Motherson Subsidiary Faces Rs 16.05 Lakh ESI Penalty for Pre-Acquisition Period

Samvardhana Motherson International Limited (SAMIL), a leading auto component manufacturer, recently disclosed that its subsidiary, Saddles International Automotive Aviation Interiors Pvt Ltd. (Saddles), has been penalized by the Employee State Insurance Corporation (ESIC) in Pune. The penalty, amounting to Rs 16.05 lakh, was imposed due to delayed deposits of employer-employee contributions for the period from September 2020 to January 2022.

Key Points of the Penalty

Subsidiary Involved: Saddles International Automotive Aviation Interiors Pvt Ltd.
Penalizing Authority: Employee State Insurance Corporation (ESIC), Pune
Penalty Amount: Rs 16.05 lakh
Period of Violation: September 2020 to January 2022
Nature of Violation: Delayed deposit of Employers Employees Contribution as per ESI Act 1950

Acquisition Context

It's important to note that the violation occurred before Saddles became a subsidiary of SAMIL. The timeline of events is as follows:

Period of Violation: September 2020 to January 2022
Acquisition Date: July 13, 2023

This chronology indicates that the issues leading to the penalty predated Saddles' association with SAMIL.

Financial Impact

Despite the substantial penalty amount, SAMIL has stated that there will be no financial impact on the company. This is because the penalty is covered by a seller indemnity, meaning the previous owners of Saddles are responsible for the financial consequences of this pre-acquisition violation.

Regulatory Compliance

This incident underscores the importance of regulatory compliance, particularly in matters related to employee benefits and statutory contributions. It serves as a reminder for companies to conduct thorough due diligence during acquisitions, especially regarding potential liabilities arising from past non-compliance issues.

Motherson's Financial Position

While this penalty does not directly impact Motherson's financials, it's worth noting the company's strong financial position. As per the latest balance sheet data:

Financial Metric	Amount (in Rs. crore)	YoY Change
Total Assets	92,847.30	+9.20%
Current Assets	43,307.90	+7.54%
Total Equity	37,128.50	+31.59%

These figures indicate that Motherson maintains a robust financial standing, which allows it to navigate such regulatory challenges effectively.

In conclusion, while the penalty on its subsidiary Saddles is noteworthy, Samvardhana Motherson International Limited's financial strength and the indemnity coverage suggest that this incident is unlikely to have a significant impact on the company's overall operations or financial health.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.22%	-0.33%	+1.96%	+16.33%	+16.02%	+94.38%

Samvardhana Motherson International Limited has successfully concluded its postal ballot process, with shareholders overwhelmingly approving both proposed resolutions. The company announced the results on December 22, 2025, following the completion of the remote e-voting period that ended on December 21, 2025.

Postal Ballot Results Overview

The e-voting process witnessed significant shareholder participation, with both resolutions receiving strong approval from members. The scrutinizer, Mr. D.P. Gupta, Managing Partner of SGS Associates LLP, submitted the voting results report confirming the passage of both resolutions with requisite majority.

Resolution Details:	Outcome
Total Electronic Ballots Received:	3,403
Total Votes Cast:	9,31,60,80,287
E-voting Period:	November 22 - December 21, 2025
Results Declaration:	December 22, 2025

Director Appointment Approved with Overwhelming Support

Shareholders approved the appointment of Mr. Dinesh Kumar Khara as Independent Director with exceptional support. The Special Resolution received 99.92% votes in favour, demonstrating strong confidence in the proposed appointment.

Voting Results - Resolution 1:	Details
Members Voted in Favour:	3,160
Votes Cast in Favour:	93,01,49,28,45
Approval Percentage:	99.92%
Members Voted Against:	168
Votes Against:	72,78,821
Opposition Percentage:	0.08%

Mr. Khara, former Chairman of State Bank of India, will serve as Independent Director for five years from September 25, 2025, to September 24, 2030. His extensive 40-year banking experience in treasury, risk management, IT, and compliance is expected to strengthen the company's board expertise.

Executive Remuneration Revision Receives Strong Approval

The Ordinary Resolution for revising Mr. Pankaj Mital's remuneration as Whole-time Director also received substantial shareholder support, with 99.64% votes in favour.

Voting Results - Resolution 2:	Details
Members Voted in Favour:	3,055
Votes Cast in Favour:	92,75,14,54,44
Approval Percentage:	99.64%
Votes Against:	3,36,20,323
Opposition Percentage:	0.36%

The approved remuneration structure includes a basic salary of ₹32.74 lakh per month for Mr. Mital, who will be designated as President - SAMIL. His annual remuneration for FY 2025-26 is capped at ₹5.56 crore, with eligibility for employee stock options and annual increments up to 15% based on performance.

Corporate Governance and Transparency

The postal ballot process was conducted in accordance with the Companies Act, 2013, and SEBI regulations. The voting results and scrutinizer's report have been uploaded on the company's website and the e-voting agency's platform for transparency.

These successful resolutions reflect Samvardhana Motherson International's commitment to strengthening its leadership team and aligning executive compensation with growth objectives. The overwhelming shareholder support demonstrates confidence in the company's strategic direction and governance practices.