Samvardhana Motherson International Limited (517334) Earnings Call Transcript & Summary

Thank you. Ladies and gentlemen, I am really pleased to be here and leading this wonderful team. I welcome you all to this call to discuss an extremely historic moment for the Motherson Group, i.e., the implementation of the intent we announced in January 2020 on the reorganization of our business. I have with me today Vaaman, Gauba, Pankaj and Kunal, an amazing team, and please believe me for every one of them, there are hundreds of people behind them who have done a phenomenal job, to take you through the structure of the transaction and also to answer your questions. I hope you had a chance to go through the presentation. We will quickly provide you with the key highlights, post which we can open the floor for question and answers. As you all know, Motherson Group over the years has established itself as a leading component manufacturer for all OEMs globally. We are today an $11-plus billion company that has grown at a CAGR of 18% in the last 10 years, and 35% year-on-year for the last 27 years since we listed. We have 33 joint venture partners, operate over 270 plus facilities across 41 countries. Our endeavor continues to be to add value to our customers and to strengthen our position as a globally preferred solution provider. As referred to in Slide 5, besides the 3 main segments of Wiring Harness, Vision Systems and Polymer, Motherson has also incubated businesses in segments such as Metals, IT, Aerospace, Health & Medical and other, which are now also poised for growth as we embark on the next 5-year journey. As an example, structural stamped parts is an exciting product segment that gives us increasing focus on light-weighting. Another interesting example is automotive lighting, which has seen a technological shift towards LED-based platforms and is now poised to significantly benefit in the medium term. Our constant pursuit of quality, customer delight and relentless focus on operational excellence has allowed us to create immense wealth for our shareholders, as depicted in Slides 7 and 8. An investor who'd have invested in the IPO in 1993 would have earned 1,630x return in 27 years. Having created a strong track record of expansion and success, we are now looking ahead for our next stage of growth. I will now let Vaaman take over from here and talk more about the reorganization. Over to you, Vaaman.

Thanks, Gauba (sic) [ Vivek ]. Hi, everyone. Earlier this year, on 30th of Jan, we'd informed all of you that in order to meet your long-standing demand for simplifying the book structure, our Board had approved some broad contours of a group reorganization. Post this, we appointed a committee to work with various financial and tax advisers, investment bankers and legal counsels to help us narrow down on the best structure which would address all the objectives that we had in mind. Namely: one, simplification of the group structure; two, alignment of interest of all the stakeholders; and three, creation of a strong platform for growth. Our current group structure is represented in Slide 12. As you can see on that slide, MSSL is represented in the orange color and has today a portfolio of wiring harness, polymers, mirrors and elastomers. We have achieved a leadership position globally in these segments. SMRP BV, depicted in yellow, houses MSSL's international polymer and mirror business. This is held 51% through MSSL and 49% through SAMIL, which is depicted in red, and is a group holding company. In addition to holding 33.4% stake in MSSL and a 49% stake in SMRP BV, SAMIL has a INR 2,800 crore portfolio of many exciting auto and auto ancillary businesses. We have incubated these businesses over the last 10, 20 years. These include automotive lighting, structural metal parts, shock absorbers, HVACs, information technologies and et cetera. As an example, in the last 5 years, our lighting JV with Marelli has grown 4x in revenue and 8x in EBITDA to become a leading premium lighting supplier for the Indian passenger vehicle market. I will take your attention to Appendix 1, which has a lot more details on the SAMIL's key businesses, which we are very excited about to bring it to the fold. With the proposed reorganization, we will bring together a wide array of products under one listed entity, which will lay the foundation for accelerated growth in multiple directions. We plan to achieve this objective in a 2-step process. Step 1 will be a demerger of the domestic wire harness business, which we call the DWH business, into a new public listed entity. This entity will have a mirror shareholding, as is depicted in Slide 13 in color pink. Thus, for every 1 share of MSSL, 1 new share of DWH will be issued. As step 2 on Slide 14, we will merge SAMIL into MSSL at a share exchange ratio of 51 shares for every 10 shares of SAMIL. The exchange ratio has been recommended by independent valuers PwC and KPMG, and its fairness has also been validated by independent investment banks DSP Merrill Lynch and Axis Securities. At the end of this process, the resultant structure is as you can see on Slide 15. Post the merger, MSSL will hold 100% stake in SMRP BV, along with a much widened product portfolio. MSSL will also hold a stake of 33.4% in the demerged entity, DWH, which would also be listed. This will ensure that the deep linkages between both entities continue and there is minimum business disruption, and the entire group gains from the synergies of shared resources and scale. In a nutshell, we are achieving our objective through a win-win solution for all stakeholders where: a, there is simplification of group structure as we are consolidating 100% of shareholding in SMRP BV under MSSL and also meeting Sumitomo-san's long-standing request to have focused participation in the DWH business, which is a natural progression in our 37-year-old partnership; b, through this, we're aligning interest of all the stakeholders by bringing all auto component businesses of the group under one umbrella. And as a result, MSSL is also retaining stake in DWH; and finally, c, creating a very strong platform for organic and inorganic growth for the group through diversification of revenue mix as well as enhanced flexibility to raise further capital for growth. With this, we believe we have fulfilled all what we had promised to you earlier this year and perhaps even more. We have expanded the scope of the reorganization further by bringing all of SAMIL's exciting products under the one MSSL umbrella. I'm also happy to highlight that the merger is expected to be EPS-accretive for the shareholders in the first year of merger itself. Now let me take you through some of the key aspects of this entity, as highlighted from Slide 18 onwards. On Slide 19 to 22, you can see the expanded customer, component and country base. As you all are already aware, we have successfully executed a 3CX15 strategy earlier, which means no country, no component and no customers will be more than 15%. And now we look ahead at establishing our 3CX10 strategy, wherein MSSL aspires to widen our component, country and customer base further to derisk ourselves. MSSL's new country mix on Slide 20 showcases a balanced mix of developed and emerging market exposure, along with an enlarged India presence. Product portfolio is enhanced by high-growth segments like lighting, telematics, metals, et cetera, which will enable greater content penetration for us. This can be seen on Slide 19 and also Slide 22. Further, non-automotive businesses and ancillary services will help diversify our customer base even more. This can be seen on Slide 21. Moving on to Slide 23. You can see that Motherson has always strived to grow and establish itself as a leader through organic and inorganic route. We have amply demonstrated this through the exponential growth of 100 to 3,000x in the last 20 years for our wiring harness, polymers and mirror categories, achieving scale and global leadership. We have grown from 16 plants in 2000 to 220-odd plants in these categories across the world. Combination with SAMIL will provide access to newer product categories having multiyear business experience. These offer a global market opportunity of more than USD 200 billion for us to expand further. Non-auto verticals coming in provide additional growth and diversification opportunities for us. Another very interesting part is that MSSL's product portfolio will continue to be powertrain-neutral. Key automotive industry trends, such as rising electronic content, light-weighting, premiumization, driver assistance, et cetera, will result in increased complexity, content and value creation across our product portfolio. The new products that are coming in are also benefiting from all the above trends, as you can see on Slide 24 and Slide 25. Coming to Slide 26, you are aware that we are one of the best examples of an extremely successful joint venture with Sumitomo-san. And post this reorganization, we have the scope to replicate that success with some very marquee and high-technology joint venture partners going ahead, such as Marelli, Valeo, Anest Iwata, Fritzmeier and Matsui. MSSL will gain from the vast experience of such market joint venture partners and will further strengthen MSSL's position as the partner of choice for industry leaders across the world. And as you can imagine, there will also be tremendous amount of synergies that will be created when these JVs all come under the same umbrella. Moving on to Slide 28. You are aware that SMRP BV has been a major growth driver for the group on the back of a very healthy order book, and we have made significant investments to grow the business. The business has shown a double-digit CAGR in the last 5 years, with steadily improving profitability, excluding the greenfield ramp-up costs. Over the past few quarters, we have made significant progress in stabilizing the greenfield and we can clearly see that the worst is behind us. Currently, MSSL owns 51% in SMRP BV, which accounts for approximately 70% of MSSL's consolidated turnover. This shareholding will now become 100% post the current reorganization. A very important benefit from this can be seen on Slide 29. Realization from all the value growth in SMRP BV will now be fully captured by MSSL shareholders versus only 51% that was being captured prior to the reorganization. This benefit is depicted in the illustration on Slide 29. Finally, on Slide 30, you can see that the combination creates a sustainable business model that has financial strength with a robust balance sheet and only a marginal change in the net leverage on account of the transaction. This will allow the business to capture enhanced growth as we move forward in our next 5-year plan. Now I invite Pankaj, sir to present the key highlights of the domestic wiring harness business. Pankaj, sir, over to you.

Thank you very much, Vaaman, sir. Ladies and gentlemen, I will be presenting Slide 32 onwards up to Slide 42. We started the wiring harness business in India in 1983-'84. Our first wiring harness order was for Maruti what was called as SB308 and then 800 CC model. Since then, we have maintained a leadership position in the Indian market. As demonstrated in Slide 33, the domestic wiring harness business has significantly outgrown the industry growth. We have grown to nearly 4x in top line in the last decade as compared to industry growth of 1.4x. This has been accomplished on account of vehicle premiumization leading to content growth between 5% to 10% every year. This trend continues even today. We now have 23 wiring harness plants. They're strategically located close to our customers' locations, as shown on Slide 35. I would like to point out here that post reorganization, supply of wiring harnesses to Hyundai and Kia will continue through our joint venture with Kyungshin called KIML, which since it's a joint venture not involving Sumitomo-san, resides in MSSL and not the domestic wiring harness entity. Today, we have long-standing and strong customer relationships across OEMs, customer delight being the bedrock of our sustainable relationships. We aim to continue to strengthen our position by supporting them in end-to-end product design and development. With Sumitomo-san as a promoter, we always had access to world-class technology. This will remain our competitive edge as we aim to harness opportunities that the new upcoming trends in the auto industry offer, as demonstrated on Slide 40. We have established best practices on sourcing and shared services. The benefits of this practice will continue, like in the past, on an arms-length basis, as shown on Slide 39. This will ensure least disruption in the business and enable continuity of scale and cost benefits for both the entities. On Slide 41, you can also see that this business has been a profitable business. Our EBITDA is healthy mid- to late-teens and is resilient to downturns. The resilience can be seen in FY '20, which was impacted by slowdown and emission norm changes. Our ROCE continues to be very strong, underscoring cash generation potential of our business while we invest in high technology, but we have remained frugal. With this, I'd like to hand over to Mr. Sehgal for his remarks.

Thank you, Pankaj. As can be clearly seen, with this, we are laying the foundation and the stepping stone for a new chapter in our growth history, and we cannot be more excited about it. Once again, I would like to thank you all for being a part of this special call. The reorganization demonstrates our commitment towards taking actions that exceed the expectations of all our stakeholders. We truly believe that we have created a historic moment for the company and its shareholders through this reorganization. We'll be very happy to take any questions if you have any. Thank you.

[Operator Instructions] The first question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.

Congrats on this landmark restructuring. One quick question on SAMIL. So primarily, there are 3 major businesses -- or 2 major businesses as we see, lighting modules and metal products. What is the road map for those businesses considering that unlike our other businesses in the group, primarily wiring harness or classic parts for mirror where we are, I think #1 or #2, how is our competitive positioning in these 2 businesses? And beyond these 2 businesses, which are the other businesses which you are excited about in SAMIL?

Thanks for that question. There are multiple businesses in SAMIL. We've given you a couple of examples already. In the lighting side, we are one of the largest lighting manufacturers together with our joint venture partner, Marelli. The other businesses as well, if you see there are exciting businesses such as Fritzmeier, where we make the entire cabins for -- of highway vehicles. We have a joint venture partner, Anest Iwata, that is making high-technology compressors, which is, again, leadership position technologies that all these partners have. We've incubated these businesses over the last 10-, 20-year period. They're all profitable businesses. They are growing in a significant pace. And we believe with this focus on the general environment of Make in India, et cetera, as well, they will really be propelled and push for even further growth as they continue to come out with latest technology products for the Indian market. I also want to bring your attention to, for example, the joint venture where we had -- in the mirror segment with Reflectec back in the day. This company was just under INR 100 crores worth of top line, but we went and did a global acquisition of Reflectec's business globally. So many such different opportunities will present themselves once we have the experience and once we have the history of incubating these businesses, which gives us the confidence to go and rapidly expand these businesses. So there's about, in total, INR 2,700 crores, INR 2,800 crores worth of top line of these businesses which are coming in, and we're very excited about their growth prospects.

The next question is from the line of Binay Singh from Morgan Stanley.

Firstly, could you share a little bit about your thought behind this? Like earlier, the plan was to add SMRP BV whole into the group, and now we are bringing the whole SAMIL into it. So why that change? Some bit on that thought structure behind the change.

Sure. So historically, yes, we first came to the Board with just simplifying the SMRP feature... [Technical Difficulty] good opportunity to bring the entire group into one, which will, again, achieve the 3 transactions, the 3 purposes that we want, which is simplification of the group structure, aligning interest of all the shareholders and creating platforms for growth for all the businesses. And the reason why we want to do it now is, of course, because that Sumitomo-san only wants to focus on the domestic pass car business. And this will allow them to keep a very sharp focus on that business and bring in the new technologies required into the DWH business. So we would have created 2 very strong platforms for future growth for all of our ambitions to -- in the automotive industry and as well as in the non-automotive industry, and brings it all done at one shot. So this is a reorganization that we thought fits better as we go onetime and prepare ourselves for the next 5-year growth.

And secondly, when I look at Slide #30, in the SAMIL financials, it seems like the SAMIL EBIT has fallen by almost 70% in FY '19 to FY '20, which is much -- it seems like the decline is much more than what other businesses have seen. So could you tell us a little bit about why did SAMIL see such a sharp fall at EBIT level? Because I think this EBIT will be ex SMRP BV, right, because that will come below the EBIT for them.

Kunal and Gauba, could you take this one?

Yes, sure. Kunal here. Can you hear me?

Yes. Go ahead.

Okay. Look, you're right, there was a decline on account of EBIT margin, firstly driven by new CapExes that has just come on board, and secondly, there was a large metals plant that we created. That's what's part of the reason why the depreciation has gone up. Not to say that the EBITDA margin itself had declined because of the headwinds that the market -- that we were having in the Indian market. Also, please bear in mind that what we are seeing on the numbers on Slide 30 is the ones which are the unconsolidated -- only the consolidated ventures of SAMIL. There is a large chunk which is not consolidated because these are either had 50% or not consolidated for control purposes, et cetera. And hence, when you combine all of that, the answer would look somewhat different. You can see that the revenue here, which is around INR 12,800 crores in FY '20, is around about INR 2,800 crores or INR 2,900 crores when you consolidate everything up. And the EBITDA, which is -- which you're seeing here as INR 120 crores will look like something like INR 360-odd crores, give or take.

Okay. Okay. That's helpful. And then lastly, this will go for a minority vote, right, aside shareholder vote?

Yes, you're correct.

This will go for majority of minority, yes.

The next question is from the line of Mohit Gupta from CLSA.

This is Amyn from CLSA. My question is again on Slide 30. If I look at the PAT number also, the MSSL consolidated ex DWH plus SAMIL is significantly lower than the combined B+C. So is there some intercompany profit which is leading to this thing? Like if you can just explain, that will be really helpful.

Yes. Yes, Gauba this side. Kunal, you are taking or?

No, go ahead, go ahead, no.

Because as you know, one of the part which Mr. Vaaman Sehgal explained that by way of this reorganization, we are also bringing in the DWH, which, as a separate entity, is first being demerged into part of the entire consolidated entity. And SAMIL is holding 33% of the holding into MSSL. So when we look at the share of profit, minority interest, so profit of associates will also include the profit, 33% coming from MSSL and plus 49% of SMRP BV. I mean last year, because of the start-up of the new plants, et cetera, that amount of SMRP BV is negative, but the impact of the greenfield is shown on the other slide. In the previous year, you will see that, that amount is much larger because SMRP BV did not have a start-up cost that's significant in that year. So therefore, when we are consolidating these entities so the share of profit which is getting here gets eliminated in the consolidation. Kunal, anything you would like to add on this?

No, no, that's right. And there are also dividend flows, et cetera, which will get knocked off as it gets consolidated.

Okay. Okay. That's helpful. And my second question was on the valuation of SAMIL which has been done to arrive at the swap ratio. So if I look at Slide 56, I think the value per share of SAMIL is at around INR 512 to INR 519. And the number of shares of SAMIL in Slide 54 is around 473 million. So is it -- I mean, is the value of SAMIL around INR 21,000 crores, is that calculation correct, INR 510 into 473 million Or am I getting something wrong here?

I don't think you're ever wrong, right?

No, I was just trying to get the valuation metric which has been used to value SAMIL. I mean, so INR 21,000 crores, obviously, revenue, like you said, is understated for SAMIL. So just trying to get a sense of that.

Mathematically, what you're saying is right. What you have to bear in mind that at the end of the day, it's the relative valuation that matters, right? When you think about SAMIL valuation, it will contain 33% of MSSL, it will contain DWH and it will contain the 49% of SMRP BV, right, which is there on the part which we are swapping it with as well, right? So we should not view it in isolation, but view it from a relative perspective.

The next question is from the line of Puneet Gulati from HSBC.

Just dwelling a bit more on SAMIL. If I look at the profit from associates for FY '20, which is INR 3.6 billion, is it fair to assume that most of it would be just the percentage share from the listed entity and 49% share of SMRP BV?

Sorry, are you referring to 360 -- or INR 3,600 million or?

Yes, yes. The same number, exactly.

Okay. So the INR 3,600 million does not take anything to do with SMRP BV or MSSL. This is non-SMRP BV, non-MSSL EBITDA. So this is in relation to the JV that SAMIL entered.

No, this is the profit from -- of associates, right?

Yes. That's right.

And SAMIL would be incorporating 33% profit from consolidated -- Motherson listed entity and 49% from SMRP BV.

No, are you referring to Slide 46?

No, Slide 30, sorry.

Okay. And 30, what are you referring to, sorry?

Profit of associates, which is FY '20 SAMIL INR 3,603 million.

Okay. Yes. That will include the share coming from MSSL, SMRP BV as well, yes.

Yes. But would there be anything other than...

No. Yes, it will also have other share coming from the joint ventures like Magneti Marelli and many others. So at an EBITDA level, there is a performance given at that. But many -- or most of the other JVs also contribute positively to this here.

But it will be a negligible number, if I were to just do back of the envelope...

No, no. It is not a negligible -- it is relatively a small number, but it is not an negligible number. So there is a difference between the 2 construct.

Okay. And ex of that, is it still loss making, is it fair to assume, because your PAT is lower than the combined basis?

Last year, Puneet, you know, SMRP BV on a consolidated basis, when we have taken the minority share, there is a loss, which is booked by SAMIL on account of that. I'll explain that...

That was profit of associates, right?

Yes. So you are referring to that figure only, no?

Yes. Yes. So after that, there is a INR 2,808 million figure, which basically means the profit is lesser than the profit from associates?

No. Which profit from associates?

The concerned share, which is INR 2,808 million, it's a total profit of SAMIL, which is lesser than the profit of the associates.

But then we have an EBIT, then there will be a -- there will be an interest cost. There will be a taxation. And this profit, so we have not given the entire rules of the reconciliation part. Because the profit of associates is accounted after tax whereas in between EBIT to tax, you will have first PBT, for which you have an interest cost. Then from PBT to PAT, you have the taxation.

No, no, completely understand that. But INR 2,808 million will include INR 3,603 million plus something, right?

Yes. Yes.

So that plus is a minus number?

Yes, at a standalone level, because of the interest cost and maybe some impairment, there will be a loss because there could be an impairment also. So we can get on to that. FY '19 balance sheet is already on the website. FY '20 should also be there soon, but we are willing to share more detail and discuss with you. Because this is just to give you a high-level number helicopter way, but we are happy to do a separate call on SAMIL exclusive numbers also.

Yes. No, no. I just want to understand whether it's a profit-making entity ex of the associates or not? That's all.

At EBIT level, yes, but there could be an interest cost.

No, at PAT level?

We will come back to you on that. Because there are interest costs, which could be higher. Because everything you can [Technical Difficulty]

Okay. Yes. And second, KIML will be a part of the new combined entity, right?

Everything is now part of the new combined entity, including the joint venture with Sumitomo-san, DWH. Because we have been hearing feedback from all of you, we will have something there. So as Vaaman saab explained in the previous statement, so we have created an entity which will encompass entire group, including DWH. So in India, we will have 2 joint ventures, 1 for DWH with Sumitomo-san, which is a public listed company; another joint venture, which is 50-50, KIML. So on the wiring harness side, this is how the entire India map will be covered.

Okay. Great. My last question is on the leadership. Of course, Sehgal saab and Vaaman and you would be there. How would the leadership be structured between the 2 entities?

So I think I'll just take this very quickly. The leadership is already planned and done because most of the companies are standing on their own anyway. It's just that how do we group it, how do we do it. So there's a lot of discussion that's going on in between the group. And I'm sure that we have 3, 4 months. We will be then coming up with the right answers. But there is no shortage of leadership in Motherson, as you know very well.

The next question is from the line of Pramod Amthe from CGS-CIMB.

Two questions. Would you be able to give more clarity on Slide #53, where there is a service charge to the domestic entity; and also on Slide 55 in terms of time line of this demerger, in the sense it seems to be a pretty long one and what is taking so much time?

Kunal, Gauba, who would like to take this one here?

Yes, I will take one. Which slide you are referring to, sorry, I'm moving on the...

53 and 55.

53 and 55, yes, I think what is important is wiring harness is coming from an integral part of the group. In fact, as Pankaj explained, the foundation of the business has been the wiring harness we started in 1983. And therefore, what is being now done is we are creating a separate listed entity. At the same time, there are certain group benefits which must be continued to be levered in terms of enhancing the performance. And this is how we have seen that effect of all this in PKC or otherwise wiring harness businesses what we have promoted apart from what -- I'm focusing on the wiring harness side at the moment. So the leadership of the new entity will continue to get support as well as continue to get the whatever guidance, or in terms of enhancing the performance. So therefore, there is a notional management fee charge which is being put, and this is the standard expectation that we have. And it is very important because at the end, there is a cost structure which is to be supported, and you people know how many questions I try to answer when we talk to you on the stand-alone employee costs, et cetera. So therefore, the fees which has been proposed to take care of that and this will run similar to the amount what is royalty or a technical know-how fee for continued support being paid to Sumitomo-san.

So any benchmarks, why 5.5% of sales, why it couldn't have been part of profit...

Yes. Yes. First of all, 5.5% is not the management fee. This includes the shared services and other costs also, including the travel cost and all that. Because today, what is happening is when we are taking out DWH into a separate legal entity, the threshold becomes much lower. So whatever the group support comes from the MIND, for example, or MATA or those, they will become a related party transaction as far as DWH is concerned. So when we talk about the quantum of 5.5%, which is there, whatever, it is constituting a whole set of services. So the amount of management services is definitely benchmark and in fact, it is benchmark for our overseas entities also, so it's much lower. And you have the royalty amount appearing as a separate line item in all our balance sheets, and we will see that near transparently.

And for Slide 55 in terms of demerger in line, which seems to be stretching all the way for 1 year, if I'm not wrong. So would you be able to help us understand that? And until that time, what will happen to the existing shares?

Kunal, can you help me on that?

Yes. Yes. So look, there is nothing unique that is happening in there. Unfortunately, there is a lot of stuff that NCLT has to do. So what's been recommended to us by our adviser seems to suggest that there is a delay in terms of the time that it will take to take all this through from the respective approvals, whether it will be the SEBI approval, stock exchange approval, NCLT approval, lender approvals, majority or minority shareholder approvals, and so on and so forth. So just given the time horizon, just given the fact of the COVID-related issues that exist in terms of travel and related to lack of ability to move things quickly, this is what's been suggested as the more likely time frame that it will take to get it done. I also want to -- I was only saying that you may also want to note that the appointed date for the demerger will be 1 April '21, from which point is where the businesses would be separated, assuming we finally get the necessary approvals for it, right, which is also taken -- keeping in mind the time lines and also keeping in mind from an operational accounting perspective, it's just easier to start it off on a fresh financial year.

And till that time, the existing shares will trade as it is? Or how does it function?

Yes. Yes, that's right. It trades as it is.

The next question is from the line of Prateek Poddar from Nippon India.

Sir, just harping on -- I mean on the Slide 30, if you could split the PAT of SAMIL of INR 280 crores into 2 parts, one is share of SMRP BV which is 33% of listed company, which is MSSL, and the other would be I'm assuming profit coming from JVs and other businesses. So what I'm essentially looking at is profit from JVs and other businesses of SAMIL, ex of SMRP BV and 33% of stand-alone Motherson?

Yes, let us pass this question. I come back. In the meantime, we can take other questions, if you like. I will just open my relevant information from my computer and come back, if you permit me.

Sure, sir. Sir, second is, could you also talk about capital employed in the combined entity? How much would be the capital employed now and ROCs, ROEs, return ratios? Obviously, they will be, I'm assuming, depressed because of SMRP BV greenfield losses, but some broad capital employed numbers, that could be really helpful.

Yes. We have tried to give the figures of the loan which will be there. So that should give you a fairly good idea because when you have a reorganization of this scale, and you also have to appreciate going through this difficult COVID time, et cetera, people operating from home. So the first priority was to get home in terms of what we have promised you because we have said that we would like to come back to you in 90 days. There were always questions when we got into this. So surely, I think that is one part. And the accounting treatment now will be a bit more technical in nature. But from a business point of view, yes, we will have SAMIL balance sheet soon on the website as it is for '18/'19 already. So you will have a fairly good idea of the capital employed, which is there on current balance sheet, how it gets reflected into this thing -- this accounting method. So the -- what is more important is when we are going through this, you have the net debt figure, which does not, in any way, go significantly up; it is within our comfort zone or within our financial policy. So taking that into consideration, first, what it is today is not tomorrow, I think the most important part. When we are talking about profit of associates or those things, so from an accounting point of view, they all get accounted as a joint venture. But kindly look at them what they can bring to the table. And I mean, we can't be very direct, but at the same time, I mean you have looked at the journey of Motherson. Motherson, as a joint venture company, has brought so many more joint ventures, so many more because the customers have loved our performance and all our initiatives have been driven by the customer. And with this, our content per car and some of you have been asking us in the past, that by getting into when we say on an acquisition, this is how the structure will be existing, what is existing in 2008/'09 balance sheet continue to be there in MSSL. So that the reaction comes or when your content per car remains limited, while our products become rich in content, so our content will grow faster than the market, but multiplying it by more components was becoming a limiting factor. And when we bring SAMIL into it, you have to see how -- and there is one slide which gives you how many more components and opportunity that side. So I think this should be the main driving focus. If we just focus too much on these numbers, I will have an explanation backup. So I'm not running away from that. You have to give me some time to get details to these numbers. But surely, I think we will lose the focus on what we are trying to present to you. I'm sorry if I have -- don't feel offended, but my solution is let's focus on the business. Meantime, I will come back on the numbers what you are asking.

I can tell you a little bit briefly on numbers. Out of the profit of associates, around about INR 2,900 million would be the profit on account of MSSL and SMRP. And from the FY '19 basis, this number would be something like INR 7,400-odd million.

Sir, we lost the connection for the current participant. We move to the next question from the line of from Ronak Sarda from Systematix.

And congratulations on the transaction. Sir, on Slide 30, continuing, I mean if Kunal and Gauba, you can answer this, on the combined entity, we still have a pretty large minority interest. Does this pertain to any part of SMRP BV, the Chinese operation? Or what would this pertain to?

As you know, we have joint ventures, and we have joint ventures, both at SMRP BV, PKC also in China because those are the joint ventures we have inherited at the time of acquisition. So -- and there is other joint venture also as part of SMRC in Korea. So there are multiple of joint ventures. And our philosophy has been to do, either by joint venture or by ourselves, and then go for acquisition. So in our numbers, you will have all the 3 pillars appearing: inorganic, organic, joint ventures. Yes, you are right on that.

Okay. And just a clarification. If I see stand-alone ex the wiring harness company, which is Part A, and if I add the wiring harness top line, would that -- the difference would be from what is reported for FY '20, is that the intersegment or the components which the wiring harness business buys from MSSL in terms of tubes and connectors? Or that would be the case? So that's a bit of substantial amount, almost INR 1,200-odd crores?

Yes, yes, yes, absolutely. Absolutely. I mean that -- because not just the connectors or -- many wires and many other parts also. Yes, you are right.

Sure. And sir, final question. At SAMIL level, I mean would you have the overall EBITDA number if we include all the JVs? Would that be readily available with you? That's the final question.

Yes. Kunal, do you have that number or do you... [indiscernible]

Kunal, do you have that number in there?

The full number of EBITDA of JV is here, JVs, JVs, joint ventures.

So the SAMIL EBITDA, which is INR 126 crores, if you add the unconsolidated JV sale...

That will be around about INR 360 crores, INR 370-odd crores. That's what's there on Slide 40-something -- sorry, that's on -- yes, that's on Slide 46.