JTEKT India Ltd

* The Board of Directors of the Company, based on the recommendation of Audit Committee, in its meeting held on 6 July 2022, has considered and approved the Scheme of Amalgamation ("Scheme") for merger of its subsidiary company namely JTEKT Fuji Kiko Automotive India Limited ("Amalgamating Company") with the Company, pursuant to Sections 230 to 232 of the Companies Act, 2013, with effect from Appointed Date i.e. 1 April 2022. The Scheme was filed with National Company Law Tribunal ("NCLT") on 26 November 2022 and was approved by NCLT on 12 December 2023. A certified copy of the Order was filed with the Registrar of Companies on 1 January 2024 and the scheme became effective. Pursuant to the Scheme, all the assets, liabilities, reserves and surplus of amalgamating company have been vested in the Company with effect from 1 April 2022 at the carrying values in financial statements of amalgamated company in accordance with Appendix C of IND AS 103.

The Company achieved revenue from operations of INR 2,24,549 lakhs during the year; with an increase of 10% compared to revenue achieved in the previous year.

The Company reported profit after tax of INR 10,686 lakhs, an increase of 23% compared to the previous year.

This year, the Company has incurred a capital expenditure of INR 17,071 lakhs. This comprises:

• Building INR 532 lakhs.

• Plant and Machinery, jig & fixture etc. INR 14,753 lakhs.

• Office equipment and others INR 1,786 lakhs.

Keeping in view the current year performance, your directors are pleased to recommend a dividend of INR 0.60 per equity share of the face value of INR 1/- each (@ 60%) out of profit for Financial Year 2023-24 resulting into distribution of sum of INR 1525.68 lakh towards dividend, payable to those shareholders whose name appear in the Register of Members as on the date of book closure.

During the previous Financial Year dividend was paid at the rate of 50% on the equity share capital of the Company.

No interim dividend was declared by the Board of Directors during Financial Year 2023-24.

(Amount in INR/Lakhs)

* Please refer note given under the Financial Results

As part of the Company's restructuring plan, the Board of Directors of the Company in their meeting held on 6 July 2022, had approved the Scheme of Amalgamation of JTEKT Fuji Kiko Automotive India Limited ('JFIN'), a subsidiary of JTEKT India Limited ('the Company'), with the Company and the same was approved by the Members at the meeting held on 20 May 2023, convened on the direction of the Hon'ble National Company Law Tribunal, Principal Bench, New Delhi ('NCLT').

The NCLT vide its Order dated 12 December 2023 had approved the Scheme, which was filed with the Registrar of Companies, NCLT of Delhi & Haryana on 1 January 2024, being the 'Effective Date. Pursuant thereto, in accordance with the terms of the Scheme, JFIN was amalgamated with the Company w.e.f., the Appointed Date i.e. 1 April 2022, and consequently, JFIN stands dissolved without winding up. The necessary accounting entries giving effect to the amalgamation have been passed in the books of accounts of the Company.

During the year there has been no change in the nature of business of the Company.

During the Financial Year 2023-24, your Company allotted 98,00,014 nos. of Equity Shares of INR 1/- each to the shareholders of JFIN, pursuant to the Scheme of Amalgamation between JFIN and the Company and their respective shareholders and creditors, approved by NCLT, New Delhi vide its Order dated 12 December 2023.

Pursuant to amalgamation of JFIN with the Company:

(a) the Authorized Share Capital of the Company has been increased from INR 87,10,00,000/- consisting of 87.10.00. 000 nos. of Equity Shares of INR 1/- each to INR 99.10.00. 000/- consisting of 99,10,00,000 nos. of Equity Shares of INR 1/- each; and

(b) the Issued, Subscribed and Paid-up Share Capital of the Company stands increased from INR 24,44,80,469 comprising of 24,44,80,469 equity shares of INR 1/- each to INR 25,42,80,483 comprising of 25,42,80,483 equity shares of INR 1/- each.

As on 31 March 2024, none of the Directors of the Company holds instruments convertible into equity shares of the Company.

For details of dividend and shares transferred to Investor Education and Protection Fund (IEPF), please refer Corporate Governance Report.

There are no significant or material Orders passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

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 financial statements relate and the date of the report.

The internal controls are aligned to adhere to the local statutory requirements. The internal control systems are supported through, management reviews, verification by internal auditors, as well as verification by Statutory Auditors. Further, the Audit Committee of the Board reviews the internal audit plan, adequacy of internal control systems, significant audit observations and monitors the sustainability of remedial measures.

In addition to policies, procedures, and guidelines, the internal controls system is facilitated by an automated "Compliance Manager Tool') which enables self-assessment by process owners on status of all applicable regulatory compliances and Internal Controls including, controls relating to adherence to company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The status of each self-assessment is approved by an immediate superior. The status of self-assessment is periodically deliberated and reviewed by the Senior Management. Further, the accuracy of sample self-assessments is verified through periodic internal audits.

The aforesaid internal control systems provide high degree of assurance with respect to effectiveness and efficiency of operations, adequacy and adherence of internal financial controls and compliances with laws and regulations except few deficiencies for which management is in process of implementing appropriate controls.

The Company has an effective and reliable internal control system commensurate with its size and operations except for the below mentioned deficiencies noted during management assessment and evaluation of internal financial controls.

The management has identified certain unusual adjustments posted by an employee to the trade receivables account amounting to INR 771.20 lakh, which pertain to prior years. These amounts have been charged to Statement of Profit and Loss as "Other expenses" in the financial statements for the year ended 31 March 2024. Management has performed an independent investigation through an external consultant and does not expect any further impact on the financial statement for the year ended 31 March 2024. The Management, in consultation with Audit Committee, has taken necessary actions and is in the process of strengthening controls in the areas of appropriate knocking of the receipts based on the remittance advices received from customers and reconciliations of trade receivables to prevent the re-occurrence of such events.

During the current year ended 31 March 2024, Statutory Auditors have given Qualified opinion on Internal Financial Controls with reference to the Financial Statements (refer Annexure B to the Independent Auditor's report).

As mentioned above, the Management is in process of taking appropriate actions to strengthen the relevant Internal Financial Controls.

Vide order dated December 12, 2023 ("Order") passed in Company Petition bearing [CAA-37(ND)/2023 connected with CA(CAA)- 113(ND)/2022] under Sections 230-232 of the Companies

Act, 2013, the Hon'ble National Company Law Tribunal, New Delhi ("Tribunal") has approved the Scheme of Amalgamation between JTEKT Fuji Kiko Automotive India Limited ('Transferor Company') and JTEKT India Limited ('Transferee Company"), their respective Shareholders and Creditors ("hereinafter referred to as the 'Scheme'). Accordingly, the Company do not have any other Subsidiary as on 31 March 2024.

In accordance with the Companies Act, 2013, Annual Return in the prescribed format is available at Company's website www. jtekt.co.in/Annual-Return.aspx .

Your company considers CSR activities as an opportunity to make a long term positive impact on the society and forms this as an integral part of the philosophy and business activities of the Company. During the Financial Year 2023-24, the Company has contributed in the areas of quality education, healthcare including preventive healthcare and rural development.

The Company has always focussed to implement these projects in local areas after detailed assessment of the requirements of the community with the objective to derive maximum benefit from these activities. The Company has successfully implemented all the projects approved by the Corporate Social Responsibility Committee of Directors, within the current financial year and has spent an excess amount of INR 0.11 lakh in addition to statutory requirement of INR 133.32 lakh.

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure - I.

The Board of Directors met 4 (four) times in the year ended 31 March 2024. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

The Board of Directors had constituted a Nomination & Remuneration Committee to review formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees and such other ancillary functions as may be required.

The Company follows a policy on remuneration of directors and senior management employees. The policy is approved by the Nomination & Remuneration Committee and the Board and is available on Company's website www.jtekt.co.in.

For details of remuneration paid to Directors, please refer Corporate Governance Report.

The Company has entered into contracts / arrangements with the related parties in the ordinary course of business and on arm's length basis. Thus, provisions of Section 188(1) of the Companies Act, 2013 are not applicable.

All related party transactions entered during the year were in the ordinary course of business and on arm's length basis. During the year under review, your Company had also entered into certain material related party transactions but these transactions too were in the ordinary course of business and were at arm's length basis. Details of these transactions, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2, appended as Annexure - II and forms part of this Annual Report.

However, in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), all transactions with related parties, which are of material in nature, are subject to the approval of the Members of the Company. The requisite resolutions in order to comply with the aforesaid requirements of Listing Regulations, were passed by the members of the Company at the last Annual General Meeting held on 11 August 2023. Considering the anticipated business growth, there is a proposal to seek shareholders' approval for material related party transactions outlined in the relevant resolutions, which are included in the Notice for the Company's 40 Annual General Meeting.

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, BSR & Co. LLP, Chartered Accountants (Firm registration number 101248W/W-100022) ('BSR') was appointed as the Statutory Auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 38 Annual General Meeting of the Company held on 26 August 2022 till the conclusion of the 43 Annual General Meeting.

Pursuant to Section 204 of the Companies Act, 2013, the Company had appointed Mr. K.K. Singh, proprietor of KKS and Associates, Company Secretaries in practice, as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2023-24. The Company provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2023-24 is annexed to this report as Annexure - III. The report does not contain any qualification.

1. The Statutory Auditor's Report for financial year 2023- 24 does not contain any qualification, reservation or adverse remark, except as provided in the Corporate Governance Report attached to this Annual Report.

2. The Secretarial Auditor's Report for financial year 2023-24 does not contain any qualification, reservation or adverse remark.

3. As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'Listing Regulations'), the Practicing Company Secretary's Certificate on corporate governance is enclosed to the Board's Report. The Practicing Company Secretary's Certificate for financial year 2023-24 does not contain any qualification, reservation or adverse remark.

During the Financial Year, no report under sub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

The Board of Directors of the Company had constituted a Risk Management Committee to oversee the risk management process in the Company.

The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and mitigate both business and non-business risks. The Risk Management Committee periodically reviews the risks and suggests the steps to be taken to identify and mitigate the same through a properly defined framework.

For details pertaining to Risk Management Committee, please refer to the Corporate Governance Report.

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the Listing Regulations. A separate section on corporate governance under the Listing Regulations, along with a certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.

Business Responsibility and Sustainability Report for the Financial Year 2024 describing the initiatives taken by the Company from an Environment, Social and Governance perspective as stipulated under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure - IV and is also available on the Company's website at https://www.jtekt.co.in/investors/FinancialInformation.html.

The Company has established a vigil/whistle blower mechanism for Directors and employees to report their genuine concerns. For details, please refer to the Corporate Governance Report attached to this Annual Report.

The Securities of your Company are listed at National Stock Exchange of India Limited and BSE Limited and the Company has paid the Listing Fee due to them.

During the year the Company has no deposits covered under Chapter V of the Companies Act, 2013.

During the year under review, no loans, guarantees and investments were made by the Company under Section 186 of the Companies Act, 2013, hence the said provision is not applicable. For details pertaining to other loan given, guarantees provided, security provided and investment made please refer to the Financial Statement for financial year 2023-24.

As on 31 March 2024, your Company has ten (10) Directors consisting of five (5) Independent Directors (including one Woman Director), three (3) Executive Directors and two (2) Non- Executive Directors.

During the year :

• Mr. Satoshi Komeda, rescinded from the position of Director (Operations) of the Company effective from 1 April 2023;

• Mr. Hidehito Araki, ceased to be an Independent Director of the Company due to completion of his tenure effective from the close of business hours of 10 August 2023;

• Mr. Ashish Srivastava, rescinded from the position of Company Secretary as well as one of Key Managerial Persons of the Company effective from the close of working hours of 5 April 2023; and

Further, during the year :

• Mrs. Hiroko Nose was re-appointed as Independent Woman Director by the shareholders of the Company at 39 Annual General Meeting held on 11 August 2023;

• Mr. Minoru Sugisawa was appointed as an Additional Director, in the capacity of Wholetime Director, with remuneration, with effect from 1 June 2023, whose appointment was confirmed by the shareholders of the Company at 39 Annual General Meeting held on 11 August 2023;

• Mr. Hiroshi Daikoku was appointed as an Independent Director of the Company with effect from 11 August 2023, whose appointment was confirmed by the shareholders of the Company at 39 Annual General Meeting held on 11 August 2023; and

• Mr. Saurabh Agrawal was appointed as Company Secretary as well as one of the Key Managerial Persons of the Company effective from 22 May 2023.

In terms of the definition of 'Independence' of Directors as prescribed under the Listing Regulations and Section 149(6) of the Companies Act, 2013 the Company has received declarations from the following Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations:

1) Mrs. Hiroko Nose

2) Mr. Inder Mohan Singh

3) Lt. Gen. Praveen Bakshi (Retd.)

4) Mr. Masahiko Morimoto

5) Mr. Hiroshi Daikoku

Your Directors take this opportunity to place on record the appreciation of services rendered by Mr. Satoshi Komeda as Director (Operations) and Mr. Hidehito Araki as Independent Director, during their association with the Company.

Pursuant to the provisions of Section 152(6) read with the Articles of Association of the Company, Mr. Rajiv Chanana will retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

For further details, pertaining to Board Meetings, please refer to the Corporate Governance Report.

As on March 31, 2024, following are the Key Managerial Persons (KMPs) of the Company:

1. Mr. Hitoshi Mogi, Chairman & Managing Director (Executive Director)

2. Mr. Rajiv Chanana, Director & CFO

3. Mr. Saurabh Agrawal, Company Secretary & Compliance Officer (Appointed w.e.f. 22 May 2023)

The Company has devised a Policy for performance evaluation of Independent Directors, the Board, its Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation.

Based on the questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee.

Further, in accordance to the Board Performance Evaluation Policy, the Board carried out annual performance evaluation of Independent Directors. The Independent Directors carried out annual performance evaluation of Non independent Directors and Board as a whole.

For composition and other details pertaining to the Committee of Directors, please refer to the Corporate Governance Report.

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the directors confirm that:

a) in the preparation of the annual accounts for the financial year 2023-24, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies and applied them 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 of the financial year 2023-24 and of the profit of the Company for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act 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) t he directors, 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) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company complies with all applicable secretarial standards.

A statement containing the necessary information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be given pursuant to provisions of Section 134 of the Companies Act, 2013, read with the rules made thereunder is annexed as Annexure - V and forms part of this report.

In terms of the provisions of Regulation 34 of the Listing Regulations, the management's discussion and analysis is set out in this Annual Report.

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in Annexure - VI(a) to this Report.

A statement showing the details of employees of the Company who are drawing salary as per the limits prescribed under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during the Financial Year 2023-24 or part thereof, is attached herewith as Annexure - VI(b) to this Report.

For details pertaining to the Sexual Harassment of women at the work place (prevention, prohibition and redressal) Act, 2013, please refer Corporate Governance Report.

During the year, there being no transactions with respect to following items during the year under review, no disclosure or reporting is required in respect of the same:

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

b. Issue of shares (including sweat equity shares) to employees of your Company under any scheme.

c. Neither the Managing Director nor the Wholetime Director of your Company receive any remuneration or commission from any of its subsidiaries.

d. Buy-back of shares.

e. No application was made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

f. No settlements have been done with banks or financial institutions.

Your Directors acknowledge with gratitude the co-operation and support extended by the Company's customers namely Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Honda Cars India, Stellantis (Fiat + PCA), Toyota Kirloskar, Club Car, E-z-go, Renault- Nissan, Isuzu and SML-Isuzu, Banks, and various agencies of the Government.

Your Directors also wish to place on record their sincere appreciation of the services rendered by all the employees of the Company and are thankful to the Shareholders for their continued patronage.