solar power project for the Chennai facility of the Company. Once incorporated, the SPV will be funded partly by equity and partly by debt capital. The Company will be acquiring 26% in the form of the equity share capital of the SPV and remaining 74% of the equity share capital will be acquired by the Cleantech. The Company is engaged into discussions with Cleantech to negotiate and finalise the documents for this purpose.

These investments in SPVs are made by the Company to meet the regulatory requirements of group captive.

5. SUBSIDIARIES AND ASSOCIATES

As on 31^st March 2024, the Company has 6 (six) directly held subsidiaries, 8(eight) step-down subsidiaries and 1 (one) associate company, the details of which is available on the website of the Company in Form MGT-7 at https:// sonacomstar.com/investor/annual-reports-and-returns

During the year under review, 5(five) bodies corporate became subsidiaries of the Company, which includes 3 (three) step-down subsidiaries.

Pursuant to Section 129(3) of the Companies Act, 2013 (Act), the Company has prepared the consolidated financial statements, which forms part of this Annual Report. Further, a separate statement containing salient features of Financial Statements of all subsidiaries in Form AOC-1 forms part of this Report.

In accordance with Section 136 of the Act, the Audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and the Audited Financial Statements of each of its subsidiaries, are available on the website of the Company viz. https://sonacomstar.com/investor/ subsidiary-companies-financial-statements

Your Company does not have any material subsidiary as on 31^st March 2024.

The policy for determining material subsidiaries, as approved by the Board, is uploaded on the Company''s website and can be accessed at the web-link: https:// sonacomstar.com/files/policy/policy-for-determining-material-subsidiaries-policy-f3dEtf.pdf

6. TRANSFER TO RESERVES

The Board of Directors of the Company do not propose to transfer any amount to reserves.

7. DIVIDEND

The Board of Directors at their meeting held on 30^th April 2024 have recommended payment of INR 1.53 (One Indian rupee and fifty-three paisa only) per equity share of Company having face value of INR 10 (Indian rupees ten only) each as final dividend for the Financial Year ended on 31^st March 2024. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on 23^rd January 2024 has declared an interim dividend of INR 1.53 (One Indian rupee fifty-three paisa only) per equity share of the Company having face value of INR 10 (Indian rupees ten only) each. The interim dividend was paid to the shareholders on 15^th February 2024.

The tabular representation of the dividend declared during the Financial Year under review is as follows:

Dividend	For the Financial Year ended 31st March 2024	For the Financial Year ended 31st March 2023
Equity share	Dividend per share (in INR)	Dividend per share (in INR)
Interim dividend	1.53	1.28
Final dividend	1.53	0.77
Total dividend	3.06	2.05

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source, as applicable.

The abovesaid dividend declared is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Listing Regulations, can be accessed on the website of the Company at https://sonacomstar. com/files/policy/dividend-distribution-policy-policy-oW38wX.pdf

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, no amount was required to be transferred to the Investor Education and Protection Fund by the Company.

9. CHANGE IN SHARE CAPITAL OF THE COMPANY

Till the date of this report and during the Financial Year 2023-24, your Company has allotted 1,055,964 (One million fifty five thousand nine hundred sixty four only) equity shares of the Company having face value of INR 10 /- (Indian rupees ten only) each fully paid up, to the eligible employees of the Company upon exercise of vested options, as granted to them, under the Sona BLW Precision Forgings Limited-Employee Stock Option Scheme 2020 (ESOP Scheme-2020).

As a result, the paid-up share capital of the Company increased from INR 5,854,045,820 (Indian rupees five billion eight hundred fifty-four million forty-five thousand eight hundred twenty only) consisting of 585,404,582 (Five hundred eighty-five million four hundred four thousand five hundred eighty two only) equity shares having face value of INR10/ - (Indian rupees ten only) each fully paid-up to I NR 5,864,605,460 (In d ian ru pees fi ve bil l ion eig h t

hundred sixty-four million six hundred five thousand four hundred sixty only) consisting of 586,460,546 (Five hundred eighty-six million four hundred sixty thousand five hundred forty six only) equity shares having face value of INR 10/ - each fully paid-up. The Equity Shares issued under ESOP Scheme-2020 shall rank pari-passu with the existing equity shares of the Company including dividend entitlement.

Your Company has not issued sweat equity shares or equity shares with differential rights as to dividend, voting or otherwise.

10. CHANGE IN NATURE OF BUSINESS

During the Financial Year 2023-24, there was no change in the nature of Company''s business.

11. CORPORATE GOVERNENCE

Your Company is continuing to benchmark itself with the best practices and national and international standards of Corporate Governance. The Company''s corporate governance practices reflect its value system which encompasses its culture and relationships with its stakeholders.

Your Company was bestowed with the ‘Golden Peacock Award for Excellence in Corporate Governance-2023’

at National Level by Institute of Directors.

Further, your Company was assessed on the Corporate Governance Scorecard 2023, by Institutional Investor Advisory Services India Limited (liAS) with a Governance Score 64, Governance Grade Good with overall rank of 33 amongst S&P BSE 200/Nifty 200 Companies.

The Company is committed to pursue and adhere to the highest standard of Corporate Governance as set out by the Securities and Exchange Board of India (SEBl) and the Act.

The report on the Corporate Governance as stipulated in Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure-A and form part to this Annual Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board Diversity

Your Company recognises the benefits of having a diverse Board and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. Your Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, race and gender, which will ensure that the Company retains its competitive advantage.

Your Company believes that a diverse Board contribute towards driving business results, make corporate governance more effective, enhance quality and responsible decision-making capability, ensure sustainable development and enhance the reputation of the Company.

The Policy to Promote Diversity on the Board of Directors (Diversity Policy) adopted by the Board, in compliance with Regulation 19(4) read with Part D of the Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (Listing Regulations), sets out its approach to diversity.

The Diversity Policy is available on the website of the Company at https://sonacomstar.com/files/policy/policy-on-board-diversitv-policv-sKCWRQ.pdf

Board of Directors

As on 31^st March 2024, the Board comprises of 8 (eight) directors, including 5 (five) independent directors (including 2 (two) women independent directors), 1 (one) executive director, and 2 (two) non-executive directors. The brief profile of each director is available on the website of the Company at https://sonacomstar. com/board-of-directors

I n the opinion of the Board, all Independent Directors (including those appointed during the year) possess requisite qualifications, experience, expertise, proficiency and hold high standards of integrity for the purpose of Rule 8(5)(iii)(a) of the Companies (Accounts) Rules, 2014. In terms of the requirements under the SEBI Listing Regulations, the Board has identified key skills, expertise and core competencies required for appointment of director on the Board, including the Independent Directors, details of which are provided as part of the Corporate Governance Report.

The list of key skills, expertise and core competencies of the Board of Directors is provided in the Report on Corporate Governance forming the part of this Board''s Report.

Appointment of Mrs. Manisha Girotra (DIN: 00774574) as Independent Director of the Company

The shareholders vide postal ballot, concluded on 01^st March 2024, approved appointment of

Mrs. Manisha Girotra (DIN: 00774574), as Independent Director of the Company w.e.f. 01^st January 2024 for a period of 5 (five) consecutive years.

Retirement of Mr. Ganesh Mani (DIN:08385423), Non-Executive Director of the Company

During the year under review, Mr. Ganesh Mani (DIN: 08385423), Non-Executive and Nominee Director of the Company retired from the directorship of the Company w.e.f. 19^th July 2023, who was liable to retire by rotation at the 27^th Annual General Meeting. Mr. Mani had expressed his unwillingness for being re-appointed at the 27^th Annual General Meeting.

The Board of Directors of the Company expressed its gratitude for the guidance and support provided by Mr. Ganesh Mani to the deliberation of the Board during his tenure as director of the Company.

Retirement of Mr. BVR Subbu (DIN:00289721), Independent Director of the Company

Mr. BVR Subbu (DIN:00289721), Independent Director of the Company will be completing his first term of appointment on 4^th July 2024. Mr. Subbu has expressed his unwillingness for being considered for re-appointment for the second term.

The Board of Directors of the Company in its meeting held on 30^th April 2024 expressed their gratitude for the guidance and support provided by Mr. Subbu to the deliberation of the Board during his tenure as an Independent Director of the Company.

Key Managerial Personnel

As on 31^st March 2024, the Key Managerial Personnel (KMP) of the Company as per Section 2(51) and Section 203 of the Act are as follows:

Name of the KMP	Designation
Mr. Vivek Vikram Singh	Managing Director and Group Chief Executive Officer
Mr. Rohit Nanda	Group Chief Financial Officer
Mr. Ajay Pratap Singh	Group General Counsel, Company Secretary and Compliance Officer

During the year under review, there was no changes in the KMP of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

Your Company has, inter-alia, received requisite declarations from all the Independent Directors confirming that they:

• meet the criteria of independence as prescribed under the Section 149(6) of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and Regulation 16(1 )(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

• have complied with the Code of Conduct for Board of Directors and Senior Management Personnel (Code) of the Company for the Financial Year 2023-24.

The Board of Directors of the Company have taken on record the declarations and confirmations submitted by the Independent Directors.

None of the directors of the Company are disqualified from being appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) or are debarred or disqualified by SEBI, Ministry of Corporate Affairs (MCA) or any other such statutory authority.

The Company has received a certificate from M/s. PI & Associates, Company Secretaries certifying that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by SEBI/Ministry of Corporate Affairs or any such statutory authority, is attached as Annexure - B to this Annual Report.

14. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy of the Company formulated in accordance with Section 178 of the Act and regulation 19 read with Schedule II of the Listing Regulations. Further, details on the same are given in the Corporate Governance Report, which forms part of this Annual Report.

The Managing Director and Group CEO of the Company has not received any remuneration or commission from any of the subsidiary companies. Further, the Company does not have any holding company.

Singapore VII Topco III Pte. Ltd. (Singapore Topco), the

erstwhile holding company/majority shareholder (and promoter) of the Company had adopted an exit return incentive plan (ERI Plan) pursuant to which Singapore Topco has rewarded certain identified employees of the Company and/or its subsidiaries (including each of Key Managerial Personnel and Executive Director(s) who are not promoters or promoter group of the Company) with cash rewards based on certain disposition event(s) in relation to its interest in the Company. These cash rewards were paid/will be paid to such employees entirely by Singapore Topco (without any recourse or liability to the Company).

None of the promoters, nominee director of the Company, having significant influence, is beneficiary of the ERI Plan. The Board of Directors and Shareholders of the Company had approved the ERI Plan, in their respective meeting held on 06^th August 2021 and 09^th September 2021 in compliance

with regulation 26(6) of the Listing Regulations. Accordingly, Singapore Topco paid part of cash rewards to the identified employees (including the Managing Director and Group CEO) of the Company.

The Remuneration Policy of the Company is available on the website of the Company at https://sonacomstar. com/files/policy/nomination-and-remuneration-policy-policy-DqCLrU.pdf

15. DISCLOSURE UNDER RULE 5(1) AND 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The percentage increase in remuneration, ratio of remuneration of each director and key managerial personnel (KMP) to the median of employees remuneration, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in a separate Annexure-CI, forming part of this Annual Report.

The statement containing names of top ten (10) employees in terms of remuneration drawn and the particulars of employees as required under section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure- C2, forming part of this Annual Report.

16. BOARD EVALUATION

Your Company believes that the process of performance evaluation at the Board level is crucial for its board engagement and effectiveness. Based on the recommendation of the Nomination and Remuneration Committee (NRC), your Company has adopted Policy for Evaluation of the Performance of the Board of Directors, which was duly approved by the Board of Directors.

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its committees as well as performance of all the directors individually.

The criteria of evaluation of Board are based on “Guidance note on Performance Evaluation” issued by the SEBI on 05^th January 2017, and in compliance with provisions of Act and Listing Regulations.

A structured questionnaire covering various aspects of the Board''s functioning was circulated to individual directors, Committees, and the Board which was followed by feedback received through one-to-one interactions by the Chairperson of the NRC Committee and Chairperson of the Board with the directors being evaluated and suggestions for the further improvements based on feedback were received from other directors.

The summary of the evaluation was presented to the NRC, Independent Director''s and the Board of Directors of the Company in their meeting held on 30^th April 2024.

Evaluation of Committees

The performance evaluation of committees was carried out by the Board on the basis of the criteria such as structure and composition of committees, fulfilment of the functions assigned to committees by the Board and applicable regulatory framework, frequency of meetings, adequacy of time allocated at the committee meetings, adequacy and timeliness of the agenda and minutes circulated, effectiveness of the Committee''s recommendation for the decision of the Board etc.

Evaluation of Directors and Board

A separate exercise was carried out by the NRC of the Board to evaluate the performance of individual Directors.

The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairperson of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non-Executive Directors. Additionally, they also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Criteria for evaluation

The evaluation of directors was based on, inter-alia, various criteria such as qualification and experience, fulfilment of functions as assigned, attendance at Board and Committee meeting, contribution to strategy and other areas impacting Company''s performance, availability and attendance etc.

The evaluation of the Board was based on the criteria such as structure and composition of the Board, frequency of meetings, adequacy of time allocated at the Board Meetings, adequacy and timeliness of the agenda and minutes circulated, functions of the Board, governance and compliance etc.

The performance evaluation of Independent Directors was based on various criteria, inter alia, including independence from the Company and other directors and that there is no conflict of interest, the director exercises his/her own judgement and voice opinion freely etc.

Criteria for Chairman

The performance evaluation of Chairman of the Board was based on various criteria, inter alia, including displaying efficient leadership, contribution to the Company and in the Board meetings, keeping shareholders'' interest in mind during discussions and decisions, etc.

Evaluation of Independent Directors

The performance evaluation of Independent Directors was carried out by the Board of Directors based on various criteria, inter-alia, including attendance at Board

and committee meetings, qualification, experience, ability to function as a team, commitment, roles performed and understanding of industry.

The feedback and results of the Board Evaluation process conducted for the Financial Year 2023-24, have been mentioned in detailed in the Corporate Governance Report.

17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors of the Company are familiarised with the operations and functioning of the Company at the time of their appointment followed by a management presentation and on an ongoing basis. The details of such training and familiarisation program conducted during the period under review, are provided in the Corporate Governance Report and is also available on the website of the Company at https://sonacomstar.com/files/policy/familiarisation-programme-policy-0ziWbw.pdf.

Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The draft format of the letter of appointment is available on our website, at https://sonacomstar.com/investor/appointment-re-appointment-of-independent-directors.

18. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:

i. i n the preparation of the annual accounts for the Financial Year ended on 31^st March 2024, the applicable accounting standards were followed, and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2024 and of the profits of the Company for the Financial Year ended at 31^st March 2024;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts for the Financial Year ended on 31^st March 2024, have been prepared on a going concern basis;

v. proper internal financial controls have been laid down by the Directors were followed and that such internal financial controls are adequate and operating effectively; and

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

19. DISCLOSURE ON COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AS PER SECTION 178 OF THE ACT

The remuneration policy for directors, key managerial personnel, senior management personnel and other employees (NRC Policy) of the Company was adopted by the Board based on the recommendation of the Nomination & Remuneration Committee (NRC). The NRC Policy sets out detailed procedure of appointment along with the criteria to pay equitable remuneration to the directors, Key Managerial Personnel (KMP) , Senior Management Personnel (SMP) and other employees of the Company and to harmonise the aspirations of human resources with the goals of the Company.

While formulating NRC Policy relating to the remuneration of the directors, key managerial personnel and other employee, the Board has ensured that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration of the directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

The salient features of the NRC Policy of the Company are as follows:

1) The NRC shall consider the ethical standards of integrity and probity, qualification, expertise and experience of the person for appointment as Director, KMPs and SMPs accordingly recommend to the Board his/her appointment to the Board;

2) The NRC shall consider qualifications and

appointment for Independent Directors as per the provisions of the Act.

3) The Company shall ensure that the person

appointed as Director/Independent Director

are not disqualified under the Act and rules made thereunder.

4) The Director/ Independent Director/KMP/SMP

shall be appointed as per the procedure laid down under the provisions of the Act, and rules made there under and the SEBI Listing Regulations, or any other enactment for the time being in force.

5) The term/ tenure of the Directors shall be governed as per provisions of the Act and the Rules made there under, as amended, from time to time.

6) In case of re-appointment of Director(s), the Board shall take into consideration, the performance evaluation of director, engagement of the director and contribution in the deliberations of the Board.

This NRC Policy is available on the website of the Company at https://sonacomstar.com/files/policy/nomination-and-remuneration-policv-policv-DqCLrU.pdf.

20. EMPLOYEE STOCK OPTIONS SCHEMES

a. Sona BLW Precision Forgings Limited-Employee Stock Option Scheme-2020

In terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as amended, from time to time, the Nomination and Remuneration Committee of your Board of Directors administer and monitor “Sona BLW Precision Forgings Limited-Employee Stock Option Scheme-2020” (ESOP Scheme-2020) of your Company.

The Nomination and Remuneration Committee has been designated as the Compensation Committee under the ESOP Scheme-2020. During the period under review, a total of 1,055,964 (One million fifty-five thousand nine hundred sixty four only) equity shares of the Company having face value of INR 10 /-(Indian rupees ten only) each fully paid up were allotted pursuant to exercise of options by the employees of the Company under the ESOP Scheme-2020. The last and final vesting under the ESOP Scheme-2020 occurred on 01^st October 2023.

Applicable disclosures as stipulated under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) (wherever applicable) with regard to the ESOP Scheme are available on the Company''s website at https:// sonacomstar.com/investor/annual-reports-and-returns

b. Sona BLW Precision Forgings Limited-Sona Employee Stock Option Plan-2023

During the Financial Year, the shareholders of the Company have approved the ESOP-2023 in their 27^th Annual General Meeting held on 19^th July 2023 and have authorised Nomination & Remuneration Committee (NRC) of the Board of the Company for administration, implementation and grant of ESOPs under the ESOP- 2023.

The NRC has granted 6,926,600 (Six million nine hundred twenty six thousand six hundred) Stock Options to the Eligible Employees of the Company and its subsidiaries as per the terms of the ESOP-2023 and the Exercise Price of the Employee Stock Options was the Fair Market value as on Grant Date.

The required disclosures under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) with regard to the ESOP Scheme-2020 and ESOP-2023 are available

on the Company''s website at https://sonacomstar.com/ investor/annual-reports-and-returns

The Company has received a certificate from M/s. PI & Associates, Secretarial Auditors of the Company as required under Regulation 13 of the SEBI (SBEB) Regulation and it confirms that both the Schemes, ESOP Scheme-2020 and ESOP- 2023, have been implemented in accordance with these Regulations. The Certificate is available for inspection during the AGM of the Company.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE ACT

Pursuant to Section 186 of the Act, disclosure on particulars relating to loans, advances, guarantees and investments form part of the standalone financial statements provided in Note 42 to the standalone financial statements of the Company.

22. DIVIDEND DISTRIBUTION POLICY

The Company has formulated and published a Dividend Distribution Policy which provides for the parameters to be considered for declaring/recommending dividend, circumstances under which the shareholders may or may not expect dividend. The policy is available on the website of the Company at https://sonacomstar. com/files/policy/dividend-distribution-policy-policy-oW38wX.pdf

23. SUCCESSION PLANNING

The Company believes that succession planning for the Board members and Senior Management is very important for creating a robust future for the Company. The Nomination and Remuneration Committee plays a pivotal role in identifying successors to the members of the Senior Management and invests substantial time with the Managing Director & Group CEO on succession planning.

The Company has a succession planning policy in place which intends to achieve the following:

• The business of the Company is not affected on account of interruptions caused due to superannuation or voluntary retirement or resignation or death or permanent incapacitation or sudden exit of any member of the Board, Executive Directors, Senior Management and other key employee covered under this Policy;

• To identify and create a talent pool of high potential personnel, who can be considered for appointment at the Board, Executive Directors, Senior Management and other critical positions and to groom them to assume such roles in the Company, whenever the need arises;

• To ensure timely and high-quality replacements for those personnel who are currently holding positions as above said.

The succession planning policy of the Company as approved by the Board of Directors of the Company is available on the website of the Company at https:// sonacomstar.com/files/policy/succession-planning-policv-policv-SYOpD5.pdf

24. DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

25. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments affecting the financial position of the Company occurred between the end of the Financial Year to which the Financial Statements relate and the date of this Annual Report.

26. RELATED PARTY TRANSACTIONS

The Company has in place a robust process for approval of related party transactions and on dealing with related parties.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated and adopted by the Company. An omnibus approval is obtained from the Audit Committee, for the related party transactions.

The Board has amended the Policy on Related Party Transactions as required under the Listing Regulations and in accordance with the recommendations of Institutional Investor Advisory Services (IiAS), which is available on the website of the Company at https:// sonacomstar.com/fi les/policy/policy-on-related-party-transactions-policy-AIlHMo.pdf

All contracts/arrangements/transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arm''s length basis in terms of provisions of the Act. Further, there are no contracts or arrangements entered into under Section 188(1) of the Act, hence no justification have been separately provided in that regard.

The details of the related party transactions as per Indian Accounting Standards (IND-AS) - 24 are set out in Note 36 to the standalone financial statements of the Company.

The Company in terms of regulation 23(9) of the Listing Regulations have disclosed the statement of related party transactions on a consolidated basis for the half year ended on 30^th September 2023 and 31^st March 2024 to the Stock Exchanges and website

of the Company at https://sonacomstar.com/investor/ financial-information

During the year under review, there were no transactions for which consent of the Board was required to be taken in terms of Section 188(1) of the Act and accordingly, no disclosure is required in respect of the related party transactions in Form AOC-2 under Section 134(3)(h) of the Act and rules framed thereunder. Further, there were no material related party transactions in terms of the Listing Regulations requiring approval of the members during the year under review.

27. NUMBER OF MEETINGS OF THE BOARD

During the year under review, six (6) meetings of the Board of Directors were held. The details of the meetings of the Board of Directors held and attended by the Board of Directors during the Financial Year 2023-24 are given in the Corporate Governance Report which forms the part of this Annual Report.

The Board of Directors have met quarterly and the gap intervening between meetings was within the time prescribed under the Act and the Listing Regulations.

The details and attendance of meetings of the Board, its committees and Annual General Meeting are mentioned in the Corporate Governance Report, which forms part of this Annual Report.

28. DOWNSTREAM INVESTMENT

During the Financial Year 2023-24, the Company has not made any downstream investment which tantamount to indirect foreign investment. Hence, the requirement of obtaining certificate from the statuary auditors under the extant Foreign Exchange Management (Non- debt Instruments) Rules, 2019 is not applicable.

29. AUDITORS AND AUDIT REPORT

a. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company at its meeting held on 03^rd May 2023, on the recommendation made by the Audit Committee, had appointed M/s. PI & Associates (CP no. 16276), as the Secretarial Auditors of the Company to undertake the Secretarial Audit for Financial Year 2023-24.

The Company voluntary conducted secretarial audit on quarterly basis and report of the secretarial auditors were placed before the Audit Committee and the Board of Directors of the Company on quarterly basis.

The Secretarial Auditors'' Report for the Financial Year 2023-24 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed herewith and forms part of this Annual Report and enclosed as Annexure-D.

Further, the Board of Directors of the Company in its meeting held on 30^th April 2024, based on the recommendation made by the Audit Committee, have appointed M/s. PI & Associates (CP No. 16276), as the Secretarial Auditors of the Company to undertake the Secretarial Audit for Financial Year 2024-25.

Secretarial Compliance Report

As per the regulation 24A(2) of the Listing Regulations, the Secretarial Auditors of the Company has provided the report on the applicable compliances of the Company for the Financial Year 2023-24 The Annual Secretarial Compliance Report obtained from the Secretarial Auditor of the Company has been submitted to the Stock Exchanges and is available on the website of the Company at https://sonacomstar.com/investor/ annual-reports-and-returns

b. Statutory Auditors

M/s. Walker Chandiok & Co. LLP, Chartered Accountants (FRN No. 001076N/N500013) was re-appointed as Statutory Auditors of the Company for the second term of 5 (five) consecutive years, to hold office from the conclusion of 26^th Annual General Meeting till the conclusion of 31^st Annual General Meeting of the Company in terms of the provisions of Section 139 and 141 of the Act.

The Statutory Auditor''s Report on standalone and consolidated financials for Financial Year 2023-24, does not contain any qualification, reservation, adverse remarks or observation and the same forms part of this Annual Report.

c. Cost Auditors

As per the section 148 of the Act and Cost (Records and Audit) Rules 2014, the Company is required to maintain cost audit records and conduct the Cost Audit. Therefore, the Board in its meeting held on 03^rd May 2023 based on the recommendation of Audit Committee had appointed of M/s. Jayaram & Associates, as the Cost Auditors of the Company for the Financial Year 2023-24 and the shareholders of the Company had ratified the fees of the cost auditor in 27^th Annual General Meeting of the Company held on 19^th July 2023.

During the Financial Year, the Cost Auditors of the Company provided the Cost Audit report for the Financial Year 2022-23 in the Form CRA-3 and the Company has filed the Cost Audit Report with the Ministry of Corporate Affairs in Form CRA-4 within the prescribed time.

The Cost Audit Report for the Financial Year 2022-23 does not contain any qualification, reservation or adverse remark.

Further, the Board of Directors of the Company, based on the recommendation of the Audit Committee at its meeting held on 30^th April 2024 has appointed M/s. Jayaram & Associates, as the Cost Auditors of the

Company for the Financial Year 2024-25 under section 148 of the Act. M/s. Jayaram & Associates, being eligible, have consented to act as the Cost Auditors of the Company for the Financial Year 2024-25.

The remuneration proposed to be paid to the Cost Auditors for the Financial Year 2024-25, is subject to ratification by the members of the Company at the ensuing 28^th AGM, would not exceed INR 275,000 (Indian rupees two hundred seventy five thousand), excluding taxes and out-of-pocket expenses, if any.

d. Internal Auditors

The Board of Directors had in their meeting held on 30^th April 2024 have appointed M/s. BDO India LLP (Firm Registration No. MCA: AAB-7880), as Internal Auditors of the Company for the Financial Year 2024-25.

30. INTERNAL CONTROL SYSTEM

The Company has in place internal control system, which is commensurate with its size, scale and complexities of its operations. M/s. BDO India LLP (Firm Registration No. MCA: AAB-7880), was appointed as Internal Auditors of the Company for the Financial Year 2023-24.

The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors are periodically apprised of the internal audit findings and corrective actions are taken accordingly. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. For more details, refer to the ‘internal control systems and its adequacy'' section in Management''s Discussion and Analysis Report, which forms part of this Annual Report.

31. REPORTING OF FRAUD

During the year under review, none of auditors have reported any instances of fraud committed in the Company by its officers or employees as specified under Section 143 (12) of the Act.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the Financial Year 2023-24, the Company has spent INR 52,911,387 (Indian rupees fifty two million nine hundred eleven thousand three hundred eighty seven only) on the CSR projects. The

amount spent includes the administrative expenses and the amount spent on the conduct of impact assessment, and the remaining unspent amount of INR 14,038,839 (Indian rupees fourteen million thirty-eight thousand eight hundred thirty nine only) was transferred to unspent CSR account of the Company on 16^th April 2024, committed for the ongoing CSR projects, as per the applicable provisions of the Act.

For the Financial Year 2023-24, your Company continued to focus on innovation and promoting education through high standard projects in the domains of education and supporting innovative start-ups. This year your Company made special efforts in skill development amongst youth through digital literacy and providing on job trainings in the field of CNC operators, Front Office Administration and banking Financial Service and Insurance. The CSR initiatives of the Company focused under the CSR intervention, amongst others, ‘Sona Comstar Samridh Bharat Program'' (for promoting education) and ‘Sona Comstar Saksham Bharat Program'' (promotion of innovation) during the year under review.

The CSR Policy of the Company is available on the website of the Company at https://sonacomstar.com/ investor/corporate-social-responsibilities.

Your Company has in place a CSR Committee, which functions in accordance with the applicable provisions of the Act and such other matters as prescribed by the Board from time to time. The detailed terms of reference of the CSR Committee, attendance at its meetings and other details have been provided in the Corporate Governance Report.

Your Company''s Annual Report on the CSR activities undertaken during the Financial Year ended 31^st March 2024, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules) is attached as Annexure-E to this Annual Report.

Your Company has engaged M/s. InGovern Research Services Private Limited and Bluesky Sustainable Business LLP, an Independent Agency, on voluntarily basis to conduct the impact assessment of the CSR initiatives undertaken for the Financial Year 2023-24. The impact assessment report is attached as Annexure L of this report.

Further, the Group Chief Financial Officer of the Company has certified that CSR spends of the Company for Financial Year 2023-2024 have been utilised for the purpose and in the manner approved by the Board of Directors of the Company.

33. AWARDS AND RECOGNITIONS

We are happy to inform that your Company has received the following recognitions/awards during the Financial

oaoo n a ¦

s. No.	Award Category	Awarded By
1.	Gold Award in recognition of outstanding performance achieved for FY23	Indian Tier-1 Supplier for CVs.
2.	Supplier Excellence Award for 2022	North-American Tier-1 Supplier for OHVs
3.	Special Support Award in vendor conference 2023	Indian OEM of PVs
4.	Great Place To Work Certificate	Great Place To Work® Institute India
5.	CII - ITC Sustainability Awards 2023-Commendation for Significant Achievement in Corporate Social Responsibility in manufacturing sector	Confederation of Indian Industry (CII)
6.	CSR Times	National CSR Summit & Award
7.	Golden Peacock Award for Excellence in Corporate Governance 2023 at National level	Institute of Directors
8.	2022-23 Vision Award on Annual Report	League of American Communications Professionals LLC (LACP)

34. RISK MANAGEMENT

Pursuant to Section 134(3) (n) of the Act and Regulation 17(9) of Listing Regulations, the Company has formulated and adopted a Risk Management Policy. The primary objectives of the policy include identification and categorisation of potential risks, their assessment, developing a mitigation plan and monitoring these risks. The Board has entrusted the Risk Management Committee (RMC) with overseeing the processes of identification, evaluation, mitigation of risks and assess management actions to mitigate such risks. The Chief Risk Officer periodically presents the risk evaluation and monitoring status to the RMC based on risk evaluation performed by risk owners in the organisation. The Company has designated Mr. Rohit Nanda, Group CFO as the Chief Risk Officer of the Company. The details of the RMC along with its charter are set out in the Corporate Governance Report, forming part of this Annual Report.

The Risk Management Policy of the Company is available on the website of the Company at https:// sonacomstar.com/files/policy/risk-management-policy-policy-NTCFLh.pdf

The Company also published Enterprise Risk Management (ERM) Framework on its website at https://sonacomstar.com/files/policy/erm-framework-policy-CZEnft.pdf

35. VIGIL MECHANISM

Your Company is committed to highest standards of professionalism, honesty, integrity, transparency

and ethical behaviour. Pursuant to the provisions of Section 177(9) & (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the Listing Regulations, the Board of Directors has approved the Policy on Vigil Mechanism/ Whistle Blower and Code of Conduct and Business Ethics which provides mechanism to its directors, employees, vendors, customers, business partners/ associates or any third party and other stakeholders to raise concerns about any wrongdoing in the Company and provide for adequate safeguards against victimisation of employees and other persons who avail this mechanism.

Your Company''s Whistle Blower Policy is also applicable to our associates who partner us in our organisational objectives. The Company has taken adequate measures to create awareness amongst its employees on the Code of Conduct and Governance Policies through regular learning sessions.

The Company has also designated an email id that is [email protected] where the whistle blower can report the concerns or wrong doings.

The mechanism under the policy has been appropriately communicated within the organisation. The Audit Committee of the Board reviews the functioning and implementation of the Whistle-blower mechanism, on quarterly basis.

During the year under review, the Company has received one complaint from one of the suppliers in terms of the Vigil Mechanism Policy of the Company, the matter was reported to the Ethics Committee of the Company. The matter was investigated by the Ethics Committee and was also placed before the Audit Committee. The disciplinary action was taken against the delinquent employee.

The Whistle Blower Policy has been appropriately communicated within the Company across all levels and is available on the website of the Company at the link: https://sonacomstar.com/files/policy/whistle-blower-policv-policv-Tb03tt.pdf

Your Company discourages bribery and corruption in any form and has adopted an Anti-Bribery and Corruption Policy, which is available on the website at sonacomstar.com/files/policy/whistle-blower-policy-policy-MUwqe2.pdf

56. CYBER SECURITY AND DATA PRIVACY

With increasing digitalisation, rise in corporate cybercrimes, high cost of data breaches and evolving regulations, businesses are placing greater focus on detecting, preventing, and combating information security threats. The Company identified its information security risks and is committed to safeguarding business information from internal and external threats. It is also committed to upholding stakeholders'' right to privacy and, as a responsible corporate, strive to protect their personally identifiable information. Guided by the provisions of the Information Technology (IT) Act, 2000, other applicable regulations as well as

international standards, the Company has established robust policies and processes on information security.

The Company has implemented an Information Security policy, which provides management direction and guidance to ensure availability, integrity and confidentiality of information and information systems across locations.

During the Financial Year under review, the Company has updated its Data Privacy framework in compliance with the Digital Personal Data Protection Act, 2023 and the General Data Protection Regulation across all its locations and subsidiaries.

37. EXTERNAL REVIEW OF ETHICAL COMPLIANCE FRAMEWORK

The Company has engaged BDO to review the Company''s compliance with the Responsible Business Alliance (RBA) code of conduct. This audit also aims to strengthen the ethical compliance framework of the Company. The period under review was from April 2023 to February 2024.

Based on the observations/suggestions in the audit report, the Company has made the necessary changes, wherever required, in the Code of Conducts and Business Ethics, Anti Bribery and Corruption Policy and Code of Conduct for Vendors, which are available on the website of the Company at https://sonacomstar. com/policies-and-codes

38. ANNUAL RETURN

In accordance with the provisions of Act, the Annual Return of the Company in the Form MGT-7 is available at: https:// sonacomstar.com/investor/annual-reports-and-returns

39. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with all the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.

40. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS

No significant and material order has been passed by any regulator or court or tribunal, which might impact the ‘going concern'' status and Company''s operations in future.

41. CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in the Annexure-F forming part of this Annual Report.

42. INTELLECTUAL PROPERTY

Your Company is an innovation driven organisation and remained focused on creating intellectual property and filings thereof for registration regularerly. On inventions, during the year under review, your company filed 11 patents and 10 designs applications with the Patent Office for registration. The Company was also granted registration of 13 patents and 15 designs during the year under review.

43. HUMAN RESOURSES

At Sona Comstar, excellence is not just about our products, technology, and delivery; it permeates every aspect of our operations and human resource practices. We are honoured to have received the ‘Great Place To Work'' certification for the past two years, a recognition of our strong human resource (HR) practices.

Our HR practices focus on collaboration, diversity, and inclusion, fostering innovation, creativity, and driving success. We believe in collaborating across teams, departments, and with external partners, creating a culture of shared success and continuous improvement. Through an inclusive culture, we ensure that every voice is heard, and every individual is valued.

We encourage an innovative mindset by embracing state-of-the-art technology and nurturing creative thinking at all levels, pushing the boundaries of what is possible. Our commitment to developing our workforce''s engineering and technical competencies is evident through training, mentorship, and hands-on experience, ensuring they have the skills needed to excel and drive the organisation forward.

At the operator level, we enhance skills through our DOJO, where operators undergo detailed training covering safety, manufacturing processes, quality, customer service, governance, and core tools. The DOJO provides a dynamic learning environment that promotes continuous improvement and excellence.

Employee engagement is crucial to our success, and we enhance it through Quality Circles, Kaizen, crossfunctional initiatives, and continuous improvement programs. These initiatives empower employees to contribute ideas and suggestions, fostering a sense of ownership and engagement.

Total Quality Management (TQM) and ‘Safety First'' are not just philosophies for us; they are a way of life. ‘Quality First'' and ‘Safe Working'' are ingrained in everything we do, from our products and processes to our systems. With a ‘Safety First'' and continuous improvement mindset, we provide a safe working environment and deliver exceptional results to our customers and stakeholders.

44. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WORKMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition

and Redressal) Act, 2013 (POSH), the Company has formulated a comprehensive Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace and Internal Committee (1C) have also been set up to redress any such complaints received.

The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. In the last few years, the IC has worked extensively on creating awareness on relevance of sexual harassment issues to help employees understand the forms of sexual harassment.

The Company''s goal is to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual orientation, and other factors, and contribute to the best of their abilities. Company is committed to providing a safe and conducive work environment to all of its employees and associates.

The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of POSH. The employees are sensitised from time to time in respect of matters connected with POSH.

During the year under review, no complaints has been received by the Company under the POSH.

Policy for prevention of Sexual Harassment at workplace (POSH Policy) of your Company can be viewed at the link: https://sonacomstar.com/files/policy/posh-policy-policy-s7HMW2.pdf

The Company has also published the procedure for filing compliant under POSH Policy on its website at https:// sonacomstar.com/files/policy/procedure-prescribed-for-filing-of-complaint-under-posh-policv-SEvfpU.pdf

45. SUSPENSION OF SECURITIES OF THE COMPANY

The securities of the Company have not been suspended from trading on any of the stock exchanges ever.

46. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

A detailed Business Responsibility & Sustainability Report (BRSR) in terms of the provisions of Regulation 34 of the Listing Regulations is attached herewith as Annexure- K to the Annual Report.

47. CAUTIONARY STATEMENTS

The Annual Report including those which relate to the Directors'' Report, Management Discussion and Analysis Report may contain certain statements on the Company''s intent expectations or forecasts that appear to be forwardlooking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statements. Some of the factors that could affect the Company''s performance could be the demand and supply for Company''s product and services, changes in Government regulations, tax laws, forex volatility etc.

48. ACKNOWLEDGEMENT

Your Board of Directors place on record sincere gratitude and appreciation for all the employees of the Company. Our consistent growth was made possible by their hard work, cooperation, and dedication during the year.

The Board of Directors acknowledges and places on record their sincere appreciation to all stakeholders, customers, vendors, banks, Central and State Governments, and all other business partners, for their continued co-operation and for the excellent support received from them. We look forward to continued support of all these partners in the future.

The Board also wishes to place on record its appreciation to the esteemed investors for showing their confidence and faith in the management of the Company.

By order of Board of Directors For Sona BLW Precision Forgings Limited

Place: Gurgaon Sunjay Kapur

Date: 30^th April 2024 (Chairman)

---

Mar 31, 2023

The Board of Directors take pleasure in presenting the twenty seventh (27th) Annual Report of the Company along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended on March 31, 2023.

1. FINANCIAL HIGHLIGHTS & PERFORMANCE

The financial performance of the Company (Standalone and Consolidated) for the Financial Year ended on March 31,2023 is as under:

(INR in million)
	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	24,686.24	19,390.48	26,755.95	21,306.40
Other Income	430.74	509.98	115.88	200.26
Total Income	25,116.98	19,900.46	26,871.83	21,506.66
Total expenses	20,137.10	15,865.46	21,747.09	17,317.60
Profit before exceptional items and tax	4,979.88	4,035.01	5,124.74	4,189.06
Less: Exceptional Items	33.69	(132.70)	33.69	(132.70)
Profit before tax	4,946.19	4,167.71	5,091.05	4,321.76
Less: Total Tax Expenses	1,065.29	632.32	1,138.08	706.33
Profit for the period/year	3,880.90	3,535.38	3,952.97	3,615.43
Other comprehensive (loss)/ income for the period/ year	14.47	(11.52)	74.82	28.70
Total comprehensive income for the period/ year	3,895.37	3,523.86	4,027.79	3,644.13
Earnings per share (Basic) (in INR)	6.64	6.08	6.76	6.22
Earnings per share (Diluted) (in INR)	6.63	6.08	6.75	6.21

Standalone

The standalone revenue (revenue from operations plus foreign exchange (net)) increased by 27% to INR 24,686.24 million for Financial Year 2023 from INR 19,390.48 million for Financial Year 2022, driven by ramp-up of sales volume for some of the new contracts especially in the electric vehicle (EV) segment in North American market and growth in sales in the Indian market in all three segments - passenger vehicles, commercial vehicles, and off-highway vehicles. Profit before exceptional items and tax in Financial Year 2023 was INR 4,979.88 million as compared to INR 4,035.01 million in Financial Year 2022, reflecting an increase of 23% from the previous year. Profit after tax (PAT) in the Financial Year 2023 was INR 3,880.90 million as compared to INR 3,535.38 million in Financial Year 2022, reflecting an increase of 10% from the previous year. The growth in PAT is lower due to certain one-time tax impact in the previous year’s PAT.

Consolidated

The consolidated revenue (revenue from operations plus foreign exchange (net)) increased by 26% to INR 26,755.95 million for Financial Year 2023 from INR 21,306.40 million for Financial Year 2022, primarily driven by the start and ramp-up of sales volume for some of the new contracts especially in the EV segment in North American market and growth in sales in the Indian market

in all three segments - passenger vehicles, commercial vehicles, and off-highway vehicles. Profit before exceptional items and tax in Financial Year 2023 was INR 5,124.74 million as compared to INR 4,189.06 million in Financial Year 2022, reflecting an increase of 22% from the previous year. Profit after tax (PAT) in the Financial Year 2023 was INR 3,952.97 million as compared to INR 3,615.43 million in Financial Year 2022, reflecting an increase of 9% from the previous year. The growth in PAT is lower due to certain one-time tax impact in the previous year’s PAT.

2. PERFORMANCE OF THE COMPANY AND INDUSTRY OVERVIEW

In Financial Year 2023, your Company continued its growth momentum by scaling new revenue and profitability benchmarks. Its consolidated revenue (revenue from operations plus foreign exchange (net)), EBITDA, and Profits (before tax and exceptional items) were INR 26,756 million, INR 6,958 million, and INR 5,123 million, respectively. The EV business that witnessed revenue growth of 33% over the previous year led the overall revenue growth. One of the key contributors to the battery electric vehicles (BEV) business growth was the increase in Traction Motor sales for the electric 2-wheeler segment. Non-BEV business also achieved 23% revenue growth, especially from the start and ramp-up of new programs in the North American market.

This performance was achieved against the headwinds of sharply higher inflation, geopolitical risks, rising interest rates, and slowing global economic growth. The shortage of semiconductors for the automotive industry started easing out slowly during the year, however, not achieving a full recovery. Global light vehicle production during the Financial Year 2023 remained negatively impacted by these supply chain constraints. As a result, global sales of automobiles have declined over the previous year, however there are sub-segments like hybrid and electric vehicles that continue to demonstrate strong growth.

While the supply chain disruption and raw material inflation intensified the challenges, your Company did not experience any interruption in the ability to supply systems and components and ensured that customers do not experience any disruption to their production lines. Apart from maintaining the revenue growth momentum during the year, your Company continued to drive business development and won 35 new programs during the Financial Year 2023, of which 12 were for EV Programs. As of 31st March 2023, your Company has 42 EV programs, out of which 10 EV programs are in fully ramped-up production, 10 are in ramp-up phase and 22 programs will undergo production in the Financial Year 2024 or later, depending upon customers'' production schedules. With these new order wins, your Company''s 10-year net order book grew by 16% during the year and currently stands at INR 215 billion.

I n technology development also, your Company took a significant leap by adding four new products to its portfolio during the year. While we achieved a significant breakthrough in precision forming by developing netshaped spiral bevel gears, we also developed a first-of-a-kind electronically locking differential for electric vehicles. The development of helical gears and rotor shafts brings us closer to developing an entire EV gearbox and thus increases our value addition in an electric vehicle.

The future of mobility is shifting towards higher and higher levels of automation, making vehicles more and more intelligent. According to a McKinsey report, by 2030, the ADAS sensors market will grow to USD 43 billion, dominated by radar sensors, which will contribute USD 14 billion. During the year, we took a big step in this direction by adding a new pillar of growth, ''Sensors and Software,'' by signing a binding term sheet to acquire at least 54% stake in Novelic d.o.o.Beograd-Zvezdara, a Serbia-based leading provider of mmWave radar sensors, subject to successful negotiations, finalisation and execution of definitive agreements and regulatory approvals.

Continuing our focus on ESG, we published our first sustainability report in the year 2022 and set targets for many sustainable development goals. One of the most important targets is to achieve a 45% revenue share from electric vehicles by 2026. We have also set up a zero liquid discharge treatment system to treat the used die

lubricant for water recovery. This system recovers around 12,000 liters of water per day from 16,000 liters of used die lubricant, which was waste earlier and used to be disposed of through an authorized channel.

This was an eventful year for your Company. We participated in person in the Auto Component Show of the Indian Auto Expo 2023, where we showcased our entire technology roadmap which was well-liked by our customers. We also inaugurated our second-largest manufacturing plant in Chakan, Pune by shifting our existing facility in Pune.

For the future outlook, S&P Global Mobility forecasts global light vehicle sales to reach 83.6 million units in the calendar year 2023 and witness a 5.6% growth over the previous calendar year 2022. The auto industry continues to navigate supply chain challenges, and several markets face deteriorating economic conditions and fading pent-up demand.

3. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report for the Financial Year 2022-23, pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), which is presented as a separate statement forming part of this Annual Report.

4. CORPORATE DEVELOPMENTSAcquisition of Novelic d.o.o. Beograd -Zvezdara

Your Company has agreed to acquire at least 54% share capital and voting rights in NOVELIC d.o.o. Beograd - Zvezdara (a company registered in Belgrade, Serbia) (“Novelic”), subject to successful negotiations, finalisation and execution of definitive agreements and regulatory approvals. In this regard, the Company has executed a binding Term Sheet on January 9, 2023 with the shareholders of Novelic.

Novelic is the world''s leading self-sustaining provider of mmWave radar sensors, perception solutions, and full-stack embedded systems. Since past ten years of market presence, Novelic has built an extensive portfolio of mmWave radar sensors and perception solutions that enable off-the-shelf and customised products focused on autonomous driving and automation. Novelic also does full cycle development of electronics and software services based on its hardware-in-loop (HIL) systems, control systems, ECU hardware/software platform, annotation tools and other in-house platforms.

The successful completion of the acquisition of Novelic will add a new vertical into the products portfolio of the Company.

Disinvestment by Singapore VII Topco III Pte. Ltd.

During the year under review, Singapore VII Topco III Pte. Ltd. ("Singapore Topco") divested its entire remaining stake in the Company through bulk deal mechanism of the stock exchanges.

The Board of Directors expresses its support and appreciation for all the co-operation and support extended by Singapore Topco to the Company.

As on 31 st March, 2023, 67% equity shares of the Company are held by more than 4,80,000 public shareholders and remaining 33% equity shares of the Company are held by Promoters and Promoter groups of the Company.

Inauguration of new Chakan Plant

During the year, the Company shifted its operations from its existing Pune plant at T-46, MIDC Bhosari Industrial Area, Pune - 411 026, India to a new bigger facility at Plot No. A-78/2, MIDC, Chakan Industrial Area Phase -2, Wasuli, Pune, Maharashtra, 410501. This plant manufactures driveline products for EV and non-EV applications and serve customers in India and globally.

5. TRANSFER TO RESERVES

The Board of Directors of the Company do not propose to transfer any amount to reserves.

6. DIVIDEND

The Board of Directors at their meeting held on May 3, 2023 has recommended payment of INR 1.53 (One rupee and fifty-three paisa only) per equity share of Company having face value of INR 10 (Rupees ten only) each as final dividend for the Financial Year ended on March 31,2023. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on January 24, 2023 declared an interim dividend of INR 1.28 (One rupee and twenty-eight paisa only) per equity share of the Company having face value of INR 10 (Rupees ten only) each. The interim dividend was paid to the shareholders on February 20, 2023.

The total dividend for the Financial Year 2022-23, including the proposed final dividend, amounts to INR 2.81 (Two rupees and eighty-one paisa only) per equity share of INR 10 (Rupees ten only) each of the Company.

As per the Income Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. Accordingly, the Company makes the payment of the final dividend from time to time after deduction of tax at source.

The abovesaid dividend declared is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Listing Regulations, can be accessed on the website of the Company at https://sonacomstar.com/policies-and-codes

7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, no amount was required to be transferred to the Investor Education and Protection Fund by the Company.

8. CHANGE IN SHARE CAPITAL OF THE COMPANY

Allotment of Equity Shares Under Employee Stock Option Scheme-2020

During the financial year under review and till the date of adoption of the Board Report, your Company has allotted 1,062,872 (One million sixty-two thousand eight hundred seventy-two only) equity shares of the Company having face value of INR 10 /- (Rupees ten only) each fully paid up, to the eligible employees of the Company upon exercise of vested options, as granted to them, under the Sona BLW Precision Forgings Limited -Employee Stock Option Scheme 2020 (“ESOP Scheme-2020”).

As a result, the paid-up share capital of the Company increased from INR 5,843,527,100 (Five billion eight hundred forty three million five hundred twenty seven thousand and one hundred only) consisting of 584,352,710 (Five hundred eighty four million three hundred fifty two thousand seven hundred and ten only) equity shares having face value of INR 10/ - (Rupees ten only) each fully paid-up to INR 5,854,155,820/- (Five billion eight hundred fifty-four million one hundred fifty-five thousand eight hundred twenty only) consisting of 585,415,582 (Five hundred eighty-five million four hundred fifteen thousand five hundred eighty-two only) equity shares having face value of INR 10/ -(Rupees ten only) each fully paid-up. The Equity Shares issued under ESOP Scheme -2020 shall rank pari-passu with the existing equity shares of the Company including dividend entitlement.

Applicable disclosures as stipulated under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB Regulations”) with regard to the ESOP Scheme are available on the Company’s website at https:// sonacomstar.com/investor/annual-reports-and-returns

The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

9. CHANGE IN NATURE OF BUSINESS

During Financial Year 2022-23, there was no change in the nature of Company’s business.

10. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

As at March 31, 2023, the Company has 4 (four) directly held subsidiaries and 5 (five) step down subsidiaries, the details of which is available on the website of the Company in Form MGT-7 at https://sonacomstar.com/ investor/annual-reports-and-returns

Pursuant to Section 129(3) of the Companies Act, 2013 (‘Act’), the Company has prepared the consolidated financial statements, which forms part of this Annual Report. Further, a statement containing salient features of Standalone Financial Statements of subsidiaries in Form AOC-1, as required under Rule 5 of Companies (Accounts) Rules, 2014 is attached to the consolidated financial statements of the Company and therefore not repeated in this report for the sake of brevity.

During the year under review, no company has become or ceased to be subsidiary, joint venture or associate of the Company.

I n accordance with Section 136 of the Act, the Audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and Audited Financial Statements of each of its subsidiaries, are available on the website of the Company viz. https:// sonacomstar.com/investor/subsidiary-companies-financial-statements

Your Company does not have any material subsidiary as on March 31, 2023.

The policy for determining material subsidiaries, as approved by the Board, is uploaded on the Company’s website and can be accessed at the web-link: https:// sonacomstar.com/policies-and-codes

11. CORPORATE GOVERNENCE

Your Company is committed to benchmarking itself with the best national and international standards of Corporate Governance. Further, your Company has also in place the Legal Risk Management System tool mapping compliance database, policies and compliance framework implemented by M/s. Shardul Amarchand Mangaldas, the leading law firm of India (“Compliance Framework”) which provides a bird’s eye view of all statutory compliances applicable to the Company.

The Company is committed to pursue and adhere to the highest standards of Corporate Governance as set out by the Securities and Exchange Board of India (SEBI) and the Act. The report on the Corporate Governance as stipulated in Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure-A and form part to this Annual Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL Board Diversity

I n compliance with Regulation 19(4) read with Part D of the Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”), the Nomination and Remuneration Committee of the Board of Directors of the Company has devised a Policy to promote diversity on the Board of Directors which aims to ensure that the Board shall have an optimum combination of Executive, Non-Executive and Independent directors in accordance with requirements of the Act, Listing Regulations and other statutory, regulatory and contractual obligations of the Company. The Policy is available on the website of the Company at https://sonacomstar.com/policies-and-codes

The Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, race and gender, which will ensure that the Company retains its competitive advantage.

Board of Directors

As on March 31,2023, Board comprises of eight directors, including four independent directors (including one-woman independent director), one executive director, and three non-executive directors. The brief profile of each director is available on the website of the Company at https://sonacomstar.com/board-of-directors

The Nomination and Remuneration Committee ("NRC") and the Board noted the following in their respective meetings 5 held on May 3, 2023:

Retirement of Mr. Ganesh Mani as NonExecutive Nominee Director of the Company

Mr. Ganesh Mani (DIN: 08385423), Non-Executive Nominee Director of the Company is liable to retire by rotation at the ensuing 27th Annual General Meeting ("AGM") of the Company and is eligible for re-appointment at the Annual General Meeting. The Company has received a request from Mr. Ganesh Mani expressing his unwillingness for re-appointment at the forthcoming Annual General Meeting. The Nomination and Remuneration Committee and the Board at their respective meetings held on 3rd May 2023 took note of the same. Consequent to this, Mr. Ganesh will cease to be a director of the Company on the conclusion of the forthcoming Annual General Meeting.

The Board of Directors of the Company expressed its gratitude for the guidance and support provided by Mr. Ganesh Mani for the deliberation of the Board during his tenure as director of the Company.

In the opinion of the Board, all the directors, including the directors proposed to be appointed / re-appointed, if any, possess the requisite qualifications, Skills, experience and expertise and hold high standards of integrity.

The list of key skills, expertise and core competencies of the Board of Directors is provided in the Report on Corporate Governance forming the part of this Board’s Report.

None of the Directors of the Company have resigned during the year under review.

Key Managerial Personnel

As on March 31, 2023, the Key Managerial Personnel (“KMP”) of the Company as per Section 2(51) and Section 203 of the Act are as follows:

Name of the KMP	Designation
Mr. Vivek Vikram Singh	Managing Director and Group Chief Executive Officer
Mr. Rohit Nanda	Group Chief Financial Officer (“CFO”)
Mr. Ajay Pratap Singh	Vice President (Legal), Company Secretary and Compliance Officer

During the year under review, there were no changes in the KMP of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

The independent directors on the Board of the Company have submitted requisite declarations to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations.

All independent directors of the Company have affirmed compliance with the Schedule IV of the Act and Company’s Code of Conduct for Directors and Senior Management.

All the Independent Directors of the Company have complied with the requirement of inclusion of their names in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs and they meet the requirements of proficiency self-assessment test.

The Directors have further confirmed that they are not debarred from holding the office of director under any SEBI order or any other such authority.

I n the opinion of Board of Directors of the Company, independent directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. The Company has an optimum mix of expertise (including financial expertise), leadership and professionalism.

14. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Remuneration Policy for Directors, Key Managerial Personnel and Other Employees ("Remuneration Policy") of the Company formulated in accordance with Section 178 of the Act and regulation 19 read with Schedule II of the Listing Regulations. Further, details on the same are given in the Corporate Governance Report which forms part of this Annual Report.

The Managing Director and Group CEO of the Company has not received any remuneration or commission from any of the subsidiary companies. Further, the Company doesn''t have any holding company, hence, there does not arise a circumstance of any remuneration or commission from holding company.

Singapore VII Topco III Pte. Ltd. (Singapore Topco), the erstwhile holding company/ major shareholder (and promoter) of the Company had adopted an exit return incentive plan ("ERI Plan") pursuant to which Singapore Topco rewarded/will reward certain identified employees of the Company and/or its subsidiaries (including each of Key Managerial Personnel and Executive Director(s) who are not promoters of the Company) with cash rewards based on certain disposition event(s) in relation to its interest in the Company. These cash rewards were paid/ will be paid to such employees entirely by Singapore Topco (without any recourse or liability to the Company). None of the promoters, nominee director or shareholder of the Company, having significant influence, is beneficiary of the ERI Plan.

The Board of Directors and Shareholders of the Company had approved the ERI Plan, in its meeting held on August 6, 2021 and September 9, 2021 respective in compliance with regulation 26(6) of the Listing Regulations. Accordingly, Singapore Topco paid part of cash reward, to the identified employees (including the Managing Director and Group CEO) of the Company.

The Remuneration Policy of the Company is available on the website of the Company at https://sonacomstar.com/ policies-and-codes

15. DISCLOSURE UNDER RULE 5(1) AND 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The disclosure pertaining to remuneration and other details, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in a separate Annexure-B1 forming part of this Report.

The statement containing names of top ten (10) employees in terms of remuneration drawn and the particulars of employees as required under section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure- B2 forming part of this Report.

16. BOARD EVALUATION

The criteria of evaluation of Board are based on “Guidance note on Performance Evaluation” issued by the SEBI on January 5, 2017, and in compliance with provisions of Act and Listing Regulations.

A structured questionnaire covering various aspects of the Board’s functioning was circulated to individual directors, Committees, Board followed by feedback received through one-to-one interactions by the Chairperson of the NRC Committee and Chairperson of the Board with the directors being evaluated and suggestions for the further improvements based on feedback received.

The summary of the evaluation was presented to the Nomination and Remuneration Committee and the Board of Directors of the Company in their meeting held on March 24, 2023.

Evaluation of Committees

The performance evaluation of committees was carried out by the Board after seeking inputs from the committee members, on the basis of the criteria such as structure and composition of committees, fulfilment of the functions assigned to committees by the Board and applicable regulatory framework, frequency of meetings, adequacy of time allocated at the committee meetings, adequacy and timeliness of the agenda and minutes circulated, effectiveness of the Committee’s recommendation to the Board etc.

Evaluation of Directors and Board

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of Individual Directors.

The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairperson of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non-Executive Directors.

The evaluation of directors was based on, inter-alia, various criteria such as qualification and experience, fulfilment of functions as assigned, attendance at Board and Committee meeting, contribution to strategy and other areas impacting Company’s performance, availability and attendance etc.

The evaluation of the Board was based on the criteria such as structure and composition of the Board, frequency

of meetings, adequacy of time allocated at the Board Meetings, adequacy and timeliness of the agenda and minutes circulated, functions of the Board, governance and compliance etc.

Evaluation of Independent Directors

The performance evaluation of Independent Directors was carried out by the Board of Directors based on various criteria, inter-alia, including attendance at Board and committee meetings, qualification, experience, ability to function as a team, commitment, roles performed and understanding of industry.

Feedback

The feedback and results of the questionnaire were collated, and consolidated report shared with the Board for improvements and its effectiveness. Broadly, the Directors have expressed their satisfaction with the evaluation process and the outcome. The Board also noted the key action points emerged from the process for implementation. A detailed update on the Board Evaluation is provided in the relevant section of the Corporate Governance Report.

Results of Evaluation

The outcome of such performance evaluation exercise was discussed at a separate meeting of the Independent Directors held on March 24, 2023 and was later tabled before the meeting of Nomination and Remuneration Committee and the Board of Directors of the Company held on the same day.

The Board of Directors expressed their satisfaction with the evaluation process. During the year under review, the Nomination and Remuneration Committee ascertained and reconfirmed that the deployment of “questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors. The overall performance of the Board, Committees, Independent Directors, Non-Executive Directors and Chairperson of the Board was positive.

17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors of the Company are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarisation programme are provided in the Corporate Governance Report and is also available on the website of the Company at https:// sonacomstar.com/files/policy/familiarisation-programme-policy-bXLXH7.pdf.

18. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:

i. i n the preparation of the annual accounts for the financial year ended March 31,2023, the applicable Accounting Standards have been followed, and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2023 and of the profits of the Company for the financial year ended March 31, 2023;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv. t he annual accounts for the financial year ended March 31, 2023, have been prepared on a ''Going Concern'' basis;

v. proper internal financial controls have been laid down by the Directors were followed and that such internal financial controls are adequate and operating effectively; and

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

19. DISCLOSURE ON COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AS PER SECTION 178 OF THE ACT

The Remuneration Policy for Directors, Key Managerial Personnel and Other Employees ("Nomination and Remuneration Policy/Policy") of the Company was adopted by the Board based on the recommendation of the Nomination & Remuneration Committee. The Policy sets out criteria to pay equitable remuneration to the Directors, KMP and other employees of the Company and to harmonise the aspirations of human resources with the goals of the Company.

While formulating policy relating to the remuneration of the directors, key managerial personnel and other employee, the Board has ensured that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration of the directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

The salient features of the Nomination and Remuneration policy of the Company are as follows:

1) The Nomination and Remuneration Committee shall consider the ethical standards of integrity and probity, qualification, expertise and experience of the person for appointment as Director, KMP and accordingly recommend to the Board his / her appointment to the Board;

2) The Nomination and Remuneration Committee shall consider qualifications and appointment for Independent Directors as per the provisions of the Act;

3) The Company shall ensure that the person appointed as Director/ Independent Director are not disqualified under the Companies Act, 2013, and rules made thereunder;

4) The Director/ Independent Director/ KMP shall be appointed as per the procedure laid down under the provisions of the Act, and rules made there under, or any other enactment for the time being in force;

5) The term/ tenure of the Directors shall be governed as per provisions of the Act and the Rules made there under, as amended, from time to time;

6) i n case of re-appointment of Director(s), the Board shall take into consideration, the performance evaluation of director, engagement of the director and contribution in the deliberations of the Board.

This Policy is available on the website of the Company at the web link: https://sonacomstar.com/files/policy/ nomination-and-remuneration-policv-policv-GXCIWS.pdf

20. EMPLOYEE STOCK OPTION

Employee Stock Option Scheme-2020

In terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as amended, from time to time, the Nomination and Remuneration Committee of your Board of Directors administer and monitor "Sona BLW Precision Forgings Limited-Employee Stock Option Scheme-2020” (ESOP Scheme-2020) of your Company.

The Nomination and Remuneration Committee has been designated as the Compensation Committee under the ESOP Scheme-2020. During the year under review, no fresh grants were made under the ESOP Scheme-2020.

The last and final vesting under the ESOP Scheme-2020 will occur on 1^st October, 2023.

Applicable disclosures as stipulated under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB Regulations”) (wherever applicable) with regard to the ESOP Scheme are available on the Company’s website at https://sonacomstar.com/investor/ annual-reports-and-returns

The Company has received a certificate from M/s. PI & Associates, Secretarial Auditor of the Company as required under Regulation 13 of SEBI SBEB Regulations and it confirms that the ESOP Scheme-2020 has been implemented in accordance with these Regulations. The Certificate is available for inspection during the AGM of the Company and is also placed at the website of the Company at https://sonacomstar.com/investor/annual-reports-and-returns

Employee Stock Option Plan - 2023

In terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and other application Regulations and the Companies Act, 2013 and based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board of Director in its meeting held on May 3, 2023 has approved the Employee Stock Option Plan-2023 and recommended to the shareholders of the Company in the ensuing 27^th Annual General Meeting of the Company.

The required disclosures of the Employee Stock Option Plan - 2023 is disclosed in the Notice of 27^th Annual General Meeting of the Company, which is attached to this Annual Report.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE ACT

Pursuant to Section 186 of the Act, disclosure on particulars relating to loans, advances, guarantees and investments form part of the standalone financial statements provided in Note 42 to the standalone financial statements of the Company.

22. DIVIDEND DISTRIBUTION POLICY

The Company has formulated and published a Dividend Distribution Policy which provides for the parameters to be considered for declaring/recommending dividend, circumstances under which the shareholders may or may not expect dividend. The policy is available on the website of the Company at https://sonacomstar.com/files/ policv/dividend-distribution-policv-policv-oW38wX.pdf

23. SUCCESSION PLANNING

The Company believes that succession planning for the Board members and Senior Management is very important for creating a robust future for the Company. The Nomination and Remuneration Committee plays a

pivotal role in identifying successors to the members of the Senior Management and invests substantial time with the Managing Director & Group CEO on succession planning.

The Company has a Succession Planning Policy in place which intends to achieve the following:

• The business of the Company is not affected on account of interruptions caused due to superannuation or voluntary retirement or resignation or death or permanent incapacitation or sudden exit of any member of the Board, Executive Directors, Senior Management and other key employee covered under this Policy;

• To identify and create a talent pool of high potential personnel, who can be considered for appointment at the Board, Executive Directors, Senior Management and other critical positions and to groom them to assume such roles in the Company, whenever the need arises;

• To ensure timely and high-quality replacements for those personnel who are currently holding positions as above said.

24. DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

25. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the Financial Statements relate and the date of this report.

26. RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated and adopted by the Company. Omnibus approval from the Audit Committee is obtained for the related party transactions.

The Policy on Related Party Transactions, as required under the Listing Regulations, is available on the website of the Company at https://sonacomstar.com/policies-and-codes

All contracts/arrangements/transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arm’s length basis in terms of provisions of the Act. Further, there are no contracts or arrangements entered

into under Section 188(1) of the Act, hence no justification have been separately provided in that regard.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 36 to the standalone financial statements of the Company.

The Company in terms of Regulation 23 of the Listing Regulations regularly submits within the stipulated time from the date of publication of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified to the stock exchange. The said disclosures can be accessed on the website of the Company at https://sonacomstar.com/investor/financial-information

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in Annexure-C to this Report.

27. NUMBER OF MEETINGS OF THE BOARD

During the year under review, eight (8) meetings of the Board of Directors were held. The details of the meetings of the Board of Directors held and attended by the Board of Directors during the Financial Year 2022-23 are given in the Corporate Governance Report which forms part of this Report.

The Board of Directors have met quarterly and the gap intervening between two meetings was within the time prescribed under the Act and the Listing Regulations.

The details and attendance of meetings of the Board, its committees, the Annual General Meeting and Extra Ordinary General meeting are mentioned in the Corporate Governance Report, which forms part of this Report.

28. DOWNSTREAM INVESTMENT

During the Financial Year 2022-23, the Company has not made any downstream investment which tantamount to indirect foreign investment. Hence, the requirement of obtaining certificate from the statuary auditors under the extant Foreign Exchange Management (Non- debt Instruments) Rules, 2019 is not applicable.

29. AUDITORS AND AUDITOR''S REPORTa. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, on the recommendation made by the Audit Committee, have appointed M/s. PI & Associates (CP No. 16276), as the Secretarial Auditor of the Company to undertake the Secretarial Audit for Financial Year 2023-24, based on consent received from M/s. PI & Associates.

The Secretarial Auditors’ Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed herewith and forms part of this report and enclosed as Annexure-D.

b. Annual Secretarial Compliance Report

As per the regulation 24A(2) of the Listing Regulations, the Secretarial Auditor of the Company has provided the report on the applicable compliances of the Company for the financial year 2022-23. The Annual Secretarial Compliance Report obtained from the Secretarial Auditor of the Company has been submitted to the Stock Exchanges and is available on the website of the Company at https://sonacomstar. com/investor/annual-reports-and-returns.

c. Statutory Auditors

M/s. Walker Chandiok & Co. LLP, Chartered Accountants (FRN No. 001076N/N500013) were re-appointed as Statutory Auditors of the Company for the second term of 5 (Five) consecutive years, to hold office from the conclusion of 26th Annual General Meeting till the conclusion of 31st Annual General Meeting of the Company in terms of the provisions of Section 139 and 141 of the Act.

The Statutory Auditor’s Report on standalone and consolidated financial statements for Financial Year 2022-23, does not contain any qualification, reservation, adverse remarks or observation and the same forms part of this Annual Report.

d. Cost Auditors

The Company has maintained cost records for certain products as specified by the Central Government under Section 148(1) of the Act. M/s. Jayaram & Associates,, Cost Accountants (Firm’s Registration No. 101077)), are in the process of carrying out the cost audit for applicable products during the financial year 2022-23.

The Board of Directors of the Company, based on the recommendation of the Audit Committee at its meeting held on May 03, 2023 have appointed M/s. Jayaram & Associates, as the Cost Auditors of the Company for the Financial Year 2023-24 under section 148 of the Act. M/s. Jayaram & Associates, being eligible, have consented to act as the Cost Auditors of the Company for the financial year 2023-24.

The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and in terms of the Act and rules made/framed thereunder and accordingly, requisite resolution for ratification of remuneration of the Cost Auditors by the members

34. RISK MANAGEMENT

Pursuant to Section 134(3) (n) of the Act and Regulation 17(9) of Listing Regulations, the Company has formulated and adopted a Risk Management policy. The primary

has been set out in the Notice of the 27th AGM of the Company.

e. Internal Auditors

The Board of Directors have in their meeting held on May 03, 2023, has appointed M/s. BDO India LLP (Firm Registration No. MCA: AAB-7880), as Internal Auditors of the Company for the Financial Year 2023-24.

30. INTERNAL CONTROL SYSTEM

The Company has in place internal control system, which is commensurate with its size, scale and complexities of its operations.

The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors is periodically apprised of the internal audit findings and corrective actions are taken accordingly. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. For more details, refer to the ‘internal control systems and its adequacy’ section in Management’s Discussion and Analysis Report, which forms part of this Annual Report.

31. REPORTING OF FRAUD

During the year under review, none of auditors have reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee, under Section 143 (12) of the Act.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the Financial Year 2022-23, the Company has spent INR 28.53 million towards CSR expenditures and INR 2.10 million towards administrative expenses and remaining unspent amount for ongoing projects of INR 11.55 million was transferred to unspent CSR account of the Company. During the year under review, the CSR initiatives of the Company mainly focused under the CSR intervention ‘Sona Comstar- Samridh Bharat Program’ (promotion of education) and ‘Sona Comstar- Saksham Bharat Program’ (promotion of innovation) during the year under review.

The Board of Directors of the Company amended the CSR Policy of the Company to re-classify the existing CSR interventions/Pillars by carving out the focus on women empowerment and green and clean initiatives under separate pillars. The two new pillars are: (a) Sona Comstar- Swachh Bharat Program, which will focus more

on environmental sustainability, conservation of natural resources and ecological and (b) Sona Comstar- Stree Shakti Bharat Program which will focus more on women empowerment. The CSR Policy of the Company is available on the website of the Company at https://sonacomstar. com/investor/corporate-social-responsibilities.

The Company’s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended March 31, 2023, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), are set out in Annexure-E to this Annual Report.

The Company has voluntarily engaged M/s Ingovern Research Services Private Limited and Bluesky Sustainable Business LLP an (Independent Agency) to conduct the impact assessment of the CSR initiatives undertaken for the Financial Year 2022-23. The synopsis of the Impact assessment report is attached as Annexure-L of this report and also available on the website of the company at https://sonacomstar.com/files/documents/csr-impact-assessment-report-fy2022-23-document-LrurBl.pdf

33. AWARDS AND RECOGNITIONS

Your Company has received the following recognitions/ awards during the period under review:
S. No.	Award Category	Awarded By
1.	2021-22 Vision Award	League of American Communications Professionals LLC (LACP)
2.	National CSR Summit & Award, 2022 (Gold- Innovation Support)	Vision India Forum
3.	7th ICSI CSR Excellence Awards - Certificate of Recognition	ICSI (Institute of Company Secretaries of India)
4.	Great Place To Work Certificate	Great Place To Work® Institute India
5.	CII Industrial Innovation Awards 2022 - Top 50 Innovative Companies	CII (Confederation of Indian Industry)
6.	India Green Manufacturing Challenge 2021-22 - Silver Medal	IRIM (Indian Research Institute for Manufacturing)
7.	Zero PPM Supplier for FY22-23 Q1	Indian OEM of PVs, CVs & EVs
8.	Best Quality Performance in Forgings - Platinum Award	Indian Tier 1 Supplier for CVs
9.	Leverage the Core 2021	Global Tier 1 Supplier for PVs, CVs, OHVs & EVs
10.	Overall Performance for the year 2021-22	Indian OEM of PVs
11.	Best in Class Quality, New Product Development & Delivery Performance in FY22	Global OEM of OHVs

objectives of the policy include identification and categorisation of potential risks, their assessment and mitigation and to monitor these risks.

The Board has entrusted the Risk Management Committee ("RMC") with overseeing the processes of identification, evaluation and mitigation of risks. The RMC inter alia periodically reviews the organisational risks that are spread across operational, financial, technological and environmental spheres and provide guidance to the management team. The outcome of the meetings of RMC are reported to the Audit committee of the Board.

Your Company is committed to protect the interests of its customers, stakeholders, investors, shareholders, employees and each person or entity with whom it is associated with. Towards this goal, your Company will further strengthen the internal processes and evaluate even more innovative ways to blunt the risk impact. The details of the RMC along with its charter are set out in the Corporate Governance Report, forming part of this Report. The Company has designated Mr. Rohit Nanda, Group CFO as the Chief Risk Officer of the Company.

Mitigation plans to significant risks are well integrated with functional and business plans and are reviewed on a regular basis by the Management periodically.

The Risk Management Policy of the Company is available on the website of the Company at https://sonacomstar.com/ files/policv/risk-management-policv-policv-NTCFLh.pdf

35. VIGIL MECHANISM

Your Company is committed to highest standards of professionalism, honesty, integrity, transparency and ethical behaviour. Pursuant to the provisions of Section 177(9) & (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the Listing Regulations, the Board of Directors have approved the Policy on vigil mechanism/whistle blower which provides mechanism to its directors, employees, vendors, customers, business partners/associates or any third party and other stakeholders to raise concerns about any wrongdoing in the Company and provide for adequate safeguards against victimisation of employees and other persons who avail this mechanism.

The Company has also designated an email id that is [email protected] where the whistle blower can report the concerns or wrong doings.

The mechanism under the policy has been appropriately communicated within the organisation. The Audit Committee of the Board reviews the functioning and implementation of the Whistle-blower mechanism, on quarterly basis. No person was denied access to the Audit Committee of the Company.

During the year under review, the Company has not received any complaints under the said mechanism.

During the year under review, the Whistle Blower Policy was amended, and the Policy has been appropriately communicated within the Company across all levels and is available on the website of the Company at the link: https://sonacomstar.com/files/policy/whistle-blower-policv-policv-MUwqe2.pdf

36. CYBER SECURITY AND DATA PRIVACY

With increasing digitalisation, rise in corporate cybercrimes, high cost of data breaches and evolving regulations, businesses are placing greater focus on detecting, preventing, and combating information security threats. The Company identified its information security risks and is committed to safeguarding business information from internal and external threats. It is also committed to upholding stakeholders’ right to privacy and, as a responsible corporate, strive to protect their personally identifiable information. The Company has established robust policies and processes on information security.

The Company has implemented an Information Security policy, which provides management direction and guidance to ensure availability, integrity and confidentiality of information and information systems across locations.

37. ANNUAL RETURN

I n accordance with the provisions of Act, the Annual Return of the Company in the Form MGT-7 is available at: https://sonacomstar.com/investor/annual-reports-and-returns

38. COMPLIANCE WITH SECRETARIAL STANDARDS

The applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) have been duly complied by the Company.

39. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS

No significant and material order has been passed by any regulator or court or tribunal, which might impact the ‘going concern’ status and Company’s operations.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in the Annexure-F forming part of this Report.

41. HUMAN RESOURSES

Our Company has excelled across all five dimensions of High-Trust, High-Performance Culture - Credibility, Respect, Fairness, Pride, and Camaraderie. On the employee satisfaction front, the Company earned the Great Place To Work® Certification™ from the Great Place To Work. The coveted recognition reinforces your Company''s standing as one of India''s leading automotive technology employers.

Sona Comstar is committed to creating fair, inclusive, and innovative working environments where employees can learn, develop and achieve our full potential. As an innovation and people-driven Company, our success is driven by the success and satisfaction of our employees, customer, and shareholders. We will continue to invest in our people and nurture a culture that promotes fairness, integrity, transparency, and collaboration.

Our customers see us as a technology leader with excellent products. We have invested heavily in creating new capabilities, skills, processes, and systems to meet our demands on committed dates with a high level of responsiveness and flexibility.

Our commitment towards Safe work culture and TQM remains uncompromised. We are continuously strengthening the goal deployment through managing points and checking points, adopting the problem-solving approach, and working towards identifying, eliminating unsafe situations so that the employees continue to feel a safe work environment.

42. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH’), the Company has formulated a comprehensive Policy on Prevention of Sexual Harassment at Workplace ("policy") for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Committee has also been set up to redress any such complaints received.

The Company’s goal is to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. Company is committed to providing a safe and conducive work environment to all of its employees and associates.

The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of POSH. The employees are sensitised from time to time in respect of matters connected with POSH.

During the year under review, no complaints has been received by the Company under the POSH.

Policy for prevention of Sexual Harassment at workplace (‘POSH Policy’) of your Company can be viewed at the link: https://sonacomstar.com/files/policv/posh-policv-policy-s7HMW2.pdf

43. SUSPENSION OF SECURITIES OF THE COMPANY

The securities of the Company have not been suspended from trading in any of the stock exchanges.

44. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

A detailed Business Responsibility & Sustainability Report in terms of the provisions of Regulation 34 of the Listing Regulations is attached herewith as Annexure-G to the Annual Report.

45. CAUTIONARY STATEMENTS

The Annual Report including those which relate to the Directors’ Report, Management Discussion and Analysis Report may contain certain statements on the Company’s intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statements. Some of the factors that could affect the Company’s performance could be the demand and supply for Company’s product and services, changes in Government regulations, tax laws, foreign exchange volatility etc.

46. ACKNOWLEDGEMENT

The Board of Directors places on record its sincere gratitude and appreciation for all the employees of the Company. Our consistent growth was made possible by their hard work, cooperation, and dedication during the year.

The Board of Directors acknowledges and places on record their sincere appreciation to all stakeholders, customers, vendors, banks, Central and State Governments, and all other business partners, for their continued co-operation and for the excellent support received from them.

The Board also wishes to place on record its appreciation to the esteemed investors for showing their confidence and faith in the management of the Company.

By order of Board of Directors For SONA BLW Precision Forgings Limited

Place: Gurugram Sunjay Kapur

Date: May 03, 2023 (Chairperson and Non- Executive Director)

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Mar 31, 2022

The Board of Directors have pleasure in presenting their twenty sixth (26^th) Annual Report along with the audited Financial Statements (Standalone and Consolidated) of the Company for the Financial Year ended 31^st March, 2022.

1. FINANCIAL HIGHLIGHTS & PERFORMANCE

The financial performance of the Company (Standalone and Consolidated) for the Financial Year ended 31^st March, 2022 is as under:

(INR in million)
Particulars	Standalone		Consolidated
_l	2021-22	2020-21	2021-22	2020-21
Revenue from Operations	19,390.49	14,000.44	21,306.40	15,663.00
Other Income	509.98	368.75	200.26	23.41
Total income	19,900.46	14,369.19	21,506.66	15,686.41
Total expenses	15,865.46	11,316.70	17,317.60	12,547.38
Profit before exceptional items and tax	4,035.01	3,052.49	4,189.05	3,139.02
Less: Exceptional Items	(132.70)	139.06	(132.70)	139.06
Profit before tax	4,167.71	2,913.43	4,321.75	2,999.96
Less Total Tax Expenses	632.32	753.04	706.325	848.31
Profit for the period/year	3,535.38	2,160.39	3,615.43	2,151.65
Other comprehensive (loss)/income for the period/ year	(11.52)	(15.49)	28.70	(12.44)
Total comprehensive income for the period/ year	3,523.86	2,144.90	3,644.13	2,139.21
Earnings per share (Basic) (in INR)	6.08	3.77	6.22	3.76
Earnings per share (Diluted) (in INR)	6.08	3.77	6.21	3.75

Standalone

The standalone revenue from operations increased by 39% to INR 19,390.49 million for Fiscal 2022 from INR 14,000.44 million for Fiscal 2021, due to ramp-up of sales volume for some of the new contracts especially in the EV segment and growth in sales in the Indian passenger vehicle and commercial vehicle markets. Profit before exceptional items and tax in Fiscal 2022 was INR 4,035.01 million as compared to INR 3,052.49 million in Fiscal 2021, reflecting an increase of 32% from the previous year. Profit after tax (PAT) in the Fiscal Year 2022 was INR 3,535.38 million as compared to INR 2,160.39 million in Fiscal 2021, reflecting an increase of 64% from the previous year due to certain one-time tax impact.

Consolidated

The consolidated revenue from operations increased by 36% to INR 21,306.40 million for Fiscal 2022 from INR 15,663.00 million for Fiscal 2021, primarily due to the ramp up of sales volume for some of the new contracts especially in EV segment and growth in sales in the Indian passenger vehicle and commercial vehicle markets. Profit before exceptional items and tax in Fiscal 2022 was INR 4,189.05 million as compared to INR 3,139.02 million in Fiscal 2021, reflecting an increase of 33% from the previous year. Profit after tax (PAT) in the Fiscal Year 2022 was INR 3,615.43 million as compared to INR 2,151.65 million in Fiscal 2021, reflecting an increase of 68% from the previous year due to certain one-time tax impact.

2. PERFORMANCE OF THE COMPANY AND INDUSTRY OVERVIEW

In Fiscal 2022, Your Company continued its growth momentum as it scaled new benchmarks in Revenue and Profitability. Its Consolidated Revenue, EBITDA and Profits (before tax and exceptional items) were INR 21,306.40 million, INR 5,591.01 and INR 3,615.43 million respectively. Growth was led by the strong traction in the EV business which witnessed revenues more than double compared to the prior year. Further, the Motor business also contributed to the EV growth trajectory. This performance was achieved in the backdrop of a challenging operating environment characterised by stop start economic activity due to subsequent waves of COVID-19, high inflation and an all-round rise in operating costs. This was accentuated by the disruption in the global supply chain which constrained availability of inputs, most notably causing a shortage of semi-conductors for the auto industry worldwide.

Encouragingly, it was witnessed that most countries and regions experienced more rapid recovery in economic activity following subsequent waves. Further, the scale-up and success of vaccination Programmes enabled faster resumption by mitigating the severity of subsequent waves. The auto industry responded to the constrained availability in semi-conductors by prioritising production of higher value vehicles and those with newer technologies. As a result, global sales of automobiles have started

to recover due to the pent-up demand, preference for personal mobility and increasing acceptance of newer technologies like EVs and hybrid vehicles.

While the multiple factors such as subsequent waves of the pandemic, disruption in supply chain, constraints to timely availability and transportation of raw materials and the compounding effect on vendors, suppliers and contractors intensified the challenges, your Company did not experience any interruption in the ability to supply systems and components and ensured that customers did not experience any disruption to their product lines. Your Company was able to continue to drive business development and won 43 new programmes during the last three quarters for the Fiscal 2022. As of 31^st March, 2022, we have total 30 EV Programmes, out of which 9 EV programmes are under serial production and 21 Programmes will undergo serial production in the Fiscal 2023 or later depending upon customer production schedules.

Your Company undertook active measures to promote health and safety and social distancing efforts and enforced all guidelines and protocols stringently. Another significant area of focus remains to train and create enough learning opportunities for its workforce as well as undertaking initiatives to maintain harmony in the workplace. During the Fiscal 2022, your Company has added to its workforce with focus on augmenting R&D capabilities through significant additions to the R&D team.

During the year under review, your Company commenced construction of its new facility at Chakan (Pune), which will be the tenth facility globally and the seventh in India. Further, your Company has made exciting progress in new product areas including winning its maiden order for an Integrated Motor Controller Module and expanding driveline products portfolio with two new products namely Spool Gear and Epicyclic Geartrain, which find application in the EV drivetrains. The Company also launched its next generation of motors and controllers with high efficiency, torque and power density, including the introduction of its maiden motor T-REF, which is made without use of rare earth elements. Besides these, the Company has also formed three technology partnerships for the development of different technology of motors. These partnerships were 1) with IRP of Israel to co-develop a magnet-less motor for electric two- and three-wheelers, 2) with Enedym Inc., a Canadian company for development of next-generation switched reluctance motors, and 3) with C-Motive, a US based company, for the development of motors based on electrostatic technology.

As per Nomura research reports’ data, global light vehicle sales declined by 3% to 79.5 million in the Fiscal 2022 from

82.3 million in the Fiscal 2021, whereas the Company’s revenue from operations grew by 36% in the same period.

By 2025, IEA expects global electric vehicle sales to reach ~15 million, accounting for ~15% of global light-vehicle sales by volume. By 2030, IEA expects global electric vehicle sales to cross 27 million, accounting for ~22% of light-vehicle sales.

The outlook for the Fiscal 2023 is one of continued industry recovery, principally in terms of underlying demand. This should be supported with build-back by OEMs gaining speed through the year as supply chain issues related to semiconductors are expected to ease. As per Nomura, the global light vehicle market is expected to grow to around 85.5 million in the calendar year 2022.

3. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report for the Financial Year 2021-22, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which forms part of this Annual Report.

4. CORPORATE DEVELOPMENTS Initial Public Offer

Your Company has successfully completed the initial public offering of its equity shares (“IPO”) which comprised of fresh issue of 10,309,278 equity shares aggregating to INR 3,000 million by the Company (“Fresh Issue”) and an offer for sale of 180,412,371 equity shares aggregating to INR 52,500 million through book building process.

The net proceeds from the Fresh Issue were fully utilised for the objects as disclosed in the Prospectus, viz; INR 2,411.17 million towards repayment and pre-payment of identified borrowings of the Company and INR 523.13 million towards general corporate purpose and INR 65.70 million towards IPO expenses.

Scheme of Amalgamation of Comstar Automotive Technologies Private Limtied with the Company

Your Company has filed a Scheme of Amalgamation (Scheme) of Comstar Automotive Technologies Private Limited (“Comstar”), a wholly-owned subsidiary with itself before the Hon’ble National Company Law Tribunal, Chandigarh Bench (NCLT) on 10^th January, 2020. The Scheme was sanctioned by NCLT vide its Order dated 7^th January, 2022. The certified true copy of the Order was filed by the Company and Comstar with the Registrar of Companies NCT of Delhi & Haryana on 28^th January, 2022. The Scheme has become effective

from 28^th January, 2022 with the appointed date of 5^th July, 2019.

5. TRANSFER TO RESERVES

The Board of Directors of the Company do not propose to transfer any amount to reserves.

6. DIVIDEND

The Board of Directors at their meeting held on 5^th May, 2022 has recommended the payment of INR 0.77 per equity share of the Company having the face value of INR 10/- each as final dividend for the Financial Year ended 31^st March, 2022. The final dividend will be paid to the shareholders who are holding the shares of the Company as on Thursday, 30^th June, 2022. The payment of final dividend is subject to the approval of the shareholders in the ensuring Annual General Meeting of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on 1^st February, 2022, declared an interim dividend of INR 0.77 per equity share of the Company having face value of INR 10/- each. The interim dividend was paid to the shareholders on 25^th February, 2022.

I n view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders.

The abovesaid dividend declared is in accordance with the Dividend Distribution Policy of the Company. The Board has adopted the Dividend Distribution policy in its meeting held on 27^th January, 2021 in accordance with the provisions of regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The policy can be accessed on the Company’s website at https:// sonacomstar.com/policies-and-codes.

7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, no amount was required to be transferred to the Investor Education and Protection Fund by the Company.

8. CHANGE IN SHARE CAPITAL OF THE COMPANY

Allotment of equity shares pursuant to initial public offer

During the year under review, your Company has allotted 10,309,278 equity shares at an offer price of INR 291/- each, as part of IPO of the Company. With the said allotment, the paid-up equity share capital has increased to INR 5,832,898,380 consisting of 583,289,838 equity shares of

INR 10/- each from INR 5,729,805,600 consisting of 572,980,560 equity shares of INR 10/- each.

Allotment of Equity Shares under Sona BLW Precision Forgings Limited-Employee Stock Option Scheme -2020

During the year under review, your Company has allotted 1,062,872 equity shares of the Company having face value of INR 10/- each fully paid-up to the eligible employees of the Company upon exercise of the vested options, as granted to them, under the Sona BLW Precision Forgings Limited-Employee Stock Option Scheme-2020 (“ESOP Scheme-2020”).

As a result, the paid-up share capital of the Company increased from INR 5,832,898,380 consisting of 583,289,838 equity shares of INR 10/- each to INR 5,843,527,100 consisting of 584,352,710 equity shares of INR 10/- each. The equity shares allotted under the ESOP Scheme-2020 rank pari-passu with the existing equity shares of the Company.

The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

The Company has not issued any sweat equity shares to its directors or employees.

Consolidation of Authorised Share Capital due to Merger of Comstar with the Company

During the Financial Year under review, Comstar Automotive Technologies Private Limited, an erstwhile wholly-owned subsidiary, merged with the Company, and pursuant to the Scheme of Amalgamation, the authorised share capital of Company increased from INR 10,000,000,000 to INR 11,500,000,000.

9. CHANGE IN NATURE OF BUSINESS

During Financial Year 2021-22, there was no change in the nature of Company’s business.

10. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

As at 31^st March, 2022, the Company has 4 (four) directly held subsidiaries and 5 (five) step down subsidiaries, the details of which is given in the Annual Return (Form MGT-7) of the Company which is available on the website of the Company at https://sonacomstar.com/investor/annual-reports-and-returns.

Pursuant to Section 129(3) of the Companies Act, 2013 (‘Act’), the Company has prepared the Consolidated Financial Statements, which forms part of this Annual Report. Further, a statement containing salient features of Standalone Financial Statements of subsidiaries in Form AOC-1, is attached to the Consolidated Financial

Statements of the Company and therefore not repeated in this report for the sake of brevity.

I n accordance with Section 136 of the Act, the audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and audited Financial Statements of each of its subsidiaries, are available on the website of the Company viz. https:// sonacomstar.com/investor/subsidiary-companies-financial-statements.

Cessation of Comstar Automotive Technologies Private Limited as subsidiary of the Company

Consequent to the merger of Comstar Automotive Technologies Private Limited (Comstar), an erstwhile wholly-owned subsidiary with the Company, during the year under review, Comstar ceases to be the wholly-owned subsidiary of the Company and the two subsidiaries of Comstar i.e Comstar Automotive USA LLC and Comstar Automotive Technology Services Private Limited, became the direct subsidiary of the Company.

Save and except as provided herein above, no other company has become or ceased to be subsidiary, joint venture or associate of the Company during the year under review.

Material subsidiaries

As on 31^st March, 2022, your Company had one material subsidiary viz. Comstar Automotive USA LLC (‘Comstar USA’).

Pursuant to Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Jeffrey Mark Overly, Independent director of the Company was appointed as Director on the Board of Comstar USA with effect from 16^th February, 2021.

However, pursuant to the definition of material subsidiary under Regulation 24 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the income or networth of Comstar USA has fallen below the threshold limit of 10 % of consolidated income or networth of the Company of the Financial Year ending 31^st March, 2022. Accordingly, Comstar USA ceases to be the material subsidiary of the Company with effect from 1^st April, 2022.

The policy for determining material subsidiaries, as approved by the Board, is uploaded on the Company’s website and can be accessed at the web-link: https:// sonacomstar.com/policies-and-codes

11. CORPORATE GOVERNENCE

The Company is committed to pursue and adhere to the highest standard of Corporate Governance as set out by the Securities and Exchange Board of India (SEBI) and the Companies Act, 2013. The report on the Corporate Governance as stipulated in regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure-A to this Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors

Your Board comprises eight Directors, including four Independent Directors (including one woman Independent Director), one Executive Director, and three Non-Executive Directors.

All Directors take active part in the deliberations at the Board and Committee Meetings by providing valuable guidance and expert advice to the Management on various aspects of business, governance, etc. and play a critical role on strategic issues and add value in the decisionmaking process of the Board of Directors.

Re-appointment of Mr. Vivek Vikram Singh (DIN: 07698495) as the Managing Director & Group CEO

The tenure of Mr. Vivek Vikram Singh (DIN: 07698495) as the Managing Director & Group Chief Executive Officer shall expire on 4^th July, 2022. The Board at its meeting held on 9^th June, 2022, based on the recommendation of the Nomination and Remuneration Committee (‘NRC’), has re-appointed Mr. Vivek Vikram Singh (DIN: 07698495) as Managing Director & Group CEO of the Company with effect from 5^th July, 2022, to hold office for a term of 5 consecutive years commencing from 5^th July, 2022 to 4^th July, 2027 (both days inclusive), and approved the remuneration payable to Mr. Vivek Vikram Singh, subject to approval of the Shareholders of the Company in the ensuing Annual General Meeting.

Re-appointment of Mr. Amit Dixit as Director

I n accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Amit Dixit (DIN: 01798942), Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013 and the Articles of Association of the Company and on the

recommendation of the Nomination and Remuneration Committee, the Board recommends re-appointment of Mr. Amit Dixit (DIN: 01798942) as director liable to retire by rotation.

I n the opinion of the Board, all the Directors as well as the Directors proposed to be appointed/re-appointed, possess the requisite qualifications, experience and expertise and hold high standards of integrity.

The list of key skills, expertise and core competencies of all Directors and number of Board and its Committee meetings attending by them is provided in the Corporate Governance Report forming the part of this Board’s Report.

None of the Directors of the Company have resigned during the year under review.

Key Managerial Personnel

As on 31^st March, 2022 following are the Key Managerial Personnel (‘KMP’) of the Company as per Section 2(51) and 203 of the Companies Act, 2013:

Name of the KMP	Designation
Mr. Vivek Vikram Singh	Managing Director and Group Chief Executive Officer
Mr. Rohit Nanda	Group Chief Financial Officer
Mr. Ajay Pratap Singh	Vice President (Legal), Company Secretary and Compliance Officer

During the year under review, there were no changes in the KMP of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors on the Board of the Company have submitted requisite declarations to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Act and regulation 16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All Independent Directors of the Company have affirmed compliance with the Schedule IV of the Act and Company’s Code of Conduct for Directors and Senior Management.

All the Independent Directors of the Company have complied with the requirement pertaining to the inclusion of their names in the data bank of independent directors maintained by Indian Institute of Corporate Affairs and they meet the requirements of proficiency self-assessment test.

I n the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognised and are doyen of the industry. There is an optimum mix of expertise (including financial expertise), leadership and professionalism.

14. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy of the Company formulated in accordance with Section 178 of the Act and regulation 19 read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, details on the same are given in the Corporate Governance Report which forms part of this Annual Report.

Further, the Managing Director & Group CEO of the Company is not in receipt of remuneration and commission from holding company or subsidiary company.

The erstwhile holding company (and now a major shareholder) of the Company namely Singapore VII Topco III Pte. Ltd. (Singapore VII) has adopted an exit return incentive plan (ERI Plan) pursuant to which Singapore VII rewarded/will reward certain identified employees of the Company and/or its subsidiaries (including each of Key Managerial Personnel and Executive Director(s) who are not promoters of the Company) with cash rewards based on certain disposition event(s) in relation to its interest in the Company. These cash awards were paid/ will be paid to such employees entirely by Singapore VII (without any recourse or liability to the Company). None of the promoters, nominee director or shareholder of the Company, having significant influence, is beneficiary of the ERI Plan.

The Board of Directors and Shareholders of the Company have approved the ERI Plan, in its meeting held on 6^th August, 2021 and 9^th September, 2021 respectively, in compliance with regulation 26(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Accordingly, Singapore VII paid part of cash reward to the identified employees (including the Managing Director and Group CEO) of the Company.

The Remuneration Policy is available on the website of the Company at https://sonacomstar.com/policies-and-codes.

15. DISCLOSURE UNDER RULE 5(1) AND 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) is provided in a separate Annexure-B forming part of this Report.

As per second proviso to Section 136(1) of the Act and second proviso of Rule 5 of Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) and 5(3) of Rules. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company or by way of e-mail at investor@sonacomstar. com.

16. BOARD EVALUATION

The Board of Directors of the Company in its meeting held on 1^st February, 2022 amended the policy for evaluation of the performance of the board of directors (“Policy”) in compliances with the provision of Section 178 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The criteria of evaluation are based on “Guidance note on Performance Evaluation” issued by the Securities and Exchange Board of India on 5^th January, 2017.

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of all the Directors individually and the Chairperson.

Feedback

Feedback was sought by way of a structured questionnaire covering various aspects of the Board’s functioning and the evaluation was carried out based on responses received from the Directors.

Evaluation of Committees

The performance evaluation of Committees was carried out by the Board after seeking inputs from the committee members, on the basis of the criteria such as structure and composition of Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, frequency of meetings, adequacy of time allocated at the Committee Meetings, adequacy and timeliness of the agenda and minutes circulated, effectiveness of the Committee’s recommendation to the Board etc.

Evaluation of Directors and Board

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of Individual Directors.

The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairperson of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non-Executive Directors.

The evaluation of directors was based on, inter-alia, various criteria such as qualification and experience, fulfilment of functions as assigned, attendance at Board and Committee Meeting, contribution to strategy and other areas impacting Company’s performance, availability and attendance etc.

The evaluation of the Board was based on the criteria such as structure and composition of the Board, frequency of meetings, adequacy of time allocated at the Board Meetings, adequacy and timeliness of the agenda and minutes circulated, functions of the Board, governance and compliance etc.

Evaluation for Independent Directors

The performance evaluation of Independent Directors was carried out by the Board of Directors based on various criteria, inter-alia, including attendance at Board and committee meetings, qualification, experience, ability to function as a team, commitment, roles performed and understanding of industry.

Results of Evaluation

The outcome of such performance evaluation exercise was discussed at a separate meeting of the Independent Directors held on 23^rd March, 2022 and was later tabled at Nomination and Remuneration Committee and the Board of Directors of the Company held on the same day.

The Directors expressed their satisfaction with the evaluation process. During the year under review, the Nomination and Remuneration Committee ascertained and reconfirmed that the deployment of “questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors. The overall performance of the Board as whole, Independent Directors, Non-Executive Directors and Chairman of the Board was positive.

17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarised with the operations and functioning of the Company. The details of the training and familiarization program are provided in the Corporate Governance Report.

18. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, the Directors of the Company state that:

1. i n the preparation of the annual accounts for the Financial Year ended 31^st March, 2022, the applicable accounting standards were followed, along with proper explanation relating to material departures;

2. they have selected such accounting policies and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs as at 31^st March, 2022 and of the profit and loss for that period;

3. t hat proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts for the Financial Year ended 31^st March, 2022 have been prepared on a going concern basis;

5. that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

19. EMPLOYEE STOCK OPTION SCHEME-2020

i n terms of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021/ SEBI (Share Based Employee Benefits) Regulations 2014, (to the extent applicable), as amended, from time to time, the Nomination and Remuneration Committee of your Board (also designated as the Compensation Committee) inter-alia administers and monitors the Sona BLW Precision Forgings Limited- Employee Stock Option Scheme-2020” (“ESOP Scheme-2020”) of your Company.

During the year under review, no fresh grants were made under the ESOP Scheme-2020.

Applicable disclosures as stipulated under the SEBI (Share Based Employee Benefits) Regulations, 2014 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB Regulations”) (wherever applicable) with regard to the ESOP Scheme are available on the Company’s website at https://sonacomstar.com/ investor/annual-reports-and-returns.

The Company has received a certificate from M/s. PI & Associates, Secretarial Auditor of the Company as required under Regulation 13 of SEBI SBEB Regulations and confirm that the ESOP Scheme-2020 has been implemented in accordance with these Regulations. The Certificate is available for inspection during the AGM of the Company and also placed at the website of the Company at: https:// sonacomstar.com/investor/annual-reports-and-returns.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Pursuant to Section 186 of the Companies Act, 2013, disclosures on particulars relating to loans, advances, guarantees and investment form part of the Standalone Financial Statements in the Annual Report.

21. DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

22. MATERIAL CHANGES

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

23. RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions, formulated and adopted by the Company. An omnibus approval from the Audit Committee is obtained for the related party transactions.

There were no contracts, arrangements or transactions entered into during the year under review that fall under the scope of Section 188(1) of the Companies Act, 2013 except transfer of 15 Nos of AC induction motor to Comstar Automotive Technologies Private Limited (erswhile wholly-

owned subsidiary of the Company) for a consideration of approximately INR 308,557/- which was not in the ordinary course of business.

As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure-0 to this Report.

The Board has amended the policy on Related Party Transactions as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which is available on the website of the Company at https://sonacomstar.com/policies-and-codes.

The Company in terms of regulation 23 of the Listing Regulations submitted disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards to the stock exchanges. The said disclosures can be accessed on the website of the Company at https://sonacomstar. com/investor/financial-information.

Related party Transactions are detailed in Note 36 to the Standalone Financial Statements of the Company.

24. MEETINGS OF THE BOARD

During the year under review, nine (9) meetings of the Board were held. The details of the meetings of the Board of Directors during the Financial Year 2021-22 are given in the Corporate Governance Report, which forms the part of this Report.

The Board met quarterly and the gap intervening between two meetings was within the time prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details and attendance of meetings of the board, its committees and the annual general meeting are mentioned in the Corporate Governance Report, which forms part of this Report.

25. COMMITTEES OF THE BOARD

The Board of Directors of the Company have the following committees:

• Audit Committee;

• Nomination and Remuneration Committee;

• Corporate Social Responsibility Committee;

• Stakeholders Relationship Committee;

• Risk Management Committee;

• Environment, Social Governance Committee;

• Capex Committee.

During the year under review, the Board of Directors constituted a committee called the Environment, Social Governance (esg) Committee to have an oversight over the implementation of ESG Framework of the Company.

The details with respect to the composition, powers, roles, terms of reference, etc. of the aforesaid committees are given in details in the Corporate Governance Report, which forms part of this Report.

During the year under review, all recommendations made by the committees were accepted by the Board.

26. DOWNSTREAM INVESTMENT

During the Financial Year 2021-22, the Company has not made any downstream investment which tantamount to indirect foreign investment. Hence, the requirement of obtaining certificate from the statuary auditors under the extant Foreign Exchange Management (Non- debt Instruments) Rules, 2019 is not applicable.

27. AUDITORS AND AUDIT REPORT Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. PI & Associates, Practicing Company Secretaries, as Secretarial Auditors to undertake the audit of the secretarial records for the Financial Year 2021 -22.

The Secretarial Auditors’ Report for the Financial Year

2021- 22 does not contain any qualification, reservation or adverse remark and enclosed as Annexure-D to this report.

Further, the Board of Directors in their meeting held on Thursday, 5^th May, 2022 re-appointed M/s. PI & Associates, Company Secretaries, as Secretarial Auditors, to undertake the audit of the secretarial records for the Financial Year

2022- 23.

Statutory Auditors

M/s. Walker Chandiok & Co., Chartered Accountants (FRN No. 001076N) was appointed as statutory auditors for a period of 5 (Five) years in the 21^st annual general meeting held on 28^th September, 2017 till the conclusion of ensuring 26^th Annual General Meeting.

M/s. Walker Chandiok & Co., Chartered Accountants (FRN No. 001076N) are eligible to be re-appointed for another term of 5 (five) years in terms of the provisions of Section 139 and 141 of the Act.

Accordingly, the Board of Directors of the Company at their meeting held on 9^th June, 2022, on the recommendation

of the Audit Committee and subject to the approval of the shareholders of the Company in the ensuing AGM, have approved the re-appointment of M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) as Statutory Auditors, for a second term of 5 consecutive years i.e., from the conclusion of the 26^th AGM till the conclusion of 31^st AGM of the Company.

The Statutory Auditors’ Report on standalone and consolidated financials for Financial Year 2021-22, does not contain any qualification, reservation or adverse remark or disclaimer and the same forms part of this Annual Report.

Cost Auditors

Consequent to the merger of Comstar with the Company, the Company is required to maintain cost records for certain products of Motor business, for Financial Year 2022-23 as specified by the Central Government under sub- Section (1) of Section 148 of the Act.

The Board of Directors of the Company at its meeting held on Thursday, 5^th May, 2022, on the recommendations made by the Audit Committee, have appointed M/s. Jayaram & Associates, as Cost Auditors of the Company to conduct the audit of cost records of certain products for the Financial Year 2022-23.

M/s. Jayaram & Associates, being eligible, have consented to act as the Cost Auditors of the Company for the Financial Year 2022-23.

Internal Auditors

The Board of Directors have in their meeting held on 09^th June, 2022, appointed M/s. BDO India LLP (Firm Registration No. MCA: AAB-7880), as Internal Auditors of the Company for the Financial Year 2022-23.

28. INTERNAL CONTROL SYSTEM

The Company has in place internal control system, which is commensurate with its size, scale and complexities of its operations M/s. BDO India LLP (Firm Registration No. MCA: AAB-7880), was appointed as Internal Auditor of the Company for the Financial Year 2022-23.

The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors are periodically apprised of the internal audit findings

and corrective actions are taken accordingly. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. For more details, refer to the ‘internal control systems and its adequacy’ section in Management’s Discussion and Analysis Report, which forms part of this Annual Report.

29. REPORTING OF FRAUD

During the year under review, none of auditors have reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee, under Section 143 (12) of the Companies Act, 2013.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The total CSR Obligations of the Company, including the CSR obligations of the erstwhile wholly owned subsidiary of the Company; i.e. Comstar Automotive Technologies Private Limited (“Comstar”), which was merged with the Company w.e.f January 28, 2022, for the Financial year 2022 was INR 55.10 million. Out of which, the Company had spent INR 40.11 million, during the Financial Year ended 31^st March, 2022 and the remaining unspent amount of INR 15 million for the Financial Year 2021-22, which pertains to ongoing projects was transferred to the Unspent CSR Account of the Company on 26^th April, 2022.

The CSR Committee has been entrusted with the prime responsibility of recommending to the Board, the CSR activities to be undertaken by the Company in terms of CSR Policy, the amount of expenditure to be incurred and monitoring the implementation of the framework of the CSR Policy.

The Annual Report on CSR activities having a brief overview of the projects undertaken, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed as Annexure-E of this Report.

The Board of Directors of the Company amended the CSR Policy of the Company pursuant to amendments in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Section 135 of the Act. The CSR Policy of the Company is available on the website of the Company at https://sonacomstar.com/investor/corporate-social-responsibilities.

31. AWARDS AND RECOGNITIONS

We are happy to inform that your Company has received the following recognitions/awards during the period under review:

S. No.	Award Category	Awarded by
1.	2020 Vision Award	League of American Communications Professionals LLC (LACP)
2.	Best Supplier of the Year Award -2021	Indian Tier 1 Supplier for CVs
3.	Overall Performance Award	Indian OEM of PVs
4.	Export Excellence Award 2019-20 - Highest Investment in Engineering Sector	MEPZ
5.	Export Excellence Award 2018-19 -Highest Employment in Engineering Sector	MEPZ
6.	VC Circle Awards 2022 in the category, “Industrial Company of the Year”	VC Circle
7.	Best in Class Quality and Delivery Performance - Financial Year19	Global OEM of OHVs

32. RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has formulated and adopted a Risk Management policy. The primary objectives of the policy include identification and categorisation of potential risks, their assessment and mitigation and to monitor these risks.

The Board has entrusted the Risk Management Committee (RMC) with overseeing the processes of identification, evaluation and mitigation of risks. The RMC inter alia periodically reviews the organisational risks that are spread across operational, financial, technological and environmental spheres and shall provide guidance to the management team. Further, the RMC in its meeting held on 23^rd March, 2022 appointed Mr. Rohit Nanda, Chief financial officer of the Company as the Chief Risk Officer of the Company.

Your Company is committed to protect the interests of its customers, stakeholders, investors, shareholders, employees and each person or entity with whom it is associated. Towards this goal, your Company will further strengthen the internal processes and evaluate even more innovative ways to blunt the risk impact. The details of the RMC along with its charter are set out in the Corporate Governance Report, forming part of this Report.

33. VIGIL MECHANISM

Your Company is committed to highest standards of professionalism, honesty, integrity, transparency and ethical behaviour. Pursuant to the provisions of Section 177(9) & (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on vigil mechanism/whistle blower which

provides mechanism to its directors, employees and other stakeholders to raise concerns about any wrongdoing in the Company and provide for adequate safeguards against victimisation of employees and other persons who avail this mechanism.

The mechanism under the policy has been appropriately communicated within the organisation. The Audit Committee of the Board shall review the functioning and implementation of the Whistle-blower mechanism, on quarterly basis.

During the year under review, the Company has not received any complaints under the said mechanism. The whistle blower policy of the Company has been displayed on the Company’s website at the link: https://sonacomstar. com/policies-and-codes.

34. ANNUAL RETURN

In accordance with the provisions of Companies Act, 2013, the Annual Return of the Company in the prescribed format is available at: https://sonacomstar.com/investor/annual-reports-and-returns.

35. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

36. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS

No significant and material order has been passed by any regulator or court or tribunal, which might impact the going concern status and Company’s operations in future.

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in the Annexure-F forming part of this Report.

38. HUMAN RESOURCES

The Company is committed to living the Sona values in the true spirit by integrating them with the people practices delivering superior quality to our employees, customer, and shareholders. Our Company considers the employees as its true partner in success.

Our world is in motion fighting climate change at a pace that is gathering speed. The Company undertakes various employee engagement Programmes and fosters a culture of learning and continuous improvement so that we give our customers, business partners, employees, executives, and shareholders an idea of the path that we want to pursue over the next few years.

The year under review, has been one of the toughest years due to COVID-19 2^nd wave, that we have ever faced. Very few events in human history have had such a profound impact on the way we operate.

Despite the volatility through the first quarter of Financial Year 2021-22, we showed great resilience, quickly adapted to the new ways of working, and delivered the customer demands. Our focus remained high on three important areas: Employee Safety & Wellness, Effective Communication & Managing teams, and staying committed to the customer demand.

This year we strengthen our focus on Company processes and systems. We inducted bright talent from Tier - I institutes like BITS Pilani and NIFFT at the entry level in Engineering and Manufacturing. We uplifted the infrastructure and enhanced the employee experience by introducing a professionally managed cafeteria service to cater healthy and hygienic food.

To achieve the Company’s goals, we cascaded organisation goals (Managing Points) to KPIs till the last mile. We initiated the Quality visit to strengthen our processes for continuous improvement and for the immediate action plan. We introduced technical skill-based online training Programmes, and Future Skill Prime by covering 36% of the staff and man-days.

39. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WORKMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Prevention of Sexual Harassment Act”), The Company has formulated a Policy on Prevention of Sexual Harassment at Workplace (“POSH”) for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Complaints Committees has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

The Company periodically conducts sessions for employees across the organisation to build awareness about the POSH policy and to sensitise the employees of the existing POSH framework.

During the year under review, no complaints have been received by the Company under the POSH.

40. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

In terms of the provision of regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company voluntary submit the Business Responsibility & Sustainability Report (“BRSR”) for the Financial Year 2021-22 in place of the Business Responsibility Report. The BRSR is attached to this report as Annexure-K.

41. CAUTIONARY STATEMENT

The Annual Report including those which relate to the Directors’ Report, Management Discussion and Analysis Report may contain certain statements on the Company’s intent, expectations or forecasts that appear to be forwardlooking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statement. Some of the factors that could affect the Company’s performance could be the demand and supply for Company’s product and services, changes in Government regulations, tax laws, forex volatility etc.

42. ACKNOWLEDGEMENT

The Board of Directors acknowledges and places on record their sincere appreciation to all stakeholders, customers, vendors, banks, Central and State Governments, and all other business partners, for their continued co-operation and for the excellent support received from them.

The Board also wishes to place on record its appreciation to the esteemed investors for showing their confidence and faith in the management of the Company.

Your Directors recognise and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.

By order of Board of Directors For Sona BLW Precision Forgings Limited

Place: Gurgaon Sunjay Kapur

Date: 9^th June, 2022 (Chairman)

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Mar 31, 2021

The Board of Directors have pleasure in presenting their Twenty Fifth (25^th) Annual Report along with the audited financial statements (Standalone and Consolidated) of the Company for the Financial Year ended 31^st March 2021.

1. FINANCIAL HIGHLIGHTS & PERFORMANCE

The financial performance of the Company (Standalone and Consolidated) for the Financial Year ended 31^st March 2021 is as under:

('' in million)
Particulars	Standalone			Consolidated
	31st March 2021	31st	March 2020 |	31st March 2021	31	* March 2020
Total Income	8,438.93		5,396.74	15,686.41		10,437.65
Total Expenses	6,030.68		4,460.27	12,547.39		8,887.93
Profit before exceptional items and tax	2,408.25		936.46	3,139.02		1,549.72
Less: Exceptional Items	(139.06)		-	(139.06)		2,368.22
Profit before Tax	2269.19		936.47	2999.96		3,917.94
Less: Provision for Tax (Incl. tax related to previous year)	368.03		124.05	666.02		365.05
Increase / (Decrease) in Deferred Tax Liability	20.75		(28.37)	182.29		(99.98)
Profit After Tax	1,880.41		840.79	2,151.65		3,652.86
Non-Controlling interest	-		-	-		(2.09)
Add: Profit Brought Forward	3,119.09		3,483.33	3,569.95		1,115.12
Add: Re-measurement of defined benefit asset, net of tax	(0.38)		1.71	3.64		8.71
Profit available for appropriations	-		4,325.83	5,725.24		4,776.69
Ind AS 116 transition adjustments	-		(13.73)	-		(13.73)
Transfer to Capital Redemption Reserve	-		(25.93)	-		(25.93)
Dividend Paid	(904.02)		(968.09)	(904.01)		(968.09)
Dividend Tax Payable / Paid	-		(198.99)	-		(198.99)
Balance Carried to Balance Sheet	4,095.21		3119.09	4,821.23		3,569.95

Standalone

The standalone revenue from operations increased by 42% to '' 7,671.73 million for Fiscal 2021 from '' 5,386.91 million for Fiscal 2020, due to ramp-up of sales volume for some of the new contracts especially in the EV segment and growth in sales in the Indian tractor market. Profit before exceptional items and tax in Fiscal 2021 was '' 2,408.25 million as compared to '' 936.46 million in Fiscal 2020, reflecting an increase of 157% from the previous year. Profit after tax (PAT) in Fiscal Year 2021 was '' 1,880.41 million as compared to '' 840.79 million in Fiscal 2020, reflecting an increase of 124% from the previous year due to certain one-time tax adjustments in Fiscal 2020 and Exceptional Expense on account of IPO expenses and dividend of ''759.97 million received from Subsidary in Fiscal 2021.

Consolidated

The consolidated revenue from operations increased by 51% to '' 15,663.00 million for Fiscal 2021 from '' 10,379.82 million for Fiscal 2020, primarily due to the full year impact of the acquisition of the Comstar Entities during Fiscal 2021 as compared to the impact of about nine months for Fiscal 2020 commencing from 5^th July 2019 and due to the ramp-up of sales volume for some of the new contracts

especially in EV segment and growth in sales in the Indian tractor market. Profit before exceptional items and tax in Fiscal 2021 was '' 3,139.02 million as compared to '' 1,549.72 million in Fiscal 2020, reflecting an increase of 103% from the previous year. Profit after tax (PAT) in Fiscal Year 2021 was '' 2,151.65 million as compared to '' 3,652.86 million in Fiscal 2020, reflecting a decrease by 41% from the previous year primarily due to exceptional income of '' 2,368.22 million and certain one-time tax adjustments in Fiscal 2020 and exceptional expense of '' 139.06 million on account of IPO expenses in Fiscal 2021.

2. PERFORMANCE OF THE COMPANY AND INDUSTRY OVERVIEW

Fiscal 2021 ended as the best year in the history of the company both in the terms of Revenue as well as Profits (before tax and exceptional items). Its consolidated revenue, EBITDA and Profit Before tax and exceptional item stood at '' 15,663.00 million, '' 4,410.16 million and '' 3,139.02 million respectively. It was the year in which we saw unfolding of potential of EV business as a meaningful part of our revenue and profitability. Consolidated financials also reflect the impact of Comstar acquisition for the full financial year for the first time. However,

the year didn''t start on a positive note to mention the least, with the entire country going through a complete lockdown since 24^th March 2020 due to outbreak of COVID-19.

Lockdown restrictions imposed in India and many countries across the world resulted in cessation of economic activities for part of the Fiscal 2021 adversely affecting demand for automobiles of all types adversely. This was followed by partial and gradual easing of lockdown restrictions which resulted in economic activity picking up gradually first and then at a faster pace in the second half of the year.

Lockdowns impacted our manufacturing activities by way of disruption in supply chain, disruption in timely availability and transportation of raw materials, unavailability of personnel, delays in obtaining local approvals and clearances and cash flow challenges of suppliers and contractors. However, we did not experience any interruption in our ability to supply our systems and components to our customers and ensured that our customers did not experience disruption of their product lines due to us. We also managed to continue to drive business development and won new development programmes during the period after April 2020. We have 58 new programmes as on 31^st March 2021 of which production has started for 24 in Fiscal 2021 and for the balance it will start in FY22 or later years depending upon customer production schedules.

In order to mitigate the impact of the COVID-19 pandemic on our operations, we proactively took steps such as reducing some of our administrative and other fixed expenses and arranging for additional liquidity through working capital loans to manage our expenses and liquidity. Despite the impact of the COVID-19 pandemic, our EBITDA margins improved from 23.3% in Fiscal 2020 to 28.2% in Fiscal 2021.

We have also taken active measures to promote health and safety and social distancing efforts, including providing PPEs, masks, hand sanitizers, and gloves to employees in our manufacturing facilities and in affected areas, staggered working shifts at our manufacturing and assembly plants and working closely with health authorities for obtaining approvals to commence operations at our plants and to lay down and enforce covid safety guidelines and protocols. In addition, as part of our risk management policy, we developed a mobile phone based application for our employees

to report their health status on a daily basis and also implemented a safety SOP applicable for our employees travelling between workplace and home, inside shop safety management practices including vendor safety management and measures to check vehicles entering and leaving our premises and employees returning to the workplace after easing of lockdown.

As per Ricardo report Global Light Vehicle (Passenger Vehicles GVW <=3.5T) production declined by approximately 18% in calendar year 2020 due to COVID-19. It expects Calendar year 2021 growth to be primarily driven by the Chinese market. In calendar year 2020, global production of BEVs (Battery Electric Vehicle) stood at approximately 2.3 million units. Among the available propulsion technologies BEV has been the fastest growing at CAGR of approximately 46% between calendar years 2015 to 2020. According to Ricardo, BEVs are also expected to see an increased penetration growing at approximately 36% CAGR between calendar years 2020 to 2025.

According to CRISIL, Indian PV, CV and Tractor production declined at a CAGR of 12%, 27% and 2% respectively between FY19 to FY21. It expects Indian PV, CV and Tractor production to grow at 8-10%, 12-14% and 1-3% between years FY21 to FY26.

The Government of India has been pushing for electrification of vehicles aggressively and announced Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) policy with significant allocation of resources in March 2019 to push for electrification of vehicles including establishing charging stations and providing subsidy on acquisition of EVs. So far the rate of adoption in India has been very low. According to CRISIL, E2W (electric 2 wheeler) adoption is likely to go up as cost of acquisition after factoring in the subsidy narrows down further and the total cost of ownership of E2W becomes favorable over the coming years. It expects the E2W sales to cross 2 million per annum by FY26 growing at a CAGR of 70-74% between FY21 to FY26. Growth projections for adoption of EVs indicate that we are at the cusp of a large transformation in the automotive industry. Revenue from EVs already constitutes 13.8% of our Revenue from Sale of Goods against it being only 3% of Global light vehicle production. We feel that the company is well positioned to gain from this large emerging trend.

3. CORPORATE DEVELOPMENTS

a. INITIAL PUBLIC OFFER

Subsequent to the year under review, the Company has successfully completed the initial public offering of its equity shares ("IPO”) which includes fresh issue of 10,309,278 equity shares aggregating to '' 3,000 million by the Company ("Fresh Issue”) and an offer for sale of 180,412,371 equity shares aggregating to '' 52,500 million by Singapore VII Topco III Pte. Ltd. (“Selling Shareholder”) for cash at a price of '' 291 per equity share through book building process.

The equity shares of your Company have been listed on the BSE Limited and the National Stock Exchange of India Limited on Thursday, 24^th June 2021.

The net proceeds from the Fresh Issue are to be utilized fully for repayment and prepayment of identified borrowings in full availed by the Company and for general corporate purposes.

b. SCHEME OF AMALGAMATION OF COMSTAR AUTOMOTIVE TECHNOLOGIES PRIVATE LIMTIED WITH THE COMPANY

Your Company has filed a Scheme of Amalgamation of Comstar Automotive Technologies Private Limited, a wholly owned subsidiary (“Transferor Company”) with itself before National Company Law Tribunal, Chandigarh on 10^th January 2020. Post issue of sanction of amalgamation by NCLT and the Scheme of Amalgamation becoming effective, once sanctioned, no new shares of the Company shall be issued and the entire share capital of the Transferor Company shall stand cancelled. The Scheme of Amalgamation shall, upon being sanctioned by the Hon''ble National Company Law Tribunal, Chandigarh, be effective from 5^th July 2019.

4. DIVIDEND

During the year under review, the Board of Directors had declared two interim dividends; first on 14^th August 2020 @ '' 9.63 per Equity Share and another on 27^th January 2021 @ '' 9.30 per Equity Share.

The Board has adopted the Dividend Distribution Policy in its meeting held on 27^th January 2021 in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The Policy can be accessed on the Company''s website at: https://sonacomstar.com/

5. TRANSFER TO RESERVES

The Board of Directors of the Company do not propose to transfer any amount to reserves other than transfer of undistributed profit to surplus in statement of Profit & Loss.

6. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the Financial Year 2020-21, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate statement forming part of this Annual Report.

7. CHANGE IN SHARE CAPITAL OF THE COMPANY

Increase in Authorised Share Capital

The authorised share capital of the Company has been increased from '' 520,000,000/- (Rupees five hundred and twenty million only), divided into 50,500,000 (Fifty million and five hundred thousand) Equity Shares of '' 10/- (Rupees Ten) each and 1,500,000 (One million and five hundred thousand) Preference Shares of '' 10/- (Rupees ten only) each to '' 10,000,000,000 (Ten thousand million) divided into 998,500,000 (Nine hundred and ninety eight million five hundred thousand) equity shares of '' 10/- (Rupees ten only) each and 1,500,000 (One million and five hundred thousand) Preference Shares of '' 10/- (Rupees ten only) vide shareholders resolution passed on 22^nd January 2021.

a. CONVERSION OF PREFERENCE SHARES INTO EQUITY SHARES

During the year under review, 594,436 (Five hundred ninety four thousand four hundred and thirty six) compulsory convertible preference shares (CCPS) issued to Singapore VII Topco III Pte. Ltd. on 5^th July 2019, were converted into Equity Shares of '' 10/- (Ten) each as per the terms of Share Subscription and Share Purchase Agreement dated 16^th October 2018.

b. ISSUE OF BONUS SHARES

During the year under review, the Company has issued and allotted 525,232,180 (Five hundred twenty five million two hundred thirty two thousand one hundred and eighty) bonus shares of '' 10/-(Ten) each to the equity shareholders in the ratio of 11:1 (i.e. eleven fully paid equity share for one fully paid equity share held) on 10^th February 2021.

The Company has not issued any sweat equity shares during the year under review.

8. CHANGE IN NATURE OF BUSINESS

During FY 2020-21, there was no change in the nature of Company''s business.

9. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

As at 31^st March 2021, the Company has 3 (three) directly held subsidiaries and 7 (seven) step down subsidiaries, the details of which is available in Annual Return (MGT-7) of the Company available on the website at https://sonacomstar.com/investor/ annual-reports-and-returns

Pursuant to Section 129(3) of the Companies Act, 2013, the Company has prepared the Consolidated Financial Statements, which forms part of this Annual Report. Further, a statement containing salient features of Standalone Financial Statements of subsidiaries in Form AOC-1 is attached to the Consolidated Financial Statements of the Company and therefore not repeated in this report for the sake of brevity.

During the year under review, on 12^th November 2020, the Company had incorporated a wholly owned subsidiary in the name of ''Sona Comstar eDrive Private Limited'' to engage into the business to design, develop, manufacture, assemble, supply, sell, trade and otherwise deal in motors, controllers and other components for electric vehicles.

Apart from Sona Comstar eDrive Private Limited, no other company has become or ceased to be subsidiary, joint venture or associate of the Company during the year under review.

In accordance with Section 136 of the Companies Act, 2013, the audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and audited Financial Statements of each of its subsidiaries, are available on the website of the Company at https:// sonacomstar.com/investor/subsidiary-companies-financial-statements

Material Subsidiaries

Your Company has two material unlisted subsidiaries viz. Comstar Automotive Technologies Private Limited (''Comstar Automotive'') and Comstar Automotive USA LLC (''Comstar USA'') as on 31^st March 2021.

During the year under review, pursuant to Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

Mr. BVR Subbu, Independent Director of the Company is designated as Director on the Board of Directors of Comstar Automotive. Further, Mr. Jeffrey Mark Overly, Independent Director of the Company was appointed as Director on the Board of Comstar USA.

The policy for determining material subsidiaries, as approved by the Board has been uploaded on the Company''s website and can be accessed at: https://sonacomstar.com/policies-and-codes

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Our Board comprises eight directors, including four Independent Directors (including one-woman Independent Director), one Executive Director, and three Non-Executive Directors.

During the year, Mrs. Pallavi Joshi Bakhru (DIN: 01526618) ceased to be an Independent. Director of the Company with effect from 2^nd May 2020, due to conflict with new assignment undertaken by her. The Board places on record its appreciation for the guidance and support provided by Mrs. Bakhru during her tenure with the Company.

During the year, Mr. Amit Jain (DIN: 06917608) ceased to be the Non-Executive Nominee Director of the Company with effect from 1^st January 2021, due to his resignation. The Board places on record its appreciation for the guidance and support provided by Mr. Jain during his tenure with the Company.

During the year, Mr. Neeraj Mohan (DIN:05117389) ceased to be the Non-Executive Nominee Director of the Company with effect from 12^th February 2021, due to his resignation. The Board places on record its appreciation for the guidance and support provided by Mr. Mohan during his tenure with the Company.

During the year under review, the Board of Directors of the Company, on the recommendation of Nomination and Remuneration Committee, has appointed Mrs. Shradha Suri (DIN: 00176902), as an Additional Director of the Company in the category of Non-Executive And Independent Director of the Company with effect from 5^th August 2020 in its meeting held on 5^th August 2020. The shareholders of the Company approved her appointment as Non-Executive and Independent Director in the 24^th Annual General Meeting held on 31^st December 2020 for a term of 5 (Five) years.

During the year under review, Mr. Prasan Abhaykumar Firodia (DIN: 00029664), tendered his resignation as a Non-Executive Nominee Director of the Company effective from 27^th January 2021. Thereafter, the Board of Directors of the Company, on the recommendation of Nomination and Remuneration Committee, appointed Mr. Firodia (DIN: 00029664), as an Additional Director of the Company in the category of Non-Executive and Independent Director of the Company with effect from 27^th January 2021 in the same meeting held on 27^th January 2021. The Shareholders of the Company approved his appointment as NonExecutive and Independent Director in the Extra Ordinary General Meeting held on 30^th January 2021 for a term of 5 (Five) years.

During the year under review, the Board of Directors of the Company, on the recommendation of Nomination and Remuneration Committee, appointed Mr. Jeffrey Mark Overly (DIN: 09041143) as an Additional Director of the Company in the category of Non-Executive and Independent Director with effect from 12^th February 2021 in its meetings held on 12^th February 2021. The shareholders of the Company approved his appointment as Non-Executive and Independent Director in the Extra Ordinary General Meeting held on 22^nd February 2021 for a term of 5 (Five) years.

In terms of applicable provisions of the Act and the Articles of Association of the Company, Mr. Vivek Vikram Singh (DIN: 07698495), Managing Director & Group CEO of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors, on the recommendation of Nomination and Remuneration Committee, has recommended his re-appointment. Brief resume and other details of Mr. Vivek Vikram Singh (DIN: 07698495), who is proposed to be re-appointed as a Director of your Company, have been furnished in the Explanatory Statement to the Notice of the ensuing Annual General Meeting of the Company.

11. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors on the Board of the Company have submitted requisite declarations to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)

All Independent Directors of the Company have affirmed compliance with the Schedule IV of the Act and Company''s Code of Conduct for Directors and Senior Management.

All the Independent Directors of the Company have complied with the requirement of inclusion of their names in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs and they meet the requirements of proficiency selfassessment test.

In the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. Composition of Independent Directors are optimum mix of expertise (including financial expertise), leadership and professionalism.

12. CORPORATE GOVERNANCE

The Company is committed to pursue and adhere to the highest standard of Corporate Governance as set out by the Securities and Exchange Board of India (SEBI) and the Companies Act, 2013. The report on the Corporate Governance as stipulated in Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure-A and form part to this Report.

Certificate from PI & Associates, Practicing Company Secretaries, confirmed that the Company has complied with the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations and the same is attached as Annexure-B to this Report.

13. ANNUAL PERFORMANCE EVALUATION

The Board has approved the policy for evaluating the performance of Board, its committees and individual Directors in compliances with the provision of Section 178 read with Schedule IV of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with the evaluation criteria specified in the policy, the Nomination and Remuneration Committee and the Board have carried out the annual performance evaluation of the Board as a whole, its committees and individual Directors. The Independent Directors carried out the annual performance evaluation of the Chairperson, Non-Independent Directors and the Board as a whole.

A structured questionnaire covering various aspects of the Board''s functioning was circulated to the Directors. The criteria for evaluation of Independent Directors included attendance at the meetings, interpersonal skills, independent judgement, knowledge, contribution to strategy, risk management, compliance framework, etc. The feedback and results of the questionnaire were collated and consolidated report was shared with the Board for improvements of its effectiveness. The Directors expressed their satisfaction with the evaluation process.

14. FAMILIARISATION PROGRAMME FOR BOARD MEMBERS

As per Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Director of the Company need to be imparted with familiarisation programme. However, since the equity shares Company has been listed on National Stock Exchange of India Limited and BSE Limited on 24^th June 2021, the Company has initiated the familiarisation programme for the Independent Directors of the Company, the details of which will be available on the website of the Company i.e. https://sonacomstar.com/policies-and-codes

The familiarisation programme aims at making the Independent Directors of the Company familiar with the business and operations of the Company through various structured familiarisation programmes.

The Company issues a formal letter of appointment to Independent Director, which outlines his / her role, function, duties and responsibilities. The format of the letter of appointment is available on the website of the Company at https://sonacomstar. com/investor/appointment-re-appointment-of-independent-directors

15. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors in terms of Section 134 of the Act, confirm that:

1. i n the preparation of the annual accounts for the financial year ended 31^st March 2021, the applicable accounting standards were followed, along with proper explanation relating to material departures;

2. they have such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of

affairs of the Company as at 31^st March 2021 and of the profit for that period;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts for the financial year ended 31^st March 2021 have been prepared on a going concern basis;

5. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

16. DISCLOSURE ON COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AS PER SECTION 178 OF THE COMPANIES ACT, 2013

The Company has, on the recommendation of the Nomination & Remuneration Committee, amended the Nomination and Remuneration Policy along with a charter of the Nomination and Remuneration Committee in terms of the Section 178 of the Act with effect from 14^th August, 2020.

While formulating policy with respect to remuneration payable to the Directors, Key Managerial Personnel and other employee, the Board has ensured that —

a) t he level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration of the Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

The salient features of the Nomination and Remuneration Policy of the Company prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 read with Part D of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been provided in the Corporate Governance Report.

This Policy is available on the website of the Company at: https://sonacomstar.com/policies-and-codes

17. EMPLOYEE STOCK OPTION SCHEME

On 30^th September 2020, pursuant to the approval by the shareholders in the extra-ordinary general meeting, the Board/Nomination and Remuneration Committee of Board, was authorized to grant options under the “Sona BLW Precision Forgings Limited Employee Stock Option Plan 2020” (ESOP Scheme-2020/Plan) to the eligible employees of the Company and its subsidiaries under the ESOP Scheme-2020.The maximum number of Options to be granted, orginally under the ESOP Scheme-2020, originally were 278,556 (Two Hundred Seventy Eight Thousand Five Hundred Fifty Six) Shares (or such other adjusted figure for any re-organisation of capital structure undertaken in accordance with this Plan).

Further, pursuant to issue of bonus shares made by the Company, the Board of Directors and the Shareholders in their respective meetings had approved adjustments to the entitlements under the said Employee Stock Option Scheme 2020, by increasing the ESOP pool of the Company from 278,556 (Two hundred seventy-eight thousand five hundred and fifty six) to 3,342,672 (Three million three hundred forty-two thousand six hundred seventy-two). Consequent to such adjustments, additional options were granted to the above-said employees during the year under review.

The Nomination and Remuneration Committee has also been designated as Compensation Committee.

Applicable disclosures as stipulated under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI SBEB Regulations) with regard to the Employee Stock Option Scheme are available on the Company''s website at https://sonacomstar. com/investor/annual-reports-and-returns

The Company has received a certificate from M/s. Walker Chandiok & Co. LLP, Statutory Auditors (Firm Registration No. 001076N/N500013) that the Employee Stock Option Scheme-2020 for grant of stock options has been implemented in accordance with the SEBI SBEB Regulations and the resolution passed by the members in their general meeting held on 30^th September, 2020. The certificate is available for inspection in the electronic mode for the members.

18. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unclaimed dividend, the provisions of Section 125 of the Companies Act, 2013 do not apply.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Pursuant to Section 186 of Companies Act, 2013, disclosure on particulars relating to loans, advances, guarantees and investments form part of the Financial Statements in this Annual Report.

20. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review in terms of Chapter V of the Act.

21. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company which have occurred between end of the financial year to which the Financial Statements relate and the date of this report, except the slowdown in economic activities due to outbreak of COVID-19 pandemic globally.

22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered by the Company during the period under review with the related parties were on arms'' length basis and in the ordinary course of business, except for the relinquishment of put option right in relation to shares of Sona Holding B.V for a value of '' 19 million as set forth in note 52 of the Consolidated Financial Statements.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure C forming part of this report.

The Board has approved a Policy on Related Party Transactions which has been uploaded on the Company''s website. The web-link to the policy on Related Party Transactions as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as under: https://sonacomstar.com/policies-and-codes

23. MEETINGS OF THE BOARD

Ten (10) meetings of the Board were held during the year under review. For details of these Board meetings, please refer to the section on Corporate Governance forming part of this Report.

The Board met quarterly and the gap intervening between two meetings was within the time prescribed under the Companies Act, 2013 and Listing Regulations.

The details and attendance of meetings of the board, its committees, the Annual General Meeting and Extra Ordinary General Meeting are included in the “Report on Corporate Governance”, which forms part of this Report.

24. COMMITTEES OF THE BOARD

The Board of Directors of the Company have constituted/ re-constituted following committees, during the year under review:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

The details with respect to the composition, powers, roles, terms of reference, etc. of the aforesaid committees are given in details in the “Report on Corporate Governance” of the Company which forms part of this Report.

During the year under review, all recommendations made by the committees were accepted by the Board.

25. DOWNSTREAM INVESTMENT

On 12^th November 2020, the Company has incorporated a wholly owned subsidiary in the name of “Sona Comstar eDrive Private Limited”. During the year under review, Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors of the Company have certified the compliance as regards the Downstream Investment under the extant Foreign Exchange Management (Non-debt Instruments) Rules, 2019, which can be access at https://sonacomstar.com/investor/annual-reports-and-returns

26. SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT AND EXPLANATIONS BY THE BOARD ON THE QUALIFICATION OF SECRETARIAL AUDITOR’S REPORT, IF ANY

Pursuant to the provisions of Section 204 of the Companies Act 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Vinod Kothari & Co., Company Secretaries, New Delhi, as its Secretarial Auditor to undertake the Secretarial Audit for Financial Year 2020-21.

The Secretarial Auditors'' Report for the financial year 2020-2021 does not contain any qualification, reservation or adverse remark.

The Secretarial Auditors'' Report is enclosed as Annexure-D to the Board''s report.

Further as per the requirement of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Secretarial Audit Report of the material subsidiaries namely Comstar Automotive Technologies Private Limited is also attached with the main Secretarial Audit Report.

The Board of Directors in its meeting held on 6 August 2021 appointed M/s PI & Associates, Company Secretaries as Secretarial Auditors for the Financial Year 2021-22.

27. STATUTORY AUDITORS AND AUDITORS’ REPORT AND EXPLANATIONS BY THE BOARD ON THE QUALIFICATION OF STATUTORY AUDITOR’S, IF ANY

M/s. Walker Chandiok & Co., Chartered Accountants (FRN No. 001076N) was appointed as statutory auditors for a period of 5 (Five) consecutive financial years in the 21^st Annual General Meeting held on 28^th September, 2017.

The Audit Report on Standalone Financial Statements does not contain any qualification, reservation or adverse remarks except as mentioned below:

However, the Statutory Auditors have "Qualified Opinion” in the Auditors Report of Consolidated Financial Statements. The qualification and the management comments thereon are as follows:

The Statutory Auditors have included an audit qualification in relation to the Consolidated Financial Statements for Fiscal Year 2020 for the matter stated below, while mentioning that it does not have any effect on the consolidated profit and equity attributable to the owners for Fiscal 2021. The qualification states that the majority shareholding in Sona Holding B.V ("Sona B.V”), the erstwhile subsidiary company, which was classified as a ''discontinued operation'' in the consolidated financial statements for the previous year ended 31^st March 2019, was sold to Sona Autocomp Holding Pvt Ltd on 4^th July 2019, and consequently, the Company ceased to exercise control over the erstwhile subsidiary company with effect from 5^th July 2019 onwards. Due to the unavailability of the consolidated financial statements of Sona B.V and its subsidiaries ("Sona B.V Group”) for the period from 1^st April 2019 to 4^th July 2019, the consolidated financial Statements of the Sona B.V Group for the period from 1^st April 2019 to 4^th July 2019 has not been included in the consolidated financial statements for Fiscal Year 2020, and the assets and liabilities of Sona B.V Group have been derecognized at their respective carrying values as at 31^st March 2019 instead of 4^th July 2019. The Statutory Auditors have stated in their audit opinion that this accounting treatment is not in compliance with the requirements of Ind AS 110 - Consolidated Financial Statements and had the consolidated financial statements of the Company been prepared after considering the consolidated financial statements of Sona B.V Group for the period from 1^st April 2019 to 4^th July 2019, the "Profit or Loss from discontinued operations” would have been higher and "Exceptional Item” would have been lower by the same amount with no effect on the consolidated profit of the Group for Fiscal 2020 and its equity attributable to the owners on that date. Further, Note 49 of the Consolidated Financial Statement states that owing to the insolvency proceedings and acquisition of the businesses by a third party, despite the best efforts of management, substantiated by multiple communications over electronic mail, the Company was unable to obtain the audited consolidated financial statements of Sona B.V for the period from 1^st April 2019 to 4^th July 2019. The Company has not been able to arrange the consolidated financial statements of Sona B.V for the above mentioned period until the date of the auditor''s report of the Consolidated Financial Statements.

Accordingly, the modification in the auditor''s report dated 27^th April 2021, could not be adjusted in the Consolidated Financial Statements for Fiscal 2020. Consequently, the auditors were unable to quantify its impact on the said items in the accompanying Consolidated Financial Statements and thus the Consolidated Financial Statements for Fiscal 2020 may not be comparable to Fiscal 2021 with respect to this matter.

28. COST AUDITORS AND COST RECORDS

The Company is in compliance of maintenance of cost records as specified by the Central Government under Section 148 (1) of the Companies Act, 2013. The Company is not required to get its cost records audited by a Cost Accountant.

29. INTERNAL CONTROL SYSTEM

The Company has in place internal control system, which is commensurate with its size, scale and complexities of its operations. The Board of Directors have in their meeting held on 27^th July 2021, re-appointed Mr. J. V. Prabhu, as Internal Auditor of the Company for the Financial Year 2021-22.

The Board has, in their meeting held on 27^th July 2021, re-appointed M/s Deloitte Haskins & Sells LLP, to review the processes gap and recommendations and submit their periodical reports to the Audit Committee on the gap analysis for the Financial Year 2021-22.

The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

The Audit Committee of the Board of Directors are periodically apprised of the internal audit findings

and corrective actions are taken accordingly. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.

For more details, refer to the ''internal control systems and its adequacy'' section in Management''s Discussion and Analysis Report, which forms part of this Annual Report.

30. BUSINESS RESPONSIBILITY REPORT

A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of the Listing Regulations is attached as Annexure-E to this Report.

31. REPORTING OF FRAUD

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Committee has been entrusted with the prime responsibility of recommending to the Board, the CSR activities to be undertaken by the Company in terms of CSR Policy, the amount of expenditure to be incurred and monitoring the implementation of the framework of the CSR Policy.

During the Financial Year 2020-21, the Company''s CSR efforts included COVID-19 relief in various ares, including providing dry rations, meals and essentials to COVID affected communities, supporting the health care system to fight COVID-19 in collaboration with credible organizations across various states.

Annual Report, on CSR activities, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed as Annexure-F to this Report.

The Board of Directors of the Company amended the CSR Policy of the Company pursuant to amendments in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Section 135 of the Companies Act, 2013. The CSR Policy of the Company is available on the website of the Company at https://sonacomstar.com/investor/ corporate-social-responsibilities

33. RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has formulated and adopted a Risk Management policy. The primary objectives of the policy include identification and categorization of potential risks, their assessment and mitigation and to monitor these risks.

The Board has entrusted the Risk Management Committee (RMC) with overseeing the processes of identification, evaluation and mitigation of risks. The RMC inter alia shall periodically review the organisational risks that are spread across operational, financial, technological and environmental spheres and shall provide guidance to the management team.

Your Company is committed to protect the interests of its customers, stakeholders, investors, shareholders, employees and each person or entity with whom it is associated. Towards this goal, your Company will further strengthen the internal processes and evaluate even more innovative ways to blunt the risk impact.

The details of the RMC along with its charter are set out in the Corporate Governance Report, forming part of this Report.

34. VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on vigil mechanism/whistle blower which provides mechanism to its directors, employees and other stakeholders to raise concerns about any wrongdoing in the Company and provide for adequate safeguards against victimization of the persons who avail this mechanism.

The mechanism under the policy has been appropriately communicated within the organisation.

During the year under review, the Company has not received any complaints under the said mechanism. The whistle blower policy of the Company has been displayed on the Company''s website at: https:// sonacomstar.com/policies-and-codes

35. ANNUAL RETURN

In accordance with the provisions of Companies Act, 2013, the Annual Return of the Company in the prescribed format is available at: https:// sonacomstar.com/investor/annual-reports-and-returns

36. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

37. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS

No significant and material order has been passed by any regulator or court or tribunal, which might impact the going concern status and Company''s operations in future.

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure-G of this Report.

39. DISCLOSURE ON MANAGING DIRECTOR AND KEY MANAGERIAL PERSONNEL RECEIVING REMUNERATION AND COMMISSION FROM HOLDING COMPANY OR SUBSIDIARY COMPANY

The Managing Director of the Company is not in receipt of remuneration and commission from holding company or subsidiary company except as mentioned hereinafter.

The erstwhile holding company (and now a majority shareholder) of the Company namely Singapore VII Topco III Pte. Ltd. (Singapore VII) has adopted an exit return incentive plan (ERI Plan) pursuant to which Singapore VII will reward certain identified employees of the Company and/or its subsidiaries(including each of Key

Managerial Personnel and Executive Director(s) who are not promoters of the Company) with cash rewards based on certain disposition event(s) in relation to its interest in the Company. These cash awards will be paid to such employees entirely by Singapore VII (without any recourse or liability to the Company). None of the promoters, nominee director or shareholder of the Company, having significant influence, is beneficiary of the ERI Plan.

The Board of Directors of the Company have approved the ERI Plan, in its meeting held on 6^th August 2021 in compliance with Regulation 26(6) of the Listing Regulations.

The Company is also seeking the approval of the shareholders (at the ensuing Annual General Meeting of the Company) in compliance with Regulation 26(6) of the Listing Regulations.

40. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure-Hl forming part of this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure-H2 forming part of this Report.

41. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WORKMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSEL) ACT, 2013

The Company has formulated a comprehensive policy on prevention, prohibition and redressal against sexual harassment of women at workplace which is also in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 (POSH).

The employees are sensitised from time to time in respect of matters connected with prevention of sexual harassment. Awareness programmes are conducted at all unit levels to sensitise the employees to uphold the dignity of their female colleagues at workplace.

During the year under review, no complaints have been received by the Company under the POSH.

42. ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) COMMITTEE

The Board of Directors of the Company in its meeting held on 6^th August 2021 constituted an ESG Committee of the Board to oversee the implementation of the ESG frameworks across all its operations in India.

43. CAUTIONARY STATEMENT

The Annual Report including those which relate to the Directors'' Report, Management Discussion and Analysis Report may contain certain statements on the Company''s intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statement. Some of the factors that could affect the Company''s performance could be the demand and supply for Company''s product and services, changes in Government regulations, tax laws, forex volatility etc.

44. ACKNOWLEDGEMENT

The Board of Directors would like to acknowledge and place on record their sincere appreciation

to all stakeholders, customers, vendors, banks, Central and State Governments, the Company''s valued investors and all other business partners, for their continued co-operation and for the excellent support received from them.

The Board also wishes to place on record its appreciation to the Book Running Lead Managers (BRLM''s), Legal Counsels, Securities Exchange Board of India (SEBI), Registrar of Companies (ROC), National Stock Exchange of India Limited (NSE), BSE Ltd., Registrar and Transfer Agent (RTA), auditors and all intermediaries for their co-operation and immense support extended to the Company in its process of the Initial Public Offer (IPO).

The Board also wishes to place on record its appreciation to the new investors consequent to the IPO, for showing their confidence and faith in the management of the Company.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.

By order of Board of Directors For Sona BLW Precision Forgings Limited

Sunjay Kapur

(Chairman and

Place: Gurgaon Non Executive Director)

Date: 6^th August 2021 DIN:00145529