CIE Automotive India : Transcript of 24th Annual General Meeting held through Video Conferencing

Transcript of 24th Annual General Meeting of CIE Automotive India Limited (formerly known as

Mahindra CIE Automotive Limited) held on 9th June, 2023

Mr. Shriprakash Shukla: Good afternoon, ladies and gentlemen. Welcome to the 24th Annual General Meeting (AGM) of CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Ltd.)

I would like to draw your attention to note no. 1 of the Notice of 24th AGM regarding the change in name of the Company. On 31st May, 2023, the Company had received the 'fresh certificate of Incorporation' dated 15th May, 2023 with the new name of the Company; i.e. "CIE Automotive India Limited" issued by the Registrar of Companies, Mumbai. Accordingly, the procedure of change in name is complete and the name of the Company stands changed to CIE Automotive India Limited.

In compliance with General Circulars issued by the Ministry of Corporate Affairs and other applicable provisions of the Companies Act, 2013 (the Act) and Rules made thereunder this meeting is being conducted through Video Conferencing without the physical presence of the members at a common venue. The proceedings of the AGM are deemed to be conducted at the Registered Office of the Company which is the deemed Venue of this AGM.

It is now 3:30 P.M. (IST) and the requisite quorum is present, I, as the Chairman, call the 24th Annual General Meeting (AGM) of the Company to order.

Before we begin AGM proceedings, I would bring your attention to the common instructions already communicated to the members through email today and also displayed on your screen at login. I assume the same as read. Request the members to adhere to the same for smooth conduct of the Meeting.

I welcome the members of the Board at this AGM, who have participated through Video Conference from their respective locations. For benefit of members, I request the members of Board and Chairman of various Board Committees, as I call out, to identify themselves and the location from where they are participating. I would begin with Mr. Alan D Silva.

Mr. Alan D'Silva: Thank you, Mr. Chairman. I am Alan Savio D Silva Picardo. I'm an Independent Director. And I'm also the chairman of the Audit Committee and the Stakeholders Relationship Committee. And I'm attending this meeting through my video conference from my residence in Madrid, Spain. Thank you.

Mr. Shriprakash Shukla: Thank you, Mr. Manoj Maheshwari. We cannot hear him. Mr. Manoj Menon.

Mr. Manoj Menon: Thank you, Chairman.

Mr. Manoj Maheswari: Hi, I am Manoj Maheswari. I'm an Independent Director of the company. I am the chairman of the nomination and remuneration committee, and I am attending this conference from my office in Mumbai.

Mr. Shriprakash Shukla: Thank you. Mr. Manoj Maheshwari.

1

Mr. Manoj Menon: Thank you, Chairman. Good afternoon. I'm Manoj Menon, the Executive Director and CEO of the business divisions. I'm also the Chairman of the CSR committee and the Risk Management Committee and a member of the Stakeholders Relationship Committee. I'm joining the AGM from the CIE office from Baner in Pune. Thank you.

Mr. Shriprakash Shukla: Thank you. Mr. Ander Arenaza.

Mr. Ander Arenaza: Yes, hello, everybody. This is Ander Arenaza. Good Afternoon. I am the CEO of CIE Automotive India Limited and I am attending the meeting from my office in Bilbao in Spain. Thank you.

Mr. Shriprakash Shukla: Thank you. Mr. Anil Haridas.

Mr. Anil Haridass: Good afternoon, everybody. This is Anil Haridass. I'm a Non-Executive Director on the board of the company. I'm attending this meeting from Lagos in Portugal. Thank you.

Mr. Shriprakash Shukla: Thank you. Mr. Dhananjay Mungale. I think he is outside. So Mr. Herrera.

Mr. Barandiaran: Okay, good afternoon, everyone. This is Jesus Maria Herrera, I am a Non-Executive Director and am attending the meeting from Spain in my office of CIE.

Mr. Shriprakash Shukla: Thank you. Mr. Herrera. Mr. Kadambi Narahari.

Mr. Kadambi Narahari: Good afternoon. I'm Kadambi Narahari and Independent Director of the Company. I have logged in from my residence in Bangalore.

Mr. Shriprakash Shukla: Thank you. Mr. Nathani.

Mr. Suhail Nathani: Good afternoon everybody. This is Suhail Nathani, Independent Director attending this meeting from New York.

Mr. Shriprakash Shukla: Thank you, Mr. Nathani. Mrs. Roxana Meda.

Mrs. Roxana Meda: Good afternoon. This is Roxana Meda. I am the Independent Director of the Company, and I am attending the meeting from my residence in Bilbao in Spain.

Mr. Shriprakash Shukla: Thank you so much. So that was the Board of Director which along with me are presented the meeting today. Apart from the Directors, members of senior management team of the Company are also participating through video conferencing. Representatives of Messrs. B S R & Co. LLP, the Statutory Auditors, Representatives of M/s Dhananjay V. Joshi and Associates, the Cost Auditors and Mr. Sachin Bhagwat, the Secretarial Auditor of the Company are also present at this AGM.

Since, this AGM is being held through VC, the facility for appointment of proxies by the Members was not available for this AGM. The Register of Directors and Key Managerial Personnel and their shareholding maintained under section 170 of the Companies Act, 2013, the Register of Contracts or arrangements in which directors are interested maintained under section 189 of the Companies Act, 2013 and the Certificate of Secretarial Auditor on the implementation of Employee Stock Option Schemes

2

under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available for inspection in electronic mode to every member who is attending this meeting.

In Compliance with MCA Circulars, the Company had on 6th May, 2023 issued a notice by way of an advertisement in newspapers informing that the 24th Annual General Meeting shall be held through Video Conferencing and other matters relating thereto. The Notice of the AGM along with the Annual Report for financial year ended on 31st December 2022 were sent to the Members by e-mail on the e-mail addresses of the Members as registered with Depositories/ Registrar on 11th May, 2023 and the printed copies thereof were sent to those members who had requested for the same. The Notice and the Annual Report has also been uploaded on the website of the Company and the website of the Stock Exchanges and website of Company's Registrar and Transfer Agent KFin Technologies Limited. The Company had published another notice by way of advertisement in the newspapers on 18th May, 2023 providing information relating to the AGM, the remote e-voting and details of participation in the AGM through video conferencing and TDS on Dividend etc.

Thus, the Company has indeed made all efforts for enabling members to participate and vote on the items being considered in this AGM.

The Notice of the AGM setting out the Ordinary and Special Businesses to be transacted, the explanatory statement thereto along-with the Annual Report of the Company for the financial year ended on 31st December, 2022 which inter-alia comprises the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended 31st December, 2022 and Report of the Board of Directors and Auditors Report thereon, were circulated to the members in advance. I consider the same as read.

The Statutory Auditors' Report on the Annual Financial Statements of the Company for the Financial Year ended 31st December, 2022 and the Secretarial Audit report for the said period do not contain any qualifications, observations or comments on financial transactions or matters, which have adverse effect on the functioning of the Company, hence, the same need not be read at this Annual General Meeting.

I would like to inform you that, as per the provisions of Section 108 of the Companies Act, 2013 and rules made thereunder and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company had provided the facility of "remote e-voting" for ensuring wider participation of the Members and to enable them to cast their vote electronically. As per the timeline mentioned in the Notice of the AGM, the remote e-voting concluded at 5:00 p.m. yesterday.

Members attending the AGM who have not already cast their vote by remote e-Voting shall be able to cast their vote electronically during the meeting. E-Voting during the AGM is integrated with the VC platform and no separate login is required for the same. Members can cast their vote after the window for e-voting is activated and at the same time continue to participate in the proceedings of the Meeting.

Mr. Sachin Bhagwat, Practicing Company Secretary has been appointed as the Scrutinizer to scrutinize the process of remote e-voting and e-voting during the AGM in a fair and transparent manner.

I will first proceed with my Statement as is customary. Thereafter, I will move the item of Businesses to be transacted at this AGM and the window for e-voting shall also be activated. Thereafter, we will move to our discussions and Question & Answer session. The members who have registered as speaker shall

3

be able to express their views during this session. Now, I will go ahead with this flow of the AGM proceedings.

Mr. Shriprakash Shukla:

Ladies and gentlemen,

Welcome once again to the 24th Annual General Meeting of CIE Automotive India Ltd (formerly Mahindra CIE Automotive Ltd.)

At the outset, let me pay tribute to two of my colleagues on the board of directors, who are completing their terms of appointment as of today's AGM. Mr. Dhananjay Mungale provided outstanding leadership as Chairman of the Audit Committee for many years. Mr. Narahari Kadambi made great contribution as the Chairman of the Stakeholders Relationship Committee and Corporate Social Responsibility Committee. On behalf of the company, I express gratitude to them and wish them the best in the future.

Mr. Jairaj Purandare is being inducted as an independent director of the company w.e.f. 10th June 2023 and his appointment will be placed before the members within the stipulated timeframe.

Let me now enumerate some major changes that have happened in the last few months.

The shareholding pattern of your company has seen a change. Mahindra & Mahindra Ltd has completely divested its shareholding in the company. Starting last year, M&M has sold its stake partly to its co-promoter, CIE Automotive Ltd. and partly to reputed domestic and foreign institutional investors. Your company is grateful to M&M for being a co-promoter and an active member of the board since its inception.

The name of your company has changed from Mahindra CIE Automotive Ltd to CIE Automotive India Ltd. Please note that the annual report for the year CY22 was issued in the name of Mahindra CIE Automotive Ltd and not the new name. This was necessitated as the regulatory approvals for the name change were received later than we had anticipated, due to factors beyond our control.

The company has also decided to actively look for a buyer for its German truck forgings vertical which has been classified as held for sale. This decision strengthens the company's focus on the India market and helps it navigate the transition to electric mobility better, especially in Europe. With this change, the company's Indian business accounted for 63% of sales in 2022 while Europe contributed the rest.

The year gone by was a difficult year for the global economy, inflation and the war in Ukraine taking their toll. These headwinds continue to be a drag on the global economy. IMF in its April report opines that the world is looking at a rocky economic recovery and global growth is forecast to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. Global inflation is set to fall marginally as many central banks increase interest rates, but its return to target seems unlikely before 2025.

The Indian economy has shown resilience amidst external headwinds and a weakening global economic scenario. Capex spending by the government has steadily increased in the last few years. The private sector has also seen a capex revival, even as the balance sheets of both banks and corporates remain healthy. But the domestic consumption could moderate due to the combination of - slower global growth, lagged effect of interest rate hikes and dissipation of 'revenge' consumption, that followed the lifting up of restrictions during the covid pandemic. IMF estimates that growth in India is set to moderate from 6.8% in 2022 to 5.9% in 2023 before picking up to 6.3% in 2024. However

4

there has been a heartening news of Indian GDP growth being estimated at 7.2% for the Fiscal Year ending March 2023.

Europe has been greatly affected by the war in Ukraine. Demand dropped while sanctions on Russia led to unprecedented increase in gas & power prices, fueling inflation. Central banks raised interest rates, and this further eroded demand. Power prices have moderated more than expected as Europe moved to replace Russian gas with other sources while optimizing electricity consumption. But inflation remains a concern. Growth in the euro area is projected by IMF to pick-up from 0.8% in 2023 to 1.4% in 2024.

In India, the light vehicles segment recorded highest production levels since 2018, though two wheelers and tractors were a bit sluggish. The company's Indian operations were able to grow faster than the market (CY 22 growth of 29%) and despite raw material prices remaining elevated, they managed to maintain EBITDA levels of 15.9%, which is 1.8% higher than previous year. In the first quarter of CY23, the India business grew 13% year on year while achieving an EBITDA margin of 16.7%. Looking ahead, the demand situation in the Indian automotive market continues to be optimistic. The order book in India is in line with these expectations and the company has been adding capacities in almost all verticals. The focus is on balancing order book requirements and investments in capacity such that both growth and profitability objectives are met.

Light vehicles production in Europe fell for the third straight year. Nevertheless, your company's European operations (excluding the German forgings vertical) showed a healthy growth of 27% in CY22 versus the previous year. The unprecedented electricity price hikes in Europe put a strain on profitability. The management team in Europe worked very hard to have pain sharing agreements with key customers to pass through some of these large cost increases. Thus, they were able to minimize the impact on profitability, achieving an EBITDA margin of 14.5% in CY 22 (excluding the German forgings vertical). In the first quarter of CY23, the Europe business grew by 28% year on year at an EBITDA margin of 17.6%. In Europe the company will aim to reengineer products and processes to meet the twin challenges of rising costs in a flat market as well as a rapid transition to Battery Electric Vehicles (EVs).

The consolidated CY22 results reflect the impact of the above business drivers. In 2022, the company's consolidated sales (excluding the German forgings vertical) were INR 82,283 mn, 28% higher than 2021 and EBITDA margin was 15.4% vs 15.2% previous year. In the first quarter of CY23, the consolidated sales were INR 23,206 mn, 19% higher year on year at an EBITDA margin of 17.1%.

EVs continued to become more mainstream in both markets. Europe is experiencing a rapid increase in penetration levels (market share >10%) and EVs are picking up in India as well, especially in two and three wheelers. Your company has developed a good order book for EV parts and is working with major European & Indian OEMs in the EV space, across segments. The EV order book covers Aluminum & steel forgings, gears, stampings & composites parts for e2W, e3W and e4W.

Environmental, Social & Governance norms have become an imperative aspect of business and investors are paying attention to this along with the financial performance of the company. Your company understands that a wholistic approach to ESG is important to have harmonious relations with all stakeholders- shareholders, employees, customers, suppliers, community. This will ensure the long-term stability of the company's business model.

I commend the entire team for navigating the uncertainties in the market to deliver these excellent results. On behalf of the team and myself, I place on record our appreciation for your company's board, for its counsel and support. Thank you for the trust reposed in us and for being invested in the company. Your company remains committed to generating superior returns for its shareholders through best in class execution of our strategic initiatives.

5