Your Directors have pleasure in presenting the 35th (Thirty Fifth)Annual Report on the business and operations of the Company together with the auditedfinancial statements for the financial year ended March 31 2020.
|PARTICULARS || |
|1 ||31.03.2020 ||31.03.2019 ||31.03.2020 ||31.03.2019 |
|Sales/ Income from operations ||21305 ||23708 ||28131 ||30920 |
|Other Income ||479 ||410 ||443 ||355 |
|Profit from operation before Interest Depreciation Other Expenses taxes and share of profit/ (loss) of joint ventures/ associate ||5548 ||6007 ||6556 ||7151 |
|Finance Cost Interest ||389 ||344 ||499 ||490 |
|Depreciation and amortization expense ||823 ||615 ||1179 ||883 |
|Other expenses ||2678 ||2810 ||3614 ||3872 |
|Profit from operation before tax and share of profit/ (loss) of joint ventures/associate ||1658 ||2238 ||1264 ||1906 |
|Share of profit of joint ventures/associate (net of taxes) ||NA ||NA ||125 ||280 |
|Profit before exceptional item & tax ||1658 ||2238 ||1389 ||2186 |
|Exceptional Item ||(3666) ||43 ||(2933) ||175 |
|Tax Expense ||396 ||695 ||447 ||688 |
|Tax Adjustment related to earlier year ||7 ||(20) ||7 ||(19) |
|Profit/Loss for the period after taxes (A) ||(2411) ||1606 ||(1998) ||1692 |
|Other comprehensive income for the year || || || || |
| Items that will not be reclassified to profit and loss: || || || || |
|- Re-measurement of defined benefit liabilities (net of tax) ||(14) ||(7) ||(12) ||(7) |
|items that will be reclassified to profit and loss || || || || |
|- Joint Venture's/Associate's share of re-measurement of Defined benefit liabilities (net of tax) ||- ||- ||(6) ||2 |
| Item that will be reclassified to profit & loss ||- ||- ||(6) ||2 |
|- Exchange difference in translating financial statement of foreign operations ||- ||- ||72 ||(93) |
|Total other comprehensive income(B) ||(14) ||(7) ||54 ||(98) |
|Total comprehensive income for the period (A+B) ||(2425) ||1599 ||(1944) ||1594 |
For details refer Notes to Accounts forming part of this AnnualReport.
The financial statements have been prepared as per the IND- ASprescribed by the Institute of Chartered Accountants of India (ICAI).
Standalone Financials: During the year under review your Companyhas achieved a turnover of Rs 21305 Million against Rs 23708 Million during previous year.The Company reported a Net Loss of Rs 2411 Million as against Net Profit of Rs 1606Million earned during previous year. This year we had an exceptional loss of Rs 3666Million on standalone basis as against exceptional gain of Rs 43 Million last year.
Consolidated Financials: During the year under review your Companyhas achieved a consolidated turnover of Rs 28131 Million against Rs 30920 Million duringprevious year. The Company reported a Net Loss of Rs 1998 Million as against Net Profit ofRs 1692 Million earned during previous year.S
This year we had an exceptional loss of Rs 2933 Million onconsolidated basis as against exceptional gain of Rs 175 Million last year.
Along with silent transformation of the automobile industry itcontinues to be gasping for fresh air for the past two year. The economic conditions havecertainly not been helpful for the industry. We are seeing the industry one of the majorcontributors to the Indian economy; continue to be in the blues since the past two years.From a growth rate of 6.3% for total vehicles produced in FY19 FY20 saw the industryde-growing at 14.7% rate. The reasons are not hard to see - overall economic slowdownlack of government stimulus for the industry liquidity crisis and poor consumersentiments and finally the COVID-19 pandemic ensured that the industry remains in a badstate of affairs impacting each and every segment of the industry. The fall in revenuefor us would have been much higher but for the strong performance in the Exports and theAftermarket.
The exceptional loss reported this year is because the Board ofDirectors of the Company at their meeting held on 09 June 2020 decided to withdraw thefinancial support to its material wholly owned subsidiary Minda KTSN Plastic SolutionsGmbH Co. & KG Germany (Minda KTSN). Thereafter Minda KTSN filed for Insolvency onthe same date. Minda KTSN has prepared its financial statements for the year ended 31March 2020 on the assumption that the fundamental accounting assumption of going concernis no longer appropriate. Accordingly the management of your Company assessed therecoverability of investments loans and other outstanding from Minda KTSN based on itsfinancial statements and has recorded impairment loss of Rs 2795 Million in respect of itsinvestments loans and other receivables. Further the Company has paid a sum of Rs 870Million (Euro 10.5 Million) pursuant to Corporate Guarantee and Stand By Letter of Credit(SBLC) given by the Company to the banks in respect of loans taken by Minda KTSN. Thetotal charge of Rs 3666 Million has been presented as exceptional items in the Statementof Audited Standalone Financial Results. Whereas the Company has recorded impairmentcharge of Rs 2933 million which has been presented as exceptional items in the Statementof audited consolidated financial results in respect of goodwill relating to MKTSN andreduction in carrying value of property plant and equipment and other assets of MKTSN.
The Operational Performance of the Company has been extensively coveredin the Management Discussion and Analysis which form part of this Directors' Report.
AMALGAMATION OF FIVE WHOLLY OWNED SUBSIDIARIESWITH MINDA CORPORATION LTD.
The Company had initiated a Scheme of Amalgamation (theScheme) involving merger of five wholly owned subsidiaries i.e. MindaManagement Services Limited Minda SAI Limited Minda Automotive Solutions Limited MindaAutoelektrik Limited and Minda Telematics and Electric Mobility Solutions Private Limited(Transferor Companies) into the Company. The Honourable National Company LawTribunal (NCLT) New Delhi Bench has approved the Scheme vide its order datedJuly 19 2019. The Scheme was operative from April 1 2018 (Appointed Date).The scheme was effective from September 01 2019 i.e. upon filing of the certified copy ofthe said order of Hon'ble NCLT with the Registrar of Companies Delhi.
Amalgamation of the Transferor Companies into and with the Companyresulted in consolidation of the businesses. The Amalgamation is also beneficial as itcreated greater synergies among the businesses and enabled them to have access to widerfinancial resources increase the managerial efficiencies lowering of cost structure andhigher transparency.
The Transferor Companies are wholly owned subsidiary companies ofCompany therefore no new equity shares have been issued and entire share capital of theTransferor Companies has been cancelled and extinguished.
India Ratings & Research (Ind-Ra) and CRISIL have assigned belowcredit ratings to the Company:
|Rating Agencies ||Instrument ||Ratings |
|India Ratings & ||Term Loan ||IND AA-/Stable |
|Research ||(Fund-based and Non-fund- based) Working Capital Limits ||IND AA-/Stable |
|CRISIL ||Long-term Rating ||CRISIL A+/ Stable |
| ||Short- term Rating ||CRISIL A1 |
The Rating Agency have re-affirmed the credit rating during the yearunder review.
For the year 2019-20 your directors have not recommended any finaldividend The interim dividend of Rs 0.35 per share (i.e. 17.5%) per equity share (FaceValue Rs 2/- each) which has already been paid by the Company for 2019-20 is being placedin the notice of the ensuing Annual General Meeting for approval by shareholders of theCompany.
DIVIDEND DISTRIBUTION POLICY
In line with Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) (Second Amendment) Regulations 2016 your Company has formulated a DividendDistribution Policy which is available at the Company's website i.e. https://sparkminda.com/wp-content/uploads/2020/04/Dividend-Policy. pdf
The paid up Equity Share Capital as on 31st March 2020 is Rs454444570 (Rupees Four Hundred Fifty Four Million Four Hundred Forty Four Thousand FiveHundred Seventy Only) divided into 227222285 Equity Share of Rs 2/- each Upon theScheme coming into effect from the Appointed Date i.e. April 01 2018 the authorizedshare capital of the Company has enhanced to an aggregate amount of Rs 1577000000/-(Rupees One Thousand Five Hundred Seventy Seven Million only) and the authorized sharecapital of the Company has been re-classified as divided into 692500000 equity sharesof Rs 2/- (Rupees Two only) each aggregating to Rs 1385000000/- (Rupees One ThousandThree Hundred Eighty Five Million Only) and 240000 preference shares of Rs 800/- (RupeesEight Hundred only) each aggregating to Rs 192000000 (Rupees One Hundred Ninety TwoMillion Only). Therefore Clause V of the Memorandum of Association of the Company standsmodified accordingly.
TRANSFER TO RESERVES
During the financial year under review there was no transfer to GeneralReserve by the Company.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (theIEPF Rules) all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the IEPF Rules the shares on which dividend has not beenpaid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. During the year under review theCompany has transferred the unclaimed dividend of Rs 86742/- to IEPF Authority. Furtherthere was no corresponding share for such transfer as per the requirements of the IEPFRules. Year-wise amounts of unpaid / unclaimed dividends lying in the unpaid account up tothe year and the corresponding shares which are liable to be transferred by the Companyto IEPF Authority are provided in the Shareholder Information Section of CorporateGovernance Report and are also available on Company's website at www.sparkminda.com.
The details of the nodal officer appointed by the Company under theprovisions of IEPF Rules are available on the website of the Company i.e. www.sparkminda.com.
EMPLOYEE STOCK OPTION SCHEME 2017
Your Company with the objective of introducing a long term incentivetool to attract motivate retain talent and reward loyalty formulated Minda CorporationLimited Employee Stock Option Scheme 2017 (ESOP 2017) for grant of a maximumof 5341840 stock options to the eligible employees of the Company. Nomination andRemuneration Committee of the Company has granted total 3430000 stock options to theeligible employees of Minda Corporation Limited and its subsidiaries. A certificate fromthe Auditors of the Company that the Scheme has been implemented in accordance with theapplicable SEBI Guidelines and the resolution passed by Members would be placed at theAnnual General Meeting for inspection by Members. There is no material change in thescheme the same is in compliance with the applicable regulations. The necessarydisclosure pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) withregard to Employee Stock Option Scheme of the Company is available at Company'swebsite i.e. www.sparkminda.com.
The Company has neither invited nor accepted any deposits from thepublic falling within the preview of section 73 of the Act read with the Companies(Acceptance of Deposits) Rule 2014 during the year. There is no unclaimed or unpaiddeposit lying with the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report (MD&A)'for the year under review as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of this Annual Report.
Your Company follows the highest standards of Corporate Governance bestpractices. It adheres to and has implemented the requirements set out by SEBI'sCorporate Governance norms. A separate section on Corporate Governance forms a part of theDirectors' Report.
A certificate confirming the compliance of conditions of CorporateGovernance as stipulated in SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 from Sanjay Grover & Associates practicing Company Secretaries isforming part of the Annual Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under Regulation 34 of the SEBI Listing
Regulations the Business Responsibility Report describing theinitiatives taken by the Company from environmental social and governance perspectiveforms part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act 2013 (the Act) andIndian Accounting Standard (Ind AS) 110 on Consolidated Financial Statements read with IndAS 28 investment in associate and joint ventures and Ind AS 112 on disclosure of interestin other entities the audited consolidated financial statement is provided in the AnnualReport.
The performance of the Company on consolidated basis is also discussedat length in the Management Discussion and Analysis which forms part of this DirectorsReport.
DIRECTORS / KEY MANAGERIAL PERSONNEL- APPOINTMENT RE-APPOINTMENT &RESIGNATION
In accordance with the provisions of the Companies Act 2013 andArticles of Association of the Company Mr. Ashok Minda Director of the Company retiresby rotation and being eligible offers himself for re-appointment.
Mr. Ashok Minda has been re-appointed as Chairman & Group CEO ofthe Company w.e.f August 01 2019 for a period of 3 years as recommended by the Nomination& Remuneration Committee and approved by the Board of Directors in their meeting heldon May 28 2019 and approved by shareholders in the Annual General Meeting held onSeptember 26 2019.
Mr. Ashok Kumar Jha has been re-appointed as Independent Director ofthe Company w.e.f November 14 2019 for a period of 5 years as recommended by theNomination & Remuneration Committee and approved by the Board of Directors in theirmeeting held on May 28 2019 and approved by shareholders in the Annual General Meetingheld on September 26 2019.
Mr. Laxman Ramnarayan has been appointed as Executive Director of theCompany w.e.f September 01 2019 for a period of 3 years as recommended by the Nomination& Remuneration Committee and approved by the Board of Directors in their meeting heldon August 12 2019 and approved by shareholders in the Annual General Meeting held onSeptember 26 2019.
Further Mr. Avinash Parkash Gandhi and Mr. Rakesh Chopra have beenre-appointed as Independent Directors of the Company w.e.f April 01 2019 with theapproval of shareholders through Postal Ballot on March 26 2019. Mr. Avinash ParkashGandhi has completed the age of 75 years however he has been re-appointed with theapproval of shareholders through Special Resolution pursuant to Regulation 17(1A) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Further the Board of Directors in their meeting held on May 28 2019has appointed Mr. Rakesh Chopra Independent Director of the Company on the Board of MindaKTSN Plastic Solution GmbH & Co. K.G Germany an unlisted material subsidiary of theCompany pursuant to Regulation 24(1) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Board of Directors in their meeting held on August 12 2019 hasdesignated Mr. Avinash Parkash Gandhi as the Lead Independent Director of the Company. Therole of the Lead Independent Director is available on the Company's website https://sparkminda.com/wp-content/uploads/2019/09/Role-of-
During the year under review Mr. Sanjay Aneja has resigned from thepost of Chief Financial Officer w.e.f September 25 2019 due to personal reasons.Thereafter Mr. Laxman Ramnarayan has been appointed as Chief Financial Officer of theCompany and has been designated as Executive Director & Group CFO of the Company w.e.fSeptember 26 2019.
Further Mr. Sudhir Kashyap Executive Director & CEO has resignedfrom the post of Executive Director & CEO w.e.f October 15 2019 due to personalreasons.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations to the effect thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013 read with Regulation 16 of SEBI (Listing obligations and DisclosuresRequirements) Regulations 2015. In the opinion of the Board Independent Directors fulfilthe conditions specified in the Act Rules made there under and Listing Regulations.
Pursuant to the corporate governance requirements as prescribed in theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 a formal evaluation of the performance ofthe Board it's Committees the Chairman and the individual Directors was carried outfor FY 2019-20. Led by the Nomination & Remuneration Committee the evaluation wascarried out using individual questionnaires covering amongst others composition ofBoard conduct as per company values & beliefs contribution towards development ofthe strategy & business plan risk management receipt of regular inputs andinformation codes & policies for strengthening governance functioning performance& structure of Board Committees skill set knowledge & expertise of Directorspreparation & contribution at Board meetings leadership etc. Further the Committeeswere evaluated in terms of receipt of appropriate material for agenda topics in advancewith right information and insights to enable them to perform their duties effectivelyupdation to the Board on key developments major recommendations & action plansstakeholder engagement devoting sufficient time & attention on its key focus areaswith open impartial & meaningful participation and adequate deliberations beforeapproving important transactions & decisions. The performance evaluation of therespective Committees and that of Independent and Non-Independent Directors was done bythe Board excluding the Director being evaluated. The actions emerging from the Boardevaluation process were collated and presented before the Chairman of Nomination andRemuneration Committee as well as the Board. Suggestions/feedback concerning strategicgovernance and operational matters are actioned upon by the team.
As part of the evaluation process the performance of nonindependentdirectors performance of the Board as a whole performance of the Committee(s) oftheBoard and the performance of the Chairman was evaluated by the Independent Directors in aseparate meeting of independent directors held on February 07 2020 taking into accountthe views of other directors.
BOARD AND COMMITTEE MEETINGS
During the year under review 6 (Six) Board Meetings 7 (Seven) AuditCommittee Meetings were convened and held apart from other Committee's meetings ofthe Company. The details of all the meetings are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
The calendar of Board and Committee Meetings were prepared andcirculated in advance to the Directors.
COMMITTEES OF THE BOARD
As on March 31 2020 there are 6 (six) Committees of the Board viz:Audit Committee Nomination and Remuneration Committee Stakeholder RelationshipCommittee Corporate Social Responsibility Committee Risk Management Committee andSecurities Issue Committee. A detailed note on the composition of the Board and itsCommittees is provided in the Corporate Governance Report section of this Annual Report.
POLICY ON DIRECTORS' APPOINTMENT ANDREMUNERATION
Pursuant to the provisions of section 134(3)(e) and Section 178(3) ofthe Companies Act 2013 and the SEBI Listing Regulations the policy of the Company onDirectors' appointment and remuneration including the criteria for determiningqualification positive attributes independence of directors and other matters like BoardDiversity are given on the website of the Company at www.sparkminda.com
The salient features of the Remuneration and Board Diversity Policy areas under:
a) To determine remuneration of Directors KMP other senior managementpersonnel and other employees keeping in view all relevant factors including industrytrends and practices.
b) If in any financial year the Company has no profits or its profitsare inadequate the Company shall pay remuneration to its Whole-time Director inaccordance with the provisions of Schedule V and other applicable provisions.
c) To guide the Board in relation to appointment and removal ofDirectors Key Managerial Personnel and Senior Management.
d) To evaluate the performance of the members of the Board and providenecessary report to the Board for further evaluation of the Board.
e) To recommend to the Board on Remuneration payable to the DirectorsKey Managerial Personnel and Senior Management.
f) To retain motivate and promote talent and to ensure long termsustainability of talented managerial persons and create competitive advantage.
g) To provide to Key Managerial Personnel and Senior Management rewardlinked directly to their effort performance dedication and achievement relating to theCompany's operations.
h) The remuneration / compensation / commission etc. to the Whole-timeDirector KMPs and Senior Management Personnel will be determined by the Committee andrecommended to the Board for approval. The remuneration / compensation / commission etc.shall be subject to the prior/ post approval of the shareholders of the Company andCentral Government wherever required.
i) The remuneration and commission to be paid to the Wholetime Directorshall be in accordance with the percentage / slabs / conditions laid down in the Articlesof Association of the Company and as per the provisions of the Act. The loans/advances toemployees shall be in accordance with the conditions of service applicable to employeesand are also in accordance with the Group Human Resource Policy.
j) Increments to the existing remuneration/ compensation structure maybe recommended by the Committee to the Board which should be within the slabs approved bythe Shareholders in the case of Whole-time Director.
k) Where any insurance is taken by the Company on behalf of itsWhole-time Director Chief Executive Officer Chief Financial Officer the CompanySecretary and any other employees for indemnifying them against any liability the premiumpaid on such insurance shall not be treated as part of the remuneration payable to anysuch personnel.
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 that:
a) In the preparation of the annual accounts the applicable accountingstandards have been followed and no material departure was made for the same. Thefinancial statements of the Company for the financial year ended March 31 2020 have beenprepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act2013 (the Act) read with the relevant rules made thereunder and otheraccounting principles generally accepted in India;
b) Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the period ended on March 31 2020;
c) Directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) The annual financial statements have been prepared on a goingconcern basis;
e) Proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;
f) Proper systems had been devised to ensure compliance with theprovisions of all applicable laws and were adequate and operating effectively.
NATURE OF BUSINESS
There has been no change in the nature of business of your Companyduring the year under review.
CODE OF CONDUCT
The Company has in place a comprehensive Code of Conduct (theCode) applicable to Directors Independent Directors and Senior ManagementPersonnel. The Code gives guidance and support needed for ethical conduct of business andcompliance of law. A copy of the Code is available on the Company's website at thelink: https://sparkminda.com/wp-content/uploads/2020/04/Code-of-Conduct.pdf TheChairman & Group CEO of the Company has given a declaration that the member of Boardof Directors and Senior Management Personnel have affirmed compliance with the code ofconduct of the Board of directors and Senior Management in terms of Schedule V (D) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during thefinancial year ended on March 31 2020 were on an arm's length basis and in theordinary course of business under Section 188(1) of the Act and the Listing Regulations.Details of the transactions with Related Parties are provided in the accompanyingfinancial statements (note no. 2.39) in compliance with the provision of Section 134(3)(h)of the Act. The policy on Related Party Transactions as approved by the Board may beaccessed on the Company's website at the link: https://sparkminda.com/wp-content/uploads/2020/04/Related-Party-Transactions-Policy.pdf
PARTICULARS OF INVESTMENTS MADE LOANS GIVENGUARANTEES GIVEN AND SECURITIES PROVIDED
Pursuant to Section 134(3)(g) of the Companies Act 2013 particulars ofloans guarantees or investments and securities provided under Section 186 of theCompanies Act 2013 along with the purpose for which the loan or guarantee or security isproposed to be utilized by the recipient are provided in the standalone financialstatement (Please refer to Note 2.4 2.5 and 2.37 to the standalone financial statements).
CORPORATE SOCIAL RESPONSIBILITY
Your Company has the policy of giving back to the society and hascarried a host of CSR activities this year. In line with the requirement of Section 135 ofthe Companies Act 2013 your Company having a Corporate Social Responsibility Committee.The details of Committee are provided in Corporate Governance Report. The CSR Policy ofthe Company is available on its website at the link: https://sparkminda.com/wp-content/uploads/2020/04/Policy-on-Corporate-Social-Responsibility.pdf
Spark Minda Foundation (A wholly owned subsidiary of the Company) anon-profit Company registered under Section 8 of the Companies Act 2013 is theimplementing agency for implementation of CSR activities. A robust system of reporting andmonitoring has been put in place to ensure effective implementation of planned CSRinitiatives. During the year the
Company has spent Rs 36.94 Million on CSR activities is annexedherewith at Annexure-I to this report.
A detailed discussion on CSR Projects and initiatives are included as aseparate section in the Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith atAnnexure-II to this Report.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in Form MGT 9 is annexed herewith atAnnexure-III to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The percentage increase in remuneration ratio of remuneration of eachdirector and Key Managerial Personnel (KMP) (as required under the Companies Act 2013) tothe median of employees' remuneration as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given at Annexure-IV to this Report.
The statement containing particulars of employees as required underSection 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in aseparate exhibit forming part of this report and is available on the website of theCompany.
The Annual Report and accounts are being sent to the shareholdersexcluding the aforesaid exhibit. Shareholders interested in obtaining this information mayaccess the same from the Company website or send a written request to the Company at firstname.lastname@example.org.
In accordance with Section 136 of the Companies Act 2013 this exhibitis available for inspection by shareholders at the website of the Company and at theRegistered Office of the Company during business hours on all working days 21 days beforethe Annual General Meeting and copies may be made available on request.
STATUTORY AUDITORS AND REPORT
At the Annual General Meeting held on September 22 2016 B S R &Co. LLP Chartered Accountants (ICAI Firm Registration No. 101248 W/W-100022) wereappointed as Statutory Auditors of the Company to hold office till the conclusion of theAnnual General Meeting to be held in the calendar year 2021. Pursuant to Section 40 ofCompanies Amendment Act 2017 made effective from 7th May 2018 ratification ofappointment of B S R & Co. LLP Chartered Accountants as statutory auditors of theCompany at every Annual General Meeting by members is no longer necessary till theconclusion of the Annual General Meeting to be held in the calendar year 2021.
Audit Reports on Standalone Financial Statements and
Consolidated Financial Statements are self-explanatory and do not callfor any further comments under Section 134 of the Companies Act 2013. The Auditors Reportto the shareholders for the year under review does not contain any adverse qualification.No frauds have been reported by the Auditors under Section 143(12) of the Companies Act2013 requiring disclosure in the Board's Report.
SECRETARIAL AUDITORS AND REPORT
Sanjay Grover & Associates Company Secretaries (Firm RegistrationNo- P2001DE052900) were appointed to conduct the secretarial audit of the Company for thefinancial year 201920 as required under Section 204 of the Companies Act 2013 and Rulesmade there under. The Secretarial Audit Report for financial year 2019-20 forms part ofthis Annual Report as Annexure-V to this Directors' Report. The Secretarial AuditReport contains one observation which is as follows:-
During the Audit Period the Company has complied with theprovisions of the Act Rules Regulations and Guidelines to the extent applicable asmentioned above except that Annual Performance report of Minda KTSN Plastic Solutions GmbH& Co. KG a wholly owned subsidiary of the Company was filed to Reserve Bank of Indiaon 16th April 2020.
The delay in filing the aforesaid Annual Performance Report was due tolate receiving of Audited Financial Results of Minda KTSN Plastic Solutions GmbH & Co.KG Germany.
The Board of Directors has appointed Chandra Wadhwa & Co. CostAccountants as Cost Auditors (Firm Registration No. 00239) for conducting the audit ofcost records made and maintained by the Company for the financial year 2020-21 pursuant toSection 148 of the Companies Act 2013.
In accordance with the provisions of section 148 of the Act read withthe Companies (Audit and Auditors) Rules 2014 since the remuneration payable to the CostAuditor for FY 20-21 is required to be ratified by the members; the Board recommends thesame for approval by members at the ensuing AGM.
Equity Shares of your Company are presently listed at National StockExchange of India Limited (NSE) and BSE Limited (BSE). The Annual Listing fees for FY2020-21 have been paid to the concerned Stock Exchanges.
During the year under review the Company has complied with theprovisions of the applicable Secretarial Standards issued by the Institute of CompaniesSecretaries of India. The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and such systems are adequate and operating effectively.
Pursuant to sub-section (3) of section 134 of the Act the annual returnhas been placed on the website of the Company i.e.
Further pursuant to Rule 12 of the Companies (Management andAdministration) Rules 2014 an extract of the annual return in such form as may beprescribed shall form part of the Annual Report. The Companies (Amendment) Act 2017amended sub-section (3) of section 92 of the Act a copy of the annual return is availableon the website of the company. The web-link of such annual return is https://sparkminda.com/wp-content/uploads/2020/06/Form MGT-7-Annual-Return.pdf
SUBSIDIARIES JOINT VENTURE AND ASSOCIATES
Pursuant to Section 129 of the Companies Act 2013 a statement in theprescribed Form-AOC-1 relating to subsidiaries and Joint Ventures for the year ended onMarch 31 2020 has been attached with the Consolidated Financial Statements of the Companyfor the financial year ended March 31 2020.
The Financial Statements of the subsidiaries shall be made available tothe shareholders seeking such information and shall also be available for inspection atits Registered Office.
The Policy for determining material subsidiaries as approved may beaccessed on the Company's Website in investor section: https://sparkminda.com/wp-content/uploads/2020/04/Policy-on-Material-Non-Listed-Subsidiary.pdf
INTERNAL FINANCIAL CONTROL
The Board has adopted the policies and procedures for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
The Board of Directors in their meeting held on May 28 2019 hasconstituted Risk Management Committee pursuant to the provisions of SEBI (Listingobligations and Disclosures Requirements) Regulations 2015 to assess risk and to makemitigation procedures. The Risk Management Policy can be accessed on the Company'swebsite at the link: https://sparkminda.com/wp-content/uploads/2020/04/Risk-ManagementPolicy.pdf
This policy forms part of the internal control and corporate governanceprocess of the Company. Basically the aim of this policy is not to eliminate risks ratherto mitigate the risks involved in the Company activities to maximize opportunities andminimize adversity by considering the following:-
Identification of risk define ownership with clearly definedroles and responsibilities;
Balance between the cost of managing risk and the anticipatedbenefits;
Contributing to more efficient use/allocation of capital andresources;
To encourage and promote a pro-active approach towards riskmanagement;
Identifying any unmitigated risks and formulating action plansfor its treatment through regular review.
In this complex and competitive world the company strongly believesthat people are the reason for its success and an important factor to achieve business andsocial objectives. Thus its Human Resource function is focused on further strengtheningand nurturing the vast and diverse employee base.
The HR initiative is focused on hiring the talent with the rightattitude develop and groom them and build the leadership pipeline for the future. We haveworked towards becoming a performance-driven organization.
Technology and automation is expanding in all fields including HumanResource Management hence strong emphasis is being laid on digitization of HR processesthat will anchor agility and analytics driven decision-making. Creating One Spark Mindaevery employee experiences consistency in HR practices and policies across the Group.
The company has well-crafted and employee-friendly HR policies andhence it enjoys a cordial relationship with its employees. We have not experienced anymajor work stoppages due to labor disputes or cessation of work in the last many years.
It continues to emphasize and focus on safety and security at theworkplace by prescribing policies and procedures creating awareness and imparting piecesof training to the workforce. It also has an established mechanism that fosters a positivework environment that is free from harassment of any nature. Prevention of sexualharassment initiative framework is in place to address the complaints of harassment at theworkplace.
During the year under review your Company has received many awards andrecognitions which have been mentioned in Award section of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company is committed to the highest standards of ethical moraland legal business conduct. Accordingly Vigil Mechanism/ Whistle Blower Policy wasformulated which provides a robust framework for dealing with genuine concerns &grievances. The Policy provides for adequate safeguard against victimization of employeeswho avail the mechanism and also provides direct access to the Chairperson of the AuditCommittee. Specifically employees can raise concerns regarding any discriminationharassment victimization any other unfair practice being adopted against them or anyinstances of fraud by or against your Company.
The same has also been displayed on the website of the Company and thelink for the same is: https://sparkminda.com/wp-content/uploads/2020/04/Whistle-Blower-Policy.pdf
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY
As per the requirement of The Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 (Act') andRules made there-under your Company has constituted Internal Complaint Committees (ICC).The Company has zero tolerance for sexual harassment at workplace. While maintaining thehighest governance norms the Company has also appointed external independent persons whohave requisite experience in handling such matters. During the year the Company has notreceived any complaint of sexual harassment.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOP referred to in this Report.
3. Neither the Executive Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
4. Significant material orders of amalgamation of 5 wholly ownedsubsidiaries into Minda Corporation Limited have been passed by the Honourable NationalCompany Law Tribunal (NCLT) New Delhi Bench vide its order dated July 192019.
5. No such order is passed by any Regulators or Courts or Tribunalswhich would impact the going concern status of the Company and its future operations.
IMPACT OF COVID-19 ON WORLD'S ECONOMY ANDCOMPANY'S PERFORMANCE
In the last month of FY 2020 the COVID-19 pandemic developed rapidlyinto a global crisis forcing governments to enforce lockdown of all economic activity.For the Company the focus immediately shifted to ensuring the health and well-being ofall employees. As of March 31 2020 work from home was enabled for the employees to theextent possible to work remotely and securely. Production was suspended at most of thelocations. While the lockdown and restrictions imposed on various activities werenecessary to contain the spread it has significantly impacted the business operations atMinda Corporation Limited and its subsidiaries. Consequently revenues and profitabilityhave been adversely affected. Further there have been no changes in the controls andprocesses.
However both the rating agencies India Ratings and Research (Ind-Ra)and CRISIL have re-affirmed the credit rating of Minda Corporation Limited
EVENT OCCURRED AFTER BALANCE SHEET DATE
a) Minda KTSN Plastic Solutions GmbH & Co. K.G Germany (MindaKTSN) a wholly owned subsidiary of the Company has filed for voluntary insolvencyapplication on June 09 2020 under the applicable German laws. Over the years yourCompany had invested a significant amount of capital into the subsidiary without an upsideto overall profitability. The European subsidiary with a product portfolio for theInterior Plastics segment has been facing challenges including a tough market environmentin Europe and Mexico and has been significantly underperforming for last two years.Despite formulating long-term turnaround measures for it and continued investment thefuture prospects appear bleak. Finally the Board of Directors of your Company decided towithdraw the financial support to Minda KTSN. This move will help your Company to improveour overall EBITDA and ROCE and go a long way in protecting shareholder value.
b) Minda China Plastic Solutions Co. Ltd a Joint Venture establishedbetween Minda KTSN Plastic Solutions GmbH & Co. K.G Germany a wholly ownedsubsidiary of Minda Corporation Limited and Shandong Beiqi Hai Hua Automobile Parts Co.Ltd China for producing and selling automotive components/parts has been called off witheffect from May 07 2020. This Joint Venture didn't convert any opportunity inprevious three years therefore JV was terminated with the mutual consent of the parties.There is no impact due to such termination.
APPRECIATIONS AND ACKNOWLEDGMENTS
We thank our customers vendors business associates investors andbankers for their continued support during the financial year. We also place on record oursincere appreciation for the enthusiasm and commitment of Company's employees for thegrowth of the Company and look forward to their continued involvement and support. Ourconsistent growth was made possible by their hard work solidarity cooperation andsupport.
| ||For and on behalf of the Board of |
| ||Minda Corporation Limited |
| ||Sd/- |
| ||Ashok Minda |
|Place: Gurugram ||Chairman & Group CEO |
|Date: July 15 2020 ||DIN: 00054727 |