DIRECTORS REPORT Dear Members, Your Directors have the pleasure in presenting the 30th Annual Report on the business and operations of the Company and the financial statements for the Financial Year ended March 31, 2015. COMPANY PERFORMANCE Indian automotive sector is slowly recovering from the distressed period of last couple of years owing to weak domestic demand. As per SIAM, automobile industry in FY15 recorded a growth rate of 7.2% in unit sales driven by recovery in PVs & M&HCVs and steady growth in two wheelers. After a distressed period of three years, the automotive sector in India is gaining pace with increased demand of passenger vehicles and halt in the fall in commercial vehicle demand. This would lead to rise in demand for the Auto component industry which is largely dependent on the automotive industry in India. Despite the lower economic growth trend and overall recession in the economy and the auto component industry, your Company has achieved sustainable revenue growth compared to the last year. During the year under review, your Company has achieved a turnover of Rs.64,906 Lacs against Rs.61,676 Lacs during 2014-15 registering a growth of 5.24% over the previous year. The Company reported a Net Profit of Rs.3,488 Lacs as against Rs.2,177 Lacs earned during last year. There has been no material changes and commitments during the financial year 2014-15. 3. ACQUISITION OF ADDITIONAL 2% STAKE IN MINDA FURUKAWA ELECTRIC PRIVATE LIMITED During the year under review, your Company has acquired an additional 2% stake in Minda Furukawa Electric Private Limited. Consequently, Minda Furukawa Electric Private Limited has become a subsidiary of the Company w.e.f. October 01, 2014. 4. REVISION OF CAPITAL STRUCTURE The Authorized Share Capital of the Company has been increased from Rs.250 Lacs to Rs.450 Lacs. The capital structure of the Company comprises of both Equity and Preference share capital. The Authorized Share Capital of the Company is Rs.642 Lacs divided into 22,50,00,000 Equity Shares of Rs.2/- each and 2,40,000, 0.001% Cumulative Redeemable Preference Shares of f800/- each. The paid-up Share Capital of the Company is Rs.61,06,23,280 divided into 20,93,11,640 Equity Shares of Rs.2/- each and 2,40,000, 0.001% Cumulative Redeemable Preference Shares of f800/- each. The entire issued share capital of the Company is fully paid-up. Sub-Division of Face Value and Bonus Issue in the ratio of 1:1 The nominal value of the shares of the Company has been sub-divided from Rs.10/- per share to Rs.2/- per share. Further, the Company has allotted 10,46,55,820 equity shares by way of Bonus Issue in the ratio of 1:1 during the year under review. There has been no change in the nature of business. 5. DIVIDEND Your Directors have recommended dividend for the financial year 2014-15 for the approval of shareholders in the forthcoming Annual General Meeting: a) On 2,40,000 - 0.001% Cumulative Redeemable Preference Shares @ 0.001%. b) On 20,93,11,640 Equity Shares @ 10 % i.e. f 0.20/-per equity share. The dividend will be paid to members whose names appear in the Register of Members as on September 03, 2015 and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. Your Directors recommend to transfer Rs.349 Lacs to General Reserve from the profits of the year as against Rs.218 Lacs transferred in the previous year. The Company has already declared and distributed an interim dividend @ 10% i.e. Rs.0.20/- per equity share of Rs.2/- each in the meeting held on February 13, 2015 subject to confirmation by the shareholders in the forthcoming Annual General Meeting. 6. CORPORATE GOVERNANCE Your Company follows the highest standards of Corporate Governance best practices. It adheres to and has implemented the requirements set out by SEBI's Corporate Governance practices. As a part of this practice, a separate section on Corporate Governance forms a part of the Directors' Report. A certificate from M/s. Sanjay Grover & Associates, practicing Company Secretaries, confirming compliance of Clause 49 on Corporate Governance of the Listing Agreement is included in this Annual Report. The Executive Director & CEO and Chief Financial Officer of the Company have issued the required certificate to the Board in terms of Clause 49 (IX) of the Listing Agreement for the financial year ended on March 31, 2015. 7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report (MD&A) for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming part of the Annual Report. 8. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. 9. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Sudhir Kashyap, Director of the Company retires by rotation and being eligible, offers himself for re-appointment. The details of the Directors being recommended for re-appointment pursuant to Clause 49 of the Listing Agreement are included in the accompanying Notice of the ensuing Annual General Meeting. In terms of the Section 149 of the Companies Act, 2013 Mr. Sunil Behari Mathur had resigned from the directorship of the Company w.e.f August 13, 2014. Mr. Mathur rejoined the Board of the Company as an Independent Director of the Company w.e.f January 07, 2015 for a period of 5 (five) years to hold office until January 06, 2020. Further, Mr. Ashok Kumar Jha and Mrs. Thankom T. Mathew were appointed as Independent Directors of the Company w.e.f November 14, 2014 and March 27, 2015 respectively for a period of 5 (five) years to hold office until November 13, 2019 and March 26, 2020 respectively. This is subject to shareholders' approval at the forthcoming Annual General Meeting of the Company. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In addition to the above, Mr. Ashok Minda, Chairman & Group CEO, Mr. Sudhir Kashyap, Executive Director & CEO-Security Business, Mr. Ashim Vohra, CEO-Die-Casting Business, Mr. Ajay Sancheti, Company Secretary and Mr. Sanjay Aneja, Chief Financial Officer have been designated as the Key Managerial Personnel of the Company under Section 203 of the Companies Act, 2013. Board Evaluation The Company has devised a mechanism for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. The criteria for performance evaluation of directors cover the areas relevant to their functioning as member of Board or its Committees thereof. The manner in which the performance evaluation of the board and its committees, the chairman and the directors individually has been carried out has been explained in the Corporate Governance Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Meetings The calendar of Meetings is prepared and circulated in advance to the Directors. During the year five Board meetings and six Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Committees The Board currently has 4 (four) Committees: 1) Audit Committee: During the year under review, the Audit Committee comprised of Mr. Rakesh Chopra as Chairman, Mr. Avinash Parkash Gandhi, Mr. Sunil Behari Mathur, Mr. Laxman Ramnarayan and Mr. Ashok Kumar Jha as Members. 2) Nomination and Remuneration Committee: During the year under review, the Committee comprised of Mr. Avinash Parkash Gandhi as Chairman Mr. Rakesh Chopra and Mr. Laxman Ramnarayan as Members. 3) Shareholders' / Investors' Grievance Committee: During the year under review, the Committee comprised of Mr. Avinash Parkash Gandhi as Chairman Mr. Ashok Minda and Mr. Laxman Ramnarayan as Members. 4) Corporate Social Responsibility Committee: During the year under review, the Committee comprised of Mr. Avinash P. Gandhi as Chairman, Mr. Ashok Minda, Mr. Sudhir Kashyap and Mr. Laxman Ramnarayan as Members. The following policies of the Company are attached herewith marked as Annexure-I and Annexure-II: a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. There is no any recommendation of the Audit Committee which has not been accepted by the Board. 10. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, your Directors confirm: a) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departure was made for the same; b) That Directors have selected such accounting policies and applied them 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 of the financial year and of the profit of the Company for the period ended on March 31, 2015; c) That Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That the annual financial statements have been prepared on a going concern basis; e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) That proper systems had been devised to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively. 11. CODE OF CONDUCT The Company has in place a comprehensive Code of Conduct (the Code) applicable to Directors, Independent Directors and Senior Management Personnel. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company. A copy of the Code has been put on the Company's website www.minda.co.in <http://www.minda.co.in> The Code has been circulated to Directors and Senior Management Personnel and its compliance is affirmed by them annually. 12. PREVENTION OF INSIDER TRADING The Securities and Exchange Board of India (SEBI) vide notification dated January 15, 2015 has put in place a new framework for prohibition of Insider Trading in Securities and to strengthen the legal framework thereof. These new regulations of the SEBI under the above notification have become effective from May 15, 2015. Accordingly, the Board has formulated the Code of Practice for Fair Disclosure of Unpublished Price Sensitive Information in accordance with Regulation 8 of Insider Trading Regulations, 2015 and the Code of Conduct, as per Regulation 9 for regulating, monitoring and reporting of Trading of Shares by Insiders. The Code lays down guidelines, procedures to be followed and disclosures to be made while dealing with shares of the Company and cautioning them on consequences of non-compliances. The copy of the same is available on the website of the Company. 13. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The policy on Related Party Transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.minda.co.in/minda/> IRDownloads/Related%20Party%20Transactions%20 Policy.pdf. 14. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 2.12 to the standalone financial statement) 15. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: <http://www.minda.co.in/minda/> IRDownloads/Policy%20on%20Corporate%20 Social%20Responsibility1.pdf. Your Company has incorporated a wholly owned subsidiary under the provision of Section 8 of the Companies Act, 2013 namely, Spark Minda Foundation for implementation of its CSR projects. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent Rs.28.78 Lacs on CSR activities. The Annual Report on CSR activities is annexed herewith as Annexure-III to this report. As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. 16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-IV to this Report. 17. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-V to this Report. 18. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this report. The ratio of remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this report at Annexure-VI. 19. STATUTORY AUDITORS AND REPORT M/s B S R & Associates LLP, Chartered Accountants were appointed as the Statutory Auditors of the Company from 29th Annual General Meeting until the conclusion of 31st Annual General Meeting of the Company subject to ratification by the shareholders at every Annual General Meeting. The Company has also received a certificate from M/s B S R & Associates LLP, Chartered Accountants pursuant to Section 139 of the Companies Act 2013, confirming their eligibility. All observations made in the Auditors' Report and notes to the accounts are self-explanatory and do not call for any further comments under Section 134 of the Companies Act, 2013. 20. SECRETARIAL AUDITORS AND REPORT Pursuant to the provisions of Section 204 of the CompaniesAct, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SanjayGrover &Associates, Company Secretaries, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure-VII. The Equity Shares of your Company are now listed at National Stock Exchange of India Ltd. and Bombay Stock Exchange Limited w.e.f October 16, 2014 and February 23, 2015 respectively. The Annual Listing fees for the listed equity shares of the Company, pertaining to the year 2015-16 has been paid to the concerned Stock Exchanges. 22. SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES At the beginning of the year, we had 12 (twelve) subsidiaries. As on March 31, 2015, we have 7 (seven) direct subsidiaries, 7 (seven) step-down subsidiaries, no joint venture and 1 (one) associate namely:- Minda SAI Limited (Subsidiary) Minda Automotive Solutions Limited (Subsidiary) Minda Management Services Limited (Subsidiary) Minda Furukawa Electric Private Limited (Subsidiary) Spark Minda Foundation (Subsidiary) Minda KTSN Plastic Solutions GmbH & Co. KG (Subsidiary) Minda Europe B.V. (Subsidiary) Minda KTSN Plastic & Tooling Solutions Sp.z.o.o. (Step-down Subsidiary) KTSN Kunststofftechnik Sachsen Beteilingungs GmbH (Step-down Subsidiary) Minda KTSN Plastic Solutions S.R.O, Czech Republic (Step-down Subsidiary) Almighty International Pte. Ltd. (Step-down Subsidiary) PT Minda Automotive Indonesia (Step-down Subsidiary) PT Minda Automotive Trading (Step-down Subsidiary) Minda Vietnam Automotive Company Limited (Step-down Subsidiary) Minda VAST Access Systems Private Limited (Associate) A statement pursuant to Section 129 of the Companies Act, 2013 relating to subsidiaries, Joint Ventures or Associate Companies for the year ended on March 31, 2015 has been attached in the Annual Accounts. The Consolidated Financial Statements of the Company and all its subsidiaries as prepared in compliance with the applicable accounting standards and listing agreements are enclosed. The statement of statutory information in aggregate for each subsidiary is enclosed along with the Consolidated Financial Statements. The annual accounts of the subsidiaries shall be made available to the shareholders seeking such information and shall also be available for inspection at its Registered Office. The Policy for determining material subsidiaries as approved may be accessed on the Company's website in investor section: <http://www.minda.co.in/> minda/IRDownloads/Policy%20on%20Material%20 Non-Listed%20Subsidiary.pdf 23. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 24. RISK MANAGEMENT The Company has laid down the procedures to inform Board Members about risk assessment and minimization procedures. The Board of Directors of the Company has framed risk management policy which can be accessed on the Company's website at the link: <http://www.minda.co.in/minda/IRDownloads/> Risk%20Management%20Policy.pdf This policy forms part of the internal control and corporate governance process of the Company. Basically the aim of this policy is not to eliminate risks, rather to manage the risks involved in the Company activities to maximize opportunities and minimize adversity by considering the following:- • Identification of risk, define ownership with clearly defined roles and responsibilities; • Balance between the cost of managing risk and the anticipated benefits; • Contributing to more efficient use/allocation of capital and resources; • To encourage and promote an pro-active approach towards risk management ; • Identifying any unmitigated risks and formulating action plans for its treatment through regular review. 25. HUMAN RESOURCES Your Company's Human Resource agenda for the year was focused on strengthening the leadership capabilities and their successor plans for future readiness, driving greater employee engagement and strengthening greater employee relations. During the year under review Employee Satisfaction Survey (ESS) and Employee Engagement Survey (EES) were conducted successfully by the Company across the group and key business charters based on findings have been finalized. These charters are owned by your Company's leadership team and will take off during 2015-16. These interventions will allow your Company to have robust people plan to guide your Company not just for an immediate performance, but also to ensure that the Company is future ready. Your Company undertook intensive training programmes through a combination of face-to-face and virtual learning approaches. 26. AWARDS During the year under review, your Company received many awards and felicitations conferred by reputable organizations for achievements in different areas:- a. Pantnagar Unit won the prestigious BAL special "Q" Award from Bajaj Auto Limited (BAL) on Tuesday, 13th May 2014 at a Vendor Meet held at Pune. b. The Company and Minda SAI Limited jointly received the Maruti Suzuki Award for Best Design, Development & Localization effort for the year 2013-14, during the Maruti Suzuki Vendor Conference at Dubai on May 08, 2014. c. Security Systems Division, Noida won the Bronze award for achieving Cost Targets in the year -2014 from India Yamaha Motor Pvt. Ltd. on March 02, 2015 during the Annual Vendor Meet. 27. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The same has also been displayed on the website of the Company and the link for the same is <http://> www.minda.co.in/minda/IRDownloads/Whistle%20 <http://www.minda.co.in/minda/IRDownloads/Whistle%20> Blower%20Policy.pdf 28. ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are amongst its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 29. 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. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. 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. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 30. FORWARD LOOKING STATEMENT This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words 'anticipate', 'believe', 'estimate', 'expect', 'intend', 'will' and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto. ACKNOWLEDGEMENT Your Directors thank various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. For and on behalf of the Board of Minda Corporation Limited Ashok Minda Chairman & Group CEO DIN: 00054727 Place: Gurgaon Date: May 27, 2015 |