BOARD REPORT TO THE MEMBERS OF MINDA INDUSTRIES LIMITED Your Directors are pleased to present the 23rd Annual Report and the Company's audited financial statements for the financial year ended on 31 March 2015. Financial Highlights The summary of financial achievements during the year under review are as under:- Revenue from operations on standalone basis for the Financial Year under review was Rs.137,038 Lacs as against Rs.110,806 Lacs for the previous year, registering a growth of 24%. Profit after Tax on standalone basis was Rs.5,320 Lacs as against Rs. 2,712 Lacs for the previous year, registering a growth of 96%. Consolidated revenue from operations was Rs.222,662 Lacs as against Rs.170,612 Lacs for the previous year, registering a growth of 31%. Consolidated Profit after Tax was Rs.6,797 Lacs as against Rs. 718 Lacs for the previous year, registering a growth of 847%. Dividend The Board of Directors have recommended a final dividend of Rs.3.50 per equity share (Face value Rs. 10/- per equity share) for 2014-15, amounting to Rs. 555 Lacs. This is in addition to the interim dividend of Rs. 2.50 per equity share, paid to the equity shareholders on 27 February, 2015, being the record date for the purpose. The Total dividend for 2014-15 aggregates to Rs.6.00 per equity share, as compared to Rs. 3.00 per equity share for 2013-14. The same is in line with the financial strategy of the Company. The dividend payout is subject to approval of members at the ensuing Annual General Meeting The dividend will be paid to members whose names appear in the Register of Members as on 1 August, 2015 and in respect of shares held in dematerialised 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. The dividend of 3% i.e. Rs. 0.30 per 3% Cumulative Redeemable Preference Shares of Rs. 10/- each on 35,00,000 3% Cumulative Redeemable Preference Shares, amounting to Rs. 10.50 Lacs was paid to the shareholders on 27 February, 2015, being the record date for the purpose (Previous Year Rs. 10.50 Lacs) is recommended to be declared and considered as the final dividend. Transfer to Reserve The Company proposes to transfer amount of Rs. 300 Lacs to the General Reserve out of amount available for appropriation and an amount of Rs. 24,242 Lacs to be retained in the Statement of Profit and Loss on Standalone basis. Capacity Expansion During the year under review, the Company's Lighting Division at Manesar, Haryana expanded its manufacturing capacity for production of Tail Lamp for K-10 Model for Maruti Suzuki India Limited (one of the major clients of the Company). The said expansion was completed on schedule and commercial production commenced from the month of September, 2014. Hiving off Battery Division During the year under review,a joint venture agreement (JVA) was signed with Panasonic Corporation, Japan. As per the terms of JVA, the running business of Battery division will be hived off on or before long stop date of 30 April, 2015. In this regard, the Board has reviewed and revised the hiving off date from 30 April, 2015 to 1 July, 2015. In the joint venture, the company will be having an equity of 40% and the remaining 60% will be held by Panasonic Group. The necessary approval for hiving off Battery Division was obtained from the shareholders through Postal Ballot in the month of December, 2014. The Company is confident that under the technical support of Panasonic, the Battery business will reach new scales of success in the coming years. Awards and Recognition During the year, the Company was facilitated with several awards, some of them being as follows:- 1) Yamaha Motors awarded "Appreciation Certificate" to MIL MINDA INDUSTRIES LIMITED Switch, Manesar Division at their Annual Vendor Conference Meet. 2) Mahindra & Mahindra awarded "Supplier Business Capability" Award to MIL Switch Division. 3) HMSI awarded MIL Switch Division for New Part Development 4) TAFE awarded "Best Supplier" Award to MIL Switch Division for consistent performance in quality and reliability. 5) Bajaj Auto awarded "Gold Quality Award" to MIL Switch Division at their BAVA i.e. Bajaj Alliance Vendor Association Meet' 2014 6) General Motors awarded MIL Lighting Division for "Supplier Quality Excellence" Award. 7) UNO MINDA was recognised by Maruti Suzuki India Ltd. on various fields like Quality, Delivery, Technology Upgradation & Tier-II Upgradation Initiatives. 8) Tata Motors awarded / recognised UNO MINDA group for "Long Association" Award at their Annual Supplier Conference Meet' 2014. Share Capital The paid up Equity Share Capital as on 31 March, 2015 was Rs.1,586.54 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. Deposits The Company has not accepted any fixed deposits under section 73 of the Companies Act, 2013 during the year and, as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet. Listing The equity shares of the Company are listed with BSE Limited, National Stock Exchange of India Limited and the *Delhi Stock Exchange Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges. *SEBI vide its order No. VTM/PS/45/MRD/DSA/NOV/2014 dated 18/11/2014 has withdrawn the recognition granted to DSE. Particulars of Loan, Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements. Corporate Social Responsibility Initiatives As part of its initiatives under "Corporate Social Responsibility (CSR), a CSR Committee was formed in the Board Meeting held on 24 May, 2014. The CSR Committee formulated CSR Policy for the company, which was approved by the Board. The CSR Committee has been entrusted with the prime responsibility of recommending to the Board and monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The Report on CSR activities is annexed herewith as Annexure-A. Energy Conservation, 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 B. Corporate Governance The report on Corporate Governance together with the Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of the Board Report as Annexure -C. The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. The Report on Corporate Governance, together with M/s. Sanjay Grover & Associates, Company Secretary in Practice regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed as Annexure-D. Risk Management Policy Effective risk management is essential to success of any business existence, and is an integral part of our culture. While we need to accept a level of risk in achieving our goals, sound risk management helps us to make the most of each business opportunity, and enables us to be flexible and respond decisively to the changing environment. Our approach to risk management assists us in identifying risks at an early stage and address them in ways that help manage business uncertainties, minimise potential hazards, and maximise opportunities for all our stakeholders. In accordance with the requirements of the Companies Act, 2013 and Listing Agreement Company has adopted Risk Management Policy, approved by Board and established a risk management framework to identify, mitigate and control the risk and threatens of risk. Internal Financial Control The Company has adequate internal financial controls with reference to financial statements., being examined by the management and internal auditors. During the year, no reportable material weakness in the design or operation were observed. Human Resource Management The management firmly believes that employees' motivation, development and engagement are key aspects of good human resource management. Several forum and communication channels are provided to our employees to share their views and give their feedback. Competency development and employee empowerment continues to be a key area of strategic focus for the Company. Vigil Mechanism / Whistle Blower Policy The Company promotes ethical behaviors in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The company has vigil mechanism and whistle blower policy under which the directors and the employees are free to report violation of the applicable laws and regulations and the code of conduct. The reportable matters may be disclosed to sub- committee - Vigil Mechanism. No personnel of the Company were denied access to the Audit Committee. Directors There are six (6) Directors on the Board of your company, consisting of three (3) Independent Directors, two (2) NonExecutive Directors and a Chairman & Managing Director (CMD) as on March 31, 2015. Woman Director In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the Company. The Board of Directors at their meeting held on December 19, 2014 appointed Ms. Renu Challu (DIN 00157204), as an Additional Director. Ms Renu Challu is a Gold Medalist in MA (Economics) and an Associate of the Indian Institute of Bankers, with nearly four decades of experience in banking and financial markets. She has held various senior positions in State Bank of India and its Subsidiaries, like President & COO of SBI Capital Markets Ltd., MD & CEO of SBIDFHI, Dy. Managing Director (Corporate Strategy and New Businesses) at SBI Corporate Centre and MD of State Bank of Hyderabad. Independent Directors In terms of definition of 'Independence' of Directors as prescribed under Clause 49 of the Listing Agreement, entered with the Stock Exchanges and Section 149(6) of the Companies Act, 2013 and based on the confirmation/ disclosures received from the Directors, the following Non-Executive Directors are Independent Directors: 1. Mr. Satish Sekhri 2. Mr. Alok Dutta 3. Ms. Renu Challu Chairman & Managing Director (CMD) Mr. Nirmal K Minda is on the Board of the Company since September 16, 1992 and he was appointed as Chairman and Managing Director on 25 May, 2010 and subsequently re-appointed with the consent of shareholders from time to time. Appointments/ Resignations from the Board of Directors Mr. Satish Sekhri and Mr. Alok Dutta were appointed as Independent Directors by the shareholders at the last Annual General Meeting of the Company held on 28 August, 2014, for a term of five (5) years. The Board of Directors at their meeting held on 19 December, 2014 appointed Ms. Renu Challu, as an additional Director of the Company. Mr. S.K. Arya, Non-Executive Director of the Company resigned from the Board with effect from August 8, 2014. The Board placed on records its appreciation for the outstanding contributions made by Mr. S.K. Arya during his tenure of office. Appointments/ Resignations of the Key Managerial Personnel Mr. Nirmal K Minda, Chairman & Managing Director, Mr. Sudhir Jain, Corp Business Head and Group CFO and Mr. H.C. Dhamija, Vice President-Group Accounts, Legal, Secretarial, Indirect Taxes & Co. Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and were already in office before the commencement of the Companies Act, 2013. None of the Key Managerial Personnel have resigned or appointed during the year under review. Directors retiring by rotation In accordance with the provisions of the Companies Act, 2013 and in terms of Memorandum and Articles of Association of the Company, Mr. Nirmal K. Minda retires by rotation and is eligible for re-appointment. Declaration by Independent Directors The Independent directors have submitted the declaration of Independence, as required pursuant to section 149 (7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub section (6). Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committees, CSR Committee and Stakeholders Relationship Committee . Familiarisation programmes for Board Members The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarise with the Company's procedures and practices. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company alongwith business strategy. Detailed presentations on the Company's business were made before the Board members. Nomination & Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Policy for Selection, Appointment, performance evaluation and remuneration of Directors, Key Managerial Personnel and Senior Management. The Remuneration policy of our Company is a comprehensive policy which is competitive, in consonance with the industry practices. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives Meetings During the year eight (8) Board Meetings and seven (7) 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 of the Board The Company has the following committees, which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. - Audit Committee - Nomination and Remuneration Committee - Stakeholders Relationship Committee -Corporate Social Responsibility Committee The details with respect to the compositions, powers, roles, terms of reference and number of meetings held during the year of relevant committees are given in detail in the Corporate Governance Report of the Company, which forms part of this Annual Report. Directors' responsibility statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended 31 March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any, b) that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2015 and of the profit of the Company for the year ended on that date, c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding 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 systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 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 (mindagroup. com). The Code has been circulated to Directors and Senior Management Personnel, and its compliance is affirmed by them annually. Prevention of Insider Trading The Securities and Exchange Board of India (SEBI) vide notification dated 15 January, 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 15 May, 2015. Accordingly, the Board at its meeting held on 26 May, 2015 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. Related Party Transactions The related party transactions that were entered into during the financial year were on arm's length basis and in the ordinary course of business. In the following related party transactions, the company has obtained shareholders' approval through Postal Ballot :- 1) Special Resolution under Section 180(1)(a) and section188 and other applicable provisions, if any, of the Companies Act, 2013 for sell/ dispose off/ transfer of Battery Division to Panasonic Minda Storage Batteries India Private Limited. 2) Special Resolution under Section 188(1)(f) of the Companies Act 2013 for Appointment of Mr. Vivek Jindal (Son in Law of Mr. Nirmal K. Minda, Chairman & Managing Director) as President and Business Head of Acoustic Division of the Company. 3) Special Resolution under Section 180(1)(a) &188(1)(b) of the Companies Act, 2013 for sale and transfer of seven (7) acres land situated at Bawal, to the Joint Venture Company, Minda Kosei Aluminium Wheel Private Limited. There are no materially significant related party transactions made by the company with promoters, directors, key managerial personnel or other designated person which may have a potential conflict with the interest of the company at large. The Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. In accordance with the requirements of Listing Agreement, the Company has also adopted the Policy on Related Party Transaction and the same has been uploaded on the website of the company. Subsidiaries Minda Auto Components Ltd., Minda Kyoraku Ltd., Minda Distribution and Services Ltd. are the Indian subsidiaries of the Company and Global Mazinkert, S.L., Spain is a foreign subsidiary and Clarton Horn S.A., Spain, Clarton Horn, Asia, Clarton Horn, Morocco and Clarton Horn, Signalkoustik, CH Mexico are the step down subsidiaries of Global Mazinkert S.L., The Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies, are not being attached with the Balance Sheet of the Company. Salient features of Financial Statements of Subsidiaries, Associates and Joint Ventures in the prescribed format, forming part of the Financial Statements. However, the financial statements of the subsidiary companies are available on the website of the company.The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. Auditors and Auditors' Report Statutory Auditors M/s. B S R & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting (AGM) held on August 28, 2014 to hold office until the conclusion of 2nd Consecutive Annual General Meeting subject to the ratification by the Shareholders at next Annual General Meeting(s). They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Cost Auditors The Board of Directors on the recommendation of the Audit Committee has appointed M/s. Jitender Navneet & Co., Cost Accountants, as a Cost Auditors for the financial year 201516. Secretarial Auditor The Board has appointed M/s Sanjay Grover & Associates, Practising Company Secretary, to conduct secretarial audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31 March, 2015 is annexed herewith as Annexure-E. The Secretarial audit report does not contain any qualification, reservation or adverse remarks. Consolidated Financial Statements The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report. Significant and Material Orders 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. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-F. Management Discussion & Analysis Report Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - G. Particulars of Employees The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled there to, excluding the information on employees' particulars which is available for inspection by the Members at the registered office of the Company during business hours on working days of the company up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard. The ratio of the remuneration of each Director to the median employee's remuneration and other details in term of subsection 12 of section 197 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- H. Acknowledgements Your Directors thank the various Central and State Government Departments, organisations and agencies for the continued help and co-operation extended by them. Your 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 Directors For MINDA INDUSTRIES LTD. Nirmal K Minda Chairman & Managing Director Date : 26 May, 2015 Place: Gurgaon |