MIRA INFORM REPORT

 

 

Report Date :

29.01.2011

 

 

Note: The above address id Lighting Division of Minda Industries Limited

 

IDENTIFICATION DETAILS

 

Name :

MINDA INDUSTRIES LIMITED

 

 

Registered Office :

B-64 / 1, Wazirpur, Industrial Area, Delhi-110 052

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

16.09.1992

 

 

Com. Reg. No.:

55- 50333

 

 

CIN No.:

[Company Identification No.]

L74899DL1992PLC050333

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

DELM12237B / DELM08257E

 

 

PAN No.:

[Permanent Account No.]

AAACM1152C

 

 

Legal Form :

Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing of Ignition Switches, Oil Pressure Switches, Locks and Ignition Locks for Automobiles, DC horns for 2 wheelers and 3 wheelers, Automobile Bulbs and Signalling Lights Equipments and Switches.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (64)

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit :

USD 5564492

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having fine track. Financials position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – April 1, 2010

 

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

INFORMATION DECLINED BY

 

The Management Non Co-operative (Name not disclosed)

 

 

LOCATIONS

 

Registered Office :

B-64 / 1, Wazirpur Industrial Area, Delhi-110 052, India

Tel. No.:

91-11-27374882/27372887

Fax No.:

91-11-27372620

E-Mail :

hcdhamija@mindagroup.com

Website :

www.mindagroup.com

www.mindaweb.com

 

 

Corporate Office

Village- Nawada,Fatehpur, P.O.-SikanderPur Badda, IMT Manesar, Distt. – Gurgaon-122004, Haryana, India

Tel. No.:

91-95124-2290427 /2290428 /2290674 / 2290675 /2290693 /2290698    

Fax No.:

91-95124-2290676

E-Mail :

atulaggrawal@mindagroup.com

 

 

Administrative  Office :

36-A, Rajasthan Udyog Nagar, New Delhi - 110 033

Tel. No.:

91-11-27244324/27142820/27432450/27437964

Fax No.:

91-11-27212182/27241524

 

 

Minda Industries

2/3 Wheeler Switch Division)

Village- Nawada,Fatehpur,
P.O.-SikanderPur Badda,
IMT Manesar, Distt. - Gurgaon.
Haryana. 122004.

Telephone :91-124-2290427, 2290428/2290674    
Fax : 91-124-2290695.
E-mail: atulaggrawal@mindagroup.com
Contact: Atul Aggrawal


20 A Sipcot Industrial Area, Phase-II, Hosur
Tamil Nadu-635109.
Ph: 91-4344-260562, 260563
Fax: 91-4344-260517

B-6, MIDC Chakan Industrial Area,
Pune-410501.
Ph: 91-20-56104114
Fax: 91-20-56104118

 

Minda TYC
34-35 K.M.G.T Road,
Vill. RasoiDistt. Sonepat.
Ph: 91-130-2219131, 2219132, 2219133, 2219135,
Fax: 91-130-2219134.
E-mail: dkalra@mindalights.com
Contact: Dinesh Kalra

Vill.Naharpur Kasan, P.O.Nakhrola,
Gurgaon - 1220050.
Ph: 91-124-2291625
Fax: 91-124-229623

 

Minda FIAMM
Vill. Naharpur Kasan,
P.O.Nakhrola, Distt-Gurgaon,
Haryana - 1220050.
Ph: 91-124-2291621/ 22 / 23 / 24 / 25.
Fax: 91-124-229623
E-mail: jkmenon@minohorn.com
Contact: J.K Menon

B-73, Wazirpur Industrial Area,
Delhi-110052.
Ph: 91-11-27374882, 27372887, 27374034
Fax: 91-11-27371850,27372620

 

Minda Impco
Village- Nawada,Fatehpur,
P.O.-SikanderPur Badda,
IMT Manesar, Distt. - Gurgaon.
Haryana. 122004.
Telephone :91-124-2290973, 2290974,2290975    
Fax : 91-124-2290976.
E-mail: newsletter@mindaimpco.net
Contact: Nitin Jain

 

Minda Rika
Village- Nawada,Fatehpur,
P.O.-SikanderPur Badda,
IMT Manesar, Distt. - Gurgaon.
Haryana. 122004.
Telephone :91-124-2290317, 2290318, 2290319, 2290460, 2290462, 2290463, 2290464, 2290465, 2290467
Fax : 91-124-2290320.
E-mail: rgandotra@mindarika.net
Contact: Rajiv Gandotra

 

 

 

Factory  :

B-64/1, Wazirpur Industrial Area, New Delhi - 110 052

 Tel. No. 91-11-27240444/27248533

 E-mail. admin@mindaswitch.com

 

B-73, Wazirpur Industrial Area, New Delhi - 110 052

Tel. No. 91-11-27144882/27224034/27144887

Fax. No. 91-11-27142620

E-mail. admin@minohorn.com

 

34-35, G. T. Karnal Road, Rasoi (Sonepat), Haryana

Tel. No. 91-1264-270374/270375/270073/270577

Fax. No. 91-1264-270576

E-mail. mindaiv@del6.vsnl.net.in

 

Village Nawada, Fatehpur, P. O. Nakhrola, Gurgaon, Haryana - 122001

Tel. No. 91-124-26337317

Fax. No. 91-124-2633732

E-mail. mrimktg@mantraonline.com

 

36-A, Rajaasthan Udyog Nagar, G. T. Karnal Road, Delhi - 110 033

Tel. No. 91-11-27432450/27437964

E-mail. admin@mindaweb.com

 

37, Rajasthan Udyog Nagar, Delhi -110 033

 

Village Naherpur Kasan P.O. Nakhrola, Distt. Gurgaon (Haryana)

 

B-1/5, Chakan Industrial Area, Village-Mahalunge, Taluk-Khed, Distt. Pune, Maharashtra.

 

20A, SIPCOT Industrial Area, Phase-It, Hosur, Tamilandu-635109

 

 

DIRECTORS

 

AS ON 31.03.2010

 

Name :

Mr. Subhash Lakhotia

Designation :

Director

 

 

Name :

Mr. Nirmal Kumar  Minda

Designation :

Managing Director and Chairman

 

 

Name :

Mr. Ashok Minda

Designation :

Director

 

 

Name :

Mr. Alok Dutta

Designation :

Director

 

 

Name :

Mr. Rakesh Sony

Designation :

Director

 

 

Name :

Mr. Satish Sekhri

Designation :

Director

 

 

Name :

Mr. S K Arya

Designation :

Director

 

 

Name :

Mr. Vivek Jindal

Director :

Executive Director

 

 

KEY EXECUTIVES

 

Name :

Mr. H C Dhamija

Designation :

Company Secretary

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As On 30.06.2010

 

Names of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter group

 

 

(1) Indian

 

 

a) Individuals / Hindu Undivided Family

5508295

52.43

b) Bodies Corporate

1808128

17.21

 

 

 

Any Others (Specify)

 

 

Trusts

21646

0.21

 

 

 

B) Public Shareholding

 

 

1. Institutions

 

 

Foreign Institutional Investors

644071

0.61

 

 

 

2. Non-Institutions

 

 

Bodies Corporate

2266147

21.57

 

 

 

b) Individuals-

 

 

i. Individual shareholders holding nominal share capital upto Rs.0.100 million

518176

4.93

ii. Individual shareholders holding nominal share capital upto Rs.0.100 million

250542

2.38

 

 

 

Any Other Specify

 

 

Non-Resident Individual

2042

0.02

Clearing Members

3664

0.03

Hindu Undivided Families

10917

0.10

Foreign Corporate Bodies

100

--

 

 

 

Total

10505064

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Ignition Switches, Oil Pressure Switches, Locks and Ignition Locks for Automobiles, DC horns for 2 wheelers and 3 wheelers, Automobile Bulbs and Signalling Lights Equipments and Switches.

 

 

Products :

Products Description

ITEM CODE NO.

Switches, Lamps and Batteries for Automobiles

870899

Switches, Head Lamps and Horns for Automobiles

 

 

Brand Names :

'MINDA'

 

 

Exports :

 

Countries :
  • UAE
  • Sri Lanka

 

 

Imports :

 

Countries :
  • Germany
  • Portugal
  • Japan
  • Spain

 

 

Terms :

 

Selling :

Cash, Contract or Credit (30/60 days) terms

 

 

Purchasing :

Cash, L/C  or Credit (30/60 days) terms

 

 

PRODUCTION STATUS AS ON 31.03.2010

 

Particulars

Unit

Actual Production

Switches

Nos

50006664

Head lamp, Tail Lamps and Spares

Nos

14932891

Batteries

Nos

1598820

Others

Nos

 

 

 

GENERAL INFORMATION

 

Customers :

v      Escorts Limited, Faridabad, Uttar Pradesh

v      Bajaj Auto Limited

v      Maruti Udhyog Limited

v      Hero Honda Motors Limited

v      Rajdoot (Escorts Limited)

v      Yamaha

v      Toyota

v      Honda

v      Piaggio

v      Royal Enfifeld

v      John Deere

v      Swaraj Mazda

 

 

No. of Employees :

Not divulged by the management

 

 

Bankers :

v       Canara Bank, 3-F Kamla Nagar, Delhi – 110 007

v       Citibank

v       Axis Bank

v      State Bank of India

 

 

Facilities :

 

Secured Loan

 

Rs. In Millions

31.03.2010

Rs. In Millions

31.03.2009

From Banks

Working Capital loans

Term Loans

Vehicle Loans

 

262.589

778.428

4.487

 

463.501

763.576

3.461

From Others

Vehicle Loans

 

0.999

 

1.514

Deferred payment Liability

Volkswagen India Private Limited

 

27.646

 

0.000

Total

1074.150

1232.052

1. a) Working Capital Loans from Canara Bank, Citi Bank N.A. and State Bank of India are secured by hypothecation of stock of raw materials, finished goods, semi finished goods, bills discounted with the bank and book debts on pari-passu basis and further secured by second charge on fixed assets of the Company on pari-passu basis with Small Industries Development Bank of India.

2. a) Term Loan from State Bank of India is secured by way of first pari-passu charge on all present and future fixed assets. Term loan from State Bank of India is further secured by hypothecation of all the goods, book debts and other movable assets of the company on pari-passu basis.

b) Term Loan from Axis Bank Ltd. is secured by way of first pari-passu charge on all fixed assets of the company.

3. Vehicle Loans from banks/others are secured by hypothecation of assets financed by them.

4. Loan from Volkswagen India Pvt. Ltd., of ` 2,76,45,714 (Previous year NIL) represents deferred payment liability in respect of specific tools and is secured by hypothecation of tools that have/will be acquired or manufactured in-house.

5. Term loans/Vehicle loans payable within one year

Term Loans

Vehicle Loans from Bank

Vehicle Loans from Others

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

164.562

2.032

0.635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120.005

3.082

0.526

 

 

 

Unsecured Loan

 

Rs. In Millions

31.03.2010

Rs. In Millions

31.03.2009

From bank - Short Term Loan

100.000

0.000

From other than banks

      – Director(s)

–         Companies 

–         Customers/ Trade Deposits

–         Others

 

4.332

18.381

81.736

0.161

 

45.499

42.009

137.339

26.111

Fixed Deposits

–         from Director(s)

–         from Others

 

2.000

23.424

 

0.000

8.228

Interest Free Sales Tax Deferred Liability @

142.725

142.725

Total

372.759

401.912

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

R.N. Saraf and Co.

Chartered Accountants

 

BRANCH AUDITORS

Shah Khandelwal Jain and Associates

Chartered Accountants

 

INTERNAL AUDITORS

N. Bahi and Company

Chartered Accountants

 

 

Joint Ventures:

·         Mindarika Private Limited

·         Minda TYC Automotive Limited

·         Om Merubani Logistic Private Limited

·         Valeo Minda Electricals Systems India Private Limited

 

 

 

 

Subsidiaries :
  • Minda Auto Components Limited
  • Minda Reality and Infrastructure Limited

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

15000000

Equity Share

Rs.10/- Each

Rs.150.000 millions

3000000

9% Cumulative Redeemable Preference Shares

Rs.10/- Each

Rs.30.000 millions

183500

3% Cumulative Redeemable Preference Shares

Rs.2187/- Each

Rs.401.314 millions

3500000

3% Cumulative Redeemable Preference Shares

Rs.10/- Each

Rs.35.000 millions

 

Total

 

Rs.215.000 millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

10505064

Equity Share

Rs.10/- Each

Rs.105.051 millions

3000000

9% Cumulative Redeemable Preference Shares

Rs.10/- Each

Rs.30.000 millions

183500

3% Cumulative Redeemable Preference Shares

Rs.2187/- Each

Rs.401.314 millions

3500000

3% Cumulative Redeemable Preference Shares

Rs.10/- Each

Rs.35.000 millions

 

Total

 

Rs.571.365 millions

 

 

 

 

 

1) Equity Shares Include

 

- 1,233,330 Equity Shares of 10 each issued during the year 1994-95 pursuant to scheme of amalgamation without payment received in cash.

- 392,832 Equity Shares of 10 each as Bonus Shares allotted on 15.12.1995 by capitalisation of General Reserve and 5252532 equity shares of `10 each as bonus shares allotted on 31.03.2004 by capitalisation of Share Premium Account and General Reserve.

- Re-issue of forfeited 31,800 Equity Shares of 10 each on 27.10.1998.

2) 9% Cumulative Preference Shares are redeemable in equal installments in the year 2011, 2012 and 2013.

3) 1,83,500 3% Cumulative Compulsorily Convertible Preference Share of ` 2187 each have been allotted on 17.02.2010 with a right of conversion into 10 Equity Shares of ` 10 each fully paid up at a premium of ` 208.70 per share within a period not exceeding eighteen months from the date of allottment.

4) 35,00,000 3% Cumulative Redeemable Preference Share of ` 10 each have been allotted on 17.02.2010 shall be redeemed at par after seven years from the date of allottment. However same can be redeemed earlier in view of availability of the profitability /surplus fund.

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

571.365

135.051

135.051

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

819.758

635.280

515.828

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1391.123

770.331

650.879

LOAN FUNDS

 

 

 

1] Secured Loans

1074.150

1232.052

1056.420

2] Unsecured Loans

372.759

401.912

303.593

TOTAL BORROWING

1446.909

1633.964

1360.013

DEFERRED TAX LIABILITIES

0.000

0.000

52.823

 

 

 

 

TOTAL

2838.032

2404.295

2063.715

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

2292.443

1628.934

1503.320

Capital work-in-progress

28.286

122.598

96.821

 

 

 

 

INVESTMENT

81.936

79.340

77.540

DEFERREX TAX ASSETS

(63.231)

(52.547)

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
469.490
243.964

246.578

 

Sundry Debtors
895.736
674.821

504.296

 

Cash & Bank Balances
131.526
38.634

50.972

 

Other Current Assets
0.000
0.000

0.000

 

Loans & Advances
312.638
364.310

280.302

Total Current Assets
1809.390
1321.729

1082.148

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
1030.689
539.803

417.878

 

Other Current Liabilities
176.735
75.065

209.219

 

Provisions
105.637
81.312

69.017

Total Current Liabilities
1313.061
696.180

696.114

Net Current Assets
496.329
625.549

386.034

 

 

 

 

MISCELLANEOUS EXPENSES

2.269

0.000

0.000

 

 

 

 

TOTAL

2838.032

2404.295

2063.715

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Income

5970.999

4456.950

3961.003

 

 

Other Income

14.720

98.466

141.017

 

 

TOTAL                                     (A)

5985.719

4555.416

4102.020

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Materials and Manufacturing

4216.989

3185.222

2910.101

 

 

Personal

650.514

473.625

437.336

 

 

Administrative and Selling

397.837

307.770

270.527

 

 

TOTAL                                     (B)

5265.340

3966.617

3617.964

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

720.379

588.799

484.056

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

144.224

164.698

115.086

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

576.155

424.101

368.970

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

269.608

214.318

171.175

Less

SHARE ISSUE EXPENSES

0.567

0.000

0.051

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

305.980

209.783

197.744

 

 

 

 

 

Less

TAX                                                                  (I)

77.251

58.121

40.500

 

 

 

 

 

 

PROFIT AFTER TAX (G-I)                                  (J)

228.729

151.662

157.244

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

408.448

330.671

247.312

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

General Reserve

40.000

40.000

40.000

 

 

Proposed Dividend

On 9% Cumulative Redeemable Preference Shares

On 3% Cumulative Compulsorily Convertible Preference Shares

On 3% Cumulative Redeemable Preference Shares

On Equity Shares

 

2.700

 

1.418

0.124

31.515

 

5.939

 

2.700

 

--

--

26.263

 

4.922

 

2.700

 

--

--

26.263

 

4.922

 

 

Corporate Dividend Tax

 

 

 

 

BALANCE CARRIED TO THE B/S

555.482

408.448

330.671

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export Earnings

325.546

301.813

193.100

 

 

Royalty/Design Fees/Magt. Fees

43.258

50.616

73.479

 

 

Dividend Income

2.547

0.000

0.000

 

TOTAL EARNINGS

371.351

352.429

266.579

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

292.647

209.418

246.475

 

 

Stores & Spares

0.986

1.646

2.477

 

 

Capital Goods

301.312

120.879

121.643

 

TOTAL IMPORTS

594.945

331.943

370.595

 

 

 

 

 

 

Earnings Per Share (Rs.)

21.30

14.14

--

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

30.06.2010

30.09.2010

Type

 

1st Quarter

2nd Quarter

 Sales Turnover

 

1954.890

2150.510

 Total Expenditure

 

1757.900

1947.520

 PBIDT (Excl OI)

 

196.990

202.990

 Other Income

 

3.550

1.310

 Operating Profit

 

200.540

204.300

 Interest

 

38.480

25.130

 Exceptional Items

 

0.000

0.000

 PBDT

 

162.060

179.170

 Depreciation

 

93.090

90.860

 Profit Before Tax

 

68.970

88.290

 Tax

 

15.490

26.800

 Reported PAT

 

53.480

61.490

Extraordinary Items       

 

0.000

0.000

Prior Period Expenses

 

0.000

0.000

Other Adjustments

 

0.000

0.00

Net Profit

 

53.480

61.490

 

                                                                                  KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)

3.82

3.33

3.83

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

5.12

4.71

4.99

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

7.46

7.11

7.65

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

0.22

0.27

0.30

 

 

 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 

1.98

0.90

1.07

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

1.38

1.90

1.55

 

 

LOCAL AGENCY FURTHER INFORMATION

 

SUNDRY CREDITORS DETAILS:

 

Particulars

Rs. in Millions

31.03.2010

Rs. in Millions 31.03.2009

Rs. in Millions 31.03.2008

Sundry Creditors
1030.689
539.803

417.878

 

 

 

 

 

 

History

 

Subject is the most favoured vendor of automotive components with major automobile manufacturers in India. The name of Mind is fast gaining the reputation of excellence and quality in Europe, Africa, Middle East and South East Asia also. The company started in 1958 under the able headship of Sh. S. L. Minda, the group has accomplished many high points in the Indian Automotive Industry and established six manufacturing facilities to meet the ever-growing worldwide demand for quality products.  The company's work force of 2000 persons is directly or indirectly committed for producing world quality Auto Electrical Switches, Lamps, Horns for 2 wheeler, 4 wheeler vehicles (car, scooters, motor cycles and tractors)

 

 

FINANCIAL HIGHLIGHTS

 

The Sales/Income from operations for the Financial Year was Rs.5971.000 Millions as against Rs.4545.300 Millions for the previous year, registering growth of 31.37 %. The Cash Operating Profit has shown a growth of 35.86 %.

 

JOINT VENTURE

 

The Company was holding 17,50,000 Equity Shares of ` 10/- each of Valeo Minda Electrical System India Private Limited (VMES). As the desired results were not achieved by VMES, hence it was decided to sale off our equity in VMES to the other promoters of VMES. In this regard, an agreement was executed on May 18, 2010.

 

The Company is holding 36.85 Lacs Equity Shares of Fiamm Minda Automotive Limited In the month of August, 2009, Fiamm S.p.A., the joint venture partners transferred all its equity to Minda Promoters. Subsequently, the name of the said company has been changed from Fiamm Minda Automotive Limited to Minda Acoustic Limited.

 

 

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

 

Indian Economic Scenario

 

The fiscal year 2009-10 began as a difficult one. There was a significant slowdown in the growth rate in the second half of 2008-09, following the financial crisis that began in the industrialized nations in 2007 and  spread to the real economy across the world.

 

Over the span of the year, the economy posted a remarkable recovery, not only in terms of overall growth figures but, more importantly, in terms of certain fundamentals, which justify optimism for the Indian economy in the medium to long term.

 

 The real turnaround came in the second quarter of 2009-10 when the economy grew by 7.9 per cent. GDP for 2009-10, released by the Central Statistical Organisation, the economy grew at 7.2 per cent, with the industrial and the service sectors growing at 8.2 and 8.7 per cent respectively.

 

Indian Auto Industry Scenario

 

Fueled by government stimulus packages, better demand and lower loan interest rates, the country's automobile industry has reported a whopping 26.41 per cent growth in sales in the year 2009-10 making FY 09 -10 one of the best years for the sector. This encouraging trend in the industry has also made India the second fastest growing market in the world following China, which recorded a 42 per cent growth.

 

In the domestic market, the sales were driven by car and the two-wheelers. While the cars segment posted a 25.10 per cent growth in 2009-10, the two-wheelers witnessed a 26 per cent surge. The excise and customs duties on cars and autocomponents have been continuously declining over the past five years. All these factors have contributed in providing the impetus to the auto sector.

 

Role of Auto-Component Industry

 

The Indian automotive component industry manufactures a wide range of parts including castings, forging, finished and semi-finished components, assemblies and subassemblies. Its development has been aided by the arrival of OEMs to India in the 1990s and the increasing exposure of Indian companies to international competition and best practices.

 

India's automotive components industry is being urged by the government to partner with overseas firms with the aim of making India a platform for outsourcing as well as a global R and D hub. As the Indian vehicle production industry has grown, so has the domestic supplier industry. But the global auto industry's search for lower cost and more international outsourcing has led to a sharp growth in component output and exports in recent years.

 

Companies such as GM, Ford, Daimler Chrysler and Toyota, see India as a cost competitive base for parts sourcing. Among Tier 1, Delphi, Visteon, Bosch, Cummins and Denso have operations in India. Factors such as superior engineering skills, modest domestic market growth, the sophistication of its IT industry and increasing free trade agreements in addition to low cost, are expected to boost India's auto component sector growth over other countries in the environment of off-shoring to low-cost countries.

 

Outlook

 

The positive demographic factors, stable macroeconomic environment and pro-reform policies of the government saw almost all major global auto players making their way into India. The intense competition has compelled the manufacturers to launch the latest global offering in India as early as possible. It has also enabled to keep the prices of the vehicles under check. The consumers, in turn, have benefited from wide choice of models,   technologically advanced cars and better service from the car manufacturers.

 

OPPORTUNITIES, CHALLENGES, RISK and CONCERNS

 

Opportunities

 

India has several advantages making it an attractive destination for investment in the automobile sector like

 

• Low-cost, high-skill manpower with an abundance of engineering talent - the second largest in the world

• Well developed, globally competitive Auto Ancillary Industry

• Established automobile testing and R and D centers.

• Among the lowest-cost producers of steel in the world.

 

Need for innovation

 

The competitiveness in the sector will largely depend on the capacity of the industries to innovate and upgrade. The industry will also benefit if it has strong domestic competition, home based suppliers and demanding local customers. There is no denying the fact that the factors like labour cost, duties, interest rate and economies of scale are the most important determinants of competitiveness. But productivity is the prime determinant of the competitiveness and also impacts the national per capita income. The globally successful OEMs and auto makers will ultimately make their base in places. The OEMs also look for the policies of the state which stimulates innovations in new technologies.

 

The key challenges facing the auto ancillary industry at this juncture include rising commodity prices and weak demand in the exports markets. Additionally, if the domestic growth trend sustains over a few more quarters, many auto component suppliers may have to revive the capacity enhancement plans they had put on hold last year following large-scale demand destruction.

 

The industry, over the years, developed the capability of manufacturing all components required to manufacture vehicles, which is evident from the high levels of indigenization achieved in the vehicle industry as well as the components developed for the completely Indian made vehicles like the Tata Indica, Tata Indigo, Mahindra Scorpio, Bajaj Pulsar, TVS Victor and TVS star.

 

The industry has now holistic capability to manufacture the entire range of auto components e.g. Engine parts, Drive, Transmission Parts, Suspension and Braking Parts, Electricals, Body and Chassis Parts, Equipment etc.

 

Segment-wise performance

 

The Indian Automotive Industry performed well in the financial year 2009-10, the segment wise market share is given as below:

 

The company is engaged in the manufacturing of automotive components two wheelers, three wheelers and off road vehicles and parts such as electrical switches, lightings, batteries and blow moulding products. All products are carrying similar risk and returns. Hence, there is no separate reportable segment.

 

The Company has implemented World Class ERP system SAP in the Company which integrate all its operations under one umbrella and it helps to achieve the Mission and Vision of the Company.

 

Company's ongoing efforts on cost reduction, productivity and efficiency improvements in all areas of operations, that should help the Company stay in good stead to continue growing at a healthy rate in the years to come.

 

Internal Control Systems

 

The Company has adequate internal control systems for assessment and eliminating various kinds of risks which include strategic, operational, financial, environment and reputation risk. Such risks are reviewed at various meetings like internal audit committee meeting and management committee review meeting where members of senior management are involved. The Board also reviews such risks procedures periodically.

 

The Company also has a proper and adequate system of internal controls for financial reporting of various transactions, efficiency of operations, safeguarding of assets and compliance with applicable statutes and regulations. In order to ensure that all checks and balances are in place and all internal control system are in order, transactions are authorized as per the accounts manual, recorded and reported promptly and correctly.

 

The audit committee of the company is reviewing the internal controls including the internal audit reports, financial results of the company at least once in every four months and provides its support to all operational and finance functions of the company through regular monitoring and suggestions. The company has exhaustive budgetary control system. Actual performance is reviewed with reference to budgeted by the management review committee on an ongoing basis.

 

Financial performance with respect to operational performance.

 

The growth of auto component industry is directly linked with the growth of the auto industry. The automobile industry has reported a 26.41 per cent growth in sales in the year 2009-10, whereas the Company has reported sales/turnover of Rs.5971.000 Millions during the year 2009-10, as against Rs.4545.300 Millions during the previous year registering a growth of 31.37%. The company has set up a state of art head lamp manufacturing facility at Chakan, Pune. The commercial production has commenced for customers like Volkswagen and Maruti Suzuki in the month of February, 2010.

 

 

Fixed Assets

 

v      Land

v      Building

v      Plant and Machinery

v      Electric Fitting

v      Furniture and Fixture

v      Office Equipment

v       Vehicles 

v       Computer Software

 

WEBSITE DETAILS

 

PROFILE

 

Subject is the flagship company of the Minda Group. It designs, develops and manufactures switches for 2/3 wheelers and off-road vehicles. In addition, Subject manufactures batteries for 2/3/4 wheelers and off-road vehicles.


Subject already enjoys more than 70% market share in the 2/3 wheeler segment in India and is amongst the top few globally.


Today, Subject is over Rs. 4.51 billion (USD 111.45 million) company and is on a rapid expansion spree. It is geared to take on global competition and has already made inroads into the ASEAN market. Minda Industries is on its way to becoming the favoured vendor for 2/3 wheeler switches globally.


Subject has established 8 state of the art facilities spread across the length and breadth of India and one in the ASEAN region and employs more than 2800 people.

 

MILESTONE

 

1995 :   Businesses Re-organised into Strategic Business Units (SBUs)

 

1997 :   Implementation of TQM - PQCDSM - TPS in the group Received ISO 9001

            Certification



1998:    Long Term and Short Term Business goals defined

 

2000:    "Business Excellence through Simple Techniques" (BEST) journey started to

            challenge

            CII-EXIM BANK Business Excellence Award

 

2001:    Start of production at Pune for 2 & 3 Wheeler Switches at newly set up state of the art facility

 

2002-2003: Entry in ASEAN region

 

                Bi-wheeler switch manufacturing units at Delhi consolidated at Manesar

                Set up manufacturing plants in Waluj and Hosur for Handle Bar Assembly

                Received ISO-14001 and OHSAS 18001 certification

 

2003-2004 :       Received TS 16949 certification First patent filed

 

2004-2005 :       NABL accreditation for labs Bajaj award for excellence

 

2005-2006 : Set up manufacturing plant at Mysore for Handle Bar Assembly Achievement award  from Honda                                                                        for quality and delivery Start of Indonesia Plant Start of Indonesia Plant  Start of Pantnagar Project Electronics manufacturing of switches started at Pune

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.45.74

UK Pound

1

Rs.72.73

Euro

1

Rs.62.73

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

7

--RESERVES

1~10

8

--CREDIT LINES

1~10

7

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

NO

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

64

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

-

NB

                                       New Business

-

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.