You are on page 1of 55

PROJECT REPORT

Preparation of Working Capital Renewal of


Application for MINDA INDUSTRIES LTD
through CANARA BANK
Submitted in partial fulfilment of Post Graduate Diploma in Business
Management
2012 -2014

Name Akansha Saxena


Registration No 0821003151

GHAZIABAD

Page5

INSTITUTE OF MANAGEMENT & TECHNOLOGY

ACKNOWLEDGEMENT
On completion of this project, I would like to sincerely thank my guide
Mr. Jagmohan Singh for his guidance and assistance which has been
of immense value to me. Without his support and guidance, this project
would not have been possible
I also wish to thank all my fellow classmates, housemates and friends
who made the long nights in the system labs more appreciable, and to
all the people I met this year for making this year so rewarding.
Finally I am very grateful to my parents for supporting me morally and
financially for this year at IMT, so that I am now able to begin my
professional life in the very best conditions.

EXECUTIVE SUMMARY

Page5

(AKANSHA SAXENA)

In the Year 1958, a visionary Mr. S.L. Minda laid the foundation of Minda
group, He like any other entrepreneur, started small garage kind operation
with only five employees. He started supplying Ammeters to Enfield India
(Motorcycles).
Later, Mr. Nirmal K. Minda expanded the single location &
product to multi locations & products.
Presently Minda Group has following automotive products:
2/3 Wheeler & Off Road Switches
Horns
4W switches
Lighting
CNG/LPG Alternate Fuel Kits
Minda Group is manufacturing world class automotive components with
stringent quality controls and has become the most favored vendor of
automotive components to Indian OEM's.
Minda has developed substantial export market and are supplying
our products to global OEM's & Replacement markets. It has strong presence
in South East Asia, Europe and USA. Minda Group is actively studying other
exports markets for future growth.
In business, many companies spend most of their time concentrating on
increasing their current profits. They try to increase the profits by either
reducing the cost of production or by controlling the expenses of the
company. However, too few companies worry very much about managing
another equally important area, the area of working capital management.

Page5

Working capital, also known as net current assets, is the excess of current
assets over current liabilities. Existence of working capital is imperative in
any firm. A large amount of funds are invested on fixed assets that can be
used at an optimum level only if supported be sufficient working capital. If
the level of working capital required by the firm is not properly maintained
then it results in unnecessary blocking of funds. Insufficient working capital,
on the other hand, put different hindrances in smooth working of the firm.
Therefore, the working capital management needs attention of all the
financial managers.

CONTENTS
Chapter
Page no.
EXECUTIVE SUMMARY
1.
6 - 12

TOPIC

INTRODUCTION

OF

THE

COMPANY

Introduction of the Company


Company Potential
Business Units
Business Divisions & Product Ranges
Competitor
Collaborations
Milestones
Award & Recognitions

3.
21 - 28
3.1
3.2
3.3
3.4
3.5
3.6
3.7

THE

Working Capital
Working Capital Management
Why Companies Require Working Capital
How to Calculate Working Capital
Information Required while Renewal/Issuance of Working Capital

2.
13 - 20
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8

OF

WHAT

MINDS

SAYS

ABOUT

ITSELF

The World of Spark Minda


Flagship Company of Minda Industry
Adding Spark to Value Creation
New Structure Consolidating to Value
Confidence of Vibrant Brand
Rich Culture of Focus & Innovation
Corporate Social Responsibility
Page5

1.1
1.2
1.3
1.4
1.5

INTRODUCTION

4.
29 - 33
4.1
4.2
4.3
4.4
4.5
4.6

METHODOLOGY

Objectives of the Study


Research Design & Survey Design
Limitation of Research
Data Analysis
Research Methodology
Research Design

5.
34 - 41
5.1
5.2
5.3
5.4
5.5

ANALYSIS

Audited Balance Sheet as on 31 March 2013


Audited Profit & Loss Account as on 31 March 2013
Business Ratios
Requirement of Working Capital Calculation
Other Financial Highlights

6.
42 - 46
6.1
6.2
6.3
6.4

FINANCIAL

CORPORATE

GOVERNANCE

REPORT

Corporate Governance Report


Credit Monitoring Arrangements
Bank Finances & Margin Money
SWOT Analysis

7.
47 - 48

CONCLUSIONS

&

LERANINGS

7.1 Conclusions
7.2 Learning

Page5

BIBLIOGRAPHY

INTRODUCTION OF THE TOPIC

Page5

1.

1.1 WORKING CAPITAL


Working capital (abbreviated WC) is a financial metric which represents
operating liquidity available to a business, organization or other entity,
including governmental entity. Along with fixed assets such as plant and
equipment, working capital is considered a part of operating capital. Net
working capital is calculated as current assets minus current liabilities. It is a
derivation of working capital that is commonly used in valuation techniques
such as DCFs. If current assets are less than current liabilities, an entity has a
working capital deficiency, also called a working capital deficit.
A company can be endowed with assets and profitability but short of liquidity
if its assets cannot readily be converted into cash. Positive working capital is
required to ensure that a firm is able to continue its operations and that it
has sufficient funds to satisfy both maturing short-term debt and upcoming
operational expenses. The management of working capital involves
managing inventories, accounts receivable and payable, and cash.
About Working Capital
Working Capital, also called net current assets, is the excess of current
assets over current liabilities. All organizations have to carry working capital
in one form or the other. The effective management of working capital is
important from the point of view of both liquidity and profitability. Poor
management of working capital means that funds are unnecessarily tied up
in idle assets hence reducing the liquidity and also reducing the ability to
invest in productive assets such as plant and machinery, so affecting the
profitability.
Working Capital is the name given to the "short-term" area of the balance
sheet. Working Capital includes four balance sheet items:

Stock - stocks of raw materials, partly completed production and


finished goods awaiting sale
Debtors - amounts owed to the company, mainly from customers in
respect of sales made on credit
Creditors - amounts owed BY the company, mainly to suppliers of raw
materials, services (electricity, water, telephone, rent, etc.) but also,
possibly, unpaid tax demands, unpaid dividends and other items
Cash - bank balances, cash holdings and short term investments
Page5

Working Capital includes the current assets and current liabilities areas of the
balance sheet.
An Example of Working Capital
Imagine that the following figures have been extracted from a company's
balance sheet:
TOTAL CURRENT ASSETS
TOTAL CURRENT LIABILITIES
Stocks
15,000,000
Creditors
2,350,000
Debtors
25,000,000
Cash
2,750,000
Total
Current 42,750,000
Total
Current 2,350,000
Assets
Liabilities
Net Working Capital = Total Current Assets Total Current Liabilities
Net Working Capital = 42,750,000 2,350,000 = 39,750,000
Figures Talk
Certainly, there are stocks but, surely, a company needs stocks if it is
to run its business.

Certainly, there are debtors but, surely, that is just a consequence of


making credit sales.

There does not seem to be much cash available so, maybe, the
directors should be considering taking a loan or issuing more shares.

There are creditors, but it does take the accounts department a little
time to process incoming invoices.

That is probably the total amount of analysis that many companies


would make.

Decision Criterion
By definition, working capital management entails short-term decisions
generally, relating to the next one-year periodwhich is "reversible". These
decisions are therefore not taken on the same basis as capital-investment

Page5

1.2 WORKING CAPITAL MANAGEMENT


Decisions relating to working capital and short term financing are referred to
as working capital management. These involve managing the relationship
between a firm's short-term assets and its short-term liabilities. The goal of
working capital management is to ensure that the firm is able to continue its
operations and that it has sufficient cash flow to satisfy both maturing shortterm debt and upcoming operational expenses.

decisions (NPV or related, as above); rather, they will be based on cash


flows, or profitability, or both.

One measure of cash flow is provided by the cash conversion cycle


the net number of days from the outlay of cash for raw material to
receiving payment from the customer. As a management tool, this
metric makes explicit the inter-relatedness of decisions relating to
inventories, accounts receivable and payable, and cash. Because this
number effectively corresponds to the time that the firm's cash is tied
up in operations and unavailable for other activities, management
generally aims at a low net count.

In this context, the most useful measure of profitability is return on


capital (ROC). The result is shown as a percentage, determined by
dividing relevant income for the 12 months by capital employed; return
on equity (ROE) shows this result for the firm's shareholders. Firm
value is enhanced when, and if, the return on capital, which results
from working-capital management, exceeds the cost of capital, which
results from capital investment decisions as above. ROC measures are
therefore useful as a management tool, in that they link short-term
policy with long-term decision making. See economic value added
(EVA).

Credit policy of the firm: Another factor affecting working capital


management is credit policy of the firm. It includes buying of raw
material and selling of finished goods either in cash or on credit. This
affects the cash conversion cycle.

Cash management- Identify the cash balance which allows for the
business to meet day to day expenses, but reduces cash holding costs.

Inventory management- Identify the level of inventory which allows for


uninterrupted production but reduces the investment in raw materials and minimizes reordering costs - and hence increases cash flow.
Besides this, the lead times in production should be lowered to reduce
Work in Process (WIP) and similarly, the Finished Goods should be kept
on as low level as possible to avoid over production - see Supply chain

Page5

Management of Working Capital


Guided by the above criteria, management will use a combination of policies
and techniques for the management of working capital. The policies aim at
managing the current assets (generally cash and cash equivalents,
inventories and debtors) and the short term financing, such that cash flows
and returns are acceptable.

management; Just In Time (JIT); Economic order quantity (EOQ);


Economic quantity

Debtors management- Identify the appropriate credit policy, i.e. credit


terms which will attract customers, such that any impact on cash flows
and the cash conversion cycle will be offset by increased revenue and
hence Return on Capital (or vice versa); see Discounts and allowances.

Short term financing- Identify the appropriate source of financing,


given the cash conversion cycle: the inventory is ideally financed by
credit granted by the supplier; however, it may be necessary to utilize
a bank loan (or overdraft), or to "convert debtors to cash" through
"factoring".

1.3 WHY COMPANY REQUIRE WORKING CAPITAL


Different industries have different optimum working capital profiles,
reflecting their methods of doing business and what they are selling.

Businesses with a lot of cash sales and few credit sales should have
minimal trade debtors. Supermarkets are good examples of such
businesses;

Businesses that exist to trade in completed products will only have


finished goods in stock. Compare this with manufacturers who will also
have to maintain stocks of raw materials and work-in-progress.

Some finished goods, notably foodstuffs, have to be sold within a


limited period because of their perishable nature.
Larger companies may be able to use their bargaining strength as
customers to obtain more favorable, extended credit terms from
suppliers. By contrast, smaller companies, particularly those that have
recently started trading (and do not have a track record of credit
worthiness) may be required to pay their suppliers immediately.

Some businesses will receive their monies at certain times of the year,
although they may incur expenses throughout the year at a fairly
consistent level. This is often known as seasonality of cash flow. For
example, travel agents have peak sales in the weeks immediately
following Christmas.

1.4 HOW TO CALCULATE WORKING CAPITAL


Working Capital is the easiest of all the balance sheet calculations. Here's the
formula.
Current Assets - Current Liabilities = Working Capital

Page5

One of the main advantages of looking at the working capital position is


being able to foresee any financial difficulties that may arise. Even a
business that has billions of dollars in fixed assets will quickly find itself in
bankruptcy court if it can't pay its monthly bills. Under the best
circumstances, poor working capital leads to financial pressure on a
company, increased borrowing, and late payments to creditor - all of which
result in a lower credit rating. A lower credit rating means banks charge a
higher interest rate, which can cost a corporation a lot of money over time.
Working capital is one of the most difficult financial concepts for the smallbusiness owner to understand. In fact, the term means a lot of different
things to a lot of different people. By definition, working capital is the amount
by which current assets exceed current liabilities. However, if you simply run
this calculation each period to try to analyze working capital, you won't
accomplish much in figuring out what your working capital needs are and
how to meet them.
A more useful tool for determining your working capital needs is the
operating cycle. The operating cycle analyzes the accounts receivable,
inventory and accounts payable cycles in terms of days. In other words,
accounts receivable are analyzed by the average number of days it takes to
collect an account. Inventory is analyzed by the average number of days it
takes to turn over the sale of a product (from the point it comes in your door
to the point it is converted to cash or an account receivable). Accounts
payable are analyzed by the average number of days it takes to pay a
supplier invoice.

Company Background Information


Year of incorporation
Company profile
Main business lines / divisions
Geographical spreads
Significant events like mergers / amalgamations

Page5

1.5 INFORMATION REQUIRED WHILE RENEWAL / ISSUANCE OF


WORKING CAPITAL
Promoter's Information
Name of promoters
Latest shareholding pattern of company
Composition of Board
Promoter education
Previous work experience
Membership of trade associations/posts held

Brief details of proposed mergers, de mergers ( if any )


Means of financing capital expenditure
Capital expenditure done in the past and proposed in the future

Companys Business Information


Segment wise sales breakup
Debtors outstanding as at March 31, 2013
Debtors outstanding as at Feb 28, 2013
Strengths / Weaknesses
Market share
Main Competitors
Terms of sale to customer
Terms of purchase from suppliers
Customer wise billing
Orders in hand as at March 01, 2013
Details of long term contracts for supply
Break up of exports sales if any

1.6 POINTS TO KEEP IN MIND WHILE RENEWAL / ISSUANCE OF


WORKING CAPITAL
The current assets and the current liabilities are classified as per the
RBI guidelines.
The minimum current ratio to be maintained is 1.33:1.
The estimates about the sales, current assets, current liabilities
excluding the bank borrowings, and networking capital should be
realistic.
The company should submit the quarterly operating statements.
The company should submit the copies of annual accounts regularly.
The company should comply with provisions of the selective credit
control and provisions of the Foreign Exchange Regulation Act, 1973, if
applicable.

Page5

Companys Financial Information


Annual reports for last two financial years
Actual Profit & Loss statement for the last financial year
Detailed Profit & Loss and Balance Sheet Estimates for FYE 31 March,
2012. Give reasons for projected movements and reasons for the same
Detailed Profit & Loss and Balance Sheet projections for FY 31 March,
2013
Details of Inter group companies and investments and exposures, if
any

Page5

2.

INTRODUCTION OF THE COMPANY

2.1 INTRODUCTION OF COMPANY


NK Minda Group Is India's Foremost Manufacturer of a Range of Automotive
Components, It Has an Annual Turnover of Rs.8.32 Billion (USD $ 205.36
Million). #It Is a Leading Supplier to Global Original Equipment
Manufacturers. #NK Minda Group Works With The Leading Auto Components
Specialists Globally, To Bring The Most Technologically Advanced Products To
Its Customers.

Minda Industries Limited is the flagship company of the Minda Group. It

Page5

NK MINDA Group is one of the leading global manufacturers of automobile


components and a leading supplier of proprietary automotive solutions to
Original Equipment Manufacturers (OEMs). For nearly five decades, N K
Minda Group has been supplying the automotive industry with innovative
engineered products that are efficient, safe, and responsive and enhance
comfort levels.

designs, develops and manufactures switches for 2/3 wheelers and off-road
vehicles. In addition, Minda Industries Limited manufactures batteries for
2/3/4 wheelers and off-road vehicles.
Minda Industries already enjoys more than 70% market share in the 2/3
wheeler segment in India and is amongst the top few globally.
Today, Minda Industries is over Rs. 4.51 billion (USD 111.45 million)
companies 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.
Minda Industries Limited has established 8 state of the art facilities spread
across the length & breadth of India and one in the ASEAN region and
employs more than 2800 people.
Manufacturing varied electrical components and catering to a diversified
group of automakers, Minda Industries, the flagship of the Minda group, is a
good bet in the auto components space. The company produces electric
switches for bikes, three-wheelers and off road vehicles, provides lighting
solutions fabricates auto-gas kits and makes automotive batteries. The group
also makes horns through a separate company, Minda Acoustic, which is in
the process of being amalgamated with Minda Industries.
At a time when the industry is battling a moderation in volumes, a focus on
the faster growing two- and three-wheeler segments and tractors and
presence in the alternative fuel solutions space, which has sizeable aftermarket sales, are positives for the company. The recent market turbulence
has seen the company's share price hit its one-year low. At the current price
of Rs. 179, the stock trades at about 8.5 times its trailing12- month earnings.
While the shares can be bought now, considering the volatile markets and
small cap status of the stock, only those with an appetite for risk and a
perspective of one year or more should invest.

Although the auto industry has witnessed a moderation in volumes in the


first few months of 2011-12 due to high inflation, fuel prices and interest
rates, the silver lining is that two-wheelers have so far been less impacted.

Page5

2.2 COMPANY POTENTIAL


Manufacturing brakes, gearshifts, handlebars and panel switches, Minda
Industries enjoys more than 70 per cent market share in supplies to the two
and three wheeler segments in India. The company also makes handlebar
grips and assembles handle bar systems for these vehicles and switches for
off roaders. In these divisions, it boasts of a clientele that includes Bajaj Auto,
Hero, TVS, Honda, Suzuki, Mahindra and TAFE.

For April-July 2011, two-wheeler volumes have grown by 16 per cent year on
year. A favorable demographic profile, increasing rural penetration,
replacement demand and a comparatively lower proportion of financed
purchases will continue to drive volume growth in the two-wheeler industry.
Moreover, the greater use of small commercial vehicles for last mile
connectivity under the hub and spoke model and the under-developed nature
of the public transport system also imply good prospects for three-wheeled
goods and passenger carriers. The company's well-entrenched presence in
these segments inspires confidence.
The group, through another private company, Mindarika, manufactures fourwheeler switches and is the largest in the country for the same. This
relationship with passenger car and commercial vehicle makers has helped
Minda Industries increase its content supplied per vehicle through its other
business divisions. Minda Industries offers lighting products such as head and
tail lamps, fog, indicator and high mounted stop lamps to cars, bikes and
tractors. The company has recently set up its own design and R&D center for
lamps. It also makes CNG/LPG kits for cars and three-wheelers, and
automotive batteries.
The batteries division faces stiff competition from bigger organized players
such as Exide and Amara Raja. However, given the rising prices of
conventional fuels such as petrol and diesel and the increased alternative
fuel offerings from manufacturers, what holds promise over the long-term, is
the manufacture of CNG/LPG kits.
The company is already a supplier of factory fitted kits to Maruti, Tata Motors
and Toyota. These kits also fuel Bajaj Auto's three-wheelers. Taking into
account the demand for conversion of existing petrol/diesel vehicles, it has
recently extended this product offering directly to the consumer, through its
authorized centres across Delhi, Haryana, Maharashtra and Gujarat, to begin
with.

A great journey always begins with a single step and MINDA group has come
a long way from a humble beginning in the year 1958 by Shri S.L. MINDA, our
Chairman. He started the garage kind of operations with 5 employees.
Minda Group started with supply of Ammeters to Bullet Motorcycles
manufactured by Enfield India.
The Minda Group has since grown to its present position with varied
product range and an intellectual capital strength of 2300 employees .

Page5

For the quarter ended June 2011, net sales grew by 26 per cent to Rs 240
crore and adjusted net profits, by 21 per cent to Rs 6.4 crore. Cost pressures
eroded EBITDA margins to 9.4 per cent as against 13 per cent in the June
2010 quarter.

Minda Group has been growing with more than 28 % CAGR and projected to
grow at 35 % CAGR in next three years
2.3 BUSINESS UNITS
S L Minda
Chairman

Nirmal K
Minda
MD

Minda TYC
Minda Industries

Ltd.

Automoti
ve Ltd.

Horn

Switch

Division

Division

Horns

Mindarika
Pvt. Ltd.

Minda Impco

Switch Masters

Ltd.

Ltd.

2/ 3 Wheeler
&

Automotive

4 Wheeler

Gaseous

Tractor

Lamps

Switches

Fuel Kits

Switches

Replace
ment
Market

ASEAN
Opera
tions

2.4 BUSINESS DIVISION & PRODUCT RANGES

Minda market for switches has grown beyond Indian markets and it is today
extended to major automobile giants globally and is successfully exporting to
the OEM's like Yamaha, Suzuki, Honda etc. in ASEAN region; Peugeot,
Piaggio, Domino, Sovenei, Cobo, Fiamm etc in European region; Torica in
Japan and Navistar, USA.
Minda Automotive switch business is organized in two different companies:

Page5

Switch Division
MINDA manufacture automotive switches of excellent quality. We design
these switches ergonomically, keeping in mind all the needs of customers.
Minda is now offering off the shelf switches to vehicle manufacturers. Minda
has developed almost complete range of switches for different types of
vehicles, and we are now supplying complete systems e.g. Handle Bar
Assembly to OEMs.

2W/3W and Off Road Vehicles switches - Minda Industries Limited and
4W switches - Minda Rika Pvt Ltd (Joint venture between Minda
Industries Limited and Tokai Rika Ltd., Japan).

Product Range
2/3 wheeler switches

Off Road
Switches

Combination Switches

Light Switches

Handle Bar Switches

Starter Switches

Brake Switches
Neutral switches
Modular switches
Lever Holder Assemblies

Blinker Switches
Horn Switches
Fuse Boxes
Brake Switches
Hazard Warning
Switches
Combination
switches

Side Stand switch


Self Cancellation Blinkers

4W Switches
Lever Combination
switches
Power Windows
Switches
Panel Window Switches
Blower & A/c Switches
HVAC Panel Assembly
Head Lamp Leveling
Head Lamp Dimmer
Lever Assy. Control
Mirror, Defogger,
Washer

Lighting Division
MINDA's Lighting Division is part of our flagship company i.e. Minda
Industries Limited. We have entered into a Joint venture with TYC Brother
Industrial Company, Taiwan for lighting products.

Minda was the pioneer company in offering new products in this area e.g.
Safety Triangle, High Mounted Stop Lamp. Minda has developed almost
complete range of lighting solutions for different types of vehicles i.e. 2/3
Wheelers, 4 Wheelers and Tractors.
Minda's market for its lighting
products has grown beyond the Indian market and presently we are
exporting to Asean countries and Europe.

Page5

Presently we have charted a comprehensive plan for expanding our Lighting


operations. Our plans are motivated by excellent response from our
customers, who are not only looking at Minda for quality products but
also need
cutting edge technology
products
in
this
area,
Are working on advance technologies in the area of Photometry, Multi Focal
Reflectors (MFR), and High Intensity Discharge Lights etc. We have also
developed our expertise in design capabilities using latest simulation
softwares e.g. Catia, Lucid etc. Minda
is
now
offering
various
concepts for rear
reflectors
to customers, thus enabling them to
choose their requirements, off the shelf.

Product Range
Automotive Lighting
Tail Lamps
Interior Lamps
Fog Lamps
Warning Triangle

Blinkers
High Mount Lamps
License Plate
Plough Lamps
Lamps

Head Lamps
Baggage Lamps

Front & Side Indicators

Horn Division
Minda Industries Limited, the flagship company of our Group has a large and
well established Automotive Horns Division.
MINDA
is a leading
supplier
of
Automotive Horns to Indian OEMs.
Minda horns have taken the leadership position because of their high
technology, durability and competitive pricing.
Company has also planned for Leadership in Asia and Global
Leadership in 2 Wheelers horns by 2007-08. We have technical agreement
with Fiamm, Italy and this has brought us in contact with World-class
practices of our partner.
Company has introduced Dia65 horn to meet customer's expectations. We
have established semi automatic Dia 70 (K 70) horn line with online testing,
which include automatic testing of sound quality, purity and frequency.
Company has some of the most advance development and test facilities in
our factory in Delhi. We have full-fledged acoustic tunnel, endurance test
facilities, weather ability test facilities etc., some of our R&D and test
capabilities are listed as follows:
Acoustic Spectrum Analyser with 2-meter anechoic tunnel.
Endurance chamber (for 24 horns) with programmable facility.
Resonance Frequency Tester.
Octave Band Analyser.
Sound level meters.
All type testing chambers of MINDA central lab.
Horn leakage testing system.
Horn waterproof testing system

2.5 COMPETITORS
Lamps
Autolite (India) Limited
Fiem Industries Limited
India Japan Lighting Limited

Page5

Lucas TVS limited


Lumax Industries Limited

Switch
Jay Ushin Limited
Lucas TVS limited
Sandhar Locking Devices Limited
Shutham Electric Limited
Premier Instruments & Controls Limited
Clutch Auto
Horns
Lucas TVS Limited
Nikko
Padmini Engineering Private Limited
Roots Industries Limited

Name of the
Company

Products

Mindarika Pvt.
Automotive
Ltd.
Switches
Minda Industries Automotive Horns
Ltd.
Minda Impco Ltd. Gaseous Fuel Kits
& Minda Impco
Tech. Ltd.
Minda TYC
Automotive Lamps
Automotive Ltd

2.7 MILESTONES
1958
Started with Ammeter production at Delhi with five
employees.
1980
Lighting division started at Delhi.
1987
Formation of Minda Switch Auto Ltd. at Noida.
1990
Collaboration with Zadi, Italy.
1991
First T.A.A with Tokai Rika, Japan for OPS & Other switches
1992
Incorporated as Public Limited Company.
1993
Horn division started at Delhi.
1994
Joint Venture with Tokairika & Sumitomo Corporation, Japan.
1996
A with Shinchang Electri Co., Korea, for combination switches.

Page5

2.6 COLLABORATIONS
S.
Name of the
Type of
N
Collaborator
Collaboration
o.
1 Tokairika Co. Ltd,
Joint Venture
Japan
2
Fiamm, Italy
Technical
Assistance
3
Impco
Joint Venture
Technologies Inc.,
USA
4
TYC Brother
Technical
Industrial Co. Ltd,
Assistance
Taiwan

1996
1995
1996
1997
1998
1997
1998
1999
2000
2001
2001
2001
2001
2002
2001
2001
2003
2004

Mindarika received ISO 9001 certification.


Public issue released.
Approval as R&D centre for Ministry of Science & Technology
Mindarika received Marutis Best Performance vendor award.
Technical collaboration with Fiamm for Horn
Commercial production started in Mindarika at Manesar.
Technical collaboration with Seima, Italy for lighting.
Received Q.A. 9000 certification for Mindarika started.
Mindarika won 1st prize in Honda supplier quality circle
Won 1st prize in Honda supplier quality circle competition.
Won 1st prize in CII north region quality circle competition.
Started Minda Impco, a joint venture with Impco Technology
Technology Horn division got QS 9000 certification.
New switch division plant established at Pune
Established joint venture with TYC Brother Ind., Taiwan for
lighting.
Received TS 16949 certification for lighting division.
Received TS 16949 & ISO 14001 certification for Horn
division.
Received ISO 14001 & OHSAS 18001 certification for switch
division.

The Gold Award won by the Switch Division, Pune in Pune Divisional
Productivity Council competition held in December, 2010.

The Excellent in TPS and Distinguished Award in QC were won by


the Switch Division, Pune, in QCFI-NCQC competition held at
Vishakhapatnam in December, 2010.

Third Consolation Award was won by the Blow Moulding Division,


Bangalore in CII QC Competition held in November, 2010.

Manufacturing Excellence Award was won by the Lighting Division


from Eicher Group.

Direct on lines Supplies Award was won by the Lighting Division,


Sonepat from the International Tractors Ltd.

The Gold Award was won by Lighting Division, Manesar in QCFI held
in September, 2010.

Page5

2.8 AWARDS & RECOGINITION


During the year, the following awards have been received by the various
units of the Company.

The Vendor Performance - Gold Award was won by Lighting Division


from Maruti Suzuki India Ltd.

Second Prize was won by Lighting Division, Pune on QC Circles at the


23rd Regional Convention (CII) held in February, 2011 at Indore.

WHAT MINDA SAYS ABOUT THEM

Page5

3.

3.1 THE WORLD OF SPARK MINDA


Spark Minda, Ashok Minda Group, present in the Indian Automotive
Component Industry for more than 50 years, has been interspersed by a
number of technological innovations that have become industry standards.
Today, the Group is a leading manufacturer of automotive components with a
turnover of `3000 Crores ($545 Million) as at the end of Financial Year 201112 (FY 12). Present globally, the Group employs more than 12,000 people in
India & overseas.
The Groups' Companies are accredited with QS 9000, ISO-14001, and TS
Certifications. The Group is one of India's leading manufacturers of
automotive components under Safety, Security & Restraint Systems; Driver
Information & Telematics Systems; and Interior Systems as broad categories.
The Group caters to the auto-component needs of all major two, three, four
wheeler and off-road vehicle manufacturers in India & overseas. The Groups
products are well accepted and appreciated worldwide, both within OEMs
and after-market.
The Group recently adopted a new identity for itself Spark Minda.
Attributed with distinctive identity elements and characteristics, the Group's
new identity will establish Spark Minda as a progressive and dynamic global
automotive component player.
Vision
To be a Dynamic, Innovative and Profitable Global Automotive Organization
for emerging as the Preferred Supplier and Employer, to Create Value for all
Stakeholders
To continually enhance
Stakeholders value
Through global competitiveness

Page5

Mission

While contributing to society

Core

Values
Passion for Excellence
Nurture Talent, Competency & Willingness
Respect & Humility

Core Purpose
To be a happy, inspiring and proud place to work, setting benchmarks and
delivering products that give customers an edge in their businesses
3.2 FLAGSHIPS COMPANY OF MINDA INDUSTRIES
Minda Corporation Limited
Minda Corporation is the flagship Company of Spark Minda, Ashok Minda
Group. The Company is a diversified Automotive Components manufacturing
company with a product portfolio encompassing Mechanical & Electronic
Security Systems, Door Systems, and Electronic Controllers for Electric
Vehicles and Plastic Interiors for OEMs and After-markets across the globe.
The Company is one of the largest suppliers of Electronic & Mechanical
Security Systems for 2 wheeler, 3 wheeler and off-road vehicles to Indian
OEMs and exports about 20% of its products to USA, Europe and ASEAN
countries. Headquartered at Noida (UP), India, Minda Corporation is the
erstwhile Joint Venture with Huf Hlsbeck & Frst GmbH & Co. KG, Germany.
Minda Sai Limited
Minda Sai Limited (MSL) is one of the leading manufacturers of wide range of
Wiring Harnesses, Wiring Sets, Connectors, and Terminals & Wires. Located
at Noida (UP), India, MSL also provides solutions to all the verticals of
automotive world.

Minda SCHENK Plastic Solutions GmbH


Minda Schenk Plastic Solutions (MSPS), located at Esslingen, Germany,
specializes in manufacturing of high-quality plastic components for
automobiles and electrical appliances. MSPS is one of the key players in
Europe and has several prestigious clients including global giants like
Volkswagen and Mercedes. The Company owns 100% stake in Minda Schenk
Plastic Solutions, Czech Republic and Minda Schenk Plastic Solutions, Poland.

Page5

Minda KTSN Plastic Solutions GmbH & Co. KG


Minda KTSN Plastic Solutions (MKPS) has more than 50 years of experience in
development and production of automotive plastic parts and assemblies
including Air Ducts, Glove Box, Ash-Tray, Cup Holders etc. Located at
Dreadsen, Germany, MKPS is a supplier of interiors to automobile giants like
Volkswagen, Daimler, BMW and Audi.

Minda Automotive Solutions Limited


Minda Automotive Solutions Limited (MASL) is the after-market arm of Spark
Minda Group. MASL is the Group's specialized auto component distribution
and servicing Company with a distribution network spread across 91 cities in
India. Located at New Delhi, India, MASL was established in 1985 as Switch
Masters Limited. MASL is in the process of spreading its wings outside India
to address the vast and growing global auto-components replacement
market.
Minda Management Services Limited
Minda Management Services Limited (MMSL), at the corporate level, is an
apex body that provides leadership and direction to the entire Group and
group companies, with a focus on future. Established in April 2007, MMSL has
emerged as an impactful pool of professionals providing thought leadership
and guidance to the Group in the key areas of Strategy, Marketing, Finance,
Legal, Projects, HR, TQM and Communications. MMSL is located at Noida
(UP), India.
3.3 ADDING SPARK TO VALUE CREATION
For well over five decades, MINDA has been driving the world of global
automobiles with multitude of components. In the evolution of global
automobiles over the last fifty years, our meaningful participation can be
traced across multiple generations of automobiles across passenger,
commercial and niche segments.
Working passionately to serve the vehicles of today and invent solutions for
tomorrow's vehicles, every single day over all these years, MINDA has
created immense value by powering millions of vehicles that empowered
billions of end users. As a responsible enterprise of our eco-system, we have
co-created and shared value with our entire stakeholder universe
customers, partners, employees, suppliers, exchequers, investors, lenders,
and communities. In doing so, we have also accumulated immense
underlying know-how, goodwill, assets and equity while growing in scale and
stature.

3.4 NEW STRUCTURE CONSOLIDATING TO VALUE


In our rich history of well over five decades, the four year period of 2007 to
2010 marked the true coming of age for our Group. It has been in this period
that our growth agenda got a bout of aggressiveness with the world

Page5

In order to unleash immense value that our Group has assimilated, we


initiated an organization-wide consolidation and restructuring exercise,
months ago. A significant portion of the stated exercise has been
accomplished during the year under review. The highpoint of our
accomplishments has been the adoption of an inspiring new identity 'Spark
Minda' for the Group.

becoming our playground. We further strengthened our stature with 6


overseas acquisitions, 4 Joint Ventures with the world's leading automotive
players and setting up our own presence in many countries. Having achieved
all this as part of our long and fast-paced campaign, we did initiate a group
wide consolidation exercise in FY 12 in order to integrate our past as well as
recently acquired or built assets.
At Spark Minda, Ashok Minda Group, we are realigning and restructuring our
business assets with an aim to optimize operational efficiencies and
consolidate the underlying value under each of our group companies. We
envision transforming
Minda Corporation Limited as the flagship Company of the Group, Minda
Corporation acquired 100% stake in Minda Management Services and 94%
stake in Minda Schenk Plastic Solutions GmbH, Germany, during the year
under review. Continuing to consolidate in the current year (FY 2012-13),
Minda Corporation has further acquired the remaining 50% stake in Minda
Automotive Solutions Limited (MASL), making it a 100% subsidiary company.
The ensuing consolidation would simplify our corporate structure
considerably. It would also help us synergize key non-production functions
including Sourcing, Marketing and Research & Development. The resultant
dual impact of enhanced efficiency and reduced cost shall go on to improve
our profit margins. Post consolidation, strength of Minda Corporation's
consolidated financial position would accelerate our pursuit of accelerated
growth, organic as well as inorganic. Consolidated Financial Statements of a
strengthened Minda Corporation would provide a true reflection of its
success.

3.5 CONFIDENCE OF VIBRANT BRAND


While consolidation of tangible assets can be achieved by realigning business
structures, it is important to back it up with integrating intangibles like
organizational culture, spirit and credo also under a binding thread that
inspires people. In our fast paced growth over the recent years, we have
spread our business footprints across many countries and continents. As a
result, our workforce also has transitioned to be multinational, multiethnic
and multicultural. At Ashok Minda Group, we decided to revitalize our
inherent intangibles and integrate our recently added ones under the power
of a well conceived corporate brand. We initiated an organization-wide

Page5

Ensuing consolidation would also power our long term aim of emerging as
one of the largest multinational players in automotive components business.
After completing the ensuing consolidation exercise, Minda Corporation aims
to offer share owning opportunities to a wider base of investors including the
retail ones through an initial public offer in due course.

consultation in order to arrive at a common identity for all our group


companies and their respective assets tangible and intangible.
Having involved people from across the functions, companies and
geographies of our operations, we evolved a new identity for ourselves and
adopted it with enthusiasm, spirit and lan. From Ashok Minda Group, we
repositioned ourselves as 'Spark Minda' during the year under review. Having
internalized it with organization-wide rolling out of our new identity, we
backed it up with a high intensity educational campaign including a
dedicated issue of our in-house journal. We unveiled this new identity to our
customer universe and the people at large at Auto Expo 2012.
Taking inspiration from what a tiny spark has done to the evolution of
civilization in ancient times and to the world of automobile in the recent
history, we have chosen our new identity to add spark to our unending and
untiring mission of value creation. Being all about vibrancy and speed, Spark
Minda instills an attitude in each one of us that of doing our deeds with
enthusiasm and aggression. It provides a distinct, dynamic and refreshing
identity to all the Group companies including Minda Corporation and
reiterates our commitment to the customer universe that they can count on
us in addressing their future needs and challenges.
'Powered by Passion', our new baseline fuels our ambition to become the
largest Indian automotive component supplier in the world. Driven by
passion to deliver business outcomes to our customers, career progression to
our employees and consistent value enhancement for all our other
stakeholders including our communities, we will keep moving from strengths
to strengths. Our passion for innovation, pursuing excellence, fulfillment,
giving and above all a meaningful success shall usher us into a new era of
sustained growth.

Two most critical changes that are bound to transform the Global Automobile
scenario by the turn of this decade would include the emergence of new
countries such as India as the global manufacturing hub and the fast-paced
development and widespread adoption of future automobiles compact cars,

Page5

3.6 RICH CULTURE OF FOCUS & INNOVATION


As we move into an ever promising and exciting future, we have decided to
stay focused on our established strengths in three distinct product segments
in the automotive value chain namely Safety, Security & Restraint Systems;
Driver Information & Telematics Systems and Interior Systems. All the three
segments possess tremendous growth potential through this decade. We
have persevered hard to earn a position of global repute and acceptance in
these segments and aim to leverage the same towards attaining global
leadership in terms of scale. Even our inorganic growth pursuits in global
markets would be limited to these three segments in near-term.

electric or alternate fuel automobiles. With such a transformation taking


place in the world of automobiles, our sphere of automotive component
manufacturing would be ruled by the companies that thrive upon continuous
research & development and innovation.
At Spark Minda, we have a rich culture of innovation running deep into the
DNA of all the group companies, including Minda Corporation Limited. At the
group level, our intellectual capabilities have always been bolstered with
well-considered acquisitions that possess valuable intellectual properties and
know-hows besides several joint ventures with reputed global corporations
that are synonymous with technology. As we move ahead, we are further
intensifying our research and development efforts by channelizing our
worldwide assets towards better results.

Corporate Social Responsibility (CSR) has emerged as a significant theme in


the business community. The growing emphasis on corporate responsibility
governs the relationship of corporate with various stakeholders. Minda
Corporation believes, to undertake CSR activities, it is important to raise
awareness on social responsibility a corporate is accountable for.

Page5

3.7 CORPORATE SOCIAL RESPONSIBILITY

At frequent times we organize unique events that solely focus on spreading


the significance of CSR amongst our employees. Minda Corporation adheres
to the highest degree of corporate ethics and believes in inclusive and
sustainable growth. We follow Triple Bottom Approach that is People, Planet
and Profit. People for us are not only customers or potential customers. It
covers our co-workers, the people working at our supplier's factories and the
local community. We at Minda Corporation focus on protection of the
environment.
CSR Initiatives of Minda Corporation covers issues of Environment &
Resource Protection, Health & Safety and Community.
To protect the environment, we have organized activities built around tree
plantation, energy conservation, use of alternative fuels, water conservation
measures, protection of trees & natural resources and pollution & waste
management.
We are committed towards the environment and always work for the
minimization of carbon footprints. We use modern and efficient technology to
conserve electricity and water. We have installed affluent treatment plants in
all the units and at all the plants, utmost importance is given to zero water
discharge. The treated water is reused in horticulture projects. The water
harvesting systems are put in place to restore ground water.
We undertake our CSR initiatives through the Moga Devi Minda Charitable
Trust (MDMCT) that was established in 1987. Several projects run under
MDMCT which are as follows:

Minda BAL Gram


It is a Home for Children, licensed with the Department of Women and Child
Development, Government of NCT, Delhi. At MBG, endless love and care is
provided to children. Organization aims to provide long-term quality
institutional care along with elementary development facilities to
disadvantaged children. Qualitative efforts are made in making a child a
responsible citizen. MBG has already completed a decade of service in this
field. It has been constantly upgrading the quality of service and exposure to

Page5

S L Minda Seva Kendra


It is a unique attempt for rural development and for bringing social change in
India. The project was launched in January 2007 in Bagla village of Hisar
District, Haryana. The project empowers youth with skills and capacities that
upgrade their knowledge base and make them employment-ready. The
vocational training programmes of SLMSK are accredited with the National
Institute of Open Schooling. Certified Vocational Training is provided in trades
like Indian Embroidery, Beauty Culture, and Cutting & Tailoring and in Basic
Computer Courses.

the children with a right mix of modern outlook based on Indian culture and
values.
S L Minda Sports Academy
Established in 2011, the Academy promotes sports activities in the rural
areas of District Hisar, Haryana. The aim of the Sports Academy is to nurture
sports, the spirit of sportsmanship and to achieve excellence in sports like
Athletics, Volleyball, Basketball, Table Tennis, Taekwondo and more. Students
of Sports Academy have already shown some remarkable results by
participating in District and National level competitions.
Minda Sanjivani Kendra
It is a medical and healthcare project that aims to provide healthcare
facilities especially to women and children in the rural areas of the Adampur
Block of Hisar District, Haryana. The medical centre aims to provide
specialized medical facilities to expecting mothers and infants.

Page5

Organizing standalone events like Free Health Check-up Camps, Blood


Donation Camps, Art and Craft Workshops, English Speaking & Personality
Development Programmes, and Remedial classes for the village community
are some of the regular activities we are constantly involved with.

METHODOLOGY

Page5

4.

4.1 OBJECTIVES OF THE STUDY


Main Objectives
To understand company structure, products and businesses across
various divisions of Minda Industries.
To determine Competitors and Collaborators for Minda Industries across
various divisions.
To determine Conditions and Requirements to access working capital
from banks.
Analyzing Corporate Governance and Financial reports of Minda
Industries.
Introduction to Working Capital and CMA (Credit Monitoring
Arrangement)
Towards managing working capital
Customer base and SWOT analysis.
Learning.
4.2 RESEARCH DESIGN AND SURVEY DESIGN
Research approach would be based on the quantitative section. Here,
the data and information gathered would be in moreover in the form of
text, comments or numeric value. We have to screen all the collected
data and information and scratch out the required information out of
that.

Here, we have to rely on the information, comments or data


released/provided by the designated authorities related to Minda
Industries Ltd.

The data would be gathered and distributed in form of text and


numeric only and put at the required stages.

4.3 LIMITATIONS OF RESEARCH


The collection of information from the employees of Minda Industries
was very difficult because, they were not very keen to share financial
information of company
As, I took the detailed financial information from the company's Annual
report, the calculation became very difficult because the terminologies
used very difficult to understand.

4.4 DATA ANALYSIS


The Data would be analyzed from the texts, numeric information provided by
the experts and samples. This information would be segregated as per the

Page5

requirement and the concrete information will be distributed according to the


required heads.
(A)Primary Data The data would be collected from the questionnaire filled
by the respondents and information collected by personal interview.
(B)Secondary Data The data would be collected from the earlier Journals,
and data collected from the designated authorities.
The data would be moreover in the form of numeric value of text information,
so that has to be converted into presentable or graphical form as per the
requirement of the project.
4.5 RESEARCH METHODOLOGY
(A) Historical research
It generates descriptions & sometimes attempted explanations, of
conditions, situations and events that have occurred in the past. For
Example, A study that documents the evolution of teacher training program
since the turn of century, with the aim of explaining the historical origins of
the content and processes of current programs (Postlethwaite, 2005)
Here, in this study, this methodology can solve our requirement,
because we can calculate the requirement from earlier filed
Financial Statements.
(B) Descriptive research
It provides information about conditions, situations and events that occur in
the present. For example, a survey of the physical conditions of school
building in order to establish a descriptive profile of the facilities that exist in
a typical school. (Postlethwaite, 2005)
This is a very elaborative and correct kind of research method,
where we not only rely on the past trends and studies but also can
observe the current studies and current concepts.

Correlation research method makes relationship between two


variables. And our study does not satisfy this methodology because

Page5

(C) Correlation research


It involves the search for relationship between variables through the use of
various measures of statistical association. For example, an investigation of
the relationship between teachers satisfaction with their job and various
factors describing the provision and quality of teacher housing, salaries,
leave entitlements, and the availability of class room supplies.
(Postlethwaite, 2005)

we are studying on just one single point and that is Calculation and
procedure of Working Capital Requirement. In case, we are studying
the trend of two different, then this kind of study would be suitable.
(D) Causal research
It aims to suggest casual linkages between variables by observing existing
phenomena and then searching back through available data in order to try to
identify plausible casual relationships. For example, a study of factors related
to student drop out from secondary school using data obtained from school
records over the past decade. (Postlethwaite, 2005)
Our study does not satisfy this kind of research methodology
because, this study is completely depended on the factual data and
theories, and casual method simply solves the problems which have
been already almost solved. It means, this method is suitable when
you already know the results but you simply need any fact to
support that.
(E) Experimental research
It is used in settings where variables defining one or more causes can be
manipulated in a systematic fashion in order to discern effects on other
variables. For Example, an investigation of the effectiveness of two new
textbooks using random assignment of teachers and students of three
groups two groups for each of the new textbooks, and one group as a
control group to use the existing textbook. (Postlethwaite, 2005)

(F) Case study research


It generally refers to two distinct research approaches. The first consist of
and in depth of a particular student, classroom or school with the aim of
producing a nuanced description of pervading cultural setting that affects
education, and an account of the interactions that take place between
students and other relevant persons. For example, an in-depth exploration of
the patterns of friendship between students in a single class, the second
approach to case study research involves the application of quantitative
research methods to non-probability samples-which provide results that are
not necessarily designed to generalizable to wider populations. For example,
a survey of the reading achievements of the students in one rural region of a
particular country (Postlethwaite, 2005)

Page5

Experimental research methodology is suitable where we are


completely studying any field or study which is altogether virgin and
has not been touched earlier. And the researcher has to make
various experiments to come out on one result. Here, we are
studying a field where, we are moreover relied on the persons and
information which is already existed in this field.

Case study research more over focus on the past data and past
information, where we study a case, which is almost similar to our
current problem or study so, as such we are not dealing with such
kind of study or case, we are collecting desecrated information from
different places and gathering at one common place to come out on
one judgment.
(G) Ethnographic research
It usually consists of a description of events that occur within the life of a
group with particular reference to the interaction of individuals in the
context of socio cultural norms, rituals and beliefs shared by the group. The
researcher generally participates in some part of the normal life of the group
and uses what he or she learns from his participation to understand the
interactions between group members. For example, a detailed account of the
daily tasks and interactions encountered by a school principal using
observations gathered by a researcher who is placed in the position of
Principals Assistant in order to become fully involved in the daily life of the
school. (Postlethwaite, 2005)
This type of method suffices the kind the research which is not
based on data and facts but on the social and cultural behavior of
the people. For example to understand the customers purchasing
behavior etc, so, our study does not suit this method.
(H) Research and development research
It differs from the above types of research in that, rather than bringing new
information to light, it focuses on the interaction between research and the
production and evaluation of a new product. This type of research can be
formative. For example, an investigation of teachers reactions to the
various drafts and redrafts of a new mathematics teaching kit, with the
information gathered at each stage being used to improve each stage of the
drafting process. Alternatively, it can be used summative. For example, a
comparison of the mathematics achievements of student exposed to anew
mathematics teaching kit in comparison with students exposed to the
established mathematics curriculum. (Postlethwaite, 2005)

So, finally, from all the above mentioned research methodology, we reached
on the point that, the current study Preparation of Working Capital
Renewal of Application for MINDA INDUSTRIES LTD through CANARA
BANK satisfy the Descriptive Research Method & Historical Research
Method. Because, here we are suppose to deal with the information and

Page5

Well, this kind of method itself defines that it is not suitable for our
study, which we are doing.

data which is based on the past facts and figures and at the same moment
current judgment and studies.
4.6 RESEARCH DESIGN
Phase I- Exploratory work
Exploratory information has been collected from the interviews of the various
senior officials related to MINDA Industries.

5.

FINANCIAL ANALYSIS

Page5

Phase II- Descriptive research


Descriptive study is done from the various journals, websites & from the
books of the authors, who have specifically written about the Minda
industries.
Research Type: Descriptive.

5.1 AUDITED BALANCESHEET AS ON 31 MARCH 2013


(In Lacs)
PARTICULARS
AS ON 31
MAR 13

AS ON 31
MAR 12

Shareholders' Funds
Share Capital
Reserve & Surplus
Minority Interest
Non Current Liabilities
Long-Term Borrowings
Deferred Tax Liabilities (Net)
Other Long Term Liabilities
Long Term Provisions

1,936.54
28,945.54
30,882.08
1,233.04

1,936.54
26,679.31
28,615.85
1,147.85

8,869.67
742.11
1,767.47

6,612.23
56.62
60.38
1,570.86

Page5

EQUITY AND LIABILITIES

Current Liabilities
Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions

12,612.29

9,447.94

8,083.14
21,638.51
6,226.57
1,114.37

9,378.44
17,729.87
5,517.15
988.12

37,062.59
80,556.96

33,613.58
71,677.37

36,042.67
43.20
140.70
-

27,874.59
97.33
-

36,226.57

27,971.92

2,180.97
2,237.49
445.09
4,863.55

2,171.71
2,164.52
152.81
4,489.04

8,949.03
21,726.45
3,852.74
4,658.19
280.43
39,466.84

109.46
8,081.31
19,626.03
6,657.15
4,462.70
279.76
39,216.41

80,556.96

71,677.37

ASSETS
Fixed Assets
Tangible Assets
Intangible Assets
Defferred Tax (Assets)
Intangible Assets Under Development
Non Current Assets
Non Current Investments
Long Term Loans & Advances
Other Non Current Assets
Current Assets
Current Investments
Inventories
Trade Receivables
Cash & Bank Balances
Short Term Loans & Advances
Other Current Assets

Revenue from Operations


Other Income
TOTAL REVENUE
EXPENSES
Cost of Material Consumed
Purchase of Stock-in-Trade
Change in Inventories of Finished Goods, WIP,
& SIT
Employee Benefits
Depreciation & Amortization
Other Expenses

1,32,838.92
1,201.28
1,34,040.20

1,16,617.39
1,303.23
1,17,920.62

94,935.15
253.48
(1,122.10)
14,392.72
4,627.31
16,235.33

79,676.18
782.31
819.82
13,432.33
4,017.72
15,623.88

1,29,321.89

1,14,352.24

Page5

5.2 AUDITED PROFIT & LOSS ACCOUNT AS ON 31 MARCH 2013


(In Lacs)
PARTICULARS
AS ON 31
AS ON 31
MAR 13
MAR 12

Profit Before Tax, Exceptional Items,


Share in Associates & Minority Interest
Other Income
Finance Cost
Exceptional Items
Profit Before Tax, Share in Associates &
Minority Interest
Tax Expenses
Net Current Tax
Deferred Tax
Minimum Alternative Tax/Created

4,718.31
1,098.21
1,906.43
19.83

3,568.38
1,633.78
1,978.08
(768.46)

3,929.92

2,455.62

1,232.55
(196.87)
63.38

777.23
(745.99)
-

2,830.86

2,424.38

(66.96)
57.92

422.58
22.15

2,821.82

2,869.11

17.71

18.01

Profit Before Share in Associates &


Minority Interest
Add: Share in Profit of Associates
Less: Share of Minority Interest
Net Profit
Earnings Per Share

5.3 BUSINESS RATIOS


Current Ratio for FY 2012
Current Ratio = Current Assets/ Current Liabilities
Current Ratio = 39,216.41 / 33,613.58
Current Ratio = 1.17: 1
Current Ratio for FY 2013
Current Ratio = Current Assets/ Current Liabilities
Current Ratio = 39,466.84 / 37,062.59

The ideal current ratio is suppose to be 2:1, because, it shows that company
can easily pay off the liabilities and as well as manage the current
requirement of business. But as the account shows that the Current Ratio for
FY 2012 is Rs. 1.17 & Current Ratio for FY 2013 is Rs. 1.06. It shows that, the
company need to work a lot to maintain the decent Current Ratio, although,
in last Financial Year, the ratio was somewhere better than the current
financial year.

Page5

Current Ratio = 1.06: 1

Debt Equity Ratio for FY 2012


Debt Equity Ratio = Total Debt/ Total Equity
Debt Equity Ratio = 6,612.23 / 1,936.54
Debt Equity Ratio = 3.41:1
Debt Equity Ratio for FY 2013
Debt Equity Ratio = Total Debt/ Total Equity
Debt Equity Ratio = 8,869.67 / 1,936.54
Debt Equity Ratio = 4.58:1
The best Debt Equity Ratio is 1:1 but the ratio with 2:1 can also be digested
but if the ratio goes over it then the financial conditions shows that,
company is having more debt than its own capital. It means the company is
more dependent on outsider's amount rather than its own fund. Company
needs to again restructure the financial health, because, the company is
completely dripped into debts.
Stock Turnover Ratio for FY 2013
Stock Turnover Ratio = Cost of Sales/ Closing Stock + Opening Stock
Stock Turnover Ratio = 94,063/ (21,726.45+19,626.03)
Stock Turnover Ratio = 94,063/41,352.48
Stock Turnover Ratio = 2.27
Working Note:
To calculate Cost of sales = Total sales (Total Sales X GP %)
GP = Total Sales (Cost of Material + Purchase of Stock in Trade + Change in
Inventories)
GP % = GP X 100 / Total Sales
The stock turnover ratio is 2.27 times. It means that, the company's stock
turnover is good but the establishment of Debtor realization is may not be
proper that's why the company may not be having good Current Ratio &
Dent Equity Ratio.

For calculation of Requirement of Working Capital:

Page5

5.4 REQUIREMENT OF WORKING CAPITAL CALCULATION

= [Current Assets Trade Payables] X 100/Revenue


Current Assets = Inventories + Trade Receivables + Cash & Bank + Short
Term Loans + Other Current Liabilities
Current Assets = 8,949.03 + 21,726.45 + 3,852.74 + 4,658.19 + 280.43
Current Assets = 39,466.84
Current Liabilities = Trade Payables
Trade Payables = 21,638.51
Revenue from Operations = 1,32,838.93
Requirement
of
Working
21,638.51]*100/1,32,838.93

Capital

[39,466.84

Requirement of Working Capital % = Approx 13.42%


It means that, if any sale of Rs. 1,000 is made then to fund that product, the
working capital required is Rs. 134.2
So, the company requires the working capital to maintain its day to day
business activity and there are certain drawbacks with the financial
statements of the company, such as Poor Current Ratio, Poor Debt Equity
Ratio & in fact the Debtors realizations period is also not good. The account
shows that heavy amount of debtors are pending from whom the company
requires their cost back.
Now, as the opening of new financial year 2013-14 is suppose to start then
the company should get the below mentioned amount of Working Capital
Renewal.
Revenue from Operation = 1,32,838.93

The Total Working Capital Requirement for the coming financial year will be =
17,826.98. It means the company requires approx working capital for coming
financial year is Rs. 179 Crore. Now, the company itself has to decide based
upon the company's improving financial conditions and will approach bank to
renew the Working Capital.
5.5 OTHER FINANCIAL HIGHLIGHTS

Page5

Requirement of Working Capital % = 13.42%

Profit before Tax

Turnover

Page5

EBIDTA

Net Worth

Page5

Net Profit

Page5

Earning Per Share

CORPORATE GOVERNANCE
ANALYSIS

6.1 CORPORATE GOVERNANCE ANALYSIS

Page5

6.

NK MINDA Group is one of the leading global manufacturers of automobile


components and a leading supplier of proprietary automotive solutions to
Original Equipment Manufacturers (OEMs). For nearly five decades, N K
Minda Group has been supplying the automotive industry with innovative
engineered products that are efficient, safe, and responsive and enhance
comfort levels.
Board of Directors and Senior Level Management Code of Conduct
It is of major importance to corporations and their leaders to create a "tone
at the top" and a corporate culture that promotes ethical conducts on the
part of those corporations and their employees. The single most important
factor in creating such a culture is the quality of corporate leadership,
especially the "tone at the top" set by Boards and Senior Level Management
For the purpose of this code of conduct, Senior Level Management means
officials one level below the Board of Directors who are directly reporting to
the Board of directors of Managing Director. The code of conduct for the
Board of directors of the company imposes the following responsibilities on
the Board of Directors and senior level management of the company.
Auditor Report
To The Members of Minda Industries Limited
We have examined the compliance of conditions of Corporate Governance by
Minda Industries Limited for the year ended.
March 31, 2013 as stipulated in Clause 49 of the Listing Agreement of the
said Company with Stock Exchanges
The compliance of condition of Corporate Governance is the responsibility of
the management. Our examination was limited to procedures and
implementation thereof, adopted by the Company for ensuring the
compliance of the conditions of Corporate Governance. It is neither an audit
nor an expression of opinion on the financial statements of the Company.

As required by the guidance note issued by the Institute of Chartered


Accountants of India, we have to state that as per the records maintained,
there were no investor grievances remaining unattended / pending for more
than 30 days as at March 31, 2013.

Page5

In our opinion and to the best of our information and according to the
explanations given to us and the representation made by the Directors and
the management, we certify that the Company has complied with the
conditions of Corporate Governance as stipulated in the above-mentioned
Listing Agreement.

We further state that such compliance is neither an assurance as to the


future viability of the Company nor the efficiency or effectiveness with which
the management has conducted the affairs of the Company.
Place: New Delhi R.N. SARAF, F.C.A.
Date: May 30, 2013

6.2 CREDIT MONITORING ARRANGEMENTS

Page5

MINDA INDUSTRIES LTD


Sept, 2013

The RBI i.e. Reserve Bank of India is the apex bank which governs and
regulates the flow of credit and formulates policies in this regard. It issues
various directions to the scheduled banks to implement the policies and
guidelines issued from time to time.
To exercise greater control on relatively large borrowers, CMA was introduced
in 1988. The RBI undertakes the role of scrutinizer of the proposals, after
sanction by the respective banks. The proposals may relate to sanction of
the term loan and the working capital facilities beyond a certain limit.
Features of CMA
As per provisions of the CMA, the banks could sanction the limits to the
borrowers without the prior approval of the RBI. In case, the borrower
enjoyed the fund based facilities of Rs. 10 crores and above, the case
will have to be reported to the RBI for the purpose of scrutiny.

If the borrower has entered into some form of consortium arrangement


with the banks, the details of such an arrangements are also required
to be reported to the RBI.

6.3 BANK FINANCES & MARGIN MONEY


The banker finances the working capital requirement after taking the net
current assets into consideration. As parts of funds are made available to the
business through the current liabilities, the bank will like to finance only that
portion of the assets which are not financed by the creditors.

Page5

The bank will not finance the net working capital requirement to the extent
of 100% of the net current assets. Some amount of the assets is put in by the
company and the rest of the amount is financed by the bank. The balance
amount that is brought in by the company or the promoters is known as
margin money for the working capital.

Importance & Significance of Margin Money


The prime importance of the margin money for the working capital is that the
amount to some extent should be brought in by the promoter. This was
essentially done to see that the current assets are not double financed.
Double financing of current assets means that current assets are financed
both by the bank as well as by current liability. There may be a situation
where the company has got the assets financed from the current liabilities
and also obtain the working capital assistance from the bank as well. In such
a case, the current assets will be deemed to be financed more than once.
The bankers are very much averse to the companies which get their assets
financed from the banks and from the creditors as well. The phenomenon is
called as double financing.
In business, promoter contributes 25% of the net current assets and the
remaining 75% is financed by the bank. Margin money also forms the cost of
projects in the new or expansion projects. The financial institutions provide
term loans for procuring the fixed assets only and the portion of the margin
money for working capital constitute the part of the total project cost.
6.4 SWOT ANALYSIS
Strengths
Product range
Strong presence in India
Backward integration
Infrastructure
Multi location plants with proximity to Customer.
Dedicated workforce
Design studio

Opportunity
EAN
China
Off Road
Europe & global after market
Threats

Page5

Weakness
Inconsistent quality
Supplier base
Product reliability
OEMs perception of Minda prices being high

Growing Indian competition


Cost down pressures from OEMs
Chinese manufacturers entry
TD/AD entry into India

7.

CONCLUSION & LEARNINGS

Page5

7.1 CONCLUSIONS

The ideal current ratio is suppose to be 2:1, because, it shows that


company can easily pay off the liabilities and as well as manage the
current requirement of business. But as the account shows that the
Current Ratio for FY 2012 is Rs. 1.17 & Current Ratio for FY 2013 is Rs.
1.06. It shows that, the company need to work a lot to maintain the
decent Current Ratio, although, in last Financial Year, the ratio was
somewhere better than the current financial year.

The best Debt Equity Ratio is 1:1 but the ratio with 2:1 can also be
digested but if the ratio goes over it then the financial conditions
shows that, company is having more debt than its own capital. It
means the company is more dependent on outsider's amount rather
than its own fund. Company needs to again restructure the financial
health, because, the company is completely dripped into debts.

The stock turnover ratio is 2.27 times. It means that, the company's
stock turnover is good but the establishment of Debtor realization is
may not be proper that's why the company may not be having good
Current Ratio & Dent Equity Ratio.

The Total Working Capital Requirement for the coming financial year
will be = 17,826.98. It means the company requires approx working
capital for coming financial year is Rs. 179 Crore. Now, the company
itself has to decide based upon the company's improving financial
conditions and will approach bank to renew the Working Capital.

7.2 LEARNINGS
One cannot do well in the business environment until he is well versed in
theoretical concepts. But to make it more significant and impressive it has to
be coupled with practical work experience. The basic purpose of summer
training is to gain an insight into the business world and to see how well we
can relate our theoretical knowledge with the business realities.

Page5

Summer training was a learning experience for me. During the training I
came to know how work is actually carried out in the corporate. It gives me
opportunity to relate my theoretical knowledge of not only finance but other
subjects as well.

My project was related to the working capital renewal application, where I


used the knowledge of working capital management. This enables me to
understand the topic in depth. Also during the course of training, I was also
involved in day to day operations of the company where I got the opportunity
to use various theoretical aspects like Ratio Analysis, Funds Flow Statement,
and Time Value etc.

Page5

BIBLIOGRAPHY

Books
Phawa HP, (2011), "Bank Finance to Business and Industry", Page no
158: 175, Module II, McGraw Hills

Rustagi PR, (2009), "Fundamentals of Financial Management", Page no


120:215, European University Institute Florence, Vol-I

ET-500, (Sept 2012), "The Changing Face of India Inc." Page no 15: 85

www.mindaweb.com assessed as on 15 May 2013

http://www.mindaweb.com/asp/hornsspr.asp assessed as on 11 May


2013

http://www.mindaweb.com/asp/lampspr.asp assessed as on 10 May


2013

http://www.mindaweb.com/asp/Switchesspr.asp assessed as on 11 May


2013

http://www.mindaweb.com/milestone.htm assessed as on 11 May 2013

http://www.mindaweb.com/milestone.htm assessed as on 10 May 2013

http://www.mindaweb.com/index.htm assessed as on 11 May 2013

Page5

Webliography

Page5

Certificate
TO WHOMSOEVER IT MAY CONCERN
This is to certify that Ms Akansha Saxena, a student of IMT
GHAZIABAD has completed project work on PREPERATION OF
WORKING CAPITAL RENEWAL OF APPLICATION OF MINDA
INDUSTRIES LTD. THROUGH BANK under my guidance and
supervision.
I certify that this is an original work and has not been copied from
any source.

For, Faculty mentor

Jagmohan Singh
Date:

Page5

Sign: