Samvardhana Motherson International Limited announced that its indirect wholly owned subsidiary, SMRC Automotive Interiors Spain S.L.U, has been penalized €65,000 by the Department of Enterprise and Labour in Spain. The penalty relates to temporary agency employment contracts that were deemed non-compliant with structural needs. The subsidiary has filed an appeal against this decision, with potential further legal recourse if the initial appeal is dismissed.
Penalty Imposed on Spanish Subsidiary
Samvardhana Motherson International Limited has disclosed that its indirect wholly owned subsidiary, SMRC Automotive Interiors Spain S.L.U., has received a penalty from the Department of Enterprise and Labour in Spain. The imposed penalty amounts to €65,000 (approximately INR 7.08 million).
Reason for Penalty and Appeal
The penalty notice cites that during 2025, SMRC Spain entered into temporary agency employment contracts with agencies for temporary employment. These contracts were found to be in contravention, as they did not correspond to structural needs but rather to short-term requirements. The company is actively contesting this decision, having already filed an appeal with the Labour Department. If this appeal is dismissed, SMRC Spain intends to pursue a further appeal with the courts in Spain.
Impact and Disclosure
The company states that this penalty is not expected to have any material impact on the financial performance or other operations of the listed entity. The disclosure of this order, received on July 6, 2026, is in compliance with SEBI Listing Regulations. The internal review and assessment of the notice, along with the preparation of the appeal, contributed to the timeline of this disclosure.
Source: BSE
