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Notes to Accounts of Minda Corporation Ltd.

Mar 31, 2016

1. Rights, preferences and restrictions attached to each class of shares

a) Equity shares of Rs. 2 each (previous year Rs. 2 each) fully paid up

The Company has one class of equity shares having a par value of Rs. 2 per share (previous year Rs. 2). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Further, certain investors ("Investors") have "Anti dilution rights" i.e. right to further subscription and price protection, ensuring that, in the event of finalisation of the terms of sale of additional shares, the Company shall (as per the procedure set out in the Articles) offer the additional shares on the finalized terms and conditions to the investors and in the event that the Company issues any additional equity shares at a price less than the Investor acquisition cost or have or permit an FPO, at such lower price, then either the Company or promoters shall transfer such number of equity shares (as per the procedures set out in the Articles) at either no additional consideration or at the lowest possible consideration permitted under applicable law that shall be necessary to ensure that in a revised investor acquisition cost per Investor that shall be equal or lower than the price at which the additional shares are proposed to be issued. Such investors also have "pre emptive rights" wherein any member of the promoter group shall, before selling, transferring or otherwise disposing of any of its shares to a bona fide independent third party purchaser, first give notice to the Investors and each investor shall have the right (but not the obligation) to serve on the transferor a pre-emption notice requiring the transferor to transfer to the purchaser (as per the procedures set out in the Articles), or to any person nominated by the purchaser, some or all of the sale shares at the sale price.

Each such investor shall also have the Tag-along right (subject to the other provisions of Articles and such rights as mentioned above) but not the obligation to require the transferor to cause the transferee in a transfer of equity shares to purchase from such investor, for the same consideration per equity share and upon the same terms and conditions as are to be paid and given to the transferor.

562,500 and 267,092 (of Rs. 10 each) equity shares allotted on preferential basis to the investors and Minda Corporation Limited Employees Stock Option Scheme Trust (MCL ESOS Trust) on 3 November 2011 and 1 November 2011 respectively were locked in for a period of one year from the date of allotment.

b) 0.001% cumulative redeemable preference shares of Rs. 800 each fully paid up

The Company has 240,000 cumulative redeemable preference shares of Rs. 800 each. The shares carry right of fixed preferential dividend at a rate of 0.001%. The holders of these shares do not have the right to vote and are compulsorily redeemable at par on or before the expiry of 20 years from the date of allotment. The dividend on the shares shall be cumulated and any unpaid dividend shall be added to the amount payable as dividend in the following year and no dividend can be paid on equity shares until the entire backlog of unpaid dividends on these shares is cleared. In the event of liquidation, these share holders are entitled to get their capital after satisfaction of dues for secured creditors, but they get preference over equity share capital.

2. Issue of shares to Minda corporation Limited Employees'' stock option scheme

Pursuant to the Board of Director''s approval in Board meeting held on 29 September 2011, the Company has constituted a trust under the name ''''Minda Corporation Limited Employee Stock Option Scheme Trust" (MCL ESOS Trust), with the objective of acquiring and holding of shares, warrants or other securities of the Company for the purpose of implementing the Company''s ESOP Scheme. The Company has contributed a sum of Rs. 1,00,000 towards initial trust fund and later on advanced a sum or Rs. 133,546,000 to fund the purchase of Company''s equity shares by MCL ESOS trust. During a prior year, the Company had issued and allotted, 267,092 equity shares of the face value Rs. 10 each at the premium of Rs. 490 per equity share to the MCL ESOS Trust, as approved in the Extra ordinary general meeting dated 24 October 2011. Further, the Company had issued bonus shares in proportion of one equity share for one share held on 29 March 2012, as decided in Extra ordinary general meeting held on 16 March 2012. In accordance with the guidance note on "Guidance Note on Accounting for Employee Share-based Payments" issued by the ICAI, the Company has reduced the amount of share capital consideration (including share premium) received from MCL ESOS trust for presentation purposes, with a corresponding reduction in advance to MCL ESOS trust. However, in earlier years the Company had also In advertantly adjusted the corresponding amount of bonus shares against the share premium account, which has been corrected in the previous year.

3. Accounting for leases

operating leases- As a lessee

The Company has taken on lease, accommodation for factory, offices and cars, with an option of renewal at the end of the lease term and escalation clause in a case. The leases are in the nature of cancellable operating leases. Lease rentals amounting to Rs. 76,932,004 (previous year Rs. 93,377,488) in respect of such leases have been recognized in the statement of profit and loss for the year.

4. CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 20,444,931 (previous year Rs. 12,517,401).

5. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

6. The Company operates only in one business segment i.e. manufacture of auto components / accessories from various locations in India. Further, in accordance with Accounting Standard 17 - ''Segment Reporting'', segment information has been given in the Consolidated Financial Statement of Minda Corporation Limited, and therefore, no separate disclosure on segment information is given in these financial statements.

7. The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and noted that there are no foreseeable losses on long term contracts. Accordingly, no provision is required to be created in the books of account under any law / accounting standards.

8. Subsequent to the year end, the Company has made an acquisition of 5,800,000 Equity Shares of Panalfa Autoelektrik Ltd, for Rs. 274,978,000 on 04th April 2016, thereby, making it a 100% subsidiary of the Company.


Mar 31, 2015

1 Rights, preferences and restrictions attached to each class of shares

a) Equity shares of Rs. 2 each (previous year Rs. 10 each) fully paid up

The Company has one class of equity shares having a par value of Rs. 2 per share (previous year Rs. 10). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Further, certain investors ("Investors") have "Anti dilution rights" i.e.right to further subscription and price protection, ensuring that, in the event of finalisation of the terms of sale of additional shares, the Company shall (as per the procedure set out in the Articles) offer the additional shares on the finalized terms and conditions to the investors and in the event that the Company issues any additional equity shares at a price less than the Investor acquisition cost or have or permit an FPO, at such lower price, then either the Company or promoters shall transfer such number of equity shares (as per the procedures set out in the Articles) at either no additional consideration or at the lowest possible consideration permitted under applicable law that shall be necessary to ensure that in a revised investor acquisition cost per Investor that shall be equal or lower than the price at which the additional shares are proposed to be issued. Such investors also have "pre emptive rights" wherein any member of the promoter group shall, before selling, transferring or otherwise disposing of any of its shares to a bona fide independent third party purchaser, first give notice to the Investors and each investor shall have the right (but not the obligation) to serve on the transferor a pre-emption notice requiring the transferor to transfer to the purchaser (as per the procedures set out in the Articles), or to any person nominated by the purchaser, some or all of the sale shares at the sale price.

Each such investor shall also have the Tag-along right (subject to the other provisions of Articles and such rights as mentioned above) but not the obligation to require the transferor to cause the transferee in a transfer of equity shares to purchase from such investor, for the same consideration per equity share and upon the same terms and conditions as are to be paid and given to the transferor.

562,500 and 267,092 (of Rs. 10 each) equity shares allotted on preferential basis to the investors and Minda Corporation Limited Employees Stock Option Scheme Trust (MCL ESOS Trust) on 3 November 2011 and 1 November 2011 respectively were locked in for a period of one year from the date of allotment.

b) 0.001% cumulative redeemable preference shares of Rs. 800 each fully paid up

The Company has 240,000 cumulative redeemable preference shares of Rs. 800 each. The shares carry right of fixed preferential dividend at a rate of 0.001%. The holders of these share do not have the right to vote and are compulsorily redeemable at par on or before the expiry of 20 years from the date of allotment. The dividend on the shares shall be cumulated and any unpaid dividend shall be added to the amount payable as dividend in the following year and no dividend can be paid on equity shares until the entire backlog of unpaid dividends on these shares is cleared. In the event of liquidation, these share holders are entitled to get their capital after satisfaction of dues for secured creditors, but they get preference over equity share capital.

2 Issue of shares to Minda Corporation Limited Employees'' Stock Option Scheme

Pursuant to the Board of Director''s approval in Board meeting held on 29 September 2011, the Company has consti- tuted a trust under the name "Minda Corporation Limited Employee Stock Option Scheme Trust" (MCL ESOS Trust), with the objective of acquiring and holding of shares, warrants or other securities of the Company for the purpose of implementing the Company''s ESOP Scheme. The Company has contributed a sum of Rs. 1,00,000 towards initial trust fund and later on advanced a sum or Rs. 133,546,000 to fund the purchase of Company''s equity shares by MCL ESOS trust. During a prior year, the Company had issued and allotted, 267,092 equity shares of the face value Rs. 10 each at the premium of Rs. 490 per equity share to the MCL ESOS Trust, as approved in the Extra ordinary general meeting dated 24 October 2011. Further, the Company had issued bonus shares in proportion of one equity share for one share held on 29 March 2012, as decided in Extra ordinary general meeting held on 16 March 2012. In accordance with the guidance note on "Guidance Note on Accounting for Employee Share-based Payments" is- sued by the ICAI, the Company has reduced the amount of share capital consideration (including share premium) received from MCL ESOS trust for presentation purposes, with a corresponding reduction in advance to MCL ESOS trust. However, in earlier years the Company had also inadvertantly adjusted the corresponding amount of bonus shares against the share premium account, which has been corrected in the current year.

3 Other long term benefit - Compensated absences

The Company operates compensated absences plan, where in every employee is entitled to the benefit as per the policy of the Company in this regard. The salary for calculation of earned leave is last drawn salary. The same is payable during the service, early retirement, withdrawal of scheme, resignation by employee and upon death of employee.

4 Operating Lease- As a lessor

The Company has leased (cancellable) some of its premises and fixed assets under a fixed lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2015 aggregate to Rs. 5,424,000 (previous year Rs. 3,874,000).

5 Accounting for leases

Operating leases- As a lessee

The Company has taken on lease, accommodation for factory, offices and cars, with an option of renewal at the end of the lease term and escalation clause in a case. The leases are in the nature of cancellable operating leases. Lease rentals amounting to Rs. 93,377,488 (previous year: Rs. 104,588,901) in respect of such leases have been recognized in the statement of profit and loss for the year.

6 EXCEPTIONAL ITEMS

During the previous year, the Company had disposed off certain fixed assets / other assets due to discontinuance of plating business with certain customers. The Company recorded a loss on disposal of such assets amounting to Rs. nil (previous year Rs. 22,466,379).

7 CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 12,517,401 (previous year Rs. 9,703,363).

8 DISCONTINUED OPERATIONS

Pursuant to the decision of the board in their meeting held on 29 May 2014 to discontinue its non core business activity (i.e. manufacturing of plastic interior parts for four wheeler), the company has sold the fixed assets of plastic business for an aggregate consideration of Rs. 129,969,066 (WDV of Rs. 124,110,488). Out of this, the Company has sold off majority of the fixed assets to one of its subsidiary on the value arrived at on the basis of a fair valuation carried out by the Company. Also, the Company has written off assets amounting to Rs. 11,863,221 in quarter ended 30 June 2014 and Rs. 1,236,004 in quarter ended 30 September 2014. Accordingly, the related business activity of the Company has been treated as discontinued operations.

9 CONTINGENT LIABILITIES

(Amount in Rs.) As at As at

31 March 2015 31 March 2014

Claims against the Company not acknowledged as debts

a) Custom duty - 161,776,450

b) Income-tax 12,262,176 12,262,176

c) Sales tax/ VAT 1,466,749 1,466,749

d) Excise duty 11,703,725 8,692,913

While the ultimate outcome of the above mentioned appeals cannot be ascertained at this time, based on current knowledge of the applicable law, management believes that these law suits should not have a material adverse effect on the Company''s financial statements or its business operations.

Others

Corporate guarantees given by the Company

i) Minda KTSN Plastic Solutions GmbH & Co. KG, Germany 1,030,287,276 1,275,062,985

ii) Minda SAI Limited 600,000,000 600,000,000

iii) Minda Furukawa Electric Private Limited 590,990,000 -

iv) Minda Management Services Limited 30,000,000 -

v) Riddi Techauto Private Limited 11,600,000 -

Movement of guarantees given to related parties

(Amount in Rs.)

S. Balance as at Given during No. Particulars 31 March 2014 the year

i) Minda KTSN Plastic Solutions 1,275,062,985 - GmbH & Co. KG, Germany

ii) Minda SAI Limited 600,000,000 -

iii) Minda Furukawa Electric - 590,990,000 Private Limited

iv) Minda Management Services - 30,000,000 Limited

v) Riddi Techauto Private Limited - 11,600,000

S. Settled / adjusted Balance as at No. Particulars during the year 31 March 2015

i) Minda KTSN Plastic Solutions 244,775,709 1,030,287,276 GmbH & Co. KG, Germany

ii) Minda SAI Limited - 600,000,000

iii) Minda Furukawa Electric - 590,990,000 Private Limited

iv) Minda Management Services - 30,000,000 Limited

v) Riddi Techauto Private Limited - 11,600,000

S. Purpose of No. Particulars Guarantees

i) Minda KTSN Plastic Solutions Working GmbH & Co. KG, Germany capital requirement ii) Minda SAI Limited

iii) Minda Furukawa Electric Private Limited

iv) Minda Management Services Limited

v) Riddi Techauto Private Limited

10 RELATED PARTY DISCLOSURES AS REQUIRED UNDER ACCOUNTING STANDARD (AS) - 18 "RELATED PARTY DISCLOSURE":

A) Related parties and nature of related party relationship with whom transactions have taken place during the year

a) Related parties and nature of related party relationships where control exists

Description of relationship Name of the party

Subsidiary (including step down subsidiaries) Minda SAI Limited, India Minda Europe B.V, Netherlands Minda Management Services Limited, India Minda KTSN Plastic Solutions GmbH & Co.KG, Germany KTSN Kunststofftechnik Sachsen Beteiligungs, Germany Minda Automotive Solutions Limited, India P T Minda Automotive, Indonesia (note 1) Minda Vietnam Automotive Co. Ltd., Vietnam (note 1)

P T Minda Automotive Trading, Indonesia (note 1) Almighty International Pte Limited, Singapore (note 1) Minda Furukawa Electric Private Limited, India (note 2) Minda Schenk Plastic Solutions S.p. Z o.o. Poland Minda KTSN Plastic Solutions S.r.o, Czech Republic Spark Minda Foundation

b) Key Managerial Personnel Mr. Ashok Minda - Chairman Mr. Sudhir Kashyap - Executive Director and CEO

c) Enterprise Minda Capital Limited, India in which Minda Industries Limited, India directors of Minda S.M. Technocast Limited, India the Company Minda Silca Engineering Limited, India and their Minda Stoneridge Instruments Limited, India relatives are Dorset Kaba Security Systems Private Limited, India able to Mars Industries Private Limited, India exercise Minda Spectrum Advisory Limited, India significant Tuff Engineering Private Limited influence:

d) Associates Minda Vast Access Systems Private Limited (formerly known Minda Valeo Security Systems Private Limited, India (note 3) Mayank Auto Engineers Private Limited, India

11 During the previous year, one of the Company''s subsidiary, Minda SAI Limited had acquired 100% stake in Almighty International Pte Limited, Singapore w.e.f. 14 February 2014. Further, pursuant to this acquision, Almighty International Pte Limited, Singapore including its step down subsidiaries viz. Minda Vietnam Automotive Co. Limited, Vietnam, PT Minda Automotive, Indonesia and P T Minda Automotive Trading, Indonesia have become subsidiaries of the Company.

12 During the previous year, the Company had acquired 49% stake in Minda Furukawa Electric Private Limited w.e.f 1 February 2014. The Company further acquired an additional 2% shareholding of Minda Furukawa Electric Private Limited during the current year. Consequent to this acquisition, Minda Furukawa Electric Private Limited has become a subsidiary of the Company with effect from 1 October 2014. Before this date, the Company was a joint venture partner in Minda Furukawa Electric Private Limited. The disclosure of transactions have been accordingly categorised as transactions with a subsidiary.

13 During the previous year, one of the Company''s subsidiary had acquired a 50% stake in Minda Vast Access Systems Private Limited (formerly known as Minda Valeo Security Systems Private Limited, w.e.f. 18 February 2014. Pursuant to this acquisition, Minda Valeo Security Systems Private Limited had become an associate of the Company''s subsidiary.

14 The Company had acquired 49% interest in Minda Furukawa Electric Private Limited on 1 February, 2014 . Minda Furukawa Electric Private Limited is a joint venture between Minda Corporation Limited and Furukawa Electric Company Limited and Furukawa Automotive Parts Inc of Japan engaged in manufacturing of wiring hireness and components related to wiring hireness. Further during the year, the Company has acquired 2% stake in Minda Furukawa ElectricPrivateLimited.Pursuant to this acquisition, Minda Furukawa ElectricPrivateLimited has become a subsidiary of the Company with effect from 1 October 2014.

15 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

16 The Company operates only in one business segment i.e. manufacture of auto components / accessories from vari- ous locations in India. Further, in accordance with Accounting Standard 17 - ''Segment Reporting'', segment infor- mation has been given in the Consolidated Financial Statement of Minda Corporation Limited, and therefore, no separate disclosure on segment information is given in these financial statements.

17 The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts has been made in the books of account.


Mar 31, 2014

1.1.1 Accounting for leases

Operating leases- As a lessee

The Company has taken on lease, accommodation for factory, godowns for storage of inventories, offices and cars, with an option of renewal at the end of the lease term and escalation clause in a few cases. The leases are in the nature of cancellable operating leases. Lease rentals amounting to Rs.104,588,901 (previous year: Rs.97,056,594) in respect of such leases have been recognized in the statement of profit and loss for the year.

1.2 During the year, the Company has entered into an agreement to sell it's fixed assets pertaining to its facility at Pune, which manufactures plastic products. This agreement is subject to approval from its Board of Directors and subject to finalisation of the consideration to be arrived at on the basis of a valuation, however, at minimum of the net book value at 30th June 2014. The advance received from the other party amounting to Rs.1,500 lakhs has been shown as "advances received for sale of fixed assets" under other current liabilites.

2.1 EXCEPTIONAL ITEMS

During the year, the Company decided to dispose off certain fixed assets / other assets due to discontinuance of plating business with certain customers. As a result, the Company has recorded a loss on disposal of such assets amounting to Rs.225 lakhs (previous year Rs.233 lakhs). The exceptional items in the previous year represented expenses incurred by the Company in earlier periods in relation to potential business acquisitions. These amounts were charged off considering the elongated period with no substantial development on such acquisitions.

2.2 CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.9,703,363 (previous year Rs.43,220,800).

2.3 CONTINGENT LIABILITIES

(Amount in Rs)

As at As at 31 March 2014 31 March 2013

Claims against the Company not acknowledged as debts

a) Custom duty 161,776,450 5,512,848

b) Sales tax/ VAT 1,466,749 29,865,733

c) Excise duty 8,692,913 8,692,913

Others

Corporate guarantees given by the Company 1,875,062,985 1,386,552,070

2.4 RELATED PARTY DISCLOSURES AS REQUIRED UNDER ACCOUNTING STANDARD (AS) - 18 "RELATED PARTY DISCLOSURE": Related parties and nature of related party relationship with whom transactions have taken place during the year a) Related parties and nature of related party relationships where control exists

Description of relationship

Subsidiary (including step down subsidiaries)

Name of the party

Minda SAI Limited, India

Minda Europe B.V., Netherlands

Minda Management Service Limited, India

Minda KTSN Plastic Solution GMBH & Co.KG, Germany

KTSN Kunststoffechnik Sachsen Beteiligung, Germany

Minda Automotive Solution Limited, India

P T Minda Automotive, Indonesia (note 1)

Minda Vietnam Automotive Co. Ltd., Vietnam (note 1)

P T Minda Automotive Trading, Indonesia (note 1) Almighty Internaltional PTE Limited, Singapore (note 1) Minda KTSN Plastic & Tooling Solutions Sp.Z.O.O. Poland (Formerly known as Minda Schenk Plastic Solutions SpZ.O.O. Poland)

b) Key Managerial Personnel

Mr. Ashok Minda - Chairman

Mr. Sudhir Kashyap - Executive Director and CEO

Mr. Jeevan Mahaldar - Executive Director and CEO (note 5)

c) Enterprise in which directors of the Company and

their relatives are able to exercise significant influence:

Minda Capital Limited, India

Minda Industries Limited, India

Minda International Limited, India

Minda S.M. Technocast Limited, India

Minda Silca Engineering Limited, India

Minda Stoneridge Instruments Limited, India

Dorset Kaba Security Systems Private Limited, India

Mars Industries Limited, India

Jeevan Mahaldar HUF (note 5)

Minda Spectrum Advisory Limited, India

d) Joint venture

Minda Furukawa Electric Private Limited, India (note 2)

e) Associates

Minda Valeo Security System Private Limited, India (note 3 Mayank Auto Engineers Private Limited, India (note 4) Minda Schenk Plastic Solutions GmbH (LLP), Germany (note 4)

Minda Schenk Plastic Solutions S.R.O. Czech Republic (note 4)

f) Relatives of key managerial personnel

Mrs Renu Mahaldar (note 5)

Note 1 During the current year, one of the Company's subsidiary, Minda SAI Limited has acquired 100% stake in Almighty International PTE Limited, Singapore w.e.f. 14 February 2014. Further, pursuant to this acquisition, Almighty International PTE Limited, Singapore including its step down subsidiaries viz. Minda Vietnam Automotive Co. Limited, Vietnam, PT Minda Automotive, Indonesia and P T Minda Automotive Trading, Indonesia have become subsidiaries of the Company.

Note 2 The Company has acquired 49% stake in Minda Furukawa Electric Private Limited w.e.f 1 February 2014. Further, pursuant to this acquisition, the Company has become a joint venture partner in Minda Furukawa Electric Private Limited. Before this date, Minda Furukawa Electric Priave Limited was an enterprise in which directors of the Company and their relatives are able to exercise significant influence. For the sake of convenience this entity has been shown under Joint venture, whereas till 31.03.2013 it was shown under enterprises in which directors of the Company and their relatives are able to exercise significant influence.

Note 3 During the current year, one of the Company's subsidiary has acquired a 50% stake in Minda Valeo Security Systems Private Limited, w.e.f. 18 February 2014. Pursuant to this acquisition, Minda Valeo Security Systems Private Limited has become an associate of the Company's subsidiary. Before this date Minda Valeo Security Systems Private Limited was an enterprise in which directors of the Company and their relatives are able to exercise significant influence. For the sake of convenience this entity had been shown under Associates, whereas till 31.03.2013 it was shown under enterprises in which directors of the Company and their relatives are able to exercise significant influence.

Note 4 During the year, two of the Company's subsidiaries disposed of their investment in the Company's step down subsidiary. Pursuant to this Mayank Auto Engineers Private Limited along with its subsidiaries Minda Schenk Plastic Solutions Gmbh (LLP), Germany and Minda Schenk Plastic Solutions S.R.O. Czech Republic has become enterprise in which directors of the Company and their relatives are able to exercise significant influence w.e.f 1 April 2013. The same were appearing under "Subsidiaries" untill 31 March 2013. For the sake of convenience this entity had been shown under associates, whereas till 31.03.2013 it was shown under Subsidiaries.

Note 5 Mr Jeevan Mahaldar (executive director and CEO) has resigned w.e.f. 01.04.2013. Pursuant to this, he is no more Key Managerial Personnel in the Company and Jeevan Mahaldar (HUF) is no more an enterprise in which directors of the Company and their relatives are able to exercise significant influence and Mrs Renu Mahaldar is no more a relative of key mangerial personnel.

2.5 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its transactions with the associated enterprises are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

2.6 The Company operates only in one business segment i.e. manufacture of auto components / accessories from various locations in India. Further, in accordance with Accounting Standard 17 - 'Segment Reporting', segment information has been given in the Consolidated Financial Statement of Minda Corporation Limited, and therefore, no separate disclosure on segment information is given in these financial statements.


Mar 31, 2013

1.1 EXCEPTIONAL ITEMS

In the previous periods, the Company had incurred expenditure amounting to Rs.233 lakhs (including Rs.158 lakhs jointly with other party) in respect of potential business acquisitions and pending recovery/ capitalisation along with cost of investments. However, considering the elongated period with no substantial development on such potential respective acquisitions, the management considered it prudent to charge off these expenses in this year.

1.2 CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.43,220,800 (previous year Rs.104,937,927).

1.3 CONTINGENT LIABILITIES

(Amount in Rs.)

Particulars As at As at 31 March 2013 31 March 2012

Claims against the Company not acknowledged as debts

a) Custom duty 5,512,848 32,048,441

b) Sales tax/ VAT 29,865,733 7,688,185

c) Excise duty 8,692,913 8,692,913

Others

a) Corporate guarantees given by the Company 1,386,552,070 569,455,526

b) Bills of exchange discounted under irrevocable letters of credit 68,237,716

1.4 UNHEDGED FOREIGN CURRENCY EXPOSURE

a) Derivative outstanding as at balance sheet date

Forward contracts in respect of foreign currency outstanding as at 31 March 2013 is Nil (Previous year US $ 600,000 equivalent to Rs.30,522,000) to hedge the foreign currency exposure for amount receivable against the export sales proceeds.

b) Particulars of unhedged foreign currency exposure as at the reporting date

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise is as follows:

1.5 The Company operates only in one business segment i.e. manufacture of auto components/accessories from various locations in India. Further, in accordance with Accounting Standard 17 - ''Segment Reporting'', segment information has been given in the Consolidated Financial Statement of Minda Corporation Limited, and therefore, no separate disclosure on segment information is given in these financial statement.


Mar 31, 2012

1.1.1 Rights, preferences and restrictions attached to each class of shares

a) Equity shares of Rs.10/- each fully paid up

The Company has one class of equity shares having a par value of Rs.10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Further, certain investors ("Investors") have "Anti dilution rights" i.e. right to further subscription and price protection, ensuring that, in the event of finalisation of the terms of sale of additional shares, the Company shall (as per the procedure set out in the Articles) offer the additional shares on the finalized terms and conditions to the investors and in the event that the Company issues any additional equity shares at a price less than the Investor acquisition cost or have or permit an FPO, at such lower price, then either the Company or promoters shall transfer such number of equity shares (as per the procedures set out in the Articles) at either no additional consideration or at the lowest possible consideration permitted under applicable law that shall be necessary to ensure that in a revised investor acquisition cost per Investor that shall be equal or lower than the price at which the additional shares are proposed to be issued. Such investors also have "pre emptive rights" wherein any member of the promoter group shall, before selling, transferring or otherwise disposing of any of its shares to a bona fide independent third party purchaser, first give notice to the Investors and each investor shall have the right (but not the obligation) to serve on the transferor a pre-emption notice requiring the transferor to transfer to the purchaser (as per the procedures set out in the articles), or to any person nominated by the purchaser, some or all of the sale shares at the sale price.

Each such investor shall also have the Tag-along right (subject to the other provisions of Articles and such rights as mentioned above) but not the obligation to require the transferor to cause the transferee in a transfer of equity shares to purchase from such investor, for the same consideration per equity share and upon the same terms and conditions as are to be paid and given to the transferor.

562,500 and 267,092 equity shares allotted on preferential basis to the investors and Minda Corporation Limited Employees Stock Option Scheme Trust (MCL ESOS Trust) on 3 November 2011 and 1 November 2011 respectively are locked in for a period of one year from the date of allotment.

b) 0.001% cumulative redeemable preference shares of Rs.800/- each fully paid up

The Company has 240,000 cumulative redeemable preference shares of Rs.800/- each. The shares carry right of fixed preferential dividend at a rate of 0.001%. The holders of these share do not have the right to vote and are compulsorily redeemable at par on or before the expiry of 20 years from the date of allotment. The dividend on the shares shall be cumulated and any unpaid dividend shall be added to the amount payable as dividend in the following year and no dividend can be paid on equity shares until the entire backlog of unpaid dividends on these shares is cleared. In the event of liquidation, these share holders are entitled to get their capital after satisfaction of dues for secured creditors, but they get preference over equity share capital.

1.1.2 Issue of shares to Minda Corporation Limited Employees' Stock Option Scheme

Pursuant to the Board of Director's approval in Board meeting held on 29 September 2011, the Company has constituted a trust under the name ''Minda Corporation Limited Employee Stock Option Scheme Trust'' (MCL ESOS Trust), with the objective of acquiring and holding of shares, warrants or other securities of the Company for the purpose of implementing the Company's ESOP Scheme. The Company has contributed a sum of Rs.1,00,000/- towards initial trust fund and later on advanced a sum or Rs.133,546,000/- to fund the purchase of Company's equity shares by MCL ESOS trust. Later in the year, the Company had issued and allotted, 267,092 equity shares of the face value Rs.10/- each at the premium of Rs.490/- per equity share to the MCL ESOS Trust, as approved in the Extra ordinary general meeting dated 24 October 2011. Further, the Company has issued bonus shares in proportion of one equity share for one share held on 29 March 2012, as decided in Extra ordinary general meeting held on 16 March 2012. In accordance with the guidance note on "Accounting for Employee Share-based Payments" issued by the ICAI, the Company has reduced the amount of share capital consideration (including share premium) received from MCL ESOS trust for presentation purposes, with a corresponding reduction in advance to MCL ESOS trust.

1.2.1 Finance Lease- As a lessee

The Company has taken an ERP software and certain plant and equipment under the finance lease arrangement. The lease term of these assets are 3 and 5 years respectively. The lease term is renewable for a further period of 3 and 5 years respectively, at the option of lessee.

1.2.2 Employee Benefits

a) Defined contribution plans

The Company's employee provident fund and Employee's state insurance schemes are defined contribution plans. The following amounts have been recognised as expense for the year and shown under Employee benefits expense in note 2.24.

b) Defined benefit plans-Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity as a defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested period of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India by whom the plan assets are maintained.

c) Defined Benefit Plans-Compensated absence

The Company operates compensated absences plan, where in every employee is entitled to the benefit as per the policy of the Company in this regard. The salary for calculation of earned leave is last drawn salary. The same is payable during the service, early retirement, withdrawal of scheme, resignation by employee and upon death of employee.

An actuarial valuation of Compensated absence has been carried out by an independent actuary on the basis of the following assumptions.

1.3.1 Operating Lease- As a lessor

The Company has leased (cancellable) some of its premises and fixed assets to a third party under a fixed lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2012 and 31 March 2011 aggregate to Rs.1,824,000 and Rs.1,824,000 respectively.

1.3.2 A ccountin g for Leases

Operating leases- As a lessee

The Company has taken on lease accommodation for factory, godowns for storage of inventories, offices and cars, with an option of renewal at the end of the lease term and escalation clause in a few cases. The leases are in the nature of both cancellable and non cancellable operating leases. Lease rentals amounting to Rs.95,904,667/- (previous year: Rs.100,364,661/-) in respect of such leases have been recognized in the statement of profit and loss for the year.

1.4 CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.104,937,927/- (Previous year Rs.33,875,661/-).

1.5 CONTINGENT LIABILITIES

(Amount in Rs.)

Particulars As at As at 31 March 2012 31 March 2011

Claims against the Company not acknowledged as debts

a) Custom duty 32,048,441 25,963,702

b) Corporate guarantees given by the Company 569,455,526 274,751,252

c) Bills of exchange discounted under irrevocable letters of credit 68,237,716 160,256,603

d) Sales tax/ VAT 7,688,185 1,541,015

e) Excise duty 8,692,913 8,692,913

1.6 UNHEDGED FOREIGN CURRENCY EXPOSURE

a) Derivative outstanding as at balance sheet date

Forward contracts in respect of foreign currency outstanding as at 31 March 2012 is US $ 6,00,000 equivalent to Rs.30,522,000/- (Previous year Nil) to hedge the foreign currency exposure for amount receivable against the export sales proceeds.

The above does not include any foreign currency exposures from investment in body corporate outside india, which as treated as non- intergal in nature.

1.7 The Company operates only in one business segment i.e. manufacture of auto components/accessories from various locations in India. Accordingly, the disclosures for primary segment and secondary segment as specified under Accounting Standard 17 - 'Segment Reporting' prescribed by the Companies (Accounting Standards) Rules, 2006 are not applicable to the Company.

1.8 The financial statements for the year ended 31 March 2012 have been prepared considering changes pursuant to revised schedule VI to the Companies Act, 1956. Accordingly, the previous years figures have also been reclassified to conform to the current year's classification.

1.9 The previous year figures have been audited by another firm of chartered accountants.


Mar 31, 2011

1. Commitments and Contingencies

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.338.76 Lacs (Previous year Rs.138.65 Lacs).

b) (i) No forward contracts in respect of foreign currency is outstanding as at March 31, 2011 (Previous year US $ 10,00,000 equivalent to Rs.4,57,10,000) to hedge the foreign currency exposure for payments to be made against working capital loans.

(ii) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise is as follows:

c) Export obligations to be undertaken by the Company under EPCG scheme in the subsequent years to the extent unexecuted is Rs.1,112.73 Lacs (Previous year Rs.1,232.18 Lacs).

d) Guarantees provided by the company aggregate to Rs.2,747.54 Lacs (Previous year Rs.504.96 Lacs).

e) Bills of exchange discounted under irrevocable letters of credit aggregate to Rs.1602.55 Lacs (Previous year Rs.1,383.41 lacs)

f) Letters of credit outstanding aggregate to Rs.34.40 Lacs (Previous year Rs.118.39 Lacs).

g) Demand for income tax aggregating to Rs.138.81 Lacs for the assessment year 2003-04, 2007-08, 2008-09 is disputed by the company against which the company has preferred an appeal. Out of the above, the company has deposited Rs.124.17 Lacs.

h) Demand for sales tax aggregating to Rs.15.41 Lacsfor the financial year 1998-99, 2001-02, 2005-06 is disputed by the company against which the company has preferred an appeal. Out of the above, the company has deposited Rs.9.46 Lacs.

i) Penalty and Interest demand for excise duty aggregating to Rs.86.93 Lacs (Previous year Rs.87.93 Lacs) for the financial years 2006-07 is disputed by the company against which the company has preferred an appeal. Out of the above, the company has deposited Rs.Nil (Previous Year Rs.Nil).

j) Warranties

TThe company warrants that its products will perform in all material respects in accordance with the company's standard specifications for the warranty period. Accordingly based on specific warranties, claims and claim history the company provides for warranty claims. The activity in the provision for warranty costs is as follows:

2. Leases

The company has not executed any non-cancelable operating leases.

The company is a lessee under various operating leases. Rental expense for operating leases for the years ended March 31, 2011 and 2010 was Rs.10,03,64,661 and Rs.6,49,94,277 respectively.

The company has leased some of its premises and some of its fixed assets to a third party under a fixed lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended March 31, 2011 and March 31, 2010 aggregate to Rs.18,24,000 and Rs.18,24,000 respectively.

3. Managerial Remuneration

Managerial remuneration under section 198 of the Companies Act, 1956 paid to the managing directors of the company is as follows:

The above remuneration does not include the accrued amount of leave encashment and gratuity as at year end as the company determines this amount through actuarial valuation and separate amount to directors is not ascertainable.

4. Related Party Transactions

In the normal course of business, the Company enters into transactions with affiliated companies and its parent and key managem personnel. The names of related parties of the Company as required to be disclosed under Accounting Standard 18 is as follow

a) Subsidiaries : Minda Europe B.V., Netherland.

Minda KTSN Plastic Solutions GmbH & Co KG, Germany

Minda SAI Ltd.

Mayank Auto Enginees Pvt. Ltd.

b) Key Managerial Personnel : Mr. Ashok Minda-Chairman

Mr. Jeevan Mahaldar - Managing Director

c) Enterprise in which directors of : Minda Valeo Security Systems Pvt. Ltd. the Company and their relatives Minda Stoneridge Instruments Ltd. exercises significant influence Mindarika Pvt. Ltd.

Mayank Auto Enginees Pvt. Ltd.

Minda S.M. Technocast Ltd.

Minda Silca Engineering Ltd.

Minda Industries Ltd.

Minda Furukawa Electric Pvt. Ltd.

Minda International Ltd.

Minda Capital Ltd.

Minda Management Services Ltd.

Minda Autocare Ltd.

5. Earnings per Share

The following is a computation of earnings per share and a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share.

6. Income Taxes

IIn accordance with Accounting Standard 22 on accounting for taxes on income the deferred tax liability of Rs.126.64 Lacs for the current year has been recognised in the profit and loss account. The tax effect of significant timing differences as of March 31, 2011 that reverses in one or more subsequent years gave rise to the following net deferred tax liabilities as at March 31, 2011:

* In view of various types of components as per specification of customers and being below ten percent of total value of consumption, it is not possible to provide quantitative details of each type of component.

** The total value of each item is below ten percent of total value of consumption; hence no separate quantitative detail is being given.

 
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