Directors Report of Munjal Showa Ltd.

Mar 31, 2025

The Board of Directors of your Company are pleased to
present the fortieth (40^th) Board Report on the business
and operations of Munjal Showa Limited ("the Company")
together with the Audited Financial Statements and the
Auditors'' Report thereon for the financial year ended March
31, 2025 ("year under review").

FINANCIAL SUMMARY AND HIGHLIGHTS

The salient features of the Company''s financial performance
for the year ended March 31, 2025 are as follows:

	Year Ended	Year Ended
	31.03.25	31.03.24
Sales and other Income (Net of GST)	1,28,071.97	1,20,711.03
Profit before Interest, Depreciation & Tax	4,718.91	4,859.27
Financial Cost	1.73	1.25
Depreciation	1,200.73	1,228.99
Profit before Tax	3,516.45	3,629.03
Tax Expenses
-Current tax	988.48	299.74
-Tax Adjustment for earlier Year	7.89	7.95
-Deferred tax	-366.90	244.73
Total Tax Expense	629.47	552.42
Profit after Tax	2,886.98	3,076.61
Other comprehensive income net of taxes	-64.89	24.37
Total Comprehensive Income	2,822.09	3,100.98
Surplus brought forward including items of other comprehensive income	29,717.25	28,416.05
Profit available for appropriation	32,539.34	31,517.03
Dividend payment	1,799.78	1,799.78
Transfer to General Reserve	-	-
Surplus available including items of other comprehensive income	30,739.56	29,717.25

OPERATIONS & STATE OF THE COMPANY''S AFFAIRS

The Company has achieved a sales turnover (Net of GST)
including other income of '' 1,28,071.97 lakhs as compared
to '' 1,20,711.03 lakhs in the previous year. The profit before
tax in the current year was '' 3,516.45 lakhs as compared to
'' 3,629.03 lakhs in the previous year.

The State of affairs of the Company is detailed in the
"Management Discussion & Analysis Report" annexed as
Annexure-A and forms part of this report.

CREDIT RATING

The Company''s financial discipline and prudence is reflected
in the credit ratings ascribed by CRISIL rating agency as
given below:

Long-Term Rating CRISIL A/Stable

Short-Term Rating CRISIL A1

'' (in crores)

'' 80.75 Long-Term Loans CRISIL A/Stable

'' 10 Cash Credit CRISIL A/Stable

'' 53.50 Letter of Credit CRISIL A/Stable

'' 6 Commercial Paper CRISIL A1

20 Crore submit to CC, 10 Crore submit to BG

TRANSFER TO GENERAL RESERVE

The Company has not transferred any amount to General
Reserve during the financial year 2024-2025. The balance
amount of '' 30,739.56 lakhs (Previous Year '' 29,717.25
lakhs) will be retained as surplus in the statement of Profit
and Loss.

DIVIDEND

Your Board of Directors are pleased to recommend a final
dividend of 225% (i.e., '' 4.50 per equity share of '' 2.00/-
each fully paid up) on the paid-up Equity Share Capital of
the Company for the financial year ended March 31, 2025
amounting to '' 1,799.78 lakhs.

As per Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing

Regulations") read with SEBI (Listing Obligations and
Disclosure Requirements) (Second Amendment)
Regulations, 2021 dated May 05, 2021, the Company has
formulated the Dividend Distribution Policy of the Company
and the Dividend recommendation is in accordance with
the Dividend Distribution Policy of the Company, and such
policy is available at the Company''s website at https://www.
munjalshowa.net/wp-content/uploads/2021/06/Dividend-
Distribution-Policy.pdf

In view of the changes made under the Income-tax Act,
1961, by the Finance Act, 2020, Dividend Distribution
Tax (DDT) which used to be payable by the Company has
been abolished and the dividend paid or distributed by the
Company shall be taxable in the hands of the Shareholders.
Your Company shall, accordingly, make the payment of the
Dividend after deduction of tax at source. The final dividend,
if approved by the shareholders, at the 40^th Annual General
Meeting shall be payable to the eligible shareholders
registered in the books of the Company and the beneficial
owners whose names are furnished by the depositories, as
on the cutoff date for determining the name of shareholder
for paying dividend i.e. Friday, August 01,2025

SHARE CAPITAL

The authorized share capital of the Company is
'' 15,00,00,000 (INR Fifteen Crores only) divided into
7,50,00,000 (Seven Crores Fifty Lakh) equity shares of face
value of '' 2 (Rupees Two) each. The paid-up Share Capital
of the Company as on March 31, 2025 was '' 7,99,90,000
(Rupees Seven Crore Ninety-Nine Lakhs Ninety Thousand
only) divided into 3,99,95,000 (Three Crore Ninety-Nine Lac
Ninety-Five thousand only) equity shares of face value of
'' 2 (Rupees Two) each.

During the year under review, there was no change in the
authorised, subscribed and paid-up share capital of the
Company from the last financial year.

During the year under review, the Company has not issued
any shares with differential voting rights nor granted any
stock options or sweat equity shares. The Company has not
issued or repaid any Debentures, Preference Shares, Bonds
and Security during the financial year. None of the Directors
of the Company hold any shares or security of the Company.
The Company does not have any Debentures or Preferential
Shares as on March 31, 2025.

FINANCE

Cash and cash equivalent as at March 31, 2025 was
'' 2,601.27 Lakhs. The Company continues to focus on
judicious management of its working capital. Receivables,
inventories and other working capital parameters were kept
under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

During the year under review, the Company has neither
given any guarantee nor provided any security covered
under the provision of Section 186 of the Companies Act,
2013 ("the Act").

The Company has made investments in Mutual funds,
Alternative Investments Funds, Commercial paper,
Perpepual Bond, debentures and has given loans/advances
to its vendors in the ordinary course of business. The details
of investments made, and loans given are provided in Note
No. 5A & 5B of the financial statements for the year ended
March 31, 2025.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good
Corporate Governance over the years. The Company has
complied with the Corporate Governance requirements
as stipulated under the Listing Regulations. In terms
of Regulation 34 of Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a separate section on Corporate
Governance along with a Certificate from M/s. Deloitte
Haskins & Sells LLP, Chartered Accountants, Statutory
Auditors of your Company confirming the compliance of
Corporate Governance is annexed as Annexure-B and forms
an integral part of the Annual Report.

TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND

Pursuant to the provisions of Section 124 of the Act read
with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF
Rules") and subsequent amendment thereof, the amount
of dividends, which remained unpaid or unclaimed for
a period of seven consecutive years from the date of
transfer to Unpaid Dividend Account of the Company, and

underlying equity shares on which dividend has not been
paid or claimed by the members for seven consecutive years
are required to be transferred to the Investor Education and
Protection Fund (IEPF) Authority established by the Central
Government.

The amount of unclaimed dividend of '' 12,91,188 was
transferred into IEPF account in respect of financial year
2016-17 on October 26, 2024.

The Company has transferred 33,531 Equity Shares of '' 2.00
each on which the dividend remained unpaid or unclaimed
for seven consecutive years, on October 25, 2024 to the IEPF
Account, after following the prescribed procedure.

STATUTORY AUDITORS

Pursuant to Section 139 of the Act, read with the Companies
(Audit and Auditors) Rules, 2014, the Members of the
Company in 37^th Annual General Meeting ("AGM") approved
the appointment of M/s Deloitte Haskins & Sells LLP,
Chartered Accountants (ICAI Registration No. 117366W/W-
100018) as the Statutory Auditors of the Company for the
period of 5 years, whose term of office will come to end after
conclusion of 42^nd Annual General Meeting (AGM) of the
Company. The shareholder of the Company in its meeting
held on 12^th August, 2022, approved the re-appointment
of M/s Deloitte Haskins & Sells LLP, Chartered Accountants
(ICAI Registration No. 117366W/W-100018) as the Statutory
Auditor of the Company for a second term of 5 consecutive
years and who shall hold office up to the conclusion of the
42nd AGM of the Company to be held in financial year 2027¬
2028.

There are no qualifications, reservation, adverse remark,
observations, comments or disclaimer given by the Auditors
in their Report except mentioned below:

The audit trail has not been enabled in respect of changes for
relevant tables made by users with privileged access and audit
trail has not been enabled at the database level to log any
direct data changes. Consequently, we are unable to validate
whether there were any instances of the audit trail feature
being tampered with.

Management response:

Audit Trail as pointed out by the auditor''s audit trail feature
was available throughout the year except for direct changes
in the relevant tables at application level. Internal controls

for the year 2024-25 were running effectively throughout
the year.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company had appointed M/s
AKU & Associates (COP No. 17196), a proprietorship firm of
Company Secretary, as the Secretarial Auditor to conduct the
Secretarial Audit of the Company for the financial year 2024¬
25. The Company had received their written consent that
the appointment will be in accordance with the applicable
provisions of the Act and rules framed thereunder.

The Secretarial Audit Report is self-explanatory and do not
call for any further comments. There are no qualifications,
reservations, adverse remark, observations, comments
or disclaimer given by the Auditors in their Report except
mentioned below:

1. The Company, in adherence to the provisions of Sections
196, 197, 203, and other applicable provisions of the
Companies Act, 2013 and rules made thereunder, along
with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, had duly approved the
appointment of Mr. Hitoshi Fukagawa (DIN: 10611378) as
Joint Managing Director of the Company. However, the
statutory filing of e-Form MR-2—being the prescribed
application to the Central Government (Ministry of
Corporate Affairs) for approval of such appointment—
was submitted/ filed beyond the prescribed timeframe.
Consequently, the Ministry of Corporate Affairs (MCA)
did not take the said form on record. As per the records
and information/explanation/justification furnished
before us by the company, to rectify this procedural
lapse, the Company, has initiated the necessary process
and submitted an application for condonation of delay
in filing e-Form MR-2 concerning the appointment of
Mr. Hitoshi Fukagawa as Joint Managing Director to the
Central Government (Ministry of Corporate Affairs).

2. There was an instance of a delayed submission under
Regulation 30 read with Schedule III of Securities and
Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Master
circular issued by Securities and Exchange Board of
India (SEBI) on November 11, 2024, concerning the

letter titled "Warning Letter" dated December 27,
2024 bearing reference number NSE/LIST/COMP/
MUNJALSHOW/0i/2024-2025. This letter, issued by the
National Stock Exchange of India Limited ("NSE"), advised
the Listed Entity/Company to refrain from incorporating
PAN information in any disclosure/ announcements/
any other public document filed with the Exchange.
Furthermore, the letter instructed the Listed Entity to
disseminate a copy of this letter on the Stock Exchanges
where they are listed. The aforementioned letter was
subsequently intimated to the exchanges on January 07,
2025.

3. The company''s adherence to the Secretarial Standards
prescribed by the Institute of Company Secretaries
of India (ICSI) relating to the Board, General and
Committee Meeting (s) including the Notice, Agenda and
maintenance of the Minute Book for Board, General and
Committee meeting(s) was observed to be satisfactory.

Management Response:

1. Form MR-2 has been filled with the MCA with a
delay of 6 days due to unavailability of auditor
certificate on time and technical issues on the
Ministry of Corporate Affair website. As per The
Companies Act, 2013, condonation of delay
application should be filled with the Ministry.
Earlier there was form CG-1 which was available
for condonation of delay but now it''s not available
on the website. The Company has filled the
condonation of delay application with the form
MR-2 as well as in physical form. This matter
of condonation of delay is pending before the
ministry for their consideration.

2. The Company''s office remained non-operational
from December 26, 2024, to January 01, 2025.
The Company Secretary and Compliance Officer
resumed duties on January 07, 2025, and the
intimation of aforementioned letter to the
exchanges was duly submitted on the first day of
rejoining. As per Regulation 30 of SEBI LODR, 2015
the company submitted this letter to the stock
exchange in as soon as reasonable possible time.

3. The Company has established adequate systems
and processes to ensure compliance with the
applicable Secretarial Standards issued by the

Institute of Company Secretaries of India (ICSI),
including those relating to Board and General
Meetings. These systems are operating effectively
and are periodically reviewed. The Company
has, in general, complied with all applicable
Secretarial Standards. Further, the Company is
committed to continually enhancing its corporate
governance practices and will duly implement
the recommendations made by the Secretarial
Auditor in this regard.

The Report given by the Secretarial Auditor for
the financial year ended on March 31, 2025 is
annexed as Annexure-D and forms an integral part
of Annual report.

Further, no fraud has been reported by the
Auditors in terms of Section 143(12) of the Act
during the financial year.

INTERNAL AUDITORS

M/s Vaish & Associates, Chartered Accountant perform
the duties of internal auditors of the Company and their
performance and reports are reviewed by the Audit
Committee.

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

The details pursuant to Section 134(3)(m) of the Act read
with Rule 8 of the Companies (Accounts) Rules, 2014
regarding Conservation of Energy, Technology Absorption
and Foreign Exchange earnings & outgo is annexed as
Annexure-E and forms an integral part of this report.

ANNUAL RETURN

In terms of provisions of Section 92(3), 134(3)(a) of the Act
read with Rule 12 of the Companies (Management and
Administration) Rules, 2014, the copy of annual return of
the Company for the Financial Year ended March 31, 2025
has been placed on the website of the company and the
same can be accessed by the any person through below
given web-link. www.munjalshowa.net.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197
of the Act read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, for

the year ended March 31, 2025 is annexed as Annexure-F
and forms an integral part of this report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of provisions of Section 135 of the Act and the
Companies (Corporate Social Responsibility Policy) Rules,
2014, the Corporate Social Responsibility (hereinafter
referred as ''CSR'') Committee has formulated a CSR Policy
indicating the activities to be undertaken by the Company.
The constitution of CSR Committee is disclosed in Corporate
Governance Report which forms an integral part of Annual
Report.

The CSR policy may be accessed on the Company''s website

i.e. https://munjalshowa.net/wp-content/uploads/2024/04/
CSR-POLICY.pdf

As part of its initiatives under CSR, the Company has
undertaken projects in the areas of Education, Health, Water
and Sanitation. These projects are largely in accordance
with Schedule VII of the Act and CSR Policy of the Company.
The annual report on CSR activities as required under the
Companies (CSR Policy) Rules, 2014 is set out as Annexure-G
and forms an integral part of this report.

Munjal Showa Limited considers Corporate Social
Responsibility as an integral part of its business activities
and endeavors to utilize the allocated CSR budget for the
benefit of the society.

The Company has incurred the CSR expenditure as follows:

Sl. No.	Particular	Amount (in '')
(i)	Two percent of average net profit of the Company as per section 135(5)	41,35,453
(ii)	Total amount spent for the financial year	45,84,117
(iii)	Excess/(Short) amount spent for the financial year [(ii)-(i)]	4,48,664
(iv)	Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any	NIL
(v)	Amount available for set off in succeeding financial years [(iii)-(iv)] *	4,48,664

*The Company has spent excess of'' 4,48,664 for CSR Expenses
in the financial year2024-25. In the Year2024-25 the Company
Adjusted '' 1,40,044 (excess expenditure done in FY 2022¬
23) against CSR Expenses liability of the said year. Therefore,
''5,88,708 will be available for set off in succeeding financial
years.

For the subsequent years, the Company endeavors to spend
the budgeted CSR expenditure in accordance with the
statutory requirements.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting
the financial position of the Company that have occurred
between the end of financial year and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that"waste is a precious resource kept in a wrong
place". We further believe that "there is no waste as per the
law of the nature". Hence from the solid waste like Iron & Steel
from old scrap machines, we are collecting the raw material
and we are manufacturing "Lean and Low cost" machines
with a philosophy of Easy to run, Easy to maintain, Easy
to clean and Zero accident by meeting all the quality and
productivity standard. Everything is done in-house starting
from design up to finishing the machine. This concept of
reuse of metallic waste is highly appreciated by CII, ACMA
and international experts of our Japanese Collaborator. By
Regular training for workers and staff to prevent accident
related to mechanical, electrical, chemical, physiological,
and psychological safety the Company has made "Zero
incidents" as acceptable standard. Hazard Identification
and Risk Assessment (HIRA) is our primary focus to mitigate
and prevent the abnormalities. Because of our dedicated
and committed efforts in continual improvement of
Safety, Health, and Environment area, we had received two
National Awards from Ministry of Labour and Employment,
Government of India for safety. The Company is a regular
member of Haryana Environment Management Society.

The Company has started Green Vendor Development
Programme (GVDP) since 2009-10. The aim of the project
is to conserve water and energy, minimize generation of
waste, terminate hazardous chemicals with non-hazardous
chemicals, minimize carbon footprint and generate
pollution prevention awareness throughout the plant and

to achieve 100 percent legal compliance. The Company is
rigorously improving to create a better place for our next
generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive
Maintenance (TPM) with the help of JIPM (Japan Institute
of Plant Maintenance) Japan and CII, TPM Club India. Major
objectives of TPM are to increase (PQCDSME) Productivity,
to improve Quality, to reduce Costs, to ensure in time
Delivery, to increase Safety, to increase profitability, to
build Morale and to protect environment by formation of
small cross functional work groups and to improve overall
Plant efficiency. The other objectives are to procure and
install maintenance free plant and machinery; and to
achieve zero defects, zero breakdown, zero losses and zero
accidents. In nutshell, TPM is to identify 21 types of Losses
& converts them into Profit. We are able to reduce Repair &
Maintenance Cost and working very aggressively towards
reduction in Inventory Loss.

We have achieved TPM Excellency Award "Category A" for
Gurugram and Manesar Plants in the years 2008 and 2010
respectively from Japan Institute of Plant Maintenance. We
have been awarded by JIPM TPM Excellence Consistency
Award for both Gurugram & Manesar Plants in the year
2013. Now we have started TPM Journey in our Haridwar
Plant also & we had TPM Kick-Off Ceremony in November
2015.

LEAN TPM ACTIVITIES

We have clubbed TPM with lean manufacturing system.
Through Lean we are able to focus & control 8 types of
wastes. Now we are giving more focus on 3 M''s - Muda, Mura
& Muri. Our Company has conducted Lean Manufacturing
System (Value Stream Mapping) Workshop through JMAC
Japan. We have converted huge & complicated machines
by using TPM & Lean Concepts. These machines consume
very less Electricity, occupy less space, take very less inputs
like consumables, manpower, tools, oils, compressed air,
less set-up time, less cycle time, etc. These machines are 10S
Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy,
Superb, Sushil & Sunder) and help us in reducing Cost of
manufacturing. As on date we have built & rebuild 1121
machines.

Low-Cost Automation is the need of hour. In this area we
have achieved great success in a very short span of time
by manufacturing 16 numbers 2W Rod CNC machines
from manual to Automatic mode. Besides this Automation
has been achieved in most of Damper case & Bottom tube
Welding process in all the 3 Plants. Many other machines
in different lines. Resulting into Quality & Productivity
improvements in many folds. Another 7 major Projects are
there in pipeline & very soon we will achieve them. We are
also working towards Introduction & implementation of
Material Flow Cost Accounting.

Major breakthrough achieved by in-house manufacturing
of 23 SPM Machines for Floating Piston Technology in Rear
Cushion segment. Already Proto samples submitted with
Hitachi Astemo as well as Hero CIT. Will start SOP in Jan 2026.

Also achieved another breakthrough in developing
22 machines for Inverted Front Fork Technology shock
absorbers for the prime segment Motor-cycles.

Fully Automatic Valves counting & Dispensing Machine has
been developed In-house with a very high level of accuracy.
This is another breakthrough achievement besides this was
the requirement of all the Customers.

ISO/TS 16949/LATF16949 ACCREDITATION

Your Company''s manufacturing facilities are located at
Gurugram, Haridwar and Manesar and we continue to
maintain and uphold the prestigious ISO/TS 16949:2009, ISO
14001:2015 and OHSAS 18001: 2007 (Occupational Health
& Safety Assessment Series) certifications from reputed
leading Indian and International Certification Institutions.

Further your Company is now an "ISO-45001" certified
Company. This Certificate for Safety Management System is
approved by the International Standard Organization. This
is an International Standard that specifies requirements for
an occupational health and safety (OH&S) management
system.

These certifications help in continuous improvements,
besides emphasis being laid on prevention of defects,
reduction of waste, prevention of near misses and to ensure
maximized customer delight.

LISTING

The shares of your Company are listed on the National
Stock Exchange of India Limited (NSE) and BSE Limited

(BSE), and pursuant to Clause C (9)(d) of Schedule V of SEBI
Listing Regulations, the annual Listing fees for the year
2025-26 has been paid to them well before the due date i.e.
April 30, 2025. Annual Custody/Issuer fee for the year 2025¬
26 has been paid by the Company to the depositories viz.
NSDL and CDSL.

HUMAN RESOURCES

Promoting Human Resources management is the strength
of our Company and over a period of time, we have
changed our vision of employees from "Human Resources
Management" to "Human Capital Management".

Your Company believes that employees form the fulcrum
of growth and differentiation for the organization. The
Company recognizes that people are its principal assets and
that its continued growth is dependent upon the Company''s
ability to attract and retain quality people. The total
headcounts were 2088 at the end of the year as compared to
2330 of the previous year. The Company encourages long¬
term commitment to the Company by rewarding its people
for the opportunities they create, and the value generated
for customers and shareholders. The Company conducts
several employee engagement and training Programmes to
upgrade the skills of the workforce and generate specialist
in quality, maintenance and manufacturing. As desired by
the Government of India we have started NEEM Scheme
and NAPS Scheme in order to enhance the technical skill
level of our unemployed youths.

Many initiatives have been taken to support business
through organizational efficiency, process change support
and various employee engagement Programmes which
have helped the organization achieve higher productivity
levels. A significant effort has also been undertaken
to develop leadership as well as technical/ functional
capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify,
evaluate business risks and opportunities. This framework
seeks to create transparency, minimize adverse impact
on the business objectives and enhance the competitive
advantage of the company. The business risk framework
defines the risk management approach across the enterprise
at various levels including documentation and reporting.

The Company regularly conducts a study to develop a
comprehensive 360° view on the opportunities, risks and
threats to the business. These include areas such as market
trends, new competition, changing customer preferences,
disruptions in supplies, product development, talent
management etc.

The Board has identified following risks: -

Intensifying Competition, Declining margins, Imposition
of strict environmental / safety / regulatory regulations,
Increase in raw material/component prices, Dependence
on Collaborators, Over dependence on limited user
segment base, Economic downturn, Risk of natural or
manmade disasters, Product liability / recall, Single vendor
dependence for critical components , Investment risks in
expansion projects, Sales Catering only to Domestic Market,
Over Dependence on few customers base, Retention &
development of personnel and Inappropriate addressing of
customer grievances. We through qualitative products and
brand image, import only in case of cost advantage, regular
improvement in productivity, controls over overhead
and Labour cost through a robust control of approvals,
internal audit of environmental safety and regulatory
compliance, localization of components, insurance, TS
16949 certification, TPM certification, regular development
of alternate vendors where only single source, capturing
customer complaints and response to them, have effective
risk mitigating plans.

The website link is given below:

https://www.munjalshowa.net/wp-content/

uploads/2021/06/Risk-Management-Policy.pdf

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for the
Directors and Employees of the Company by adopting the
Whistle Blower Policy to report about the genuine concerns,
unethical behaviour, fraud or violation of Company''s Code
of Conduct. Your Company hereby affirms that no Director/
Employee of the Company have been denied access to
the Chairperson of the Audit Committee. The details of
the Whistle Blower Policy are explained in the Corporate
Governance Report which form an integral part of this
Report and is also posted on the website of the Company.

The website link is given below:

https://munjalshowa.net/wp-content/uploads/2025/05/

VIGIL-MECHANISM-POLICY.pdf

RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, all the recommendations made by the
Audit Committee were accepted by the Board.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the
Company during the Financial Year 2024-25.

DIRECTORS AND KEY MANAGERIAL PERSONNEL''S

During the financial year 2024-25, following changes took
place in the composition of Board of Directors and Key
Managerial Personnel of the company:

1. The Board of Director, on recommendation of the
Nomination and Remuneration Committee and
approval by members of the Company through postal
ballot (Remote E-voting) dated March 16, 2024 (being
the last date of Remote E-voting), approved the
appointment of Dr. Neetika Batra (DIN: 10219725) as
a Non-Executive Independent Women Director of the
Company w.e.f. April 01, 2024 to hold office for a term
of five consecutive years, i.e. up to March 31, 2029, not
liable to retire by rotation.

2. Mrs. Charu Munjal (DIN: 03094545) resigned as Director
(Non-Executive) of the Company effective as of the
close of business hours on May 29, 2024.

3. The Board of Director, on recommendation of the
Nomination and Remuneration Committee and
subject to approval by members of the Company in
ensuing Annual General Meeting ("AGM") and Central
Government, approved the appointment of Mr. Hitoshi
Fukagawa (DIN: 10611378) who was appointed by the
Board as Additional Director (Executive Director) on
May 29, 2024 and as the Joint Managing Director of the
Company, w.e.f. May 29, 2024 to hold office for a term
of five consecutive years, i.e. up to May 28, 2029, liable
to retire by rotation on such terms of employment as
agreed between the Company.

In accordance with the provisions of the Companies Act,
2013 not less than 2/3rd (Two-third) of the total number
of Directors (other than Independent Directors) shall be

liable to retire by rotation. Accordingly, pursuant to the Act
read with the Articles of Association of the Company, Mr.
Yogesh Chander Munjal, Executive Director and Mr. Hitoshi
Fukagawa, Executive Director are liable to retire by rotation
at the ensuing 40^th AGM and being eligible they have offered
themselves for re-appointment.

During the year under review, apart from the above-stated
facts, there is no change in the composition of Board of
Directors. Further, there was no change in the office of
the Key Managerial Personnel of the company except as
mentioned above.

Pursuant to the provisions of the SEBI Listing Regulations
and the Act, the profiles of all the Directors, seeking
appointment/re-appointment at the ensuing AGM, have
been provided in the Notice of 40^th AGM of the Company.

All Independent Directors have given individual declarations
that they meet the criteria of independence as laid down
under Section 149(6) of the Act and Listing Regulations.
All the Independent Directors have registered themselves
under data bank of Independent Directors created and
maintained by Indian Institute of Corporate Affairs.

With regard to integrity, expertise and experience (including
the proficiency) of the Independent Directors, the Board of
Directors is of the opinion that all the Independent Directors
are persons of integrity and possess relevant expertise and
experience and their continued association as Directors
will be of immense benefit and in the best interest of the
Company.

All Directors of the Company have also given declarations
that they are not debarred from holding the office of
Director by virtue of any SEBI order or any other such
statutory authority as required under the Circular dated
20^th June, 2018 issued by BSE Limited and National Stock
Exchange of India Limited.

The Company appreciates the dedicated and valuable
guidance given by all the Directors of the Company.

COMMITTEES OF THE BOARD

The Company has several Committees which have been
established in compliance with the requirement of the
relevant provisions of applicable laws and statutes.
As on March 31, 2025, the Board has five committees:
The Audit Committee, Nomination and Remuneration

Committee, Corporate Social Responsibility Committee,
Share Transfer/Stakeholders Relationship Committee and
Risk Management Committee. A detailed note on the
composition of the Board and its committees is provided in
the Corporate Governance Report, which forms an integral
part of the Board Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR
ASSOCIATE COMPANIES

During the year under review, the Company is not having
any subsidiary, joint venture, Associate Company. Further,
no Company became or ceased to be a Subsidiary/Joint
Venture/Associate of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Act and Listing
Regulations, the Board in consultation with Nomination
and Remuneration Committee has carried out an annual
performance evaluation of its own, the Directors individually
as well as its various committees and the Chairman on
the criteria as recommended by the Nomination and
Remuneration Committee of the Company. The manner in
which the formal annual evaluation has been carried out
has been explained in the Corporate Governance Report,
which forms an integral part of this report. The performance
evaluation was found satisfactory.

NOMINATION AND REMUNERATION POLICY AND
REMUNERATION TO THE DIRECTORS

The Board on the recommendation of the Nomination &
Remuneration Committee has framed a policy for selection
and appointment of Directors, Senior Management
Personnel including Key Management Personnel and
affixing their remuneration. The salient features of the
Nomination and Remuneration Policy are mentioned below:

• The Nomination and Remuneration Policy of the
Company is designed to attract, motivate, improve
productivity and retain manpower by creating a
congenial work environment, encouraging initiatives,
personal growth, team work and inculcating a
sense of belongingness and involvement, besides
offering appropriate remuneration packages and
superannuation benefits.

• The Committee shall comprise at least three (3)
Directors, all of whom shall be non-executive Directors
and at least two-third shall be Independent.

• The Nomination and Remuneration Committee shall
meet at least once in a financial year.

• Quorum of the meeting shall be either two members or
one-third of the members of the committee, whichever
is greater, including at least one independent director
in attendance.

• The Role of the Committee includes: Periodically
reviewing the size and composition of the Board to
have an appropriate mix of executive and independent
Directors to maintain its independence and separate
its functions of governance and management and
to ensure that it is structured to make appropriate
decisions, with a variety of perspectives and skills, in
the best interests of the Company;

• Formulate the criteria for determining qualifications,
positive attributes and independence of a Director and
recommend to the Board, relating to the remuneration
for the Director, key managerial personnel and other
employees.

• Establishing and reviewing Board, KMP and Senior
Management succession plans in order to ensure and
maintain an appropriate balance of skills, experience
and expertise on the Board and Senior Management.

• The Board as per the criteria approved by the
Nomination and Remuneration Committee shall
carry out evaluation of performance of its own,
its committees, and individual Directors and the
Chairman.

The Nomination and Remuneration Policy is available on
the website of the Company at:

https://munjalshowa.net/wp-content/uploads/2025/07/

NRC-POLICY.pdf

The details of remuneration under Section 197 of the Act
paid to Directors are given in point No. IV of Corporate
Governance Report which forms an integral part of this
Report.

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of
a diverse Board in its success. We believe that a truly diverse
board will leverage differences in thought, perspective,
knowledge, skill, regional and industry experience, cultural
and geographical background, age, ethnicity, race and
gender, which will help us, retain our competitive advantage.
The Board has adopted the Board Diversity Policy which

sets out the approach to diversity of the Board of Directors.
The Board Diversity Policy is available on our website at:

https://www.munjalshowa.net/wp-content/

uploads/2016/02/Boards-Diversity-Policy.pdf

MEETINGS OF BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in
advance to the Directors. During the financial year, four (4)
Board Meetings were convened and held on May 29, 2024,
August 12, 2024, November 11,2024, and February 06, 2025.
The details of Board and Committee Meetings and Board
members and Committee members who have attended the
meetings are given in the Corporate Governance Report
forming part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of
Section 134(3)(c) & (5) of the Act, which is to the best of their
knowledge and belief and according to the information and
explanations obtained by them:

a. In the preparation of the annual accounts for the
Financial Year ended March 31, 2025, the applicable
accounting standards had been followed and no
material departures were made from the same;

b. Appropriate accounting policies have been selected
and applied consistently and made judgments and
estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company
at the end financial year ended March 31, 2025 and of
the profits of your Company for that period;

c. 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;

d. The annual accounts have been prepared on a going
concern basis;

e. They have laid down Internal Financial Controls to
be followed by the Company and that such Internal
Financial Controls are adequate and were operating
effectively; and

f. They have devised proper systems to ensure
compliance with the provisions of all applicable laws

and that such systems are adequate and operating
effectively.

RELATED PARTY TRANSACTIONS

During the year under review, all transactions entered by the
Company with Related Parties as defined under the Act and
Listing Regulations were in the ordinary course of business
and on an arm''s length pricing basis and do not attract the
provisions of Section 188 of the Act. Hence, the requirement
of Form AOC-2 as required under Section 188(1) of the Act is
not applicable to the Company.

The Company has not entered into any material related
party transactions, i.e., transactions exceeding 10% of the
annual consolidated turnover or '' 1000 Crore, whichever is
lower, as per the last audited financial statements.

All transactions with related parties were periodically placed
before Audit Committee and committee has also given
omnibus approval for repetitive and foreseen transactions.
The Board and Audit Committee also noted these related
party transactions on a quarterly basis. The details of related
party transactions are given in Note No. 33 of Audited
Financial Statements.

The Related Party Transactions Policy is available on the
website of the Company at:

https://munjalshowa.net/wp-content/uploads/2025/02/

RELATED-PARTY-TRANSACTIONS-POLICY.pdf

MAINTAINANCE OF COST RECORDS

The provisions of Section 148 of the Act is not applicable to
the Company so the Company is not required to maintain
cost records under the aforesaid section.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal
control to safeguard the Company''s assets against any loss
from unauthorized use and ensure proper authorization of
financial transactions.

The Company has internal control systems commensurate
with the size and nature of the business and has experienced
personnel positioned adequately in the organization to
ensure internal control processes and compliances. The
Company takes abundant care in designing, reviewing
and monitoring regularly the working of internal control
systems and their compliances for all important financial

internal control processes. The Audit findings are reported
on a quarterly basis to the Audit Committee of the Board
headed by a Non-Executive Independent Director.

The Company has robust ERP systems based on SAP
platform. This ensures high degree of systems-based checks
and controls.

The Company maintains a system of internal controls
designed to provide a high degree of assurance regarding
the effectiveness and efficiency of operations, the reliability
of financial controls and compliance with laws and
regulations.

The Act has introduced under Section 143(3)(i) stating
that the statutory auditors of the Company shall include
in his audit report whether the Company has adequate
internal financial controls system in place and the operating
effectiveness of such controls in addition to the reporting
by Board of Directors in director''s responsibility statement.
The concept of reporting on internal financial controls is still
new in India. This new reporting requirement has thrown up
many challenges. The Company has developed the internal
financial control processes and that was vetted by the
internal auditors during the year. The same has also been
verified by the statutory auditors and who have reported
that all the material Internal financial controls exist during
the financial year 2024-25.

The Company has developed a compliance tool for the
purpose of legal compliance of all the applicable Acts to the
Company.

COMPLIANCE OF THE SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards on Board and General meetings issued by the
Institute of Company Secretaries of India and that such
systems are adequate and operating effectively. The board
has complied all the secretarial standard applicable on the
Company.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report for the
year under review as stipulated under Regulation 34 of

the Listing Regulations is presented in a separate section
forming part of this Annual Report.

GENERAL

Your Directors state that no disclosure or reporting is
required in respect of the following items as there were no
transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V
of the Act - The Company did not invite/accept any
deposit within the meaning of Chapter V of the Act,
and the rules made thereunder.

2. No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the
going concern status and Company''s operations in
future.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION & REDRESSAL), ACT,
2013

The Company has in place a Policy on prevention of Sexual
Harassment at workplace in line with the requirements
of The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. Internal
Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All
employees (permanent, contractual, temporary, trainees)
are covered under this policy.

Your Directors further state that during the year under
review, no complaints were received or pending pursuant to
the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.

Various workshops and awareness Programmes w.r.t.,
prevention of sexual harassment has been carried out
during the F.Y. 2024-25.

PROCEEDING UNDER INSOLVENCY AND
BANKRUPTCY CODE, 2016

The Company has not made any application or any
proceeding pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) ("IBC Code") during the year.
Further, at the end of the year, Company does not have any
proceedings related to IBC Code.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT ANDTHE VALUATION DONE WHILETAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
ALONG WITH THE REASONS THEREOF

During the year under review, the Company has not made one-time settlement therefore, the same is not applicable.
POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value
system. The SEBI Listing Regulations mandated the formulation of certain policies for all listed companies. All our corporate
governance policies are available on website of the company i.e. www.munjalshowa.net

Policy	Web-link
Policy for Determination of Materiality of Information or Events	https://munjalshowa.net/wp-content/uploads/2025/02/POLICY-ON-
	DETERMINATION-OF-MATERIALITY-OF-INFORMATION-OR-EVENT.pdf
Boards Diversity Policy	https://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-
	Diversity-Policy.pdf
Corporate Social Responsibility Policy	https://munjalshowa.net/wp-content/uploads/2024/04/CSR-POLICY.pdf
Vigil Mechanism / Whistle Blower Policy	https://munjalshowa.net/wp-content/uploads/2025/05/VIGIL-
	MECHANISM-POLICY.pdf
Nomination and Remuneration Policy	https://munjalshowa.net/wp-content/uploads/2025/05/VIGIL-
	MECHANISM-POLICY.pdf
Records and Archives Management Policy	https://munjalshowa.net/wp-content/uploads/2025/02/RECORD-AND-
	ARCHIVES-MANAGEMENT-POLICY.pdf
Related Party Transaction Policy	https://munjalshowa.net/wp-content/uploads/2025/02/RELATED-PARTY-
	TRANSACTIONS-POLICY.pdf
Code of Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons	https://munjalshowa.net/wp-content/uploads/2025/07/CODE-OF-
	CONDUCT.pdf
Code of Conduct for Directors and Senior Management Personnel	https://www.munjalshowa.net/wp-content/uploads/2016/02/Code-of-
	conduct.pdf
Policy on prevention of Sexual Harassment at workplace	https://munjalshowa.net/wp-content/uploads/2025/02/POSH-POLICY.pdf
Quality Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/Quality-
	Policy.pdf
Occupational Health and Safety Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/
	Occupational-Health-and-Safety-Policy.pdf
Environment Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/
	Environment-Policy.pdf
Risk Management Policy	https://www.munjalshowa.net/wp-content/uploads/2021/06/Risk-
	Management-Policy.pdf
Dividend Distribution Policy	https://www.munjalshowa.net/wp-content/uploads/2021/06/Dividend-
	Distribution-Policy.pdf

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government
of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other
stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense
of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by
Astemo Ltd., (earlier Hitachi Astemo Limited) Japan and for the encouragement and assurance, which our collaborator has
provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received
from its valued shareholders.

For and on behalf of the Board

Yogesh Chander Munjal Ashok Kumar Munjal

Place: Gurugram (Chairman & Managing Director) (Director)

Date: May 26, 2025 (DIN 00003491) (DIN 00003843)

---

Mar 31, 2024

The Board of Directors of your Company are pleased to present the Thirty Ninth (39^th) Board Report on the business and operations of Munjal Showa Limited ("the Company") together with the Audited Financial Statements and the Auditors'' Report thereon for the financial year ended March 31, 2024 ("year under review").

FINANCIAL SUMMARY AND HIGHLIGHTS

The salient features of the Company''s financial performance for the year ended March 31, 2024 are as follows:

('' in Lakhs)

	Year Ended	Year Ended
	31.03.24	31.03.23
Sales and other Income (Net of GST)	1,20,711.03	1,26,082.70
Profit before Interest, Depreciation & Tax	4,859.27	5,401.97
Financial Cost	1.25	4.87
Depreciation	1,228.99	1,178.36
Profit before Tax	3,629.03	4,218.74
Tax Expenses
- Current tax	299.74	943.36
- Tax Adjustment for earlier Year	7.95	62.88
- Deferred tax	244.73	22.18
Total Tax Expense	552.42	1,028.42
Profit after Tax	3,076.61	3,190.32
Other comprehensive income net of taxes	24.37	-5.41
Total Comprehensive Income	3,100.98	3,184.91
Surplus brought forward including items of other comprehensive income	28,416.05	27,030.92
Profit available for appropriation	31,517.03	30,215.83
Dividend payment	1,799.78	1,799.78
Transfer to General Reserve	-	-
Surplus available including items of other comprehensive income	29,717.25	28,416.05

OPERATIONS & STATE OF THE COMPANY''S AFFAIRS

The Company has achieved a sales turnover (Net of GST) including other income of '' 1,20,711.03 lakhs as compared to '' 1,26,082.71 lakhs in the previous year. The profit before tax in the current year was '' 3,629.03 lakhs as compared to '' 4,218.74 lakhs in the previous year.

The State of affairs of the Company is detailed in the "Management Discussion & Analysis Report" annexed as Annexure-A and forms part of this report.

CREDIT RATING

The Company''s financial discipline and prudence is reflected in the credit ratings ascribed by CRISIL rating agency as given below:

Long-Term Rating	CRISIL A /Stable (reaffirmed)
Short-Term Rating	CRISIL A1 (reaffirmed)
'' (in crores)
'' 80.75 Long-Term Loans	CRISIL A /Stable
'' 10 Cash Credit	CRISIL A /Stable
'' 53.50 Letter of Credit	CRISIL A /Stable
'' 6 Commercial Paper	CRISIL A1 (reaffirmed)

TRANSFER TO GENERAL RESERVE

The Company has not transferred any amount to General Reserve during the financial year 2023-2024. The balance amount of '' 29,717.25 lakhs (Previous year '' 28,416.05 lakhs) will be retained as surplus in the statement of Profit and Loss.

DIVIDEND

Your Board of Directors are pleased to recommend a final dividend of 225% (i.e., '' 4.50 per equity share of '' 2.00/-each fully paid up) on the paid-up Equity Share Capital of the Company for the financial year ended March 31, 2024 amounting to '' 1799.78 lakhs.

As per Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing

Regulations") read with SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 dated May 05, 2021, the Company has formulated the Dividend Distribution Policy of the Company and the Dividend recommendation is in accordance with the Dividend Distribution Policy of the Company, and such policy is available at the Company''s website at https://www. munialshowa.net/wp-content/uploads/2021/06/Dividend-Distribution-Policy.pdf

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, Dividend Distribution Tax (DDT) which used to be payable by the Company has been abolished and the dividend paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the Dividend after deduction of tax at source. The final dividend, if approved by the shareholders, at the 39^th Annual General Meeting shall be payable to the eligible shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, as on the cutoff date for determining the name of shareholder for paying dividend i.e. Saturday, August 03, 2024.

SHARE CAPITAL

The authorized share capital of the Company is '' 15,00,00,000 (INR Fifteen Crores only) divided into 7,50,00,000 (Seven Crores Fifty Lakh) equity shares of face value of '' 2 (Rupees Two) each. The paid-up Share Capital of the Company as on March 31, 2024 was '' 7,99,90,000 (Rupees Seven Crore Ninety-Nine Lakhs Ninety Thousand only) divided into 3,99,95,000 (Three Crore Ninety-Nine Lac Ninety-Five thousand only) equity shares of face value of '' 2 (Rupees Two) each.

During the year under review, there was no change in the authorised, subscribed and paid-up share capital of the Company from the last financial year.

During the year under review, the Company has not issued any shares with differential voting rights nor granted any stock options or sweat equity shares. The Company has not issued or repaid any Debentures, Preference Shares, Bonds and Security during the financial year. None of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures or Preferential Shares as on March 31, 2024.

FINANCE

Cash and cash equivalent as at March 31, 2024 was '' 1,738.22 Lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013 ("the Act").

The Company has made investments in Mutual funds, Alternative Investments Funds, Commercial paper & Market linked debentures and has given loans/advances to its vendors in the ordinary course of business. The details of investments made, and loans given are provided in Note No. 5A & 5B of the financial statements for the year ended March 31, 2024.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years. The Company has complied with the Corporate Governance requirements as stipulated under the Listing Regulations. In terms of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance along with a Certificate from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Statutory Auditors of your Company confirming the compliance of Corporate Governance is annexed as Annexure-B and forms an integral part of the Annual Report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") and subsequent amendment thereof, the amount of dividends, which remained unpaid or unclaimed for a period of seven consecutive years from the date of transfer to Unpaid Dividend Account of the Company, and

underlying equity shares on which dividend has not been paid or claimed by the members for seven consecutive years are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government.

The amount of unclaimed dividend of '' 8,98,248 was transferred into IEPF account in respect of financial year 2015-16 on April 28, 2023.

The Company has transferred 17,137 Equity Shares of '' 2.00 each on which the dividend remained unpaid or unclaimed for seven consecutive years, on May 12, 2023 to the IEPF Account, after following the prescribed procedure.

STATUTORY AUDITORS

Pursuant to Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in 37^th Annual General Meeting ("AGM") approved the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Registration No. 117366W/W-100018) as the Statutory Auditors of the Company for the period of 5 years, whose term of office will come to end after conclusion of 42^nd Annual General Meeting (AGM) of the Company. The shareholder of the Company in its meeting held on 12^th August, 2022, approved the re-appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Registration No. 117366W/W-100018) as the Statutory Auditor of the Company for a second term of 5 consecutive years and who shall hold office up to the conclusion of the 42^nd AGM of the Company to be held in financial year 20272028.

There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report except mentioned IN auditor report.:

The Report given by the Statutory Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants on the financial statements of the Company for the financial year 2023-24, is part of the Annual Report and self-explanatory and do not call for any further comments except mentioned below:

Based on our examination, which included test checks, the Company has used an accounting software for maintaining its books of account for the year ended March 31, 2024, wherein the accounting software has an audit trail (edit logs) feature of capturing logs for transactions processed

through transaction codes (user interface) and the same has operated throughout the year for all relevant transactions recorded in the software, however, the audit trail feature was not enabled for direct changes for relevant tables at application level and audit trail has not been enabled at the database level to log any direct data changes. (refer note 45 of the financial statements).

Further, as audit trail has not been enabled for the relevant tables at transaction level and database level, we are unable to validate whether there were any instances of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the year ended March 31, 2024.

Management reply:

Audit Trail as pointed out by the auditor''s audit trail feature was available throughout the year except for direct changes in the relevant tables at application level. Internal controls for the year 2023-24 were running effectively throughout the year.

Further, no fraud has been reported by the Statutory Auditors to the Audit Committee in terms of Section 143(12) of the Act during the financial year.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Satyender Kumar & Associates (COP No. 5189), a proprietorship firm of Company Secretary, as the Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2023-24. The Company had received their written consent that the appointment will be in accordance with the applicable provisions of the Act and rules framed thereunder.

The Secretarial Audit Report is self-explanatory and do not call for any further comments. There are no qualifications, reservations, adverse remark, observations, comments or disclaimer given by the Auditors in their Report except

mentioned below:

1. The Company has delayed submission of outcome of Board meeting held on 10.8.2023 with National Stock Exchange as required under Regulation 30 of Listing Regulations by about 15 minutes.

2. The Company has delayed submission of outcome of Board meeting held on 8.11.2023 with National Stock Exchange as required under Regulation 30 of Listing Regulations by about 9 minutes.

3. The Company has delayed submission of Quarterly results for the quarter ended 30.9.2023 approved in Board meeting held on 8.11.2023 with Stock Exchanges i.e. BSE Ltd and National Stock Exchange as required under Regulation 33 of Listing Regulations by about 4 minutes and 9 minutes respectively.

4. The Company has delayed disclosure of Related party transactions for the quarter ended 30.9.2023 with Stock Exchanges as required under Regulation 23(9) of Listing Regulations by one day. The Company has received notices from BSE Limited and National Stock Exchange regarding non-compliance of Regulation 23(9) and a fine of '' 5000/- each was imposed by both the stock exchanges. The Company has replied to said notices of stock exchanges and requested for waiver of fine.

5. The Company has delayed submission of Quarterly results for the quarter ended 31.12.2023 approved in Board meeting held on 8.2.2024 with National Stock Exchange as required under Regulation 33 of Listing Regulations by about 3 hours 11 minutes.

6. Regarding related party transaction-Grant of trade advances to Shivam Autotech Limited amounting to '' 10 Crore, it was observed that the said item was not part of audit committee agenda/board agenda circulated to members of the Audit Committee/Board and also draft minutes shared with audit committee/board members. In absence of any clarification on the above by the company and on the basis of documents produced before us during the course of audit we are not in a position to form an opinion about compliance of Regulation 23 of listing regulations, Section 177 and Section 188 of the Companies Act, 2013.

7. The Company has delayed submission of voting result under Regulation 44(3) relating to passing of resolution through postal ballot on 16.3.2024 with BSE Ltd (XBRL Mode) and National Stock Exchange (Physical and XBRL Mode) by one day.

Management Reply to observations made by the Secretarial Auditor:

For point no. 1 to 3:

With respect to point 1 to 3 we submit that due to technical glitches while uploading the intimation at the BSE Limited and the National Stock Exchange of India Limited portal, there is inadvertent slight delay in submitting the said intimations. The Company had always follows good corporate practices and will ensure timely compliance going forward.

For point no. 4

The Company had replied to notice received imposing fine by the BSE Limited and the National Stock Exchange of India Limited.

For point no. 5

The Company had timely submitted the results with the BSE Limited however due to login issue at the National Stock Exchange of India Limited portal, there is negligible inadvertent slight delay in submission of results. Further the Company had also sent an email attaching the results to the stock exchange for taking the results on record within the timeline.

For point no. 6

The Company had taken up the agenda item as any other agenda with unanimous approval of the Audit Committee and Board. The same was captured in the minutes duly signed by the Chairman of the Audit Committee and Board respectively. The Company is in compliance of Regulation 23 of SEBI (LODR) Regulations, 2015 and section 177 and 188 of the Companies Act, 2013 and Rules made thereunder.

For point no. 7

The delay in submission of voting result under Regulations 44(3) relating to passing of resolution through postal ballot on 16.03.2024 was due to technical reason only.

The company is a law abiding company and always ensure the compliances well within the time frame and governance.

The Report given by the Secretarial Auditor for the financial year ended on March 31, 2024 is annexed as Annexure-D and forms an integral part of Annual report.

Further, no fraud has been reported by the Secretarial Auditors in terms of Section 143(12) of the Act during the financial year.

INTERNAL AUDITORS

M/s Vaish & Associates, Chartered Accountant perform the duties of internal auditors of the Company and their performance and reports are reviewed by the Audit Committee.

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

The details pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo is annexed as Annexure-E and forms an integral part of this report.

ANNUAL RETURN

In terms of provisions of Section 92(3), 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of annual return of the Company for the Financial Year ended March 31, 2024 has been placed on the website of the company and the same can be accessed by the any person through below given web-link www.munjalshowa.net.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2024 is annexed as Annexure-F and forms an integral part of this report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of provisions of Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility (hereinafter

referred as ''CSR'') Committee has formulated a CSR Policy indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report which forms an integral part of Annual Report.

The CSR policy may be accessed on the Company''s website

i.e. https://munjalshowa.net/wp-content/uploads/2024/04/ CSR-POLICY.pdf

As part of its initiatives under CSR, the Company has undertaken projects in the areas of Education, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Act and CSR Policy of the Company. The annual report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 is set out as Annexure-G and forms an integral part of this report.

Munjal Showa Limited considers Corporate Social Responsibility as an integral part of its business activities and endeavors to utilize the allocated CSR budget for the benefit of the society.

The Company has incurred the CSR expenditure as follows:

Sl. No.	Particular	Amount (in ''
(i)	Two percent of average net profit of the Company as per section 135(5)	43,70,250
(ii)	Total amount spent for the financial year	40,53,363
(iii)	Excess/(Short) amount spent for the financial year [(ii)-(i)]	(3,16,887)
(iv)	Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any	4,55,336
(v)	Amount available for set off in succeeding financial years [(iii)- (iv)] *	1,38,449

*The Company has spent excess oft 4,55,336 for CSR Expenses in the previous years. In the Year 2023-24 the Company Adjusted '' 4,55,336 against CSR Expenses liability of said year. Therefore, '' 138,449 will be available for set off in succeeding financial years.

For the subsequent years, the Company endeavors to spend the budgeted CSR expenditure in accordance with the statutory requirements.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company that have occurred between the end of financial year and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that "waste is a precious resource kept in a wrong place". We further believe that "there is no waste as per the law of the nature" Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing "Lean and Low cost" machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in-house starting from design up to finishing the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological, and psychological safety the Company has made "Zero incidents" as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health, and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon footprint and generate pollution prevention awareness throughout the plant and to achieve 100 percent legal compliance. The Company is rigorously improving to create a better place for our next generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute

of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero breakdown, zero losses and zero accidents. In nutshell, TPM is to identify 21 types of Losses & converts them into Profit. We are able to reduce Repair & Maintenance Cost and working very aggressively towards reduction in Inventory Loss.

We have achieved TPM Excellency Award "Category A" for Gurugram and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015.

LEAN TPM ACTIVITIES

We have clubbed TPM with lean manufacturing system. Through Lean we are able to focus & control 8 types of wastes. Now we are giving more focus on 3 M''s - Muda, Mura & Muri. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Workshop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder) and help us in reducing Cost of manufacturing. As on date we have built & rebuild 1019 machines.

Low-Cost Automation is the need of hour. In this area we have achieved great success in a very short span of time by manufacturing 16 numbers 2W Rod CNC machines from manual to Automatic mode. Besides this Automation has been achieved in most of Damper case & Bottom tube Welding process in all the 3 Plants. Many other machines in different lines. Resulting into Quality & Productivity improvements in many folds. Another 7 major Projects are

there in pipeline & very soon we will achieve them. We are also working towards Introduction & implementation of Material Flow Cost Accounting.

ISO/TS 16949/LATF16949 ACCREDITATION

Your Company''s manufacturing facilities are located at Gurugram, Haridwar and Manesar and we continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2015 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions.

Further your Company is now an "ISO-45001" certified Company. This Certificate for Safety Management System is approved by the International Standard Organization. This is an International Standard that specifies requirements for an occupational health and safety (OH&S) management system.

These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of waste, prevention of near misses and to ensure maximized customer delight.

LISTING

The shares of your Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), and pursuant to Clause C (9)(d) of Schedule V of SEBI Listing Regulations, the annual Listing fees for the year 2024-25 has been paid to them well before the due date i.e. April 30, 2024. Annual Custody/Issuer fee for the year 2024-25 has been paid by the Company to the depositories viz. NSDL and CDSL.

HUMAN RESOURCES

Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from "Human Resources Management" to "Human Capital Management".

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Company''s ability to attract and retain quality people. The total headcounts were 2179 at the end of the year as compared to 2412 of the previous year. The Company encourages long

term commitment to the Company by rewarding its people for the opportunities they create, and the value generated for customers and shareholders. The Company conducts several employee engagement and training Programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing. As desired by the Government of India we have started NEEM Scheme and NAPS Scheme in order to enhance the technical skill level of our unemployed youths.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement Programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the competitive advantage of the company. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.

The Board has identified following risks: -

Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices, Dependence on Collaborators, Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and

brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and Labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.

The website link is given below:

https://www.munjalshowa.net/wp-content/

uploads/2021/06/Risk-Management-Policy.pdf

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for the Directors and Employees of the Company by adopting the Whistle Blower Policy to report about the genuine concerns, unethical behaviour, fraud or violation of Company''s Code of Conduct. Your Company hereby affirms that no Director/ Employee of the Company have been denied access to the Chairman of the Audit Committee. The details of the Whistle Blower Policy is explained in the Corporate Governance Report which form an integral part of this Report and is also posted on the website of the Company.

The website link is given below:

https://munialshowa.net/wp-content/uploads/2024/05/

WBP.pdf

RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, all the recommendations made by the Audit Committee were accepted by the Board.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2023-24.

DIRECTORS AND KEY MANAGERIAL PERSONNEL''S

During the financial year 2023-24, following changes took place in the composition of Board of Directors and Key Managerial Personnel of the company:

1. Mr. Yasuhiro Ashiki (DIN: 09132637) resigned as Joint Managing Director (Executive) of the Company effective as of the close of business hours on March 31,2024.

2. Mr. Vinod Kumar Agrawal (DIN: 00004463) concluded his tenure as Non-Executive (Independent) Director of the Company upon the completion of his second term as Independent Director, effective as of the close of business hours on March 31,2024.

3. Mr. Devi Singh (DIN: 00015681) concluded his tenure as Non-Executive (Independent) Director of the Company upon the completion of his second term as Independent Director, effective as of the close of business hours on March 31,2024.

4. Mr. Nand Lal Dhameja (DIN: 02351762) concluded his tenure as Non-Executive (Independent) Director of the Company upon the completion of his second term as Independent Director, effective as of the close of business hours on March 31,2024.

* The Board of Director, on recommendation of the Nomination and Remuneration Committee and approval by members of the Company through postal ballot (Remote E-voting) dated March 16, 2024 (being the last date of Remote E-voting), approved the appointment of Ms. Neetika Batra as a Non-Executive Independent Women Director of the Company w.e.f. April 01,2024 to hold office for a term of five consecutive years, i.e. up to March 31,2029, not liable to retire by rotation.

* Mrs. Charu Munjal (DIN: 03094545) resigned as Director (Non -Executive) of the Company effective as of the close of business hours on May 29,2024.

*The Board of Director, on recommendation of the Nomination and Remuneration Committee and subject to approval by members of the Company in ensuing Annual General Meeting ("AGM") and Central Government, approved the appointment of Mr. Hitoshi Fukagawa (DIN: 10611378) who was appointed by the Board as Additional Director (Executive Director) on May 29, 2024 and as the Joint Managing Director of the Company, w.e.f. May 29, 2024 to hold office for a term of five consecutive years, i.e. up to May 28,2029, liable to retire by rotation on such terms of employment as agreed between the Company.

In accordance with the provisions of the Companies Act, 2013 not less than 2/3rd (Two-third) of the total number of Directors (other than Independent Directors) shall be liable to retire by rotation. Accordingly, pursuant to the Act read

with the Articles of Association of the Company, Mr. Yogesh Chander Munjal, Executive Director and Mr. Kazuhiro Nishioka, Non-Executive Director are liable to retire by rotation at the ensuing 39^th AGM and being eligible they have offered themselves for re-appointment.

During the year under review, apart from the above-stated facts, there is no change in the composition of Board of Directors. Further, there was no change in the office of the Key Managerial Personnel of the company.

Pursuant to the provisions of the SEBI Listing Regulations and the Act, the profiles of all the Directors, seeking appointment/re-appointment at the ensuing AGM, have been provided in the Notice of 39^th AGM of the Company.

All Independent Directors have given individual declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Listing Regulations. All the Independent Directors have registered themselves under data bank of Independent Directors created and maintained by Indian Institute of Corporate Affairs.

With regard to integrity, expertise and experience (including the proficiency) of the Independent Directors, the Board of Directors is of the opinion that all the Independent Directors are persons of integrity and possess relevant expertise and experience and their continued association as Directors will be of immense benefit and in the best interest of the Company.

All Directors of the Company have also given declarations that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such statutory authority as required under the Circular dated 20^th June, 2018 issued by BSE Limited and National Stock Exchange of India Limited.

The Company appreciates the dedicated and valuable guidance given by all the Directors of the Company.

COMMITTEES OF THE BOARD

The Company has several Committees which have been established in compliance with the requirement of the relevant provisions of applicable laws and statutes. As on March 31, 2024, the Board has five committees: The Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Share Transfer/Stakeholders Relationship Committee and

Risk Management Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report, which forms an integral part of the Board Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, the Company is not having any subsidiary, joint venture, Associate Company. Further, no Company became or ceased to be a Subsidiary/Joint Venture/Associate of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Act and Listing Regulations, the Board in consultation with Nomination and Remuneration Committee has carried out an annual performance evaluation of its own, the Directors individually as well as its various committees and the Chairman on the criteria as recommended by the Nomination and Remuneration Committee of the Company. The manner in which the formal annual evaluation has been carried out has been explained in the Corporate Governance Report, which forms an integral part of this report. The performance evaluation was found satisfactory.

NOMINATION AND REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS

The Board on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management Personnel including Key Management Personnel and affixing their remuneration. The salient features of the Nomination and Remuneration Policy are mentioned below:

• The Nomination and Remuneration Policy of the Company is designed to attract, motivate, improve productivity and retain manpower by creating a congenial work environment, encouraging initiatives, personal growth, team work and inculcating a sense of belongingness and involvement, besides offering appropriate remuneration packages and superannuation benefits.

• The Committee shall comprise at least three (3) Directors, all of whom shall be non-executive Directors and at least two-third shall be Independent.

• The Nomination and Remuneration Committee shall meet at least once in a year.

• Quorum of the meeting shall be either two members or one-third of the members of the committee, whichever is greater, including at least one independent director in attendance.

• The Role of the Committee includes: Periodically reviewing the size and composition of the Board to have an appropriate mix of executive and independent Directors to maintain its independence and separate its functions of governance and management and to ensure that it is structured to make appropriate decisions, with a variety of perspectives and skills, in the best interests of the Company;

• Formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board, relating to the remuneration for the Director, key managerial personnel and other employees.

• Establishing and reviewing Board, KMP and Senior Management succession plans in order to ensure and maintain an appropriate balance of skills, experience and expertise on the Board and Senior Management.

• The Board as per the criteria approved by the Nomination and Remuneration Committee shall carry out evaluation of performance of its own, its committees, and individual Directors and the Chairman.

The Nomination and Remuneration Policy is available on the website of the Company at:

https://munjalshowa.net/wp-content/uploads/2024/05/

NRC.pdf

The details of remuneration under Section 197 of the Act paid to Directors are given in point No. IV of Corporate Governance Report which forms an integral part of this Report.

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse board will leverage differences in thought, perspective,

knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

The Board Diversity Policy is available on our website at:

https://www.munjalshowa.net/wp-content/

uploads/2016/02/Boards-Diversitv-Policv.pdf

MEETINGS OF BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the financial year, four (4) Board Meetings were convened and held on May 30, 2023, August 10, 2023, November 08, 2023, and February 08, 2024. The details of Board and Committee Meetings and Board members and Committee members who have attended the meetings are given in the Corporate Governance Report forming part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

a. In the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable accounting standards had been followed and no material departures were made from the same;

b. Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end financial year ended March 31, 2024 and of the profits of your Company for that period;

c. 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;

d. The annual accounts have been prepared on a going concern basis;

e. They have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

During the year under review, all transactions entered by the Company with Related Parties as defined under the Act and Listing Regulations were in the ordinary course of business and on an arm''s length pricing basis and do not attract the provisions of Section 188 of the Act. Hence, the requirement of Form AOC-2 as required under Section 188(1) of the Act is not applicable to the Company.

The Company has not entered into any material related party transactions, i.e., transactions exceeding 10% of the annual consolidated turnover or '' 1000 Crore, whichever is lower, as per the last audited financial statements.

All transactions with related parties were periodically placed before Audit Committee and committee has also given omnibus approval for repetitive and foreseen transactions. The Board and Audit Committee also noted these related party transactions on a quarterly basis. The details of related party transactions are given in Note No. 33 of Audited Financial Statements.

The Related Party Transactions Policy is available on the website of the Company at:

https://www.munjalshowa.net/wp-content/

uploads/2022/03/RELATED-PARTY-TRANSACTION-POLICY.

pdf

MAINTAINANCE OF COST RECORDS

The provisions of Section 148 of the Act is not applicable to the Company so the Company is not required to maintain cost records under the aforesaid section.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the Company''s assets against any loss from unauthorized use and ensure proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on a quarterly basis to the Audit Committee of the Board headed by a Non-Executive Independent Director.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems-based checks and controls.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

The Act has introduced under Section 143(3)(i) stating that the statutory auditors of the Company shall include in his audit report whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in director''s responsibility statement. The concept of reporting on internal financial controls is still new in India. This new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2023-24.

The Company has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.

COMPLIANCE OF THE SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards on Board and General meetings issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. The board has complied all the secretarial standard applicable on the Company.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report for the year under review as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming part of this Annual Report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act - The Company did not invite/accept any deposit within the meaning of Chapter V of the Act, and the rules made thereunder.

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL), ACT, 2013

The Company has in place a Policy on prevention of Sexual Harassment at workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors further state that during the year under review, no complaints were received or pending pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Various workshops and awareness Programmes w.r.t., prevention of sexual harassment has been carried out during the F.Y. 2023-24.

PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

The Company has not made any application or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) ("IBC Code") during the year. Further, at the end of the year, Company does not have any proceedings related to IBC Code.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT ANDTHE VALUATION DONE WHILETAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, the Company has not made one-time settlement therefore, the same is not applicable. POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI Listing Regulations mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on website of the company i.e. www.munjalshowa.net

Policy	Web-link
Policy for Determination of Materiality of Information or Events	https://munjalshowa.net/wp-content/uploads/2024/05/DMIE.pdf
Boards Diversity Policy	https://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-
	Diversity-Policy.pdf
Corporate Social Responsibility Policy	https://munjalshowa.net/wp-content/uploads/2024/04/CSR-POLICY.pdf

Policy	Web-link
Vigil Mechanism / Whistle Blower Policy	https://munjalshowa.net/wp-content/uploads/2024/05/WBP.pdf
Nomination and Remuneration Policy	https://munjalshowa.net/wp-content/uploads/2024/05/NRC.pdf
Records and Archives Management Policy	https://www.munjalshowa.net/wp-content/uploads/2016/02/Records-and-
	Archives-Management-Policy.pdf
Related Party Transaction Policy	https://www.munjalshowa.net/wp-content/uploads/2022/03/RELATED-PARTY-
	TRANSACTION-POLICY.pdf
Code of Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons	https://munjalshowa.net/wp-content/uploads/2024/04/CODE-OF-CONDUCT.
	pdf
Code of Conduct for Directors and Senior Management Personnel	https://www.munjalshowa.net/wp-content/uploads/2016/02/Code-of-
	conduct.pdf
Policy on prevention of Sexual Harassment at workplace	https://www.munjalshowa.net/wp-content/uploads/2023/02/POSH-POLICY.
	pdf
Quality Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/Quality-Policy.
	pdf
Occupational Health and Safety Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/Occupational-
	Health-and-Safety-Policy.pdf
Environment Policy	https://www.munjalshowa.net/wp-content/uploads/2021/02/Environment-
	Policy.pdf
Risk Management Policy	https://www.munjalshowa.net/wp-content/uploads/2021/06/Risk-
	Management-Policy.pdf
Dividend Distribution Policy	https://www.munjalshowa.net/wp-content/uploads/2021/06/Dividend-
	Distribution-Policy.pdf

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Hitachi Astemo Ltd., Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Yogesh Chander Munjal Ashok Kumar Munjal

Place: Gurugram (Chairman & Managing Director) (Director)

Date: May 29, 2024 (DIN 00003491) (DIN 00003843)

---

Mar 31, 2018

Dear Members,

The Directors have great pleasure in presenting the 33^rd Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2018.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company’s Financial Results for the year under review are as follows:

(Rs. In lakhs)

	Year Ended	Year Ended
	31.03.18	31.03.17
Sales and other Income (Net of Excise Duty and GST)	160,210.77	147,724.69
Profit before Interest, Depreciation & Tax	13,379.62	11,707.15
Financial Cost	14.93	5.40
Depreciation	2,824.46	2,906.20
Profit before Tax	10,540.23	8,795.55
Tax Expenses
Current tax	3,110.23	3,108.91
Deferred tax	(321.42)	(384.69)
Total Tax Exp	2,788.81	2,724.22
Profit after Tax	7,751.42	6,071.33
Other comprehensive income net of taxes	(130.52)	(205.23)
Adjustment to deferred tax liability	-	(89.79)
Total Comprehensive Income	7,620.90	5,776.31
Net Profit brought forward	24,559.05	18,782.74
Profit available for appropriation	32,179.95	24,559.05
Dividend payment	1,599.80	-
Dividend Tax	325.68	-
Transfer to General Reserve	2,000.00	-
Surplus Available	28,254.47	24,559.05

OPERATIONS & STATE OF THE COMPANY’S AFFAIRS

The Company has achieved a sales turnover, including other income (Net of Excise Duty), of Rs. 160,210.77 lakhs vis-a-vis Rs. 147,724.69 lakhs in the previous year. The profit before tax in the current year was at Rs. 10,540.23 Lakhs as compared to Rs. 8,795.55 lakhs in the previous year.

The State of affairs of the Company is detailed in the “Management Discussion & Analysis” section which forms part of this report.

CREDIT RATING

The Company’s financial discipline and prudence is reflected in the credit ratings ascribed by CRISIL rating agency as given below:

(In lakhs)

INR 6850 Long-Term Loans	AA/Stable (Reaffirmed)
INR 3000 Cash Credit	AA/Stable (Reaffirmed)
INR 4350 Letter of Credit	CRISIL A1
INR 225 Bank Guarantee	CRISIL A1
INR 600 Commercial Paper Programme	CRISIL A1

TRANSFER TO GENERAL RESERVE

The Board has transferred an amount of Rs. 2,000/- lakhs to General Reserve before recommending the final dividend. The balance amount of Rs. 28,254.47 lakhs (Previous year Rs. 24,559.05 lakhs) will be retained as surplus in the statement of Profit and Loss.

DIVIDEND

Your directors are pleased to recommend a dividend of 225 per cent (i.e. Rs. 4.5/- per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2018 amounting to Rs. 1,799.78 lakhs. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 369.95 lakhs. The dividend, if approved, at the Annual General Meeting (hereinafter refer as “AGM”) shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from Saturday, September 15, 2018 to Wednesday, September 26, 2018 (both days inclusive).

SHARE CAPITAL & DEBENTURES

The authorized share capital of the Company is Rs. 15,00,00,000 (Rupees Fifteen Crores only) divided into 7,50,00,000 (Seven Crores Fifty Lakh) equity shares of Rs. 2 (Rupees Two) each. The paid up Share Capital of the Company as on March 31, 2018 was Rs. 7,99,92,500 (Rupees Seven Crore Ninety Nine Lakhs Ninety Two Thousand Five Hundred only).

During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2018.

FINANCE

Cash and cash equivalent as at March 31, 2018 was Rs. 1912 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 5A and 5B to the financial statements. As per policy of loans to employees of the Company, during the year the Company provided an interest free loan amounting to Rs. 40,000/- to Mr. Saurabh Agrawal-Company Secretary & Key Managerial Person of the Company.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the Financial Year under review, your Company has transferred unpaid/ unclaimed dividend, amounting to Rs. 4.89 Lakhs for FY 2009-10 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.

AUDITORS

At 32^nd AGM of the Company, the members of the Company appointed M/s Deloitte Haskins & Sells LLP as a statutory auditor of the Company for the period of 5 years, who hold office up to the conclusion of the 37^th AGM of the Company. In compliance with the applicable provisions of the Companies Act, 2013 and the rules made thereunder read with the statutory modification(s) or re-enactment(s) thereof, for the time being force, the Board recommends for ratification of the appointment of M/s Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company. The Statutory Auditors have consented for the said ratification of appointment and confirmed their eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

The Report given by the Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, on the financial statements of the Company for the financial year 2017-18, is part of the Annual Report. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.

Further, with regard to section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the auditors under section 143(12) of the said Act.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report except two e-forms were filled with additional fees due to administrative reason with Ministry of Corporate Affair.

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

The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made thereunder regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Board’s Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-D to this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2018, is annexed hereto and forms part of this Report. Annexure-E

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility (hereinafter referred as ‘CSR’) Committee has formulated a CSR Policy indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report.

The CSR policy may be accessed on the Company’s website i.e. http://www.munjalshowa.net/wp-content/ uploads/2015/05/Corporate-Social-Responsibility-Policy1.pdf.

As part of its initiatives under CSR, the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013 and CSR Policy of the Company. The annual report on CSR activities as required under the Companies (CSR Policy) Rules,

2014 is set out as Annexure-F to Board’s Report.

Munjal Showa Limited considers social responsibility as an integral part of its business activities and endeavours to utilize the allocated CSR budget for the benefit of the society.

The Company has incurred the CSR expenditure of Rs. 112.67 lakhs during the current financial year being about 61.04 % of Rs. 184.59 Lakh, to be spent during the year. The shortfall of Rs. 71.92 Lakh, being 38.96% of the required expenditure on CSR was due to non-identification of appropriate projects / activities / programmes in line with the CSR policy of the Company. The CSR activities of the Company are approved by the Board and few new initiatives have been proposed that may be considered in future. For the subsequent years, the Company endeavours to spend the budgeted CSR expenditure in accordance with the statutory requirements.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that “waste is a precious resource kept in a wrong place”. We further believe that “there is no waste as per the law of the nature”. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing “Lean and Low cost” machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in-house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made “Zero incidents” as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify 21 types of Losses & converts them into Profit. We are able to reduce Repair & Maintenance Cost.

We have achieved TPM Excellency Award “Category A” for Gurugram and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015.

Lean TPM Activities:

We have clubbed TPM with lean manufacturing system. Thru Lean we are able to focus & control 7 types of wastes. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing. So far we are able to manufacture more than 750 machines In-House with Lean TPM Concept inclusive of many CNC Machines.

ISO/TS 16949 ACCREDITATION

Your Company’s manufacturing facilities are located at Gurugram, Haridwar and Manesar and we continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes, prevention of rear misses and to ensure maximized customer delight.

LISTING

The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V of SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2018-19 has been paid to them well before the due date i.e. April 30, 2018. Annual Custody/Issuer fee for the year 2018-19 has also been paid by the Company to NSDL and CDSL.

HUMAN RESOURCES

Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from “Human Resources Management” to “Human Capital Management”.

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Company’s ability to attract and retain quality people. The total headcounts were 3302 at the end of the year as compared to 3058 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing. As desired by the Govt. of India we have started NEEM Scheme and NAPS Scheme in order to enhance the technical skill level of our unemployed youths.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.

The Board has identified following risks:-

Intensifying Competition, Declining margins, Imposition of strict environmental / safety /
regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

The website link is given below:

http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, all the recommendations of the Audit Committee were accepted by the Board.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2017-18.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Masanao Matsui ceased to be a director of the Company w.e.f. May 19, 2017.

During the period 2017-18, Mr. Ashok Kumar Munjal was the director liable to retire by rotation and being eligible, he had offered himself for re-appointment before the shareholder at 32^nd AGM of the Company. The shareholder confirmed his appointment at the 32^nd AGM of the Company.

At the 32^nd Annual General Meeting of the Company, the members confirmed the appointment of Mr. Kobayashi as Joint Managing Director of the Company.

Mr. Teruyoshi Sato was appointed as an additional director of the Company w.e.f. May 19, 2017. Further, he was appointed as a Non-Executive Director of the Company, liable to retire by rotation u/s 152 of the Companies Act, 2013, at the 32^nd AGM of the Company.

At the 32^nd AGM of the Company, the members approved the variation in the terms of appointment of Mr. Yogesh Chander Munjal and Mr. Shigeki Kobayashi w.e.f. September 01, 2017.

The Board of Directors in its meeting held on May 30, 2018, after considering the recommendation of Nomination and Remuneration Committee, recommended to the shareholders to approve the variation in the terms of appointment of Mr. Yogesh Chander Munjal, Managing Director and Mr. Shigeki Kobayashi, Joint Managing Director of the Company w.e.f. September 1, 2018.

Mr. Yogesh Chander Munjal and Mrs. Charu Munjal are liable to retire by rotation at the ensuing AGM. And being eligible they offered themselves for re-appointment.

The Board of Directors in its meeting held on May 30, 2018, after considering the recommendation of Nomination and Remuneration Committee, recommended to the shareholders, the re-appointment of Mr. Devi Singh, Mr. Vinod Kumar Agrawal, Mr. Nand Lal Dhamejaand Mr. Surinder Kumar Mehta as Independent Directors of the Company for a second term of 5 (five) consecutive years on the Board of the Company w.e.f. April 01, 2019 to March 31, 2024, as special resolution at the ensuing AGM.

Further Mr. Yasuhiro Yamamoto has been appointed as an additional director of the Company w.e.f May 30, 2018. The Board, after considering the recommendations of Nomination and Remuneration Committee, recommends his appointment as a Non-Executive Director of the Company, liable to retire by rotation u/s 152 of the Companies Act, 2013, before the shareholder at the 33^rd AGM of the Company.

Pursuant to the provisions of the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, the profiles of all the directors, seeking appointment or reappointment at the ensuing AGM, have been provided in the Notice of 33^rd AGM.

Mr. Teruyoshi Sato has resigned as Director of the Company w.e.f May 30, 2018. The Board placed its appreciation for the valuable services rendered by Mr. Teruyoshi Sato during his tenure as Director of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The following employees were designated as whole-time key managerial personnel of the Company:

a. Mr. Yogesh Chander Munjal- Managing Director

b. Mr. Shigeki Kobayashi- Joint Managing Director

c. Mr. Pankaj Gupta- Chief Financial Officer.

d. Mr. Saurabh Agrawal- Company Secretary

The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1

The Company appreciates the dedicated and valuable guidance given by all the Directors of the Company. COMMITTEES OF THE BOARD

Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee and the Risk Management Committee (non-mandatory committee). A detailed note on the composition of the Board and its committees is provided in the corporate governance report, which forms a part of the Board Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the financial year 2017-18, the Company neither has any subsidiary, joint venture or associate company, nor has any company become or ceased to be its subsidiary, joint venture or associate company.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The silent feature of the Nomination and Remuneration Policy has been provided in this Report as Annexure-G. During the Financial Year 2017-18, no changes or amendments were made in such policy. The Nomination and Remuneration Policy is available on our website at http://www.munjalshowa.net/wp-content/uploads/2015/05/Nomination-And-Remuneration-Policy1.pdf.

The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

The Board Diversity Polic

is available on our website

Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

a. that in the preparation of the annual accounts for the Financial Year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2018 and of the Profit of your Company for the Financial Year ended March 31, 2018;

c. that 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;

d. that the annual accounts for the Financial Year ended March 31, 2018 have been prepared on a going concern basis;

e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

All transactions except the loan to Mr. Saurabh Agrawal, entered into with Related Parties as defined under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company for all the transactions except the loan provided to Company Secretary.

The Company generally provided interest free loan to all its permanent employees and workers. As per the same, the Company has provided interest free loan of Rs. 40000 to Mr. Saurabh Agrawal, KMP of the Company. The form AOC-2 in respect of such transaction has been provided as Annexure H.

All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The details of related party transactions are given in note number 32 of Financial Statements.

The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. And the link of such policy is given below:

http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf

None of the Independent Directors has any pecuniary relationships with the Company.

EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest.

There is no other qualification, reservation or adverse remark, comment, observation or disclaimer made by the auditor in his report and the company secretary in practice in his secretarial audit report except two e-forms were filled with additional fee to ROC due to administrative reason.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the Company’s assets against any loss from unauthorized use and ensure proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

The Companies Act, 2013 has introduced under Section 143(3)(i) stating that the statutory auditors of the Company shall include in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in director’s responsibility statement. The concept of reporting on internal financial controls is still new in India. This new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2017-18.

The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.

COMPLIANCE OF THE SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

SEXUAL HARASSMENT POLICY

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Various workshops or awareness programme w.r.t. sexual harassment has been carried out during the FY 2017-18. ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/

For and on behalf of the Board

Place: Gurugram Yogesh Chander Munjal Vinod Kumar Agrawal

Date: May 30, 2018 (Chairman & Managing Director) (Director)

(DIN 00003491) (DIN 00004463)

B-175, Greater Kailash,

Part I, A-224 Ist Floor,

Defence Colony

New Delhi, 110048

New Delhi 110024

---

Mar 31, 2017

The Directors have great pleasure in presenting the 32nd Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2017.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company’s Financial Results for the year under review are as follows:

(Rs. In lakhs)

	Year Ended	Year Ended
	31.03.17	31.03.16
Sales and other Income	147,575.77	150,713.70
Profit before Interest, Depreciation & Tax	11,071.86	11,727.49
Financial Cost	5.39	12.19
Depreciation	2,906.21	2,929.84
Profit before Tax	8,160.26	8,785.45
Provision for Taxation	2,505.07	2,670.22
Profit after Tax	5,655.19	6,115.23
Net Profit brought forward	18,554.25	16,364.50
Profit available for appropriation	24,209.44	22,479.73
Dividend (Recommended)	1,599.80	1,599.80
Dividend Tax (Net)	325.68	325.68
Transfer to General Reserve	2,000.00	2,000.00
Surplus Available	20,283.96	18,554.25

OPERATIONS & STATE OF THE COMPANY’S AFFAIRS

The Company has achieved a sales turnover, including other income, of Rs. 147575.77 lakhs vis-a-vis Rs. 150713.70 lakhs in the previous year. The profit before tax in the current year was at Rs. 8160.26 lakhs as compared to Rs. 8785.45 lakhs in the previous year.

CREDIT RATING

The Company’s financial discipline and prudence is reflected in the credit ratings ascribed by CRISIL rating agency as given below:

INR 6850 Long-Term Loans	AA/Stable (Reaffirmed)
INR 3000 Cash Credit	AA/Stable (Reaffirmed)
INR 4350 Letter of Credit	CRISIL A1
INR 225 Bank Guarantee	CRISIL A1
INR 600 Commercial Paper Programme	CRISIL A1

TRANSFER TO GENERAL RESERVE

The Board has transferred an amount of Rs. 2000 lakhs to General Reserve before recommending the final dividend. The balance amount of Rs. 20,283.96 lakhs (Previous year Rs. 18,554.25 lakhs) will be retained as surplus in the statement of Profit and Loss.

DIVIDEND

Your directors are pleased to recommend a dividend of 200 per cent (i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2017 amounting to Rs. 1599.80 lakhs Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 325.68 lakhs. The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from August 12, 2017 to August 24, 2017 (both days inclusive).

SHARE CAPITAL & DEBENTURES

The authorized share capital of the Company is Rs. 15,00,00,000 (Fifteen crores rupees only) divided into 75,000,000 equity shares of Rs. 2 each. The paid up Share Capital as on March 31, 2017 was Rs. 7,99,92,500 (Seven crore ninety nine lakhs ninety two thousand five hundred rupees only).

During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2017.

FINANCE

Cash and cash equivalent as at March 31, 2017 was Rs. 621.19 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 10 and 12 to the financial statements. As per policy of loans to employees of the Company, during the year the Company provided an interest free loan amounting to Rs. 40,000/- to Mr. Saurabh Agrawal-Company Secretary & Key Managerial Person of the Company and the loan amount was fully repaid to Company by Mr. Saurabh Agrawal as on March 31, 2017.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the Financial Year under review, your Company has transferred unpaid/unclaimed dividend, amounting to Rs. 5.22 Lakhs for FY 2008-09 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.

AUDITORS

M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Gurugram, the Auditors of the Company, appointed at 29th Annual General Meeting for a period of 3 years, up to the date of the 32nd Annual General Meeting of the Company are now liable to retire. So, M/s S.R. Batliboi & Co. LLP will retire at the ensuing General Meeting of the Company.

Thus, on the recommendations of the Audit Committee, and after due deliberation and consideration, the Board recommends the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (Firm Registration no. 117366W/W-100018) as the Statutory Auditors of the Company in place of retiring auditors for five years, who will hold the office upto the conclusion of the 37th Annual General Meeting subject to the ratification of appointment by shareholders at every annual general meeting.

The Report given by the Auditors, M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Gurugram, on the financial statements of the Company for the financial year 2016-17, is part of the Annual Report. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.

Further, with regard to section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the auditors under section 143(12) of the said Act.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.

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

The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made thereunder regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Board’s Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-D to this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2017, is annexed hereto and forms part of this Report. Annexure-E

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. Please refer Annexure-F to

Board’s Report

The Company was required to spend Rs.184.83 lakhs under Corporate Social Responsibility activities (CSR). The Company has spent 185.03 lakhs on CSR Activities during the financial year 2016-2017.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that “waste is a precious resource kept in a wrong place”. We further believe that “there is no waste as per the law of the nature”. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing “Lean and Low cost” machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in-house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made “Zero incidents” as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify various types of Losses & converts them into Profit.

We have achieved TPM Excellency Award “Category A” for Gurugram and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015.

Lean TPM Activities:

We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing. So far we are able to manufacture more than 700 machines In-House with Lean TPM Concept inclusive of many CNC Machines.

ISO/TS 16949 ACCREDITATION

Your Company’s manufacturing facilities located at Gurugram, Haridwar and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

LISTING

The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2017-18 has been paid to them well before the due date i.e. April 30, 2017. Annual Custody/Issuer fee for the year 2017-18 has been paid by the Company to NSDL and CDSL.

HUMAN RESOURCES

Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from “Human Resources Management” to “Human Capital Management”.

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Company’s ability to attract and retain quality people. The total headcounts were 3058 at the end of the year as compared to 3451 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.

The Board has identified following risks:-

Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

The website link is given below:

http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf

RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, all the recommendations of the Audit Committee were accepted by the Board.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2016-17.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period 2016-17, Mrs. Charu Munjal was the director liable to retire by rotation. And Mrs. Charu Munjal being eligible had offered herself for re-appointment before the shareholder at 31st Annual General Meeting of the Company. Shareholder confirmed her appointed at the 31st Annual General Meeting of the Company.

During the period 2016-17, Mr. Pankaj Munjal was appointed as Independent Director of the Company at the 31st Annual General Meeting of the Company.

Mr. Yogesh Chander Munjal was re-appointed as Managing Director of the Company for a further period of five years with effect from September 01, 2016 to August 31, 2021 at the 31st Annual General Meeting of the Company.

The Board of Directors in its meeting held on May 19, 2017, after recommendation of Nomination and Remuneration Committee, recommended to the shareholders variation in the Terms of Appointment of Mr. Yogesh Chander Munjal w.e.f. September 1, 2017.

Mr. Ashok Kumar Munjal (DIN 00003843) non-executive director of the Company is liable to retire by rotation at the ensuing Annual General Meeting. Mr. Ashok Kumar Munjal being eligible has offered himself for re-appointment.

Mr. Ashok Kumar Munjal aged about 66 years old, serves as the Managing Director of Sunbeam Auto Private Limited. Mr. Munjal has 33 years of experience in the field of engineering industry, investment, finance and auto component. He is holding the position of directorship in fourteenth Companies including Munjal Showa Limited. Mr. Munjal is a Commerce and Law Graduate from Punjab University, Chandigarh. He does not hold any share in the Company. He is the Member of Audit Committee and Share Transfer/ Stakeholder Relationship Committee of the Company. He is also the member of the Audit Committee of Orient Craft Limited.

Your directors recommend his re-appointment at the ensuing Annual General Meeting.

Mr. Shigeki Kobayashi was appointed as an additional director in the Company w.e.f. October 26, 2016. The Board also appointed him as a Joint Managing Director of the company subject to the approval of the shareholders at the ensuing general meeting. On the recommendations of Nomination and Remuneration Committee, the Board recommends his appointment before the shareholder at the 32nd General Meeting of the Company. The brief profile is given in the explanatory statement of the AGM Notice. The Board also recommends the variation in terms of appointment of Mr. Shigeki Kobayashi before the shareholders.

Mr. Masanao Matsui (DIN 00340218) has resigned as Director of the Company w.e.f May 19, 2017. The Board placed its appreciation for the valuable services rendered by Mr. Masanao Matsui during his tenure as Director of the Company.

Mr. Teruyoshi Sato (DIN07825074) has been appointed as an additional director of the Company w.e.f May 19, 2017. The detailed profile is given in the explanatory statement of the AGM Notice. The Board recommends his appointment before the shareholder at the 32nd General Meeting of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The following employees were designated as whole-time key managerial personnel of the Company:

a. Mr. Yogesh Chander Munjal- Managing Director

b. Mr. Shigeki Kobayashi- Joint Managing Director

c. Mr. Pankaj Gupta- Chief Financial Officer.

d. Mr. Saurabh Agrawal- Company Secretary

The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1

The Board appointed Mr. Devi Singh as Chairman of the Company w.e.f. May 20, 2016. Due to pre-occupancy, Mr. Devi Singh resigned from the post of chairmanship w.e.f. October 26, 2016 and continued to act as an Independent Director of the Company.

After resignation of Mr. Devi Singh, the Board of Directors appointed Mr. Yogesh Chander Munjal, Executive Director and Managing Director, as the Chairman of the Company. The Board also appointed Mr. Devi Singh as new Member of the Audit Committee and Mr. Shigeki Kobayashi as Member of the CSR Committee and Share Transfer/Stakeholders Relationship Committee.

The Company appreciates the dedicated and valuable guidance given by all the Directors of the Company.

COMMITTEES OF THE BOARD

Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee, the Risk Management Committee (non-mandatory committee). A detailed note on the composition of the Board and its committees is provided in the corporate governance report section of this Annual Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

The Company neither has any Subsidiaries, joint ventures or associate companies nor any company has become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy has been included in this Report as Annexure-G.

The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.

The Board Diversity Policy is available on our website

Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

a. that in the preparation of the annual accounts for the Financial Year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2017 and of the Profit of your Company for the Financial Year ended March 31, 2017;

c. that 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;

d. that the annual accounts for the Financial Year ended March 31, 2017 have been prepared on a going concern basis;

e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on arm’s length basis and were in the ordinary course of business. During the year the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company.

All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The details of related party transactions are given in note number 27 and 27A of Financial Statements.

The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. And the link of such policy is given below:

http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf

None of the Directors has any pecuniary relationships with the Company.

EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest.

There is no other qualification, reservation or adverse remark, comment, observation or disclaimer made by the auditor in his report and the company secretary in practice in his secretarial audit report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the Company’s assets against any loss from unauthorized use and ensure proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

The Companies Act, 2013 has introduced under Section 143(3)(i) stating that the statutory auditors of the Company shall include in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in director’s responsibility statement. The concept of reporting on internal financial controls is still new in India. This new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2016-17.

The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

SEXUAL HARASSMENT POLICY

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Various workshops or awareness programme w.r.t. sexual harassment has been carried out during the F.Y. 2016-17.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/

Policy	Web-link
Policy for Determination of Materiality of Information or Events	http://www.munjalshowa.net/wp-content/ uploads/2016/02/Policy-for-Determination-of- Materiality-of-Information-or-Events.pdf
Boards Diversity Policy	http://www.munjalshowa.net/wp-content/ uploads/2016/02/Boards-Diversity-Policy.pdf
Corporate Social Responsibility Policy	http://www.munjalshowa.net/wp-content/ uploads/2015/05/Corporate-Social-Responsibility- Policy1.pdf
Vigil Mechanism / Whistle Blower Policy	http://www.munjalshowa.net/wp-content/ uploads/2015/05/Vigil-Mechanism-Whistle-Blower- Policy2.pdf

Nomination And Remuneration Policy	http://www.munjalshowa.net/wp-content/ uploads/2015/05/Nomination-And-Remuneration- Policy1.pdf
Records and Archives Management Policy	http://www.munjalshowa.net/wp-content/ uploads/2016/02/Records-and-Archives- Management-Policy.pdf
Related Party Policy	http://www.munjalshowa.net/wp-content/ uploads/2016/02/Related-Party-Policy-of-MSL.pdf
CODE OF INTERNAL PROCEDURES AND CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS	http://www.munjalshowa.net/wp-content/ uploads/2015/05/CODE-OF-INTERNAL- PROCEDURES-AND-CONDUCT-FOR- REGULATING-MONITORING-AND-REPORTING- OF-TRADING-BY-INSIDERS.pdf
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL	http://www.munjalshowa.net/wp-content/ uploads/2016/02/Code-of-conduct.pdf

For and on behalf of the Board

Place: Gurugram Yogesh Chander Munjal Vinod Kumar Agrawal

Date: May 19, 2017 (Chairman & Managing Director) (Director)

(DIN 00003491) (DIN 00004463)

B-175, Greater Kailash, Part I, A-224 Ist Floor, Defence Colony

New Delhi 110048 New Delhi 110024

---

Mar 31, 2016

Dear Members,

The Directors have great pleasure in presenting the 31^st Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2016.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company’s Financial Results for the year under review are as follows:

(Rs. In Lacs)

	Year Ended	Year Ended
	31.03.16	31.03.15
Sales and other Income	150,702.88	165,111.23
Profit before Interest, Depreciation & Tax & Exceptional item	11,727.49	13,474.60
Financial Cost	12.19	44.54
Depreciation	2,929.84	2,867.09
Exceptional Item (interest expenses reversed)	-	(67.74)
Profit before Tax	8,785.45	10,630.71
Provision for Taxation	2,670.22	3,067.82
Profit after Tax	6,115.23	7,562.89
Net Profit brought forward	16,364.50	12,905.08
Net value of fixed assets transferred to retained earning whose useful life exceeded the specified useful life		177.99
Profit available for appropriation	22,479.73	20,289.98
Dividend (Recommended)	1,599.80	1,599.80
Dividend Tax (Net)	325.68	325.68
Transfer to General Reserve	2,000.00	2,000.00
Surplus carried to Balance Sheet	18,554.25	16,364.50

OPERATIONS & STATE OF THE COMPANY’S AFFAIRS

The Company has achieved a sales turnover, including other income, of Rs. 150,702.88 lacs vis-a-vis Rs. 165,111.23 lacs in the previous year. The profit before tax in the current year was at Rs. 8,785.45 lacs as compared to Rs. 10,630.71 lacs in the previous year.

CREDIT RATING

The Company’s financial discipline and prudence is reflected in the credit ratings ascribed by rating agency CRISIL as given below:

(I_n L_acs)

INR 6,850 Long-Term Loans	AA/Stable (Reaffirmed)
INR 3,000 Cash Credit	AA/Stable (Reaffirmed)
INR 4,350 Letter of Credit	CRISIL A1
INR 225 Bank Guarantee	CRISIL A1
INR 600 Commercial Paper Programme	CRISIL A1

TRANSFER TO GENERAL RESERVE

The Board has transferred an amount of Rs. 2000 lacs to General Reserve before declaring the interim dividend. The balance amount of Rs. 18,554.25 lacs (Previous year Rs. 16,364.50 lacs) will be retained as surplus in the statement of Profit and Loss.

DIVIDEND

Your directors declared an interim dividend of 200 per cent (i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2016 amounting to Rs. 1,599.80 lacs. Dividend was a tax free in the hands of shareholders, as the Company has paid the dividend distribution tax of Rs. 325.68 lacs. The Board fixed March 17, 2016 as the Record Date for the purpose of Payment of Interim Dividend for the financial year 2015-16 and the dividend payout date was March 21, 2016.

The Company considered interim dividend as final dividend for the financial year 2015-16. The Company maintained the dividend in spite of declining in the net profit and wants to retain its surplus for the future growth of the Company.

SHARE CAPITAL & DEBENTURES

The paid up Equity Share Capital as on March 31, 2016 was Rs. 799.93 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not has any Debentures, Preferential Shares as on March 31, 2016.

FINANCE

Cash and cash equivalent as at March 31, 2016 was Rs. 242.58 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 10 and 12 to the financial statements.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co. LLP Chartered Accountants, Gurgaon, the Auditors of the Company, appointed at 29th Annual General Meeting from the date of 29th Annual General Meeting up to the date of 32nd Annual General Meeting of the Company. Now at the 31³¹ Annual General Meeting of the Company, their appointment will be the subject to ratification by shareholders of the Company. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. The Board recommends their ratification of appointment for your approval.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

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

The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made there under regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Board’s Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-Dto this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2016, is annexed hereto and forms part of this Report as Annexure-E.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. Please refer Annexure-Fto Board’s Report

The Company was required to spend Rs. 171 lacs (approx) under Corporate Social Responsibility activities (CSR). The Company has spent 173.86 lacs on CSR Activities during the financial year 2015-2016.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

CHANGES IN THE TERMS IF ROYALTY PAYMENT WITH SHOWA CORPRORATION, JAPAN

The Company has entered with Showa Corporation, Japan (Showa) a world leader in shock absorber technology in May 1985 under technical collaboration contract apart from shareholders agreement.

Showa apprised the Company that due to current trend of localization Showa has to concentrate on R&D for global market and use of increasing investment more effectively so as to survive in such a global competition and further sustainable expansion and rate of Munjal Showa (MSL) @ 3 per cent not enough now and Showa bears the shortage of actual R&D expenses. Showa then requested to consider the change in the condition of the royalty ratio. The proposal was discussed at length by the Board of Directors and it was approved that “the royalty to be paid by the Licensee (MSL) to Licensor shall be three (3) per cent of the ex-factory sales price of the Product invoices by Licensee. Provided that Licensor approves the products for which Licensor employs new technologies, the royalty rate of four (4) per cent shall be applied to such Products. All other conditions of this agreement shall remain same. This will be effective from April 01, 2016.

CHANGES IN MEMORANDUM OF ASSOCIATION (MOA) AND ARTICLES OF ASSOCIATION (AOA)

With the enactment of the Companies Act 2013, it is necessary to amend the existing MOA and to adopt new set of the AOA to be in accordance with the requirements of the Act.

The Board recommends changes in MOA and AOA before the shareholder for their approval.

ENVIRONMENT COMPLIANCE

We believe that “waste is a precious resource kept in a wrong place”. We further believe that “there is no waste as per the law of the nature”. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing “Lean and Low cost” machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made “Zero incidents” as acceptable standard. Hazard Identification and Risk Assessment (HIRa) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society. The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of tPm are to increase (PQcDsME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify various types of Losses & converts them into Profit. We have achieved TPM Excellency Award “Category A” for Gurgaon and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurgaon & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015. We are going ahead to challenge TPM Excellence Special category by end of 2016.

Lean TPM Activities:

We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing.

ISO/TS 16949 ACCREDITATION

Your Company’s manufacturing facilities located at Gurgaon, Haridwar and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited.

LISTING

The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2016-17 have been paid to them well before the due date i.e. April 30, 2016. Annual Custody/Issuer fee for the year 2016-17 will be paid by the Company to NSDL and CDSL on receipt of the invoices.

HUMAN RESOURCES

Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from “Human Resources Management” to “Human Capital Management”. Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Company’s ability to attract and retain quality people. The total headcounts were 3451 at the end of the year as compared to 3401 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.

The Board has identified following risks:-

Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company. The website link is given below:

http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2015-16 DIRECTORS & KEY MANAGERIAL PERSONNEL

The Company appreciates the dedicated and valuable guidance given by Late Sh. Brijmohan Lall Munjal during his tenure as director and chairman of the Company. His sad demise on November 01, 2015 is a big and irreparable loss to the nation as well as to the Company. Late Mr. Brijmohan Lall Munjal was a great leader and he was a guiding force for the Company. He was not only committed to success but also devoted to rising India. He did all that it takes to build an industrial group based on a sustainable business model. His vision allowed Hero Group to become the world’s largest cycle maker, and Hero Motocorp the world’s largest two-wheeler manufacturer by volumes. He positioned his motorcycles and scooter as more fuel efficient, which struck a chord with cost-conscious Indian buyers. The “Fill it, shut it, forget it” campaign remains one of the most effective ones in the country’s corporate history. Worthy Chairman Sir, will always occupy a prominent place in India’s corporate history for his ability to do all this, and lived a life on the principle that if you work hard and be good to people around you, success in business will follow.

Then, Mr. Krishan Chand Sethi was elected as the chairperson of the company on February 05, 2016. But the Company also lost the Guidance of Lt. Sh. Krishan Chand Sethi on March 29, 2016, another ace Director and Chairman of the Company, the Company appreciates the dedicated and valuable services rendered by him during his tenure. His unwavering passion, insatiable ambition and his strong sense of basic ethics and integrity will always be a motivation for the Company. Sethi Sir, will always occupy a prominent place in our hearts.

Mr. Pankaj Munjal is currently our Non executive Director and pursuant to Sub Section 6 of Section 152 of the Companies Act, 2013, his office is liable to determination by retirement of directors by rotation. Being eligible, he offers himself for reappointment and a declaration under Section 149(7) of Companies Act, 2013 has also been duly received by the Company from the said Director

Mrs. Charu Munjal non executive director of the Company is liable to retire by rotation at the ensuing Annual General Meeting. Mrs. Charu Munjal being eligible has offered herself for re-appointment.

Mrs. Charu Munjal aged 44 years has been appointed as the Non Executive Director of the Company w.e.f. May 23, 2014. She holds a Diploma in Textile Designing from Banaras Hindu University and has considerable exposure in creative designing and marketing field. She is the Whole Time Director in Shivam Autotech Limited.

Your directors recommend her re-appointment at the ensuing Annual General Meeting.

Pursuant to the recommendation of the Board, Nomination and Remuneration Committee, Mr. Yogesh Chander Munjal was reappointed by the Board of Directors, subject to the approval of the shareholders, as the Managing Director of the Company on May 20, 2015 for a further period of five years with effect from September 01, 2016 to August 31, 2021.

The shareholders approved the variation in the terms of appointment of Mr. Isao Ito the 30^th Annual General Meeting of the Company. The Board of Directors in its meeting held on May 20, 2016 after recommendation of Nomination and Remuneration Committee recommended to the shareholders variation in the Terms of Appointment of Mr. Isao Ito w.e.f. September 1, 2016.

The Board also recommended the terms of Mr. Isao Ito, liable to retire by rotation in pursuance of Section 152 and any other provisions of the Companies Act, 2013, before the members of the company at the 30^th AGM for their approval

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The following employees were designated as whole-time key managerial personnel:

a. Mr. Yogesh Chander Munjal- Managing Director

b. Mr. Isao Ito- Joint Managing Director

c. Mr. Pankaj Gupta- Chief Financial Officer.

d. Mr. Saurabh Agrawal- Company Secretary

The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1

The Board of Directors appointed Mr. Devi Singh, Independent Director, as Chairman of the Company. Board and also appointed Mr. Surinder Kumar Mehta as Chairman of the Nomination and Remuneration Committee and Mr. Yogesh Chander Munjal as Chairman of the CSR Committee.

COMMITTEES OF THE BOARD

Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee, the Risk Management Committee (non mandatory committee). A detailed note on the composition of the Board and its committees is provided in the Corporate governance report section of this Annual Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

The Company neither has any Subsidiaries, joint ventures or associate companies nor any company has become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy has been included in this Report as Annexure-G.

The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website

Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

a. that in the preparation of the annual accounts for the Financial Year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2016 and of the Profit of your Company for the Financial Year ended March 31, 2016;

c. that 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;

d. that the annual accounts for the Financial Year ended March 31, 2016 have been prepared on a going concern basis;

e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

RELATED PARTY TRANSACTIONS

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on arm’s length basis and were in the ordinary course of business. During the year the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company. All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The detail with related party transactions is given in note number 28 and 28A of Financial Statements.

The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. And the link of such policy is given below:

http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf

None of the Directors has any pecuniary relationships with the Company.

EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest. There is no other qualification, reservation or adverse remark or disclaimer made by the auditor in his report; and the company secretary in practice in his secretarial audit report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the Company’s assets against any loss from unauthorized use and ensure proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

The Companies Act, 2013 has introduced under Section 143(3)(i) of the Act which include the statutory auditors also to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in director’s responsibility statement. The concept of reporting on internal financial controls is still new in India this new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2015-16. The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

SEXUAL HARASSMENT POLICY

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/

Policy	Web-link
Policy for Determination of Materiality of Information or Events	http://www.munjalshowa.net/wp- content/uploads/2016/02/Policy-for- Determination-of-Materiality-of- Information-or-Events.pdf
Boards Diversity Policy	http://www.munjalshowa.net/wp- content/uploads/2016/02/Boards-Diversity Plicy.pdf
Corporate Social Responsibility Policy	http://www.munjalshowa.net/wp- content/uploads/2015/05/Corporate-Social-
	Responsibility-Policy1.pdf
Vigil Mechanism / Whistle Blower Policy	http://www.munjalshowa.net/wp- content/uploads/2015/05/Vigil-Mechanism-
	Whistle-Blower-Policy2.pdf
Nomination And Remuneration Policy	http://www.munjalshowa.net/wp- content/uploads/2015/05/Nomination-And- Remuneration-Policy1.pdf
Records and Archives Management Policy	http://www.munjalshowa.net/wp- content/uploads/2016/02/Records-and- Archives-Management-Policy.pdf
Related Party Policy	http://www.munjalshowa.net/wp- content/uploads/2016/02/Related-Party- Policy-of-MSL.pdf
CODE OF INTERNAL PROCEDURES AND CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS	http://www.munjalshowa.net/wp- content/uploads/2015/05/CODE-OF- INTERNAL-PROCEDURES-AND- CONDUCT-FOR-REGULATING- MONITORING-AND-REPORTING-OF- TRADING-BY-INSIDERS.pdf
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL	http://www.munjalshowa.net/wp- content/uploads/2016/02/Code-of- conduct.pdf

For and on behalf of the Board

Place: Gurgaon Yogesh Chander Munjal Vinod Kumar Agrawal

Date: May 20, 2016 (Managing Director) (Director)

(DIN 00003491) (DIN 00004463)

B-175, Greater Kailash, Part I, A-224 Ist Floor, Defence Colony

New Delhi, 110048 New Delhi, 110024

---

Mar 31, 2015

Dear Members,

The Directors have great pleasure in presenting the 30th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31,2015.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company''s Financial Results for the year under review are as follows:

(Rs. In Lacs)

Year Ended Year Ended 31.03.15 31.03.14

Sales and other Income 179,197.05 174,074.41

Profit before Interest, Depreciation, Tax & Exceptional item 13,474.60 11,129.85

Financial Cost 44.54 270.32

Depreciation 2,867.09 2,840.99

Exceptional Item (interest expenses reversed) (67.74) -

Profit before Tax 10,630.71 8,018.54

Provision for Taxation 3,067.82 1,048.46

Profit after Tax 7,562.89 6,970.08

Net Profit brought forward 12,905.08 9,572.73

Net value of fixed assets transferred to retained earning whose

useful life exceeded the specified useful life 177.99 -

Profit available for appropriation 20,289.98 16,542.81

Dividend (Recommended) 1,599.80 1,399.83

Dividend Tax (Net) 325.68 237.90

Transfer to General Reserve 2,000.00 2,000.00

Surplus carried to Balance Sheet 16,364.50 12,905.08

OPERATIONS & STATE OF THE COMPANY''S AFFAIRS

The Company has achieved a sales turnover, including other income, of Rs. 179,197.05 lacs registering a growth of 2.94 per cent vis-a-vis Rs. 174,074.41 lacs in the previous year. The profit before tax in the current year was at Rs. 10,630.71 lacs as compared to Rs. 8,018.54 lacs in the previous year registering a growth of 32.58 per cent.

CREDIT RATING

The Company''s financial discipline and prudence is reflected in the credit ratings ascribed by rating agency CRISIL as given below:

INR 4,500 Long-Term Loans AA/Stable (Reaffirmed)

INR 2,000 Cash Credit AA/Stable (Reaffirmed)

INR 7,700 Letter of Credit CRISIL A1

INR 225 Bank Guarantee CRISIL A1

INR 600 Commercial Paper Programme CRISIL A1

TRANSFER TO GENERAL RESERVE

The Board proposes to transfer an amount of Rs. 2,000 lacs to General Reserve. The balance amount of Rs. 16,364.50 lacs (Previous year Rs. 12,905.08 lacs) will be retained as surplus in the statement of Profit and Loss.

DIVIDEND

Your directors are pleased to recommend a dividend of 200 per cent (i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2015 amounting to Rs. 1,599.8 lacs in aggregate as compared to 175 per cent i.e. Rs. 3.50/- per share in the corresponding last year. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 325.68 lacs (Previous year Rs. 237.90 lacs). The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from August 08, 2015 to August 26, 2015 (both days inclusive).

SHARE CAPITAL & DEBENTURES

The paid up Equity Share Capital as on March 31,2015 was Rs. 7.99 Crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options or sweat equity. And also the Company has not accepted or repaid any Debentures, Preference Share Capital and any Bond & Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not has any Debentures, Preferential Shares as on March 31,2015.

FINANCE

Cash and cash equivalent as at March 31,2015 was Rs. 156.41 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 10 and 12 to the financial statements.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of part IX of Clause 49 of the Listing Agreement, Certificate of CEO/CFO is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors support the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co.LLP, Chartered Accountants, Gurgaon, the Auditors of the Company, appointed at 29th Annual General Meeting from the date of 29th Annual General Meeting up to the date of 32nd Annual General Meeting of the Company. Now at the 30th Annual General Meeting of the Company, their appointment will be the subject to ratification by shareholders of the Company. The Company has also received certificate from the auditors to the effect that their ratification of appointment, would be in accordance with Section 139 & 141 of the Companies Act, 2013 and the rules framed thereunder.

The Board recommends their ratification of appointment for your approval.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure -B.

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

The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made thereunder regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Board''s Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-D to this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31,2015, is annexed hereto and forms part of this Report. Annexure-E

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. Please refer Annexure-F to Board''s Report

The Company was required to spend Rs. 156 lacs under Corporate Social Responsibility activities (CSR Activities) but Company could spend only Rs. 28.33 Lacs under CSR Activities. As the CSR is a new concept for the Company so Company is trying to develop its CSR activities. Your Company will try to spend whole amount to be spent on CSR activities during the financial year 2015-2016.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that "waste is a precious resource kept in a wrong place". We further believe that "there is no waste as per the law of the nature". Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing "Lean and Low cost" machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made "Zero incidents" as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and Energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print, generate pollution prevention awareness throughout the plant and to achieve 100 percent legal compliance. The Company is rigorously improving to create a better place for our next generation.

TPM

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify 16 types of Losses & converts them into Profit.

We have achieved TPM Excellency Award "category A" for Gurgaon and Manesar Plant in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurgaon & Manesar Plants in the year 2013. Now we have started TPM Journey to our Haridwar Plant.

Lean TPM Activities:

We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop. We have converted huge & complicated machines to Lean Machines. These machines consumes very less Electricity, occupies less space, takes very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time etc. These machines are 5S Machines. Simple, Small, Slim, Speed & Safe and helps us in reducing Cost of manufacturing.

ISO/TS 16949 ACCREDITATION

Your Company''s manufacturing facilities located at Gurgaon, Haridwar and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

LISTING

The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to Clause 38 of the Listing Agreement, the Annual Listing fees for the year 2015-16 have been paid to them well before the due date i.e. April 30, 2015. Annual Custody/Issuer fee for the year 2015-16 will be paid by the Company to NSDL and CDSL on receipt of the invoices.

HUMAN RESOURCES

Preventive Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from "Human Resources Management" to "Human Capital Management".

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that to continued growth is dependent upon the Company''s ability to attract and retain quality people. The total headcounts were 3,401 at the end of the year as compared to 3,525 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several training programmes to upgrade the skills of the workforce.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.

The Board has identified following risks:-

Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company. The website link is given below-

http://www.munialshowa.net/pdf/Vigil%20Mechanism%20%20Whistle%20 Blower%20Policv.pdf

RECOMMENDATION OF THE AUDIT COMMITTEE

During the year, there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2014-15 DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Matsui Masanao (DIN 00340218) has been appointed as an additional director under Section 161(1) and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Article 89 of the Articles of Association of the Company w.e.f May 22, 2015.

Mr. Ashok Kumar Munjal (DIN 00003843) non executive director of the Company is liable to retire by rotation at the ensuing Annual General Meeting. Mr. Ashok Kumar Munjal being eligible has offered himself for re-appointment.

Mr. Ashok Kumar Munjal aged about 64 years old, serves as the Managing Director of Sunbeam Auto Private Limited. Mr. Munjal has 33 years of experience in the field of engineering industry, investment, finance and auto component. He serves as a Director in Ledpra Infracon Private Limited, Radha Kishan Buildwell Private Limited And Privilege Estates Private Limited w.e.f. October 13, 2014. He is also a Director in Orient Craft Limited, SKH Education Private Limited., Chandernagar Chemicals And Minerals Private Limited, Hero Auto Components Private Limited, H & H Industries Private Limited and Sunglow Industries Private Limited. Mr. Munjal is a Commerce and Law Graduate from Punjab University, Chandigarh. He does not hold any share in the Company. He is the Member of Audit Committee and Share Transfer/Stakeholder Relationship Committee of the Company. He is also the member of the Audit Committee of Orient Kraft Limited. He is holding the position of directorship in twelve Companies including Munjal Showa Limited.

Your directors recommend his re-appointment at the ensuing Annual General Meeting.

Mr. Matsuura Katsuhiko (DIN 05276954) has resigned as Director of the Company w.e.f May 22, 2015. The Board placed its appreciation for the valuable services rendered by Mr. Matsuura Katsuhiko during his tenure as Director of the Company.

The shareholders approved the variation in the terms of appointment of Mr. Yogesh Chander Munjal (DIN 00003491) & Mr. Isao Ito (DIN 05134031) at the 29th Annual General Meeting of the Company. The Board of Directors in its meeting held on May 22, 2015 after recommendation of Nomination and Remuneration Committee recommended to the shareholders variation in the Terms of Appointment of Mr. Yogesh Chander Munjal & Mr. Isao Ito w.e.f. September 1,2015.

Mr. Pankaj Gupta was looking after dual responsibility of Chief Financial Officer and Company Secretary of the Company after the resignation of Mr. Mahesh Taneja from the post of Chief Financial Officer and the company was searching for a Company Secretary who will take care of all secretarial functions. After completion of search Mr. Pankaj Gupta resigned from the post of Company Secretary & Compliance Officer and retained the post of Chief Financial Officer of the Company w.e.f. February 06, 2015.

Mr. Saurabh Agrawal was appointed as Company Secretary & Compliance Officer of the Company w.e.f. February 06, 2015.

The following employees were designated as whole-time key managerial personnel:

a. Mr. Yogesh Chander Munjal- Managing Director

b. Mr. Isao Ito- Joint Managing director

c. Mr. Pankaj Gupta- Chief Financial Officer

d. Mr. Saurabh Agrawal- Company Secretary

Pursuant to the section 149, 150, 152 of the Company Act 2013, the rules framed thereunder and the Listing Agreement, All the Independent Directors have been appointed for five years w.e.f. April 01,2014 to March 31,2019.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The members of the Company at 29th Annual General Meeting held on August 28, 2014 approved the appointments of Mrs. Charu Munjal (DIN 03094545) as a non-executive Non-Independent Director who is liable to retire by rotation and of Mr. Krishan Chand Sethi, Mr. Vinod Kumar Agrawal, Mr. Devi Singh, Mr. Surinder Kumar Mehta and Mr. Nand Dhameja as Independent Directors who are not liable to retire by rotation.

The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

The Company neither has any Subsidiaries, joint ventures or associate companies nor any company have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee, Risk Management Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy has been included in this Report as Annexure-G.

The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement. (Please refer point no. I & II of Corporate Governance Report)

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Director''s state that:

a. in the preparation of the annual accounts for the year ended March 31,2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b. 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 31,2015 and of the profit of the Company for the year ended on that date;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual accounts on a ''going concern'' basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

RELATED PARTY TRANSACTIONS

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on arm''s length basis and were in the ordinary course of business. During the year the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company.

All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The detail with related party transactions is given in note number 28 and 28A of financial statement.

The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. And the link of such policy is given below: http://www.munialshowa.net/pdf/Related%20Partv%20Transaction%20 Policv.pdf None of the Directors has any pecuniary relationships with the Company.

EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest.

There is no other qualification, reservation or adverse remark or disclaimer made by the auditor in his report; and the company secretary in practice in his secretarial audit report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal control to safeguard the Company''s assets against any loss from unauthorized use and ensure proper authorization of financial transactions.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.

The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Place: New Delhi Yogesh Chander Munjal Date: May 22, 2015 (Managing Director) (DIN 00003491) B-175, Greater Kailash, Part I, New Delhi, 110048

Krishan Chand Sethi (Director) (DIN 00004471) 9/304 East End Apartments, Mayur Vihar Extn. Phase I, New Delhi, 110096

---

Mar 31, 2013

Dear Members,

The Directors have great pleasure in presenting the 28th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2013.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company''s Financial Results for the year under review are as follows:

(Rs. In Lacs)

Year Ended Year Ended 31.03.13 31.03.12

Sales and other Income 172743.67 167568.49

Profit before Interest, Depreciation, Tax & Exceptional item 10886.81 12414.66

Exceptional Item (Interest expenses) 614.34

Financial Cost 716.57 1101.90

Depreciation 2764.20 2722.88

Profit before Tax 6791.70 8589.88

Provision for Taxation 723.64 1876.99

Profit after Tax 6068.06 6712.89

Net Profit brought forward 6908.43 3590.03

Profit available for appropriation 12976.49 10302.92

Dividend (Recommended) 1199.85 1199.85

Dividend Tax (Net) 203.91 194.64

Transfer to General Reserve 2000.00 2000.00

Surplus carried to Balance Sheet 9572.73 6908.43

OPERATIONS

The Company has achieved a sales turnover of Rs. 172743.67 lacs registering a growth of 3.09 per cent vis- à-vis Rs. 167568.49 lacs in the previous year. The profit before tax in the current year was at Rs. 6791.69 lacs as compared to Rs. 8,589.88 lacs in the previous year and the decrease was mainly on account of wage settlement at Manesar Plant, reducing the useful life of certain assets and provision of interest of Rs.697.33 lacs (including Rs.614.34 lacs shown as exceptional item as above) on Manesar Land Enhancement Demand made by HSIIDC during the year under review.

FUTURE PROSPECTS

As per RBI''s Indian Economy survey there is an anticipation of a modest recovery with growth in 2013-14 at 5.7 per cent from 5.0 per cent in the year 2012-13 while Average WPI & CPI inflation moderate to 5.5 per cent from 7.4 per cent & 7.5 per cent from 10.2 per cent in year 2012-13 respectively which shows that inflation expectations have moderated slightly, while business expectations remain subdued.

As per Consumer Confidence Survey March 2013 conducted by Reserve Bank of India the negative sentiments with respect to the current and future economic conditions have been rising over the last four quarters.

The outlook has been comparatively better than the perception on current economic conditions due to positive forecast for the monsoon from normal to excess based on the El Nino and sea temperature patterns, increase in rural demand due to rising agricultural incomes to the economy. About one third of the respondents reported no change in the employment scenario. However, the overall perception on future employment scenario remains optimistic.

Our existing customers have assured to meet predetermined sales targets with around 10 per cent growth, with the support of new models likely to be launched both in 2 Wheeler and 4 Wheeler segment and export in the coming year i.e.2013-14. They have planned major initiative to boost the industry sentiments and accelerate growth in the year 2013-14 mainly through new launches, campaigns, capacity addition and network expansion and a significant step working toward their global vision. In nutshell, all customers of the Company are on growth path and Company is confident to meet their increased demand.

TRANSFER TO GENERAL RESERVE

The Board proposes to transfer an amount of Rs. 2000.00 lacs to General Reserve, having regard to the requirements of Section 205 (2A) of the Companies Act, 1956. The balance amount of Rs. 9572.73 lacs (Previous year Rs. 6908.43 lacs) will be retained in the Profit and Loss Account.

DIVIDEND

Your directors are pleased to recommend a dividend of 150 per cent (i.e. Rs. 3/- Per equity share of Rs. 2/- each) for the year ended March 31, 2013 amounting to Rs. 1199.85 lacs in aggregate as compared to 150 per cent i.e. Rs. 3.00 per share in the corresponding last year. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 203.91 lacs (Previous year Rs.194.64 lacs). The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from July 20, 2013 to August 09, 2013 (both days inclusive).

DIRECTORS

Mr. Pankaj Munjal, Mr. Surinder Kumar Mehta and Mr. Anil Kumar Vadehra, the directors of the Company are liable to retire by rotation from the Board at the ensuing Annual General Meeting. Mr. Pankaj Munjal, Mr. Surinder Kumar Mehta and Mr. Anil Kumar Vadehra being eligible have offered themselves for re-appointment.

Mr. Tetsuo Terada- executive director has resigned from the post of director w.e.f. April 24, 2013. The Board places on record their appreciation for the valuable services rendered by Mr. Tetsuo Terada during his tenure as Director of the Company.

Mr. Isao Ito has been appointed as an additional director under Section 260 of the Companies Act, 1956 read with Article 89 of the Articles of Association of the Company w.e.f May 24, 2013. He shall hold office of director up to the date of ensuing Annual General Meeting. A notice under Section 257 of the Companies Act, 1956, proposing his candidature as Director at the ensuing Annual General Meeting of the Company, has been received.

Brief resumes of Mr. Pankaj Munjal, Mr. Surinder Kumar Mehta, Mr. Anil Kumar Vadehra and Mr. Isao Ito have been appended to the Notice of the Annual General Meeting.

Your directors recommend their appointment/ re-appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of sub-clause (v) of Clause 49 of the Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of internal control measures and reporting of matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors support the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co.LLP, Chartered Accountants, Gurgaon, the Auditors of the Company (M/s S. R. Batliboi & Co. constitution changed to M/s. S. R. Batliboi & Co. LLP) retire at the conclusion of the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The Company has also received certificate from the auditors to the effect that their re-appointment, if made, would be in accordance with Section 224(1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS REPORT

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number (ix) (a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues.

COST AUDITORS

M/s. Ramanath Iyer & Co., Cost Accountants, New Delhi, the Cost Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The Company has also received certificate from the auditors to the effect that their re-appointment, if made, would be in accordance with Section 233(B) of the Companies Act, 1956.

The Board recommends their re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

a) that the applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures;

b) that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March'' 2013 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) that the annual accounts have been prepared on a going concern basis;

AUDIT COMMITTEE RECOMMENDATION

During the year there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.

FIXED DEPOSIT

The Company has not accepted any Fixed Deposits during the year under Section 58A or 58AA of the Companies Act, 1956 and the rules made there-under, and as such no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and R & D and Foreign Exchange earnings & outgo are given in Annexure-B which forms part of Directors'' Report.

ENVIRONMENT COMPLIANCE

As India''s economy continues to accelerate, the performance of both the environmental regulations and the regulator has come under increased national and international scrutiny and pressure. The increasing public demand for better performance by the environmental regulatory agencies is matched by adequate support to these agencies, conditioned on institutional reforms to increase efficiency, transparency and accountability; it would be unfair to expect substantial progress from the corporate and also unfair to solely blame the regulator for the lack of it. We must induct some concern and commitment in our profiting from Clean and Green Development Mechanism to ensure compliance of pollution standards.

We have started believing "waste is a precious resource kept in a wrong place". We further believe that "there is no waste as per the law of the nature". Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing "Lean and Low cost" machines with a philosophy of "Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator.

By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made "Zero incidents" as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, this year we have received two national awards from Ministry Of Labour and Employment for safety. The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) in 2009-10. The aim of the project is to conserve water and Energy, Minimize generation of waste, terminate hazardous chemicals with non- hazardous chemicals, minimize carbon foot print, generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.

ISO/TS 16949 ACCREDITATION

Your Company''s manufacturing facilities plants located at Gurgaon and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. Company''s third plant located at Haridwar has also got TS 16945. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

TPM

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups (PQCDSME) and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM converts all the losses into Profit.

We have achieved Japan Institute of Plant Maintenance TPM Excellency Award "category A" for Gurgaon as well as our Manesar Plants in the year 2008 & 2010 respectively. We are working towards challenging the next level which is consistency level by the end of 2013. The Company had made the TPM declaration for our Haridwar Plant on 23rd March 2011. Munjal Showa is helping some of our Vendors in doing TPM in their Organizations.

To share the TPM & Lean achievements we receive many delegations not only from India rather from all over the World, Countries like USA, Germany, UK, Japan, Thailand, Brazil, Indonesia, Vietnam, China, etc. Besides that we receive lots of Delegations from CII, (all the regions) ACMA, Honda cluster club, IMTMA, etc.)

Lean Activities:

We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop. We have converted lots of huge & complicated machines to Lean Machines & manufactured Lean machines in house. We receive many visitors not only from India but also from all over the World to see our TPM & Lean machine manufacturing activity. Munjal Showa is taking a lead role in spreading this concept of Lean Machines across the Country thru CII, ACMA, IMTMA, MSIL, HMCL, Honda Siel Club, etc.

In the recent past, we were able to re-build many very big & very complicated machines into very simple & Lean machines, which have many advantages besides the space saving. We have manufactured many new machines by using the TPM, Lean & Low cost Automation concepts. And the Journey is still on.

LISTING

The shares of your Company are listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited, and pursuant to Clause 38 of the Listing Agreement, the Annual Listing fees for the year 2012-2013 have been paid to them well before the due date i.e. April 30, 2013. The Company has also paid the annual custodian fees for the year 2013-14 in respect of Shares held in dematerialized mode to NSDL & CDSL.

PARTICULARS OF EMPLOYEES

A statement under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forming part of this Directors'' Report is given in Annexure-C.

HUMAN RESOURCES

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that to continued growth is dependent upon the Company''s ability to attract and retain quality people. The total headcounts were 3292 at the end of the year as compared to 3494 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several training programmes to upgrade the skills of the workforce.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Place: New Delhi BRIJMOHAN LALL MUNJAL

Dated: May 24, 2013 Chairman

---

Mar 31, 2012

The Directors have great pleasure in presenting the 27th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2012.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Company's Financial Results for the year under review are as follows:

(Rs. In Lacs)

Year Ended Year Ended

31.03.12 31.03.11

Sales and other Income 167568.49 139075.53

Profit before Interest, Depreciation & Tax 12428.68 8332.17

Financial Cost 1115.92 914.01

Depreciation 2722.88 2624.67

Profit before Tax 8589.88 4793.49

Provision for Taxation 1876.99 1391.58

Profit after Tax 6712.89 3401.91

Net Profit brought forward 3590.03 2347.12

Profit available for appropriation 10302.92 5749.03

Dividend (Recommended) 1199.85 999.88

Dividend Tax (Net) 194.64 159.12

Transfer to General Reserve 2000.00 1000.00

Surplus carried to Balance Sheet 6908.43 3590.03

OPERATIONS

The Company has achieved a record sales turnover of Rs. 167568.49 lacs registering a growth of 20.49 per cent vis-a-vis Rs. 139,075.53 lacs in the previous year. The profit before tax in the current year was at Rs. 8,589.88 lacs as compared to Rs. 4,793.49 lacs in the previous year registering a growth of 79.20 per cent.

FUTURE PROSPECTS

It has become clearer that Indian economy will not be able to achieve its GDP growth forecast of 8% or thereabouts, it might have the possibility to settle for a figure as estimated by IMF around 6.9 per cent in 2012 and 7.3 per cent next year, as a result of weak demand and higher interest rates, another flare-up of the euro- zone sovereign debt crisis or sharp escalation in oil prices on geopolitical uncertainty could easily undermine confidence and disrupt the improving growth path for world economy. With the passing of the crisis and some good news about the US economy, some optimism has returned.

As per Consumer Confidence Survey March 2012 conducted by Reserve Bank of India households' perception about current economic conditions and expectation for next one year has decreased in terms of net response; however, more than half of the respondents continue to feel that the current economic conditions and future prospects are favourable. Majority of respondents perceive that household circumstances have become better, though the proportion of respondents reporting worsening of current household circumstances has increased as compared with the previous round.

While the growth prospects of the Indian auto components industry remain promising, there are new challenges as we evolve into a critical part of the global auto ecosystem. For Indian suppliers, on one hand there is the need to maintain competitiveness in an inflationary environment and on the other they need to compete with the best in an increasingly uncertain global market. The increase in petrol prices may impact the sales of 4 Wheeler sales but subsequent proposal for increase in duties of diesel vehicles & increase in diesel prices in order to balance the fiscal deficit will neutralize the shift towards diesel run vehicles. Further, OEMs internationally are reducing the number of suppliers that they wish to work with. Thus, it calls for Tier-1 suppliers to facilitate up-gradation and scaling up capacity, quality, technology, people and even hand hold the Tier-II and Tier-III suppliers, without which it will be really difficult to sustain the industry's competitiveness in the long term.

Our existing customers have targeted to meet predetermined sales targets with around 10 per cent growth, with the support of new models likely to be launched both in 2 Wheeler and 4 Wheeler segment in the coming year i.e.2012-13. In brief, all customers of the Company are on growth path and Company is confident to meet their increased demand.

TRANSFER TO GENERAL RESERVE

The Board proposes to transfer an amount of Rs.2000.00 lacs to General Reserve, having regard to the requirements of Section 205 (2A) of the Companies Act, 1956. The balance amount of Rs. 6908.43 lacs (Previous year Rs. 3,590.03 lacs) will be retained in the Profit and Loss Account.

DIVIDEND

Your directors are pleased to recommend a dividend of 150 per cent (i.e. Rs. 3/- Per equity share of Rs. 2/- each) for the year ended March 31, 2012 amounting to Rs.1199.85 lacs in aggregate as compared to 125 per cent i.e. Rs. 2.50 per share in the corresponding last year. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 194.64 lacs. The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from July 21, 2012 to August 09, 2012 (both days inclusive).

DIRECTORS

Mr. Krishan Chand Sethi, Mr. Ashok Kumar Munjal and Mr. Vinod Kumar Agrawal, the directors of the Company are liable to retire by rotation from the Board at the ensuing Annual General Meeting. Mr. Krishan Chand Sethi, Mr. Ashok Kumar Munjal and Mr. Vinod Kumar Agrawal being eligible have offered themselves for re-appointment.

Mr. Akira Kadoya- non executive director has resigned from the post of director w.e.f. May 23, 2012. The Board places on record their appreciation for the valuable services rendered by Mr. Akira Kadoya during his tenure as Director of the Company.

Mr. Katsuhiko Matsuura has been appointed as an additional director under Section 260 of the Companies Act, 1956 read with Article 89 of the Articles of Association of the Company w.e.f May 23, 2012. He shall hold office of director up to the date of ensuing Annual General Meeting. A notice under Section 257 of the Companies Act, 1956, proposing his candidature as Director at the ensuing Annual General Meeting of the Company, has been received.

Brief resumes of Mr. Krishan Chand Sethi, Mr. Ashok Kumar Munjal, Mr. Vinod Kumar Agrawal and Mr. Katsuhiko Matsuura have been appended to the Notice of the Annual General Meeting.

Your directors recommend their appointment/ re-appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of sub-clause (v) of Clause 49 of the Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of internal control measures and reporting of matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors support the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The Company has also received certificate from the auditors to the effect that their re-appointment, if made, would be in accordance with Section 224(1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS REPORT

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number (ix) (a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date.

COST AUDITORS

The Board on the basis of recommendation of Audit Committee and subject to the approval of Central Government appointed M/s. Ramanath Iyer & Co., Cost Accountants, New Delhi, as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the financial year 2012-13 and the necessary application for obtaining the requisite approval will be filed with the Central Government before due date.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

a) that the applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures;

b) that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March' 2012 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) that the annual accounts have been prepared on a going concern basis;

AUDIT COMMITTEE RECOMMENDATION

During the year there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.

FIXED DEPOSIT

The Company has not accepted any Fixed Deposits during the year under Section 58A or 58AA of the Companies Act, 1956 and the rules made there-under, and as such no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and R & D and Foreign Exchange earnings & outgo are given in Annexure-B which forms part of Directors' Report.

ENVIRONMENT COMPLIANCE

As India's economy continues to accelerate, the performance of both the environmental regulations and the regulator will come under increased national and international scrutiny and pressure. The increasing public demand for better performance by the environmental regulatory agencies is matched by adequate support to these agencies, conditioned on institutional reforms to increase efficiency, transparency and accountability; it would be unfair to expect substantial progress from the corporate and also unfair to solely blame the regulator for the lack of it. We need to replicate climate change initiatives on finance and technology for pollution abatement within the country as this model has suggested. We must induct some concern and commitment in our profiting from Clean Development Mechanism to ensure compliance of pollution standards.

We have started believing "waste is a precious resource kept in a wrong place". We further believe that "there is no waste as per the law of the nature". Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing "Lean and Low cost" machines with a philosophy of "Easy to run, Easy to maintain, Easy to clean and Zero accident" by meeting all the quality and productivity standard. Everything is done in house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and experts of our Japanese Collaborator.

By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made "Zero incidents" as acceptable standard.

The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) in 2009-10. The aim of the project is to conserve water and Energy, Minimize generation of waste, terminate hazardous chemicals with non- hazardous chemicals, minimize carbon foot print, generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance.

ISO/TS 16949 ACCREDITATION

Your Company's manufacturing facilities plants located at Gurgaon and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. Company's third plant located at Haridwar has also got TS 16945. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

TPM

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Moral and to protect environment by formation of small cross functional work groups (PQCDSME) and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nut shell TPM convert all the losses into Profit.

We have achieved Japan Institute of Plant Maintenance TPM Excellency Award "category A" for Gurgaon as well as our Manesar Plants in the year 2008 & 2010 respectively. We are working towards challenging the next level which is consistency level by the end of 2012. Top Management has made the TPM declaration for our Haridwar Plant on 23rd March 2011. Munjal Showa is helping some of our Vendors in doing TPM in their Organizations.

To share the TPM & Lean achievements we receive many delegations not only from India rather from all over the World Countries like USA, Germany, UK, Japan, Thailand, Brazil, Indonesia, Vietnam, China, etc. Besides that we receive lots of Delegations from CII, (all the regions) ACMA, Honda cluster club, IMTMA, etc.)

Lean Activities:

We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop. We have converted lots of huge & complicated machines to Lean Machines & manufactured Lean machines in house. We receive many visitors not only from India but also from all over the World to see our TPM & Lean machine manufacturing activity. Munjal Showa is taking a lead role in spreading this concept of Lean Machines across the Country thru CII, ACMA, IMTMA, MSIL, HMCL, Honda Siel Club, etc.

At present we were able to re-build many very big & very complicated machines into very simple & Lean machines, which have many advantages besides the space saving. We have manufactured many new machines by using the TPM, Lean & Low cost Automation concepts. And the Journey is still on.

LISTING

The shares of your Company are listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited, and pursuant to Clause 38 of the Listing Agreement, the Annual Listing fees for the year 2012-2013 have been paid to them well before the due date i.e. April 30, 2012. The Company has also paid the annual custodian fees for the year 2012-13 in respect of Shares held in dematerialized mode to NSDL & CDSL.

PARTICULARS OF EMPLOYEES

A statement under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forming part of this Directors' Report is given in Annexure-C.

HUMAN RESOURCES

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that to continued growth is dependent upon the Company's ability to attract and retain quality people. The total headcount increased to 3494 at the end of the year as compared to 3477 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several training programmes to upgrade the skills of the workforce.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Place: New Delhi BRIJMOHAN LALL MUNJAL

Date: May 23, 2012 Chairman

---

Mar 31, 2011

The Directors have great pleasure in presenting the 26th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2011.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Companys Financial Results for the year under review are as follows:

(Rs. In Lacs) Year Ended Year Ended 31.03.11 31.03.10

Sales and other Income 138924.02 108092.61

Profit before Depreciation & Tax 7420.04 6178.52

Depreciation 2424.67 2307.64

Profit before Tax 4795.37 3870.87

Provision for Taxation 1393.46 1409.87

Profit after Tax 3401.91 2461.00

Net Profit brought forward 2347.12 1821.96

Profit available for appropriation 5749.03 4282.96

Dividend (Recommended) 999.88 799.90

Dividend Tax (Net) 159.12 135.94

Transfer to General Reserve 1000.00 1000.00

Surplus carried to Balance Sheet 3590.03 2347.12

OPERATIONS

The Company has achieved a record sales turnover of Rs. 138,924.02 lacs registering a growth of 28.52 percent vis-à-vis Rs. 108,092.61lacs in the previous year. The profit before tax in the current year was at Rs. 4,795.37 lacs as compared to Rs. 3,870.87 lacs in the previous year registering a growth of 23.88 percent.

FUTURE PROSPECTS

Indias GDP is likely to grow at an estimated sustained annual average rate of 8.40 percent over 2011-12 to 2015-16 and domestic demand - spurred by a large, growing young population, rising middle-class household consumption, and growing savings and investment rates - will support economic growth over the next five years. A likely increase in discretionary spending by Indias middle-class households will boost demand for durables such as automobiles and white goods, and services like hotels, restaurants and tourism.

Auto Component Industry is gathering speed as it has direct bearing to automobile sector. Robust automobile sales should translate into strong order inflows for auto component manufacturers. In the year 2010-11 Auto component Industry has registered encouraging results and growth, which augur well for the year ahead. The company recorded an impressive growth of 28.52 percent in value and 20.08 percent in volume.

Our existing customers have targeted to meet predetermined sales targets with around 15 percent growth, with the support of new models likely to be launched both in 2 Wheeler and 4 Wheeler segment in the coming year i.e.2011-12. In brief, all customers of the Company are on growth path and Company is confident to meet their increased demand.

TRANSFER TO GENERAL RESERVE

The Board proposes to transfer an amount of Rs. 1,000.00 lacs to General Reserve, having regard to the requirements of section 205 (2A) of the Companies Act, 1956. The balance amount of Rs. 3,590.03 lacs (previous year Rs. 2,347.12 lacs) will be retained in the Profit and Loss Account.

DIVIDEND

Your directors are pleased to recommend a higher dividend of 125 per cent (i.e. Rs. 2.50 Per equity share of Rs. 2/- each) for the year ended March 31, 2011 amounting to Rs. 999.88 lacs in aggregate as compared to 100 percent i.e. Rs. 2 per share in the corresponding year. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 162.20 lacs. The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from July 23, 2011 to August 11, 2011 (both days inclusive).

DIRECTORS

Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja and Mr. Devi Singh, the directors of the Company are liable to retire by rotation from the Board at the ensuing Annual General Meeting. Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja and Mr. Devi Singh being eligible have offered themselves for re-appointment.

The present tenure of Mr. Yogesh Chander Munjal as Managing Director of the Company expires on August 31, 2011 being eligible has offered himself for re-appointment.

Brief resumes of Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja, Mr. Devi Singh and Mr. Yogesh Chander Munjal have been appended to the Notice of the Annual General Meeting.

Your directors recommend their appointment at the ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of sub-clause (v) of Clause 49 of the Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of internal control measures and reporting of matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting, and being eligible, offer themselves for re- appointment. The Company has also received certificate from the auditors to the effect that their re- appointment, if made, would be in accordance with Section 224(1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS REPORT

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number (ix) (a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the payment due date.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

a) that the applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures;

b) that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2011 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) that the annual accounts have been prepared on a going concern basis;

AUDIT COMMITTEE RECOMENDATION

During the year there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.

FIXED DEPOSIT

The Company has not accepted any Fixed Deposits during the year under Section 58A or 58AA of the Companies Act, 1956 and the rules made there-under, and as such no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and R & D and Foreign Exchange earnings & outgo are given in Annexure-B which forms part of Directors Report.

ENVIRONMENT COMPLIANCE

India is the seventh largest country in the world by geographical area. While progress on the environmental front is being made, India still faces some major challenges. Despite highly evolved environmental laws and regulations in some areas, many environmental practices such as regulation of air pollutants using a model seen in western countries are still at a very rudimentary stage in India. Increased environmental regulations will likely become a key area of concern in the near future.

The increasing desire of Indian companies to meet world class standards has caused established companies in India to take on sustainable initiatives as a means of improving their global brand and reputation and the environmental sector is expected to be at the forefront of Indias evolving story in the coming years.

The Company has already considered the prerequisites of environment compliance long way back and is doing new initiative every year. Some of the major initiatives of regular basis are;

Slogan of the Company "One planet, one earth, one nature which propagates "Save the earth for better tomorrow”.

By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made "Zero incidents” as acceptable standard.

The Company is a regular member of Haryana Environment Management Society.

The Company has started Green Vendor Development Programme (GVDP) in 2009-10. The aim of the project is to conserve water and Energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print, generate pollution prevention awareness throughout the plant and to achieve 100 percent legal compliance.

In 2010-11 the Company has added special units to recover and recycle chrome and thinner from the waste. Special Kaizen teams with specific project made to conserve resources like energy, water and electricity. More emphasis was given to utilize natural light and natural ventilators.

ISO/TS 16949 ACCREDITATION

Your Companys manufacturing facilities plants located at Gurgaon and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. Companys third plant located at Haridwar has also got TS 16945. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.

TPM

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, India. Major objectives of TPM are to increase Productivity, to improve Quality, to reduce Costs, to ensure Delivery in time, to increase Safety, to increase profitability, to build Moral and to protect environment by formation of cross functional work groups (PQCDSME) and to improve overall effectiveness of equipment and processes within their areas. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nut shell to convert all the losses into Profit.

We have already got the category A award for TPM Excellency for Gurgaon Plant and will challenge the next level by the end of 2011. We have challenged JIPM TPM Excellence Award in December 2009 for Manesar Plant and were honored with TPM Excellence Award category A at Kyoto, Japan on March 9, 2011. We are now going to challenge the next level of TPM Excellence Award. For the same the TPM Kick - Off Ceremony for 2nd stage was held on April 22, 2011. The Company has declared start of TPM in Haridwar Plant on 23rd March 2011.We will challenge the TPM Excellence Award in December 2013. For further excellence in the industry the company is helping some of its vendors to start TPM journey.

Lean Activities:

We are in the process of clubbing TPM with lean manufacturing system in the near future. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop in the month of July 2008. We have converted lots of huge & complicated machines to Lean Machines & manufactured Lean machines in house. We receive many visitors not only from India but also from all over the World to see our TPM & Lean machine manufacturing activity. Munjal Showa is taking a lead role in spreading this concept of Lean Machines across the Country thru CII, ACMA, IMTMA, MSIL, HHML, Honda Seil Club, etc.

LISTING

The shares of your Company are listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited, and pursuant to Clause 38 of the Listing Agreement, the Annual Listing fees for the year 2011-2012 have been paid to them well before the due date i.e. April 30, 2011. The Company has also paid the annual custodian fees for the year 2011-12 in respect of Shares held in dematerialized mode to NSDL & CDSL.

PARTICULARS OF EMPLOYEES

A statement under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forming part of this Directors Report is given in Annexure-C.

HUMAN RESOURCES

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Companys ability to attract and retain quality people. The total headcount increased to 3477 at the end of the year as compared to 3012 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several training programmes to upgrade the skills of the workforce.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Place: New Delhi BRIJMOHAN LALL MUNJAL Dated: May 20, 2011 Chairman

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Mar 31, 2010

The Directors have great pleasure in presenting the 25th Annual Report together with the Audited Statement of Accounts for the financial year ended March 31,2010.

FINANCIAL RESULTS AND APPROPRIATIONS

The salient features of the Companys Financial Results for the year under review are as follows:

(Rs. In Lacs)

Year Ended Year Ended 31.03.10 31.03.09

Sales and other Income 108092.61 95392.24

Profit before Depreciation & Tax 6178.52 4975.51

Depreciation 2307.64 1685.70

Profit before Tax 3870.88 3289.81

Provision for Taxation 1409.88 1221.24

Profit after Tax 2461.00 2068.58

Net Profit brought forward 1821.96 1689.23

Profit available for appropriation 4282.96 3757.81

Dividend (Recommended) 799.90 799.90

Dividend Tax 135.94 135.94

Transfer to General Reserve 1000.00 1000.00

Surplus carried to Balance Sheet 2347.12 1821.96

OPERATIONS

The Company has achieved a record sales turnover of Rs. 108,962.61 lacs registering a growth of 14.23 per cent vis-a-vis Rs. 95,392.24 lacs in the previous year. The profit before tax in the current year was at Rs. 3,870.87 lacs as compared to Rs. 3,289.81 lacs in the previous year registering a growth of 17.66 per cent.

FUTURE PROSPECTS

Auto Component Industry is gathering speed as it has direct bearing to Auto Companies. Robust automobile sales should translate into strong order inflows for auto component manufacturers. In the year 2009-10 Auto component Industry has registered encouraging results and growth, which augur well for the year ahead. The company recorded an impressive growth of 19.15 per cent in value and 21.67 per cent in volume.

India has emerged as one of the favorite destinations of global auto majors considering huge demand growth potential driven by substantially low penetration. Entrance of new players into the small car market and with new launches of cars, motor cycles and scooters by existing players to capture the share of growing segment is indicator for favorable growth of Auto Component Industry.

Our existing customers have targeted to meet predetermined sales targets with around 20 per cent growth, with the support of new models likely to be launched both in 2 Wheeler and 4 Wheeler segment in the coming year i.e.2010-11. In brief, all customers of the Company are on growth path and Company is confident to meet their increased demand.

TRANSFER TO GENERAL RESERVE

The Board proposes to transfer an amount of Rs.1,000.00 lacs to General Reserve, having regard to the requirements of section 205 (2A) of the Companies Act, 1956. The balance amount of Rs.2,347.12 lacs (previous year Rs.1,821.96 lacs) will be retained in the Profit and Loss Account.

DIVIDEND

Your directors are pleased to recommend a dividend of 100 per cent (i.e. Rs. 21- Per equity share of Rs. 21- each) for the year ended March 31, 2010 amounting to Rs. 799.90 lacs in aggregate. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 135.94 lacs. The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from July 24,2010 to August 11,2010 (both days inclusive).

DIRECTORS

Mr. Pankaj Munjal, Mr. Anil Kumar Vadehra and Mr. Surinder Kumar Mehta, the directors of the Company, liable to be retire by rotation from the Board at the ensuing Annual General Meeting. Mr. Pankaj Munjal, Mr. Anil Kumar Vadehra and Mr. Surinder Kumar Mehta being eligible have offered themselves for re-appointment.

Mr. Akira kadoya and Mr. Tetsuo Terada have been appointed additional directors under section 260 of the Companies Act, 1956 read with Article 89 of the Articles of Association of the Company.

Brief resumes of Mr. Pankaj Munjal, Mr. Anil Kumar Vadehra, Mr. Surinder Kumar Mehta, Mr. Akira kadoya and Mr. Tetsuo Terada have been appended to the Notice of the Annual General Meeting.

Your directors recommend their appointment at the ensuing Annual General Meeting,

CORPORATEGOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.

In terms of sub-clause (v) of Clause 49 of the Listing Agreement, Certificate of CEO/CFO, inter alia, confirming the correctness of the financial statements, adequacy of internal control measures and reporting of matters to the Audit Committee in terms of the said Clause, is also enclosed as a part of the Report.

The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.

AUDITORS

M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors of the Company retire at the conclusion of the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment. The company has received copy of valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India from the Auditors. The Company has also received certificate from the auditors to the effect that their re-appointment, if made, would be in accordance with Section 224(1 B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS REPORT

The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However, as pointed out by the Auditors in annexure to their report at point number (ix) (a), the delay was on account of finalisation of accounts beyond the due date of depositing the tax.

DIRECTORSRESPONSIBILITY STATEMENT

lncompliancewithSection217(2AA)oftheCompaniesAct, 1956, the Directors confirm: a) that the applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures;

b) that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March2010 and of the profit of the Company forthe year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) that the annual accounts have been prepared on a going concern basis;

AUDIT COMMITTEE RECOMMENDATION

During the year there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need forthe disclosure of the same in this Report.

RATINGS

The rating agency CRISIL Limited has reviewed and reaffirmed the AA/stable for Companys long term loans & cash credit loans and P1 + to its Letter of Credit limits, Bank guarantees limits & Commercial Paper.

FIXED DEPOSIT

The Company has not accepted any Fixed Deposits during the year under Section 58Aor 58AAof the Companies Act, 1956 and the rules made there-under, and as such no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption and R&D and Foreign Exchange earnings & outgo are given in Annexure-B which forms part of DirectorsReport:

ENVIRONMENT COMPLIANCE

"One planet, one earth, one nature" is the slogan of the Company which propagates "Save the earth for a better tomorrow".

Safety and environment performance is integral to the business performance of the Company and received continued focus throughout the year. Zero accidents is acceptable standard of safety performance which was achieved during the financial year 2009-10. Now, to put more focus on safety, we have made Zero incidents as our acceptable standard. The Company regularly organizes training for staff and workers to prevent incidents related to mechanical, electrical, chemical, physiological and psychological safety.

For all manufacturing facilities/which require environmental consents such as air, water and hazardous waste, proper authorizations from respective Pollution Control Boards have been obtained and are in compliance with the present Environmental Legislation. The Company initiated many programmes to improve the health and safety of employees by way of Internal Environment Management Programmes. These initiatives and the improvements are monitored and reviewed through structured audits and management reviews.

The Company is a member of Haryana Environment Management Society. Government of Haryana has identified and notified a site in District Faridabad for use of disposal facility for hazardous waste.

The Company believes waste is a precious resource kept in a wrong place. We have started collection of all kind of waste paper and giving it to authorized agency, who is recycling and reusing it. By doing this activity we are able to save around four to five trees per month. Company believes there is no waste as per the "law of nature".

Manufacturing of machines from old or scrapped machine is a unique initiative by our Company. A lot of machines were overhauled and rebuilt by incorporating all the best practices in the world like lean manufacturing, easy to clean, easy to maintain, zero accident, zero defect, zero breakdown, cockpit concept etc. Experts from overseas plant of Japan, China, Indonesia, Thailand, Vietnam and Brazil including CM delegates are the regular visitors to our plants and understand the cost effectiveness of new technology.

The Company has started a new project for improvement in its performance in environment management. The project is specifically designed and named as Green Vendor Development Programme (GVDP). As a part of the project, six pillars named as Water, Energy, Waste, Chemical Substitution, Pollution Prevention and Legal Compliances have been constituted.

Basic objectives of GVDP are;

100 per cent compliance of legal requirements

To conserve Water and Energy through process mapping

To minimize generation of Waste including hazardous waste and effectuate 3R principles i.e. Reduce,

Recycle and Reuse.

- To terminate hazardous chemicals with less hazardous or non-hazardous chemicals. To understand and minimize carbon foot print.

- To generate pollution prevention awareness throughout the plant and to control & monitor all the pollution control devices to operate at optimum level within the Company and amongst the suppliers also.

ISO/TS16949 ACCREDITATION

Your Companys manufacturing facilities at both the plants at Gurgaon and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management. For the new facility at Haridwar, the Company will be able to take the certification by the end of this financial year i.e. March, 2011.

TPM

The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and Oil, India. Major objectives of TPM are to increase Productivity, to improve Quality, to reduce Costs, to ensure Delivery in time, to increase Safety, to increase profitability, to build Moral by formation of cross functional work groups (PQCDSM) and to improve overall effectiveness of equipment and processes within their areas. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nut shell convert all the losses into Profit.

a) Gurgaon Plant:

We have challenged the TPM excellence award with JIPM Japan and were honored with TPM Excellence Award category Aat Kyoto on 12"1 March 2009. We are now going to challenge the next level of TPM Excellence Award by end of 2011. For the same the TPM Kick - Off Ceremony for 2nd stage was held on 23rt of April 2009.

b) Manesar Plant:

For Manesar Plant we have challenged the TPM Excellence Award & successfully cleared the health check - up Audit on 21" December 2009 & will clear the final Audit by end of December 2010.

Lean Activities:

We are in the process of clubbing TPM with lean manufacturing system in the near future. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop in the month of July 2008. We have converted lots of huge & complicated machines to Lean Machines & manufactured Lean machines in house. We receive many visitors not only from India and from all over the World to see our TPM & Lean machine manufacturing activity.

LISTING

The shares of your Company are listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited, and pursuant to Clause 38 of the Listing Agreement, the Annual Listing fees for the year 2010-2011 have been paid to them well before the due date i.e. April 30,2010. The Company has also paid the annual custodian fees for the year 2010-11 in respect of Shares held in dematerialized mode to NSDL & CDSL.

PARTICULARS OF EMPLOYEES

A statement under sub-section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, forming part of this Directors Report is given in Annexure-C.

HUMAN RESOURCES

Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Companys ability to attract and retain quality people. The total headcount increased to 3012 at the end of the year as compared to 2343 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several training programmes to upgrade the skills of the workforce.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board

Place: New Delhi Brijmohan Lall Munjal

Dated: May 18,2010 Chairman