Reserve on amalgamation

This reserve was created at the time of amalgamation and mergers carried out in earlier years. The reserve will be utilised in accordance with the provisions of the Act.

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

Capital reserve

This reserve is created at the time of merger of Motherson Polymers Compounding Solution Private Limited (MPCSL) with the Company during previous year (refer note 50). During the previous year the amount has been increased by ' 3,612 million in relation to merger of erstwhile Samvardhana Motherson International Limited (SAMIL) pursuant to Composite Scheme (refer note 50), wherein the investments and other assets have been acquired at fair value. The reserve will be utilised in accordance with the provisions of the Act.

General reserve

General reserve is the retained earnings of the Company which are kept aside out of the Company's profits to meet future (known or unknown) obligations.

FVOCI equity investments

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investment reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Cash flow hedging reserve

The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps and interest rate swaps. To the extent these hedges are effective, the

change in fair value of the hedging instrument is recognised in the effective portion of cash flow hedges. Amounts recognised in the effective portion of cash flow hedges is reclassified to the statement of profit and loss when the hedged item affects profit or loss (e.g. interest payments).

Bracket denotes appropriations / deductions / debit balances.

¹ As on March 31 2022, Working capital loans were secured by first pari passu charge on entire current assets of the Company including receivables, both present and future and second pari passu charge over the fixed assets of the Company including equitable mortgage of specified properties and are repayable on demand in consortium. During the year ended March 31, 2023, the company has moved the working capital arrangements from consortium banks to multiple banks. Now all the working capital facilities are unsecured as per agreements with "the respective bank”.

² The carrying amount of financials and non financial assets pledged as security for short term borrowings as on March 31, 2022 is disclosed in Note 44

³ Short term borrowings carry interest rate ranging from 5.5% to 8.0% p.a.

The Company had borrowings from banks on basis of security of current assets. The quarterly returns/statements filed by the Company with such banks were in agreement with the books of accounts of the Company.

Warranties

Provision for warranty relates to the estimated outflow in respect of warranty for products sold by the Company. Due to the very nature of such costs, it is not possible to estimate the timing/ uncertainties relating to the outflows of economic benefits.

Contingencies

Provision for contingencies relates to excise, entry tax and octroi demands including interest thereon, where applicable, being contested by the Company. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above, pending resolution of the respective proceedings.

The long term defined employee benefits and contribution schemes of the Company are as under:A. Defined Benefit Schemes Gratuity

The Company operates a gratuity plan administered through Life Insurance Corporation of India (LIC) under its Group Gratuity Scheme. Every employee is entitled to a benefit equivalent to fifteen days' salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service. The Company pays contribution to Life Insurance Corporation of India to fund its plan.

In the current year, the said LIC fund has been transferred to the Motherson Sumi Wiring India Limited (MSWIL) to the extent of its share which was determined basis the employees transferred to the MSWIL post demerger. Pursuant to such determination by LIC, adjustments for actualisation of the fund balances amounting to ' 207 million has been effected during the year.

Above sensitivity analysis is based on a change in assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and change in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in balance sheet.

x) Risk exposure

The gratuity scheme is a salary Defined Benefit Plan that provides for lump sum payment made on exit either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The plan design means the risk commonly affecting the liabilities and the financial results are expected to be:

(a) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds, if bond yield fall, the defined benefit obligation will tend to increase.

(b) Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.

(c) Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

C. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India, however, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued by the Government of India. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

In respect of ongoing projects, the Company has transferred unspent amount to a special account, within a period thirty days from end of the financial year in compliance with provisions of sub section (6) of section 135 of the Companies Act.

The Company has not transferred the amount remaining unspent in respect of other than ongoing projects, to a Fund specified in Schedule VII to the Companies Act, 2013 (the Act) as the period for such transfer i.e. six months of the expiry of the financial year as permitted under second proviso to sub-section (5) of section 135 of the Act, has not elapsed.

In accordance with the requirements, changes in ratios of more than 25% as compared to previous year have been explained.

(i) Considering the impact of accounting for Composite Scheme of Amalgamation and Arrangement (refer note 50), ratios for the period ended March 31, 2022 have been calculated after considering relevant amounts pertaining only to continuing operations, hence the ratio are not strictly comparable.

(ii) Debt service coverage ratio has decreased due to higher amount of long term borrowing maturing in the next twelve months as compared to FY2021-22. The Company has utilised the borrowing to finance the operation of its Subsidiary Company, which is the reason for lower debt service coverage ratio at Standalone level.

(iii) Return on Equity ratio has decreased mainly due to lower dividend received from the group companies and impairment losses recognised during FY 2022-23.

(iv) Net Capital Turnover Ratio, has decreased due to higher revenue in FY 2022-23 and also due to increased current maturity of long term borrowings impacting the working capital for the FY 2022-23.

(v) Net Profit ratio has decreased due to lower dividend income and impairment losses recognised during FY 2022-23.

(vi) Return on investment has decreased due to lower dividend and impairment losses recognised income during FY 2022-23.

ii. Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

a. the use of quoted market prices or dealer quotes for similar instruments.

b. the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date.

c. the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows.

d. the fair value of the remaining financial instruments covered under level 3 is determined using discounted cash flow analysis.

*The carrying amounts of trade receivables, borrowings, cash and cash equivalents, other financial assets, trade payables and other financial liabilities are considered to be the same as their face values.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

¹ The fair value of non-current financial assets and financial liabilities carried at amortized cost is substantially same as their carrying amount.

The Company has taken interest rate swap amounting to ' 39,650 million (March 31, 2022: ' 39,650 million) and a borrowing with fixed interest rate amounting ' 11,150 million (March 31, 2022: ' 5,150 million).

Note: The carrying amounts of current financial assets and current financial liabilities i.e. trade receivables, loans, other financial assets, trade payables, short term borrowings and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

37(a) Financial risk management

The Company in its capacity as an internationally active supplier for the automobile industry is exposed to various risks i.e., market risk, liquidity risk and credit risk. The company has global presence and decentralized management structure. Concentrating on the plants make it necessary for implementing an organized risk management system. The Company is therefore exposed to risks associated with global organizations and automotive industry in particular.

The Company has set up a Risk Management Committee (RMC) at the board level to periodically review operating, financial and strategic risks in the business and their mitigating factors. RMC has formulated Risk Management Policy for the Company which outlines the risk management framework to help minimize the impact of uncertainty on the Company's strategic goals. The framework enables a structured and disciplined approach to risk management. The Company has developed guidelines on risk controlling and the use of financial instruments. These guidelines contain a clear allocation of duties. Risks are controlled and monitored by means of operational and financial measures.

Below are the major risks which can impact the Company:

A Market risk:

Market risk is the risk that the fair value of future cashflows of a financial instruments will fluctuate because of changes in market price/ rate. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risks. Financial instruments affected by market risk include loans and borrowings, deposits and payables/ receivables in foreign currencies.

a. Price risk:

Fluctuation in commodity price in global market affects directly and indirectly the price of raw material

and components used by the Company in its various products segment. Substantial pricing pressure from major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the profitability of the Company. The Group has set up Global Sourcing Procurement (GSP) at Sharjah which gives leverage of bulk buying and helps in controlling prices to a certain extent.

The key raw material for the Company's wiring harness business is copper. There are substantial fluctuations in prices of copper. The Company has arrangements with its major customers for passing on the price impact.

The major raw materials used by Polymer Division of the Company are polypropylenes, polycarbonates and various grades of nylons and resins. The Company is having arrangement with major customers for actualization of raw material price variations periodically. Motherson Polymer Solutions, compounding unit has been established with a view of taking leverage on group's bulk consumption on major grades. The setting up of GSP further strengthens the procurement function.

The Company is regularly taking initiatives like VA-VE (value addition, value engineering) to reduce its raw material costs to meet targets set up by its customers for cost downs. In respect of customer nominated parts, the Company has back to back arrangements for cost savings with its suppliers.

b. Foreign currency risk:

The exchange variations in India has mainly impacted the imports, but however the Company has arrangements with its major domestic customers for passing on the exchange impact on import purchase and has considerably increased its export sales during last few years to attain natural hedge. The Company also does selective hedging to hedge its risks associated with foreign currency.

c. Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company's main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March 31, 2023 and March 31, 2022, the Company's borrowings at variable rate were mainly denominated in INR.

B Credit risk:

The credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations towards the Company and arises principally from the Company's receivables from customers and deposits with banking institutions.

Trade receivables

The Company has developed guidelines for the management of credit risk from trade receivables. The Company's primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to payment due dates is monitored on an on-going basis, thereby practically eliminating the risk of default and impairment.

Financial instruments and cash deposits

The Company has deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign banks. In long term credit ratings these banking institutions are considered to be investment grade. Also, no impairment loss has been recorded in respect of fixed deposits that are with recognised commercial banks and are not past due.

C Liquidity risk:

The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated by Company finance. The Company's finance monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

38 Capital management (a) Risk management

The Company's objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the Company monitors Net Debt to EBITDA ratio i.e. Net debt (total borrowings (including lease liabilities) net of cash and cash equivalents) divided by EBITDA (Earnings before interest, depreciation, dividend income, interest income and exceptional items)

Terms and conditions:

Transactions relating to sales and purchase of goods with related parties during the year are based on the price lists in force and terms that would be available to third parties. All other transactions were made on normal commercial terms and conditions and at market rates.

There is no significant allowance for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect of impaired receivables due from related parties.Outstanding balances are unsecured and are repayable in cash.

41 Segment Information:(a) Description of segments and principal activities

The Company is primarily in the business of manufacture and sale of components to automotive original equipment manufacturers.

Subsequent to the completion of group re-organisation as mentioned in note 50, the Chief Operating Decision Maker '"'CODM'"' reviews the operations of the group in the following operating segments i.e. 'Wiring Harness', 'Modules and polymer products', 'Elastomers', 'Precision Metals & Modules' and 'Services', therefore disclosures on segment reporting in the standalone financial statement have been made in accordance therewith.

The CODM primarily uses a measure of revenue from operation and earnings before interest, tax, depreciation, amortisation and exceptional item (EBITDA) to assess the performance of the operating segments on monthly basis.

Unallocated:

Revenue, expenses, assets and liabilities have been identified to a segment on the basis of relationship to operating activities of the segment. Assets and liabilities which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed under unallocated.

Inter segment transfer:Inter Segment revenues are recognised at sales price. Profit or loss on inter segment transfer are eliminated at the Company level.(b) Revenue from operation

Interest income, rental income, dividend income, income recognised on sales of assets and investment are excluded from segment revenue. Transactions between segments are carried out at arm's length and are eliminated on Company level. The segment revenue is measured in the same way as in the statement of profit or loss.

As on March 31 2022, Working capital loans were secured by first pari passu charge on entire current assets of the Company including receivables, both present and future and second pari passu charge over the fixed assets of the Company including equitable mortgage of specified properties and are repayable on demand.

During the year ended March 31, 2023, the company has moved the working capital arrangements from consortium banks to multiple banks. Now all the working capital facilities are unsecured as per agreements with "the respective bank”.

46 Leases

The Company assesses each lease contract and if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration, the Company recognised right to use assets and lease liabilities for those lease contracts except for short-term lease and lease of low-value assets.

The Company has leases contracts for land, building, plant & machinery and vehicles. These lease arrangements for land are for a period upto 99 years, for building are for a period upto 10 years, plant & machinery are for a period upto 5 years and vehicles are for a period upto 5 years. The Company also has certain leases of machinery, computers, vehicles with lease terms of 12 months or less and leases of office equipment with low value. The Company applies the 'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases.

Contract assets are initially recognised for revenue earned from development of tools and secondary equipment as receipt of consideration is conditional on successful completion and acceptance by the customer. Upon completion and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables. The expected credit loss on contract assets is considered very low and hence no provision for credit loss is recorded in respect of contract assets.

47 Acquisitions by the CompanyA) During the year ended March 31, 2023i) CIM Tools Private Limited

On October 08, 2021 the Company signed share purchase agreement for acquisition of 55% stake in CIM Tools Private Limited (CIM). CIM in turn holds 83% stake in Aero Treatment Private Limited (ATPL) and 49.99% in Lauak CIM Aerospace (JV with Lauak International, LCA), together known as CIM Group for a total purchase consideration of ' 1,609 million. Investment in CIM is reported under investment in subsidiaries (refer note 6).

CIM Tools is engaged in specialised machining and sub-assembly of components for the aerospace industry. ATPL is a vertically integrated unit engaged in surface treatment of machined parts. The transaction has been completed in the month of April 2022.

ii) Fritzmeier Motherson Cabin Engineering Pvt. Ltd.

On March 20, 2023, the Company has purchased remaining 50% share of Fritzmeier Motherson Cabin Engineering Pvt. Ltd. (FMCEL) from F Holdings GmbH, Austria for total purchase consideration of ' 1,107 million.

Previously the Company held 50% shares in FMCEL and was reported as investment in joint ventures, which is now classified as investment in subsidiaries in standalone financial statements. (refer note 6)

B) Proposed acquisitionsi) Saddles International Automotive and Aviation Interiors Private Limited

On January 27, 2023, the Company entered into an agreement to purchase 51% share holding in Saddles International Automotive and Aviation Interiors Private Limited (SIAAIPL). SIAAIPL is engaged in manufacturing of premium upholstery for passenger vehicles applications.

ii) Youngshin Motherson Auto Tech Limited

Susequent to the Balance sheet date, The Board of Directors of the Company at their meeting held on April 17, 2023 approved to acquire additional 30% stake of Youngshin Motherson Auto Tech Limited ("YMAT”) from Youngshin Components Co. Ltd., Korea subject to satisfactory completion of conditions precedent. Post completion of the transaction, the Company will hold 80% of equity share capital of YMAT and accordingly YMAT will become subsidiary of the Company. As on March 31, 2023, the Company held 50% stake in YMAT and the same is reported under investment in joint ventures (refer note 6).

50 The Composite Scheme of Amalgamation and Arrangement

The Hon'ble National Company Law Tribunal, Mumbai Bench ("Hon'ble NCLT”) vide its order dated December 22, 2021 approved the Composite Scheme of Amalgamation and Arrangement ("the Scheme”) between the Company, Motherson Sumi Wiring India Limited ('"'MSWIL'"'), erstwhile Samvardhana Motherson International Limited (erstwhile SAMIL) and their respective shareholders. The Scheme among other things, included demerger of Domestic Wiring Harness ("DWH”) business from the Company into a new company, viz., MSWIL and subsequent merger of erstwhile SAMIL into the Company.

Considering that all necessary and substantive approvals were received, the Company had given effect to the merger and demerger accounting from December 31, 2021 in accordance with the accounting treatment prescribed in the Scheme and relevant accounting principles.

A Demerger of Domestic Wiring Harness (DWH) Business

As per the Scheme, 3,157,934,237 equity shares having face value of ' 1/- each, were allotted by MSWIL, in the ratio of 1 equity share of MSWIL of face value ' 1/- each for every 1 equity share of the Company of face value ' 1/- each, to the shareholders of the Company as on January 19, 2022, being the record date fixed by the Company. The carrying amount of net assets amounting to ' 10,721 million, as on December 31, 2021, pertaining to DWH Business transferred to MSWIL was adjusted against retained earnings of the Company. Till the date of transfer, results of DWH Business were reflected and presented as Discontinued Operation.

B Amalgamation of erstwihile Samvardhana Motherson International Limited

In accordance with the Scheme, 1,359,680,007 net equity shares having face value of ' 1/- each have been allotted by the Company in the ratio of 51 equity shares of the Company of face value ' 1/- each for every 10 equity shares of erstwhile SAMIL of face value ' 10/- each to the shareholders of erstwhile SAMIL as on January 28, 2022, being the record date fixed in terms of the Scheme. This translates into net consideration for the transaction at ' 241,827 million and capital reserve of ' 3,612 million, being excess of fair value of identifiable assets and liabilities assumed through merger with erstwhile SAMIL over net consideration. The fair values used for the accounting have been determined based on purchase price Allocation in accordance with IND AS 103 - "Business Combination”.

52 Other Statutory Information

(i) There are no proceeding that has been initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules thereunder.

(ii) There are no transactions with companies that are struck off under Section 248 of the Companies Act, 2014 or Section 560 of the Companies Act, 1956.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period except few charges, which are in the process of satisfaction.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(viii) The Company is not declared as wilful defaulter by any bank or financial institutions.

53 The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which are effective from 01 April 2023.

(i) Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after 1 April 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. The amendments are not expected to have a material impact on the Company's financial statements.

(ii) Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to Ind AS 1 are applicable for annual periods beginning on or after 1 April 2023. Consequential amendments have been made in Ind AS 107.

The Company is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements.

(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12 The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences.

The amendments should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, at the beginning of the earliest comparative period presented, a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax liability should also be recognised for all deductible and taxable temporary differences associated with leases and decommissioning obligations. Consequential amendments have been made in Ind AS 101. The amendments to Ind AS 12 are applicable for annual periods beginning on or after 1 April 2023.

54 Amounts appearing as zero ”0” in financial are below the rounding off norm adopted by the Company