Munjal Showa Ltd

Dear Members,

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:

OPERATIONS & STATE OF THE COMPANY'S AFFAIRS

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

Rs. 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:

TRANSFER TO GENERAL RESERVE

The Company has not transferred any amount to General Reserve during the financial year 2023-2024. The balance amount of Rs. 29,717.25 lakhs (Previous year Rs. 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., Rs. 4.50 per equity share of Rs. 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 Rs. 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. 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 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 cuto_ 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 Rs. 15,00,00,000 (INR Fifteen Crores only) divided into 7,50,00,000 (Seven Crores Fifty Lakh) equity shares of face value of Rs. 2 (Rupees Two) each. The paid-up Share Capital of the Company as on March 31, 2024 was Rs. 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 Rs. 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 Rs. 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 Rs. 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 Rs. 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 2027-2028. 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 _ne of Rs. 5000/- each was imposed by both the stock exchanges. The Company has replied to said notices of stock exchanges and requested for waiver offline.

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 Rs. 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 _ne 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:

*The Company has spent excess of Rs. 4,55,336 for CSR Expenses in the previous years. In the Year 2023-24 the Company Adjusted Rs. 4,55,336 against CSR Expenses liability of said year. Therefore, Rs. 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-O_ 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: h t t p s : / / w w w . m u n j a l s h o w a . n e t / w p - c o n t e n t / 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 afirms 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://munjalshowa.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.

* 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 pro_ciency) 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 afixing 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: h t t p s : / / w w w . m u n j a l s h o w a . n e t / w p - c o n t e n t / 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 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 Rs. 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: h t t p s : / / w w w . m u n j a l s h o w a . n e t / w p - c o n t e n t / 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 AND THE VALUATION DONE WHILE TAKING 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

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.