Dear Members,
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 DEVELOPMENTS
Acquisition 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 1st 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 27th Annual General Meeting
of the Company.
The required disclosures of the Employee Stock Option Plan - 2023 is disclosed in the
Notice of 27th 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 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, 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
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 |
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 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 speakup.sbpl@sonacomstar.com 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) |
|