(s) Provisions and contingent liabilities
Provisions
Provisions for legal claims, product warranties and other obligations are recognised when the Company has a present (legal
or constructive) obligation as a result of past events, it is probable that an outflow of resources will be required to settle the
obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be small.
When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating
to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Warranty provisions
In cases where the obligations include warranty liabilities, the Company provides warranties for general repairs of defects
that existed at the time of sale, as required by law. Provisions related to these assurance-type warranties are recognised
when the product is sold or the service is provided to the customer. Initial recognition is based on historical experience. The
initial estimate of warranty-related costs is revised annually.
Contingent Liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle or a reliable estimate of the amount cannot be made.
(t) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees'
services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are
settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
Provident Fund & Employee State Insurance
Contribution towards provident fund and employee state insurance for employees is made to the regulatory authorities,
where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the
Company does not carry any further obligations, apart from the contributions made on a monthly basis.
Superannuation fund
The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined
benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn. The maximum
amount is defined subject to 12% of the eligible employees' salary. Such contributions are recognised as an expense as and
when incurred. The Company does not have any further obligations beyond this contribution.
Gratuity
The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees in accordance
with the Social Security Code 2020 effective November 21, 2025 . The Gratuity Plan provides a lump sum payment to vested
employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective
employee's eligible salary and the tenure of employment. The gratuity plan in Company is funded through annual
contributions to an Insurance Company .
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company's liability is
actuarially determined (using the Projected Unit Credit method) at the end of each year. The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government
bonds. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity through other comprehensive income in the period in which they arise. They are included in
retained earnings through OCI in the statement of changes in equity and in the balance sheet. Past-service costs are
recognised immediately in statement of profit and loss.
Compensated Absences
Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the
year end are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of
accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as
at the year end.
Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the
year end are treated as other long term employee benefits. The Company's liability is actuarially determined (using the
Projected Unit Credit method) at the end of each year. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of government bonds. Re-measurement gains and
losses arising from experience adjustments and changes in actuarial assumptions are recognised in statement of profit or
loss in the period in which they arise. Past-service costs are recognised immediately in statement of profit and loss.
(u) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
(v) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the net profit or loss attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a
fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity
share during the reporting period.
The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus
issue that have changed the number of equity shares outstanding, without a corresponding change in resources.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account:
• the after income tax effect of interest and other financing costs associated with dilutive potential equity shares,
and
• The weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.
(w) Treasury shares
The Company has created an Motherson ESOP Trust ("Trust") for providing share-based payment to its employees. The
Company uses Trust as a vehicle for distributing shares to employees under the Samvardhana Motherson International
Limited Employee Stock Purchase Scheme- 2025. The Trust buys shares of the Company from the market, for giving shares
to employees. The Company treats Trust as its extension and shares held by Trust are treated as treasury shares. Own equity
instruments that are reacquired (treasury shares) are recognised at cost and deducted from other equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments. Treasury
shares are reduced while computing basic and diluted earnings per share. The Company would transfer the excess, if any, of
exercise price over the cost of acquisition of treasury shares, net of tax, by Trust to General Reserve and any shortfall will be
transferred to Employee benefits expense
2.2 Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods.
Judgements
In the process of applying the Company's accounting policies, management has made the following judgements, which have the
most significant effect on the amounts recognised in the consolidated financial statements.
In the process of applying the Company's accounting policies, management has made the following judgements, which have the
most significant effect on the amounts recognised in the consolidated financial statements.
(i) Determining the lease term of contracts with renewal and termination options - Company as lessee
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Company has several lease contracts that include extension and termination options. The Company applies judgement
in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease.
(ii) Revenue from contracts with customers
The Company applies the judgements in respect to transactions relating to tools development, Principal versus agent, that
significantly affect the determination of the amount and timing of revenue from contracts with customers. For more details,
refer note 2.1 (d)
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
described below. The Company based its assumptions and estimates on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or
circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(i) Useful life of property, plant and equipment, intangible and investment properties
The Company uses its technical expertise along with historical and industry trends for determining the economic useful life
of an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate. In
case of a revision, the unamortised amount is charged over the remaining useful life of the assets.
(ii) Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment defined benefits are determined using actuarial
valuations. An actuarial valuation involves various assumptions that may differ from actual developments in the future. These
include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved
in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date. Further details about gratuity obligations are given in Note 21.
(iii) Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and
timing of future taxable income. Given the nature of business differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and
expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such
provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax
regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide
variety of issues depending on the conditions prevailing in the respective domicile of the companies.
The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be
due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences
will impact the current and deferred tax assets and liabilities in the period in which such determination is made.
(iv) Recognition of revenue over the period of time
The Company recognises revenue over the period of time for contracts related to the development of tools, as the
performance obligation is satisfied over the period. This approach requires the company to estimate revenue by measuring
the progress towards satisfaction of the performance obligation, using a method that best reflects the transfer of control of
goods or services to the customer.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the Company and that are believed to be reasonable
under the circumstances
(v) Provisions and liabilities
The Company estimates the provisions and liabilities and to the probability of expenses arising from warranty claims and
claims from legal disputes that have present obligations as a result of past events and it is probable that outflow of resources
will be required to settle the obligations. These provisions are reviewed at the end of each reporting date and are adjusted to
refect the current best estimates.
Estimation of fair value
The fair values of investment properties have been determined by registered valuers. The fair valuation is based on market
approach observing prevailing market prices/ price trend of the property in that locality/ city considering the location, size of
plot, approach road, amenities, locality etc and fall in level 3 of valuation hierarchy due to significant unobservable inputs for
reference prices used for valuation.
(v) The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase,
construct or develop investment properties or for repairs, maintenance and enhancements.
The Company tests goodwill for impairment on annual basis. The goodwill has been evaluated based on the cashflow
forecasts of the related cash generating units (CGUs) and the recoverable amounts of these CGUs exceeded their carrying
amounts. The estimated value in use of cash generating units (CGU) is based on the future cash flows using annual growth
rate of 6% for periods subsequent to the forecast period of 5 years and weighted average cost of capital of 11%. An analysis
of the sensitivity of the computation to a change in key parameters (operating margin, discount rates, revenue growth, long
term average growth rate and terminal value), based on reasonable probable assumptions, did not identify any probable
scenario in which the recoverable amount of the CGU would decrease below its carrying amount for any segment. The
discount rate was estimated based on past experience and Company's average weighted average cost of capital. The values
assigned to the key assumptions represent the management's assessment of future trends in the industry and based on
both internal and external factors.
* Sumitomo Wiring Systems Ltd., Japan ("SWS") along with H.K Wiring Systems Limited, Hong Kong ("HKWS") vide letter
dated May 17, 2024 had requested for re-classification from 'Promoter Group' to 'Non-Promoter Group' under Regulation 31A
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors of the Company in
its meeting held on May 29, 2024, had inter-alia, considered and approved the aforesaid request letters received for
reclassifying them from 'Promoter/Promoter Group' category to 'Public' category. During the current year, the Stock
Exchanges have approved the aforesaid reclassification vide letter dated May 07, 2025.
** Smt. Renu Alka Sehgal ceased to be part of the Promoter Group in terms of Regulation 31A(6)(c ) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 upon her sad demise on May
01, 2024.
- Renu Sehgal Trust (RST) held 841,238,437 equity shares of SAMIL in the name of its Trustee Smt. Renu Alka Sehgal. Further
RST has opened two separate demat accounts in the name of other trustees and transfer of shares in its new demat
accounts on March 26, 2025 as details below:
(a) Transfer of 821,867,324 equity shares held by RST to its another Demat Account opened in the name of Shri Sehgals
Trustee Company Private Limited, Trustee of RST and disclosed in the shareholding as "Renu Sehgal Trust (Trustee -
Shri Sehgals Trustee Company Private Limited)" and
(b) Transfer of 19,371,113 equity shares held by RST to its another Demat Account opened in the name of Ms. Geeta Soni
jointly with Mr. Laksh Vaaman Sehgal, Trustees of RST and disclosed in the shareholding as "Renu Sehgal Trust (Trustees
- Ms. Geeta Soni jointly with Mr. Laksh Vaaman Sehgal)".
- Renu Sehgal held 585,127 equity shares of SAMIL in her name. These shares were transferred on March 26, 2025 as details
below:
(a) Transfer of 384,588 equity shares held by Ms. Renu Alka Sehgal to Mr. Laksh Vaaman Sehgal (son of Late Smt. Renu
Alka Sehgal) and
(b) Transfer of 200,539 equity shares held by Ms. Renu Alka Sehgal to Ms. Vidhi Sehgal Chopra (daughter of Late Smt.
Renu Alka Sehgal)"
As per records of the Company, including its register of shareholders/ members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of
shares.
Reserve on amalgamation
This reserve was created at the time of amalgamation and mergers carried out in earlier years. The reserve will be utilised in
accordance with the provisions of the Companies Act, 2013 (the Act) as defined.
Securities premium
Securities premium represents the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
Capital reserve
The Capital Reserve was generated in previous years on account of the Amalgamation and Mergers in past years. The reserve will
be utilised in accordance with the provisions of the Act.
General reserve
General reserve is the retained earnings of the Company which is kept aside out of the Company's profits to meet any future
obligations.
FVTOCI equity investments
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive
income. These changes are accumulated within the FVTOCI equity investment reserve within equity. The Company transfers
amounts from this reserve to retained earnings when the relevant equity securities are sold or otherwise derecognised.
Cash flow hedge reserve
The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on
borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross
currency swaps and interest rate swaps. To the extent these hedges are effective, the change in fair value of the hedging
instrument is recognised in the effective portion of cash flow hedges. Amounts recognised in the effective portion of cash flow
hedges is reclassified to the statement of profit and loss when the hedged item affects profit or loss (e.g. interest payments).
Treasury shares
Treasury shares represents Company's own equity shares held by Motherson ESOP Trust, which is created for the purpose of
issuing equity shares to employees under Company's stock option plan scheme. (refer note 55)
The long term defined employee benefits and contribution schemes of the Company are as under:
A. Defined Benefit Schemes
Gratuity
The Company operates a gratuity plan administered through an Insurance Company under its Group Gratuity Scheme.
Every employee is entitled to a benefit in accordance with Code on Social Security, 2020. The same is payable at the time of
separation from the Company or retirement, whichever is earlier. The Company pays contribution to an Insurer to fund its
plan.
Above sensitivity analysis is based on a change in assumption while holding all the other assumptions constant. In
practice, this is unlikely to occur, and change in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has
been applied as when calculating the defined benefit liability recognised in balance sheet.
ix) Risk exposure
The gratuity scheme is a Defined Benefit Plan that provides for lump sum payment made on exit either by way of
retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of last drawn salary and the
period of service and paid as lump sum at exit. The plan design means the risk commonly affecting the liabilities and
the financial results are expected to be:
(a) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds, if
bond yield fall, the defined benefit obligation will tend to increase.
(b) Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.
(c) Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include
mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation
is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria .
Note:
In accordance with the requirements, changes in ratios of more than 25% as compared to previous year have been explained.
(i) Debt-equity ratio has increased owing to increased borrowings during current year for advancement of loans and investment
in subsidiaries
(ii) Net Working Capital Turnover Ratio has increased due to higher business volumes during the financial year ended March 31,
2026 as compared to previous year.
(iii) Return on Capital Employed has has increased due to improved Earnings before finance cost, interest income and taxes.
(iv) Return on investment has decreased due to lower dividend income received during the year
*The carrying amounts of trade receivables, borrowings, cash and cash equivalents, other financial assets, trade payables
and other financial liabilities are considered to be the same as their fair values.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity
instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued
using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all
significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities included in level 3.
ii. Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
a. the use of quoted market prices or dealer quotes for similar instruments.
b. the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at
the balance sheet date.
c. the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows.
d. the fair value of the remaining financial instruments covered under level 3 is determined using discounted cash flow
analysis.
1 The fair value of non-current financial assets and financial liabilities (except non-convertible debentures, which are valued at
their respective traded prices as at March 31, 2026 available at Bloomberg)) carried at amortized cost is substantially same as
their carrying amount.
2 The Company has taken interest rate swap against loans amounting to INR 25,400 million (March 31, 2025: INR 10,500
million).
Note: The carrying amounts of current financial assets and current financial liabilities i.e. trade receivables, loans, other
financial assets, trade payables, short term borrowings and other financial liabilities are considered to be the same as their
fair values, due to their short-term nature.
v. Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair
value measurements. See (ii) above for the valuation techniques adopted:
37 (a) Financial risk management
The Company in its capacity as active supplier for the automobile industry is exposed to various risks i.e., market risk, liquidity
risk and credit risk. The Company has necessary management structure in place for implementing an organized risk
management system. The Company is exposed to risks associated in particular with automotive industry and its various
subsidiaries have business across the globe therefore it is also exposed to various Global Market Risk.
The Company has set up a Risk Management Committee (RMC) at the board level to periodically review operating, financial
and strategic risks in the business and their mitigating factors. RMC has formulated Risk Management Policy for the
Company which outlines the risk management framework to help minimize the impact of uncertainty on the Company's
strategic goals. The framework enables a structured and disciplined approach to risk management. The Company has
developed guidelines on risk controlling and the use of financial instruments. These guidelines contain a clear allocation of
duties. Risks are controlled and monitored by means of operational and financial measures.
Below are the major risks which can impact the Company:
A Market risk:
Market risk is the risk that the fair value of future cashflows of a financial instruments will fluctuate because of changes
in market price/ rate. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price
risks. Financial instruments affected by market risk include loans and borrowings, deposits and payables/ receivables in
foreign currencies.
a. Price risk:
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material and
components used by the Company in its various products segment. Substantial pricing pressure from major
OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the profitability
of the Company. The Group has set up Global Sourcing Procurement (GSP) which gives leverage of bulk buying
and helps in controlling prices to a certain extent.
The key raw material for the Company's wiring harness business is Copper. There are substantial fluctuations in
prices of Copper. The Company has arrangements with its major customers for passing on the price impact.
The major raw materials used by Polymer Division of the Company are polypropylenes, polycarbonates and
various grades of nylons and resins. The Company is having arrangement with major customers for actualization
of raw material price variations periodically. The setting up of Global Sourcing Procurement division further
strengthens the procurement function.
The Company is regularly taking initiatives like VA-VE (value addition, value engineering) to reduce its raw material
costs to meet targets set up by its customers for cost downs. In respect of customer nominated parts, the
Company has back to back arrangements for cost savings with its suppliers.
b. Foreign currency risk:
The exchange variations in India impacts the imports, however the Company has arrangements with its major
domestic customers for passing on the exchange impact on import purchase and has considerably increased its
export sales during last few years to attain natural hedge. The Company also does selective hedging to hedge its
risks associated with foreign currency.
c. Interest rate risk:
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of
changes in market interest rates. The Company's main interest rate risk arises from long-term borrowings with variable
rates, which exposes the Company to cash flow interest rate risk. During March 31, 2026 and March 31, 2025, the
Company's borrowings at variable rate were mainly denominated in INR.
(i) Interest rate risk exposure
The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as
follows:
B Credit risk:
The credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations towards the Company and arises principally from the Company's receivables from
customers and deposits with banking institutions.
Trade receivables
The Company has developed guidelines for the management of credit risk from trade receivables. The Company's
primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM clients are
subjected to credit assessments as a precautionary measure, and the adherence of all clients to payment due dates is
monitored on an on-going basis, thereby practically eliminating the risk of default and impairment.
Financial instruments and cash deposits
The Company has deposits with liquid funds at various financial institutions, banking institutions. Primary banking
institutions are major Indian and foreign banks. In long term credit ratings these banking institutions are considered to
be investment grade. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognised
commercial banks and are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the
liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated by
Company. The Company monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient
cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities /
overdraft facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable)
on any of its borrowing facilities.
38 Capital management
(a) Risk management
The Company's objectives when managing capital is to safeguard their ability to continue as a going concern, so that they
can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital
structure to reduce the cost of capital.
Consistent with others in the industry, the Company monitors Net Debt to EBITDA ratio i.e. Net debt (total borrowings
(including lease liabilities) net of cash and cash equivalents) divided by EBITDA (Earnings before interest, depreciation,
dividend income, interest income and exceptional items).
The Company is also engaged in providing finance to its subsidiaries operating across the globe. Therefore, capital of the
Company is measured at consoldiated level, rather than on standalone basis. Therefore no seperate disclosure has been
made in this regard.
(b) Loan covenants
Under the terms of the major borrowing facilities, the Company is required to comply with certain financial and other
covenants and the Company has complied with those covenants throughout the reporting period. (refer note 17).
Note:- Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits
recognised as per Ind AS 19 - 'Employee Benefits' in the financial statements. Provision for contribution to gratuity, leave
encashment, and other defined benefit are determined by actuary on an overall Company basis at the end of each year and
accordingly , have not been considered in the above information. The same are included on payment basis.
Terms and conditions:
Transactions relating to sales and purchase of goods with related parties during the year are based on the arms length. All
other transactions were made on normal commercial terms and conditions and at market rates.
41 Segment Information:
The Company is primarily in the business of manufacture and sale of components to automotive original equipment
manufacturers.
The Chief Operating Decision Maker "CODM" reviews the operations of the Company in the following operating segments i.e.
'Wiring Harness', 'Modules and polymer products', 'Vision systems', 'Integrated assemblies' and residual as 'Emerging businesses'
at a consolidated level. As the Company presents consolidated financial statements along with standalone financial statements,
the Company has opted to disclose segment information in the consolidated financial statements only in accordance with para 4
of Ind AS 108 "Operating Segments".
46 Leases
The Company assesses each lease contract and if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration, the Company recognised right to use assets and lease liabilities for those lease
contracts except for short-term lease and lease of low-value assets.
The Company has leases contracts for land, building, plant & machinery and vehicles. These lease arrangements for land are for a
period upto 99 years, for building are for a period upto 10 years, plant & machinery are for a period upto 5 years and vehicles are
for a period upto 5 years. The Company also has certain leases of machinery, computers, vehicles with lease terms of 12 months or
less and leases of office equipment with low value. The Company applies the 'short-term lease' and 'lease of low-value assets'
recognition exemptions for these leases.
51 During the previous year, the Company had raised INR 64,376 million through Qualified Institutional Placement (QIP) on September
20, 2024, by way of issue of 259,873,701 equity shares of INR 1 each at a premium of INR 189 per share and issue of 150,000
Compulsory Convertible Debenture of INR 100,000 each. The said proceeds were fully utilized as at March 31, 2025 for the
purpose it was raised.
52 The Board of Directors of the Company in its meeting held on February 07, 2025, approved the scheme of amalgamation (Scheme)
of Samvardhana Motherson Auto System Private Limited, Motherson Machinery and Automations Limited and Samvardhana
Motherson Innovative Solutions Limited (hereinafter collectively referred as "the Transferor Companies") and Samvardhana
Motherson International Limited ("the Company") and their respective shareholders and creditors under section 230 and 232 and
other applicable provisions, if any, of the Companies Act, 2013 ("the Act"). The Scheme is pending for approval with National
Company Law Tribunal (NCLT). Therefore, no effect of this Scheme has been recorded in the financial statements.
53 Other Statutory Information
(i) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period
except few charges which are in process of satisfaction.
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or,
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(intermediaries) with the understanding that the intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the company (Ultimate Beneficiaries) or,
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
54 Exceptional expenses
On 21 November 2025, the Government of India notified four Labour Codes, namely the Code on Wages, 2019, the Code on Social
Security, 2020, the Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020
(collectively, the "Labour Codes"), consolidating 29 erstwhile labour laws. Subsequently, the Ministry of Labour & Employment
issued Central Rules and FAQs to facilitate assessment of the financial implications arising from changes in the regulatory
framework.
Based on management's assessment of the impact of the notified provisions of the Labour Codes, supported by Rules, FAQs and
external legal opinion, the Company has determined an impact of INR 43 million for these changes on obligation towards gratuity
and compensated absences liabilities. The impact is recognised in the statement of profit and loss under "Exceptional expenses".
The Company continues to monitor the issuance and finalisation of further Rules and further clarifications from the Government
in respect of other aspects of the Labour Codes.
55 Treasury Shares and Employees' Stock option plan
The Board of Directors and the shareholders of the Company have approved a Scheme "Samvardhana Motherson International
Limited Employee Stock Option Scheme - 2025" ("Scheme") in their meetings held on June 19, 2025 and August 22, 2025,
respectively. This scheme is effective from August 22, 2025. Pursuant to the Scheme, the Company has constituted Motherson
ESOP Trust ('Trust') to acquire, hold and allocate/transfer equity shares of the Company to eligible employees from time to time on
the terms and conditions specified under the Scheme.
The Company's equity shares held by ESOP Trust are consolidated as a part of the Company as per the requirements of Ind AS 32
in standalone financial statements. Treasury shares are carried at acquisition cost and presented as a deduction from total equity.
The loan granted by the Company to the trust as well as the income accruing to the trust arising from the shares held are
eliminated. All other assets and liabilities and administrative expenses are consolidated as a part of the Company's standalone
financial statements.
During the current year, the Trust has purchased 23,211,370 equity shares (INR 2,789 million) of the Company from the secondary
open market. These number of equity shares have been reduced while computing basic and diluted Earning per share.
Subsequent to the year end, The Nomination and Remuneration Committee in its meeting dated May 04, 2026 has approved the
grant of 23,211,370 Employee Stock Options to the eligible employees at an exercise price of INR 121.21 per option.
56 Standards notified but not yet effective
Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants
and Ind AS 10 Events after the Reporting Period
Ind AS 10 has been amended to remove the previous treatment under which a lender's post reporting date waiver-granted
before the financial statements were approved for issue-of a breach of a material covenant in a long term loan arrangement that
occurred on or before the end of the reporting period, resulting in the liability becoming payable on demand at the reporting date,
was regarded as an adjusting event.
For annual reporting periods beginning on or after 1 April 2026, any breach of a covenant-whether material or immaterial-
occurring on or before the reporting date will, in accordance with Ind AS1, require the related liability to be classified as current,
unless the lender has granted a waiver of the breach on or before the reporting date and has agreed not to demand repayment for
at least 12 months after the reporting date as a consequence of the breach. Such a waiver shall be treated as an adjusting event.
The amendments are effective for annual reporting periods beginning on or after 1 April 2026 retrospectively in accordance with
Ind AS 8."
57 Previous year's figures has been regrouped and /or reclassed wherever applicable necessary to confirm to the current year's
groupings and classifications. These reclassificaiton / regrouping does not have any material impact on these financial statements.
58 Amounts appearing as zero "0" in financial are below the rounding off norm adopted by the Company
|