Motherson Sumi Systems Limited AR 08 09
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Transcript of Motherson Sumi Systems Limited AR 08 09
Motherson Sumi Systems LimitedCreating wealth through global synergies
Growing trust. Transforming business. Enhancing value for all.
2 2 n d A n n u a l R e p o r t 2 0 0 8 - 0 9
a member of Samvardhana Motherson Group
What you will find inside
Corporate Information 01 | Introduction 02 | Samvardhana Motherson Group 04 | Mother-
son Sumi Systems Ltd 05 | Sumitomo Wiring Systems Ltd 08 | Samvardhana Motherson Finance
Ltd 09 | MSSL Overview 12 | Chairman’s Letter 15 | Vice Chairman’s Letter 16 |Growing trust, Transforming Business, Enhancing Value for all 20 | The Transformation so far 22 |The quantum leap – Visiocorp acquisition 26 | Global Presence 32 | Financial Highlights 34 |Customer Relationships 36 | Management Discussion and Analysis 37 | Director’s Report 52| Report on Corporate Governance 57 | Auditor’s Report 67 | Balance Sheet 70 | Profit &
Loss Account 71 | Cash Flow Statement 72 | Schedules 74 | Balance Sheet Abstract 104| Consolidated Financial Statements 107
Disclaimer
In this Annual Report we have disclosed forward-looking information to enable investors to comprehend our prospects and take
informed investment decisions. This report and other statements – written and oral – that we periodically make contain for-
ward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried
wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’,
‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance.
We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in as-
sumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or un-
known risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially
from those anticipated, estimated or projected. Readers should bear this in mind.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future
events or otherwise.
1Together we make it happen
Corporate Information
FounderChairperson (Late) Smt. S.L. Sehgal
Chairman Emeritus(Late) Sh. K.L. Sehgal
Board of Directors Mr. Mohinder Singh Gujral Chairman
Mr. Vivek Chaand Sehgal Vice Chairman
Mr. Toshimi Shirakawa Director
Mr. Hiroto Murai Director
Mr. Bimal Dhar Director
Mr. Toshihiro Watanabe Whole Time Director
Maj. Gen. Amarjit Singh (Retd.) Director
Mr. Arjun Puri Director
Mr. Laksh Vaaman Sehgal Director
Mr. Futoshi Urai Alternate Director
Mr. Pankaj K. MitalAlternate Director
Registered Office2nd Floor, F-7, Block B-1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi 110 044, India
Investor CellMr. G.N. Gauba (Company Secretary & Chief Financial Officer)E-mail: [email protected]
Registrar Karvy Computershare Pvt. Ltd.Karvy House, 46, Avenue 4, Street No. 1Hyderabad 500 034, Andhra Pradesh, India
AuditorsPrice WaterhouseChartered AccountantsBuilding 8, 7th & 8th Floor, DLF Cyber CityGurgaon 122 002, Haryana, India
BankersState Bank of IndiaICICI Bank Ltd.Citibank N.A.HDFC Bank Ltd.Bank of Tokyo Mitsubishi Ltd.Axis Bank Ltd.
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Growing Trust. Transforming Business. Enhancing Value For All.
A year of building on the edifice of the growing trust of ourcustomers and partners. A year of strategically aligning ourbusiness to their changing needs and aspirations.
A watershed year for MSSL. A year of big developments and bigger evolution. A year of pivotal growth and strategicexpansion.
A landmark year of expansive transformation. A year of deliveringgreater value to our valued customers.
It was indeed a critical year in the growth odyssey of MSSL. It wasa year when our relentless efforts towards fostering deepercustomer relationships transformed into our game-changingacquisition of Visiocorp. It was a year of making a paradigm shift
from our approach of successfully notching up incrementalacquisitions to reaching out to global customers.
The Visiocorp acquisition was a strategic move aimed atleveraging our existing product strengths and managementexpertise to provide the necessary synergies that would enableour expansion into the fast-growing and ever-expanding globalautomotive systems business. It was a transformational move thatprovided us with direct access to global blue chip companies anda global manufacturing base through the extension of our corecapabilities.
This acquisition was indeed a momentous and meaningfuldevelopment for MSSL, enabling its growth from a domestic OEsupplier to a global entity encompassing a world market.
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It was a far-sighted decision to look ahead, and beyond thecurrent negative environment, to take a big step forward towardsour further transformation and evolution into a bigger and bettercompany. It was a decision that helped position us uniquely todeliver consistent growth and maximum value to all our customersand stakeholders at all times.
It was a year when we took a quantum leap towards building greater trust to enable an even bigger transformation that would continue to drive us towards bigger returns and value for our expanding network of customers and partnersaround the world.
“It was a year of deeper trust, bigger transformationand better value for all our stakeholders.”
GLOBAL SCALE
AMONG THE LARGEST MANUFACTURERS OF AUTOMOTIVE EXTERIOR REAR VIEW MIRRORS
DOMESTIC SCALE
LARGEST MANUFACTURER OF AUTOMOTIVE WIRE HARNESSES IN INDIA
LARGEST MANUFACTURER OF REAR VIEW MIRRORS FOR CARS & MUVS IN INDIA
AMONG THE LARGEST MANUFACTURERS & SUPPLIERS OF AUTOMOTIVE PLASTIC COMPONENTS & MODULES
AMONG THE MOST DIVERSIFIED GROUPS IN THE AUTOMOTIVE INDUSTRY
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Samvardhana Motherson Group
Trust is the core of successful growth, and transformation the growth driver. And together, they combine to deliver exceptional value.It is this philosophy that has enabled the growth of Samvardhana Motherson Group (SMG) into one of India’s leading business houses.
SMG is a focused, dynamic and progressive group that is geared towards providing customers with innovative and value-addedproducts, services and solutions. The Group posted a combined revenue of Rs. 42.819 billion in 2008-09.
A growing business portfolioThe business portfolio of the Samvardhana Motherson Group is a diversified bouquet of verticals, continuously growing to expand andencompass a wider and bigger choice of products and services that more than meet the transforming and exacting needs of its customersacross the world.
The unique competencies of the Group’s constituent companies combine to develop integrated solutions for its diverse customers.These solutions comprise a range of applications across diverse industries. The constituent companies also provide support throughproducts and services that strengthen MSSL’s position as a full-system solutions provider.
Wiring HarnessManufacturing
Wiring Harness
High TensionCords
Battery Cables
Wires
Connectors &Terminals
Wiring HarnessComponents
Rear ViewMirrors
ExteriorMirrors
InteriorMirrors
Modules
Sunroofs
Car HVACSystems
Bus Air-conditioning
Lighting & AirIntake
Precision MetalMachined
Components
RefrigerationSystems -
Transport &Stationary
Cabins for Off - HighwayVehicles
EnvironmentManagement
Systems
ElastomerProcessing
RubberInjectionMolding
Silicon InjectionMolding
Bonded Rubber Parts
RubberExtrusion
RubberCompounding
IT & DesignEngineering
SoftwareDevelopment
DesignEngineering
CAE Services
CNC CodeGeneration &
Press DieDesign
Metal Working
CuttingTools
Bimetal BandSaw Blades
Gear CuttingTools
Thin FilmCoating Metals
ManufacturingSupport
AirCompressors
Paint CoatingEquipment
IndustrialRobots
Automotive Manufacturing
Engineering
AuxiliaryEquipment
for InjectionMoldingMachines
Other Business
TravelServices
ManagementServices
Agencies
FULLSYSTEM
SOLUTIONS
Mirrors withIntegratedLighting
Blind SpotDetectionSystems
TelescopicTrailer Tow
Mirrors
PolymerProcessing &
ToolManufacturing
InjectionMolded Plastic
Parts
Plastic BlowMolded Parts
Post MoldingProcesses
Assemblies
Tool Design &Analysis
ToolManufacturing
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Motherson Sumi Systems Ltd (MSSL)
A TRACK RECORD OF MILESTONES EVOLVING AROUNDTHE NUCLEUS OF TRUST.
AN EPOCH OF CONTINUOUS GROWTH AND EXPANSION.
AN ODYSSEY OF CONSTANT CHANGE ANDTRANSFORMATION.
AN ETHOS OF NURTURING RELATIONSHIPS ANDENHANCING VALUE.
An apt description of the spirit of MothersonSumi Systems Limited.
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Motherson Sumi Systems Ltd. (MSSL), the flagshipcompany of the Samvardhana Motherson Group, is a jointventure between Samvardhana Motherson Finance Limited(SMFL) and Sumitomo Wiring Systems (SWS), Japan, whichis a global supplier and manufacturer of wiring harnesses,components & wires.
MSSL is a customer-driven company providing innovative andvalue-added products, services and solutions to customers. TheCompany is listed at the stock exchanges since 1993. MSSL isIndia’s largest manufacturer of automotive wiring harnesses andmirrors for passenger cars, and is also a leading supplier of plasticcomponents and modules to the automotive industry. The recentacquisition of the mirror business from Visiocorp (now renamedas Samvardhana Motherson Reflectec) has helped it evolve as oneof the world’s leading automotive mirror manufacturers.
The present product range of MSSL comprises of wiringharnesses, rear view mirrors, molded plastic parts including carinterior and exterior parts, complete modules including bumpers,dashboards and door trims, rubber components for automotiveand industrial applications, high-precision machined metal parts,injection molded tools and car air conditioners. It has been MSSL’sendeavour to constantly add new products in its product line, withthe objective of emerging as a single-service interface for multiplecustomer needs. MSSL’s diversity of product range, coupled withsheer depth within each product portfolio, has helped theCompany garner leadership in its area of operations.
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Over the years, MSSL has evolved as a JV specialist, havingcollaborations with global technology leaders to bring world-classtechnologies to serve its customers. The company has multipleJVs. These alliances give MSSL ready access to differenttechnologies and keeps it updated with the latest technologicaldevelopments. This has further helped the Company leverage itscompetencies in existing areas to create products fulfilling theemerging technical needs of its customers. MSSL and its jointventures have invested in state-of-the-art technologies andinfrastructure to ensure superior efficiencies and total customersatisfaction.
MSSL is continuously strengthening its position as a globallypreferred solutions provider by offering end-to-end solutions,encompassing designing from basic data to prototyping, tooling,molding, assembly and integrated modules. The ability to providesuch end-to-end solutions in each product category, and tocombine these solutions in the form of full system solutions, hasenabled the Company to evolve as a preferred supplier. Thesesolutions are supported by the flexibility to supply from any of thealternative manufacturing bases and logistic models best suited tocustomer requirements.
MSSL has developed a network of manufacturing bases, designcentres, logistics centres, marketing support and sourcing hubsacross a diversified geographical base. MSSL has presence in 20countries which include India (Noida, Gurgaon, Faridabad,Manesar, Pune, Lucknow, Bangalore, Chennai, Kandla, &Pondicherry), UAE, Sri Lanka, Singapore, China, Korea, Japan,
Germany, UK, Czech Republic, Austria, Hungary, Italy, Spain,France, Ireland, USA, Mexico, Australia & Mauritius to providetimely and quality delivery to our customers worldwide.
MSSL has manufacturing bases across four continents - Asia,Europe, North America & Australia, to support its customers.MSSL’s diverse global customer base comprises of almost allleading automobile manufacturers around the world.
MSSL Shareholding Pattern
SMFL39.6%
Sehgal Family4.2%
Public18.3%
SWS27.3%
FIIs & Mutual funds
10.6%
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Sumitomo Wiring Systems Ltd, Japan (Our principal partner)
Evolving from a relationship of growing trust, our partnership with Sumitomo Wiring Systems Ltd. (SWS) has constantly grown fromstrength to strength, since it started over two decades earlier. As MSSL’s oldest joint venture, dating back to 1986, this partnership hasenabled us to ensure continuous up-gradation of technology and a high degree of backward integration for wiring harnesses. Therelationship also brought in tooling technology and molding technology critical for wiring harnesses and got further strengthened withsubsequent ventures.
CollaborationProvided technical assistance for manufacturing wiring harnesses in 1983.
Entered into a joint venture to form Motherson Sumi Systems Limited (MSSL) in 1986.
Joint venture covered the manufacture of wiring harnesses, catering mainly to the needsof Japanese OEMs.
Engaged as the principal partner of MSSL, initially providing access to latest technologies for manufacturing wiring harnesses & wires, and gradually providing technical supportfor wiring harnesses, components, injection molded parts, mould manufacturing (throughgroup companies), engineering design and software development (through joint ventures).
A second JV formed with MSSL for wiring harness manufacturing in Sharjah.
SupportPivotal in providing technical support to MSSL, in the form of resident technical advisors,training of engineers and production personnel, manufacturing methodologies, Japanesemanufacturing techniques, quality circle activities, kaizen, as well as collaborative designand development.
Instrumental in helping the Company stay abreast of state-of-the-art technologies andenhancing product quality at competitive costs.
Buyback of wiring harnesses to SWS locations in Japan and Europe.
BackgroundA 100% subsidiary of Sumitomo Electric Industries (Japan).
A global supplier engaged in the manufacture and sale of wire harnesses, components andwires.
Enjoys the second-highest share in wire harnesses worldwide.
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SamvardhanaMotherson Finance Ltd
Samvardhana Motherson Finance Limited (SMFL) is the principalholding company of the Samvardhana Motherson Group. SMFLhas investments in over 25 companies, including Motherson SumiSystems Limited (MSSL) & other Group companies.
SMFL acts as the central corporate body for managing the Groupcompanies and for their overall co-ordination. It is also the mainvehicle for exploring new business areas and forming new jointventures of the Group in diversified areas.
The company has 39.6% stake in Motherson Sumi SystemsLimited. On 6th March 2009, MSSL in joint venture with SMFLacquired the Rear View Mirror business of Visiocorp where SMFLholds 49% stake.
SamvardhanaMothersonFinance Limited
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Samvardhana Motherson Finance Ltd : Product & Company Portfolio
Wiring Harness Manufacturing Rear View Mirrors
Polymer Processing & Tool Manufacturing
Elastomer Processing
Motherson Sumi Systems Ltd.Kyungshin Industrial Motherson Ltd.Motherson Sumi Wiring System Ltd. (FZC)MSSL (GB) Ltd.MSSL Ireland Pvt. Ltd.MSSL Mideast (FZE)Motherson Sumi Electric Wires(A Division of MSSL)Motherson Electrical Wires Lanka Pvt. Ltd.
Balda Motherson Solution India Ltd.MSSL Advanced Polymers s.r.o.MSSL Polymers GmbHMotherson Automotive Technologies & Engineering (A Division of MSSL)Sumi Motherson Innovative Engineering Ltd.MSSL Tooling (FZE)CTM India Ltd.Motherson Molds and Diecasting Ltd.
Samvardhana Motherson Reflectec Ltd. (SMR)• SMR Automotive Systems India Limited• SMR Automotive Taree Pty Limited• SMR Automotive Australia Pty Limited • SMR Automotive Yancheng Co. Limited• SMR Automotive Beijing Company Limited• Ningbo SMR Huaxiang Automotive Mirrors Limited• SMR Automotive Systems France S.A.• SMR Automotive Services GmbH• SMR Grundbesitz GmbH & Co. KG• SMR Automotive Mirrors Stuttgart GmbH• SMR Automotive Beteiligungen Deutschland GmbH• SMR Automotive Mirror Technology Hungary Bt• SMR Poong Jeong Automotive Mirrors Korea Ltd. • SMR Hyosang Automotive Ltd• SMR Patents S.à.r.l.• SMR Automotive Vision Systems Mexico S.A de C.V• SMR Automotive Systems Spain S.A.U.• SMR Automotive Mirrors UK Limited • SMR Automotive Systems USA Inc.
Motherson Elastomer Pty Ltd.Woco Motherson Advanced Rubber Technologies Ltd.Woco Motherson Elastomer Ltd.Woco Motherson Ltd. (FZC)
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SMFL ventures have a diversified product portfolio, encompassing the entire range of the Samvardhana Motherson Group products.SMFL ventures supplement and support MSSL products and enhance MSSL’s position as a full system solutions provider to a widerange of industries.
IT & Design Engineering
A Basic Concepts Designs Pty Ltd.Miyazu Motherson Engineering Design Ltd.MothersonSumi INfotech & Designs Ltd.
Metal Working
Motherson Innovative Engineering Solutions (A Division of MSSL)Motherson ORCA Precision Technology GmbHMotherson Techno Tools Ltd.Nachi Motherson Tool Technology Ltd.Nissin Advanced Coating Indo Co. Ltd.
Manufacturing Support
AES (India) Engineering Ltd.Anest Iwata Motherson Ltd.Anest Iwata Motherson Coating Equipment Ltd.Matsui Technologies India Ltd.Motoman Motherson Robotics Ltd.
Modules & Systems
Calsonic Kansei Motherson Auto Products Ltd.Fritzmeier Motherson Cabin Engineering Ltd.Magneti Marelli Motherson Auto System Ltd.Motherson Zanotti Refrigeration Systems Ltd.Spheros Motherson Thermal System Ltd.Webasto Motherson Sunroofs Ltd.Global Environment Management (FZC)
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VISION
To be a GloballyPreferred SolutionsProvider
MissionEnsure Customer Delight
Involve Employees as “Partners” in Progress
Enhance Shareholder Value
Set new standards in good corporate citizenship
ValuesBe a lean, responsive and learning organisation
Continuously improve to achieve world-class standards and total customer satisfaction
Proactively manage change
Maintain high standards of integrity and safety
Ensure a common culture and a common set of values throughout the organisation
Recognise individuals' contributions
Develop stronger leadership skills, greater teamwork anda global perspective
Constantly upgrade skill levels across the organisation through knowledge sharing programmes
MSSL Overview
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Market PositionOne of the largest manufacturers of automotive rear viewmirrors for passenger cars in the world
Largest manufacturer of automotive wiring harnesses inIndia, with more than 65 per cent market share in passengercar segment, serving the entire automotive industry
Largest manufacturer of rear view mirrors for passengercars and MUVs in India, with nearly 48 per cent sharein the segment as assessed by the company
One of the largest manufacturers and suppliers of plasticcomponents to automotive industry
One of the most diversified groups in the Indian automotive industry
FacilitiesWiring harness manufacturing: 20
Wire manufacturing: 3
Tube manufacturing: 1
Plastic molding: 14
Rubber molding: 5
Liquid silicone rubber injection molding: 1
Injection molding tool manufacturing: 1
Design engineering: 15
IP/ cockpit assembly: 2
Door trim manufacturing: 3
Automotive mirror manufacturing: 18
Metal machining: 3
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ProductsAutomotive Rear View Mirrors
Wiring Harnesses
Wires
Injection Molded Products
Blow Molded Products
Liquid Silicone Rubber Molded Components
Injection Molding Tools
Precision Machined Metal Components
Modules
> IP/Cockpit
> Door Trims
> Bumpers
> Air intake manifolds
> Air filter systems
> Car air conditioning systems
Waste Recycling System
Industries ServedAutomotive
Off-Road Vehicles
Earthmoving and Material Handling Equipment
Agriculture and Farm Equipment
Medical Diagnostics
Rubber and Tyre Industry
IT Hardware
Test and Measuring
Scientific Equipment
Elevators
Electrical Equipment
Lawn Equipment
White Goods
Electronics
Office Automation
MSSL Overview
15Together we make it happen
Chairman’s Letter
WxtÜ f{tÜx{ÉÄwxÜá?
IT GIVES ME IMMENSE PLEASURE TO PRESENT
TO YOU THE 22ND ANNUAL REPORT OF YOUR
COMPANY. IT IS MY FIRST LETTER TO YOU AS
THE CHAIRMAN OF THE COMPANY.
I have been associated with MSSL since 1992. From the listing ofthe company in 1993 till date I have seen the evolution of MSSLfrom an Indian wiring harness manufacturer to a global tier 1manufacturer of modules and systems. MSSL has always been aconsistent performer, but this year has been a truly special year.
It has been a year of economic meltdown across the world. Theautomotive industry along with auto components industry hasbeen severely affected. Though no one remains unaffected by theeconomic situation, MSSL still maintained its trend of growingfaster than the market. This could be achieved because MSSL hasbeen increasing its content per car through a balanced productportfolio coupled with a balanced customer base.
Considering the given situation, MSSL’s growth of 28% on aconsolidated basis is a fairly good growth. This demonstrates theresilience and inherent values of MSSL that have always been themotive force behind its growth. These are the values of buildingtrust in customers, always trying to add value as a supplier and atthe same time create more value for its investors.
As a part of its strategy for Vision 2010, MSSL acquired thebusiness of Visiocorp, one of the world’s largest manufacturersof rear view mirrors. This acquisition establishes MSSL as a leadingmanufacturer of rear view mirrors and also as an established Tier-1 manufacturer to the global automotive industry. Since thisacquisition was made in March 09, the real impact would bevisible in the next fiscal.
The Indian auto sector is on the recovery course. The worldeconomy has also started showing signs of recovery. We have apositive outlook. With the improving economic conditions wesee good opportunities in next couple of years.
It has always been our endeavour to create more value for all ourstakeholders. MSSL will continue its efforts to achieve its growthand profitability targets. I thank all our stakeholders for theircontinued support.
Sincerely,
M.S. GujralChairman, Motherson Sumi Systems Limited
Vice Chairman’s
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Letter to the shareholders
WxtÜ f{tÜx{ÉÄwxÜá?I take this opportunity to present to youthe new name of our group –“Samvardhana Motherson Group”.Samvardhana means ever increasing valuefor all. The new name of the group is aprojection of our commitment andconsistent focus on creating value for allour stakeholders.
I also present to you a new face of yourcompany; a new Motherson Sumi SystemsLimited (MSSL) that is now a truly globalcompany with a presence across fourcontinents; the Company that has a muchexpanded product range, service offeringsand technological capabilities and cannow offer a broad range of integratedsolutions to support customers’ evolving
business needs, moving forward in itsvision of being a globally preferredsolutions provider. The Company hastransformed from being the largestmanufacturer of wiring harnesses and rearview mirrors for passenger cars in India toone of the largest manufacturers of RearVision Systems in the world.
In March 2009 MSSL along with groupcompany Samvardhana MothersonFinance Limited has acquired globalbusiness of Visiocorp, one of the largestmanufacturers of automotive rear viewmirrors in the world. Visiocorp brings itsown state-of-the-art technology, a globalmanufacturing base and a customer basecovering almost every major automobile
manufacturer of the world. We are deeplyhonored for the confidence our customershave reposed in us and we look forwardto further strengthening these excellentrelationships.
After the restructuring and turnaround,which we plan to bring about in theforthcoming years, it would emerge as amuch stronger company. The new entitywill operate under the new brand nameSamvardhana Motherson Reflectec(SMR). I welcome all the members ofVisiocorp to the Samvardhana Mothersonfamily.
We now have the capability to serveglobal OEs in all major markets. With this
“SAMVARDHANA MOTHERSON GROUP”.
SAMVARDHANA MEANS EVER INCREASING
VALUE FOR ALL. THE NEW NAME OF THE
GROUP IS A PROJECTION OF OUR
COMMITMENT AND CONSISTENT FOCUS
ON CREATING VALUE FOR ALL OUR
STAKEHOLDERS.
17Together we make it happen
acquisition we have moved closer to ourVision 2010: to make MSSL a BillionDollar Company; Maximum share of anyone customer in consolidated turnover tobe less than 20%, and to have more than60% sales to customers outside India. Adividend of 32% of the consolidatedprofit is already being paid to ourshareholders in view of substantialinvestments being made by the Company.We aim to achieve cash positive positionin the acquired entity in the first year itself.We strive to lay a strong foundation foryears to come, to match the financialtargets of the group. Though because ofnew investments and the acquisitionROCE has been impacted in the shortterm, we are focused on achieving ourlong term targets.
This was an unprecedented year globally,although not on a positive note. Most ofthe world economies went into arecession. Industrial output declined
following a severe slump in globaldemand. Auto industry faced probably the worst crisis in many decades with a number of major players struggling for survival. Collapsing banks, tight credit, soaring interest rates, fuel costs,raw material cost and exchangefluctuations all added to the gravity of thesituation. Our performance also gotimpacted by the global meltdown. Wecould grow the top line but the bottomline was affected particularly on astandalone basis. Still we managed tomaintain our profitability albeit lower thanthe previous year. Though not entirely toour satisfaction, considering the overalleconomic conditions and the industryperformance this was not a badperformance. We still have strong cashflows and have a sound financial andoperative health. We have survived theworst crisis faced by the industry in a longtime. We have emerged as a leaner and amore efficient company.
In wiring harnesses we continue to bemarket leaders. The company has addednew customers, new products as well asnew technologies in both wiring harnessesand polymers. Air cleaner assemblies aresignificant additions in polymer productsfor which we have acquired newtechnologies through our collaborators.
The mirror business in India now hasaround 48% share in rear view mirrors forpassenger cars. We have got new businessfrom Renault Nissan and Mahindra &Mahindra for their new models.
During the year our joint venture CalsonicKansei Motherson started commercialproduction of HVAC systems andcompressors which are being supplied toMaruti Suzuki’s new model Ritz. The JVwill be introducing more products and isgeared up for the new launches.
We have established new facilities for
IN WIRING HARNESSES WE CONTINUE TO BE
MARKET LEADERS. THE COMPANY HAS ADDED NEW
CUSTOMERS, NEW PRODUCTS AS WELL AS NEW
TECHNOLOGIES IN BOTH WIRING HARNESSES
AND POLYMERS.
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rubber products in India. Aimed at theIndian market, the company will beintroducing some of the rubber productsand compounds using technologiesacquired in Australia. The existing rubberbusiness in Australia is doing well and hasstarted supply of rubber to tyre retreadingindustry in Australia.
We are making conscious efforts toincrease the depth of product range in allour business verticals, thereby increasingour content per car. We are creating morevalue for our customer by offering moresolutions and becoming a single windowsource for multiple products. With thisincreasing content we have been able togrow our sales even in a shrinking marketcondition.
It seems that for the Indian automotiveindustry the worst is over. With thepassenger cars sales picking up in the 1stquarter of 2009-10 aided by the stimulus
packages from the government, thesituation is improving. Even at the globallevel there are slow but clear indicationsof recovery. The coming quarters may stillbe tough, but by the year end the globalindustry is expected to recover to areasonable level.
The results of the first quarter of the year2009-10 has started on a promising noteparticularly on the domestic side whichhas resulted in positive growth on a yearon year basis. Consolidated sales havegrown by 133% while the standalone saleis stable. The operation of SMVSL hasshown some signs of improvement and Iam proud of the team of SMVSL who aretaking the challenge of delivering theimproved performance in this turbulentglobal scenario. SMVSL has shownpositive EBIDTA in the first quarter.
For us years 2010-11 and 2011- 12 willbe significant as the Indian market will
witness a number of new car modellaunches. We now have a strong globalfootprint and a better global position as atier-1 supplier. We are well poised to servethe requirements of our customers and toavail the emerging growth opportunitiesglobally.
We have always believed in transformingwith the changing times, with a proactiveapproach towards growing faster than themarkets. We believe in building trust bycreating value for our stakeholders. Wewill always follow value creating growth.We value your trust in us and thank youfor your support.
V. C. SehgalVice Chairman Motherson Sumi Systems Ltd.Chairman Samvardhana Motherson Group
19Together we make it happen
20 Motherson Sumi Systems Limited
Trust is the basis for all growth and the core of all transformation…
Growing Trust. Transforming Business. Enhancing Value For All.
The trust MSSL shares amongst its stakeholders is a legacy it hasbuilt in the past 23 years, and which is today its greatest asset. Asuccessful business is built through fruitful relationships andtowering trust levels. With a philosophy rooted in this credo, MSSLbelieves in an increased propensity to strengthen trust among allits stakeholders.
So deep-rooted and intrinsic to the Company’s business is thistrust that most of the joint ventures of the Company have takenplace at the behest of customers, either to partner with theirfollow-me source or to acquire a particular technology to meettheir requirement. Calsonic Kansei Motherson, a joint venture,was formed to meet the requirements of Maruti Suzuki and NissanMotors. Kyungshin Industrial Motherson Limited caters to wiringharness requirements of Hyundai motors in India. Both thepartners in these JVs are major suppliers, globally, to theirrespective customers.
These are just a few examples. MSSL itself is the oldest jointventure, being 23 years old. The relationships with our JV partners
have grown from strength to strength over the years, which isevident from formation of multiple JVs with the same JV partners.
Another vital dimension of this ever-growing trust is theconfidence the shareholders have in the Company. GoodCorporate Governance means complete transparency, which ispractised by MSSL in all its operations and activities. The Companyhas always believed in keeping its shareholders informed aboutthe path it is taking in any venture or operation. The five-yeartarget set by the Company for itself is made public, and each yearthe progress made in the direction of achieving the same is sharedwith all the stakeholders.
Highly committed employees with high trust levels contribute ina big way to the productivity of MSSL. The integrity of theorganization and the trust enjoyed by the Company from itscustomers, shareholders, employees and collaborators havehelped it in achieving the goals and targets it has set over theyears.
21Together we make it happen
All growth is rooted in transformation, andtherein lies the importance of change…
Armed with the trust of its various stakeholders, MSSL hascontinuously evolved over the years, successfully transforminginto its present form. The Company, which started its journey asa wiring harness supplier to a single customer, is now a supplier ofmultiple products ranging from Wiring Harness to AutomotiveRear View Mirrors, from Plastic Molded Parts & Assemblies toComplete Modules, Injection Molding Tools & from RubberProducts to Metal Machined components, serving more than 500customers worldwide.
The Company, which was running through a single unit in India,has now grown into more than 60 units in 20 countries acrossAsia, Europe, North America and Australia. Starting with itspartnership with SWS, today MSSL has transformed into a JVspecialist, having multiple JV partners.
Trust is the basis for growth… growth is rootedin transformation… transformation leads tovalue enhancement for all.
MSSL is a customer-driven company. Today, the Company is asingle-window - complete solutions provider - for its customers.The Company’s passion for Quality, Cost, Delivery, Development,Management, Safety & Environment (QCDDMSE) yields bothtangible & intangible value enhancement to all its customers.
The Company has, since its inception, always striven to retain allits valued customers. It has established dedicated units to cater tothe needs of specific customers. MSSL is committed to sustainedand value-creating growth for all its stakeholders. A person whoinvested Rs 1,000 in MSSL in 1993 would have a value of Rs. 2,50,000 as on 31st March 2009.
A strong foundation of trust is the basis of growth for MSSL. MSSLhas been continuously transforming proactively to become abetter and stronger company, creating more value for all.
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23Together we make it happen
The transformation so far
For MSSL, it has been a journey of transformation – a transformationrooted in the trust of all its customers and other stakeholders, and atransformation that has enabled it to deliver exceptional value to themat every stage of its growth.
MSSL started as a wiring harness manufacturing company in 1986 ---a single-product and a single-unit entity. What propelled MSSL’s growthwas a core value of creating more value for all its stakeholders throughconstant transformation. It has been a continuous transformationspanning all the constituents of the Company’s business, be it products,technologies, partnerships, customer segments or geographicalfootprints.
Wide range of products MSSL offers a diverse range of products for varied applications. Overthe years, the Company has leveraged its competence in existing areasand collaborated with global technology leaders to create productsfulfilling the technical needs of its customers. And, in doing so, it hastransformed from a wiring harness manufacturer to a single-serviceinterface for multiple customer needs.
MSSL has consistently grown its content per car by continuously addingnew products. MSSL offers products ranging from wiring harnesses toautomotive rear view mirrors, injection molding tools, plasticcomponents, rubber molded and extruded components, wastemanagement systems, machined metal components, vehicle airconditioning systems and integrated modules like door trims andcockpits.
It is not just the diverse product range but also the sheer depth withineach product portfolio that differentiates MSSL. Within each segment,the Company provides a comprehensive range of products tailored tospecific customer needs across various industries.
24 Motherson Sumi Systems Limited
Wiring harnesses ---froma simple single circuit to complex designs with hundreds of circuits.
Molded plastic parts --- as small as a clip to as large as a bumper. From functional plastic parts to aesthetic appearance parts --- painted, printed and upholstered. From a smallcomponent to fullyintegrated modules like dashboards and door trims.
Rubber components for automotive and industrial applications.
High precision machinedmetal parts for critical applications like fuel injectors.
State-of-the-art technologies Contemporary technologies in wiring harnesses withbackground integration.
Full range of molding technologies, encompassing plasticinjection molding, gas assist molding, two component molding,thermo set molding, blow molding, compression molding andpost-molding facilities.
Rubber injection molding, liquid silicon injection molding andrubber extrusion.
Comprehensive mould-making technologies.
A full range of specialised and customised metal machiningsolutions.
State-of-the-art assembly techniques.
Patented aeration technology for waste recycling systems.
Diverse customer segmentsMSSL has a customer base spread over a spectrum of industries.
Under automotives MSSL caters to - cars, SUVs, trucks, buses,two-wheelers, trailers, dump trucks, garbage disposers, materialhandling and earthmoving equipment (including forklifts, cranes,bulldozers, road rollers, loaders), tractors, tillers, harvesters andlawn mowers. Under non-automotives, MSSL caters to machines,microscopes, cameras, binoculars, elevators, office automationequipment, consumer electronics, medical equipment, diagnosticequipment, industrial mounts, computers, as well as a number ofprecision measuring equipments.
MSSL is increasing the list of applications with a widening productrange, penetrating deeper into each segment.
Key collaboratorsBased on customer preference for follow-me sources and thegrowing requirement for new technologies, MSSL hascollaborated with technology leaders in their respective fields tobring relevant technologies for the products required by itscustomers. With Sumitomo Wiring Systems as its principal partner,the Company currently has multiple collaborations with differenttechnology leaders.
The transformation so far
25Together we make it happen
Small moulds for a tinyconnector to large moulds weighing a fewtonnes.
Basic flat-plate automotive mirrors to electric mirrors loaded with features.
AC ducts to complete carAC systems.
Waste recycling systems
Extensive geographical presenceBy February 2009, MSSL had established its presence in 12countries across Asia, Europe and Australia. MSSL has developeda network of manufacturing bases, design centres, logisticscentres, marketing support and sourcing hubs across a diversifiedgeographical base. This imparts MSSL the advantage of proximityto customers, flexibility of alternative manufacturing and theability to serve customers from India, UAE, Europe and Australia.Within India, MSSL enjoys a multi-locational manufacturing basewith facilities located strategically close to major customer clusters.
The worldwide customers base of MSSL demonstrates its ability inserving customers that are globally dispersed. In this, it issupported by its robust logistics management.
Global vendor base: MSSL has a high degree of backwardintegration for key inputs, along with a well diversified vendorbase. Its international presence has translated into a cost-effectiveglobal procurement network with alternative sourcing options formost of its input materials.
Leadership position in the marketMSSL is the largest manufacturer of wiring harnesses and rearview mirrors, and is also one of the largest suppliers of moldedplastic products and modules for the passenger car and MUVindustry in India. It is considered among the largest auto ancillariesin India.
Track record of mergers and acquisitionsMSSL has a long and extensive experience of successful mergersand takeovers. While most of the mergers of its subsidiaries andJVs were a part of its restructuring strategy to make MSSL astronger company, the inorganic growth has come throughacquisition of assets of companies in distress, which MSSL hassuccessfully turned around.
All these acquisitions were supported by a strong rationale, as theywere all done at very favourable valuations with complete supportof customers, and contributed significantly in terms of turnover,technology, geographical presence, product range and above all,a ready presence in respective niche segments with a strongcustomer base.
26 Motherson Sumi Systems Limited
About VisiocorpThe mergers and acquisitions that the Company had been undertakingall these years contributed significantly to its growth. However, therecent acquisition of Visiocorp has a unique significance for theCompany because of its size, turnover, customer base, technology,geographical spread and the way it has positioned MSSL as a tier-1supplier on a global level. With this acquisition, MSSL has taken a bigleap in its growth and expansion plans.
Visiocorp is one of the largest manufacturers of exterior rear viewmirrors for passenger cars in the world. Visiocorp was originally namedSchefenacker. The rear view mirror business was developed bycombining Britax, Engelmann and Schefenacker.
Visiocorp’s global share of exterior mirrors for passenger cars is around30%, and that for the Indian passenger car segment is around 48% asaccessed by the company. The market leader in Europe, Visiocorpmanufactures approx. 30 mn exterior mirrors and 10 mn interior mirrorsper annum. It supplies exterior mirrors, interior mirrors and blind spotdetection systems for all passenger vehicle segments to nearly everycarmaker in North America, Europe, Asia and Australia.
Visiocorp has about 50 customers covering all the major OEMs in theworld. The main customers of Visiocorp include BMW, Chrysler, Daimler,Ford/Volvo, GM, Hyundai/Kia, Mahindra & Mahindra, Maruti Suzuki,Mitsubishi, Porsche, PSA, Renault/Nissan, Tata JLR, Toyota,Volkswagen/Audi etc. In 2008, Visiocorp Group had a turnover ofapprox. Euro 660 million (unaudited).
The quantum leap – Visiocorp acquisition
27Together we make it happen
28 Motherson Sumi Systems Limited
Visiocorp’s various operating companies include manufacturinglocations at the US, Mexico, Australia, UK, Hungary, Spain, France,China, India and Korea, together with design and engineeringcenters at each location and at Germany. It has in-housecompetencies for plastic molding, electric drives, lightingtechnologies, electronics, painting and glass processing.
What led to the Visiocorp saleVisiocorp, at the time of its sale, was held by private equity holders / hedge funds. The business was carrying a huge debt at theplc level, senior debt of Euro 165.5 million including revolver ofEuro 25 million, and Mezzanine debt of Euro 124.5 million. Thecompany required infusion of funds to support the operations,particularly in the present economic scenario. The company hadfinancial problems coupled with management problems at plc level.
What the acquisition entailsMSSL subsidiary, Samvardhana Motherson Visiocorp Solution Ltd.(SMVSL), now renamed as Samvardhana Motherson Reflectec hasacquired all the operating subsidiaries of Visiocorp plc (inadministration) for a cash consideration of approx. Euro 25 millionand allotment of 5% consideration shares having face value ofEuro 1.5 million. The acquisition from Visiocorp plc (inadministration) comprises only assets in the form of shares of theoperating companies and no debt is being acquired from Visiocorpplc (in administration).
SMVSL is 95% owned by Samvardhana Motherson GlobalHoldings Limited (SAMVARDHANA MOTHERSON GROUP), ajoint venture between MSSL and Samvardhana MothersonFinance Limited (SMFL), in the ratio of 51:49.
The rationale behind our acquisition of VisiocorpA strategic fit for the MSSL business and its core competencies, theacquisition of Visiocorp is but an extension of our philosophy ofdeveloping the trust of our customers to generate bigger growth
through constant transformation of our business with the ultimateaim of delivering the maximum value to all our stakeholders.
Essentially an extension of our core activities, the acquisition was,as in the case of most of our previous major acquisitions, acustomer-driven move that was totally in line with thetransforming global scenario where customer needs areperpetually changing. With today’s customers essentially lookingfor one-window solutions through bigger product portfolio andbetter geographical reach, the acquisition of Visiocorp – with itsglobal footprints and huge customer base – was completelyaligned with our goal to strive constantly to meet the changingcustomer demands.
What made the acquisition even more attractive and timely wasthat it was undertaken at an extremely good valuation since itinvolved assets that were in distress, thereby bringing in a highvalue accretion for MSSL. The acquisition promises positive cashflow from the first year itself, making it a highly beneficial strategicmove for MSSL.
It was, in fact, the prevailing economic situation that generatedthe right and ideal opportunity for the acquisition. This was theappropriate time to acquire Visiocorp as we were able to completethe acquisition at very attractive valuations. Also, as per the deal,we had complete access over the assets of the company and hadno obligations for any of Visiocorp plc’s liabilities. Thus, it was avery favourable proposition to us.
The acquisition is clearly also validated by the fact that it has notonly propelled MSSL to the global Tier I league, opening newmarkets like China, Mexico, USA, Korea, Japan, Spain, France andHungary, but has also opened up a huge vista of opportunity forour associates to take on more responsibilities and cater to thegrowing and diverse demands of our global customers.
Another key rationale for this morale-boosting acquisition is thecomplete synergy of the Visiocorp business with the SamvardhanaMotherson Group, since mirrors, being a synergistic product,
29Together we make it happen
brings re-sourcing value into MSSL’s existing business lines ofWiring Harness, Polymer Processing & Elastomer.
Lending prudence to our move was also the fact that Visiocorphad been successfully running business in India for more than 13 years through Joint Venture with MSSL.
Visible and projected advantages of theacquisition
With this acquisition, MSSL has become one of the largestmanufacturers of automotive mirrors in the world.
The synergies of the Visiocorp business are completely alignedwith the existing business of MSSL.
Visiocorp is a market leader in exterior rear view mirror systemsand brings with it cutting edge technology, covering thecomplete range of mirrors from low-end entry segments tohigh-end luxury segments. The product range also includesspecialised unique solutions like the Telescopic Trailer TowMirrors and camera-based Blind Spot Detection systems.
Importantly, this acquisition also paves the way for MSSL toaccomplish its stated goal of reaching a sales turnover of US $1billion by the year 2010.
The acquisition has enabled MSSL to acquire its owntechnology, research base, product expertise, and a readycustomer base that includes all the leading automobilemanufacturers of the world.
The acquisition of Visiocorp has enabled MSSL to enhance it’sposition as a global Tier-1 supplier in very short time and hasalmost doubled MSSL’s turnover.
The acquisition will also provide access to Visiocorp’s over 300patents.
With Visicorp, the Group now has over 80 group manufacturinglocations in 20 countries, of which 60 are in India.
The acquisition has led to expansion of MSSL customer base,opening more opportunities, thus establishing a global platformfor MSSL and opening new opportunities for extendingrelationship with global customers.
It has extended MSSL’s presence to more countries - USA,Mexico, Spain, France, Hungary, China, Korea and Japan.
Turnaround plan for VisiocorpWith a highly successful track record of managing multiple jointventures with players from different countries, cultures,Motherson is working as a truly global group. Before thisacquisition, the Group had overseas facilities in 13 countries. The experience of operating together with joint ventures andoverseas plants will help the Group effectively integrate with the global organisation of Visiocorp. With synergies between the existing Group business and the Visiocorp business, thetechnical and operational integration is being well taken care of. Financial restructuring has already been done.
The existing business of MSSL and SMG greatly supplementsVisiocorp’s need for products and services, particularly in design engineering services, IT, molds, injection molded parts &assemblies and wiring harnesses. We will leverage these synergiesto support Visiocorp.
Earlier, because of the financial condition of the company, a lot ofVisiocorp facilities were underutilized as customers were holdingback orders. The situation is now improving in the wake of theacquisition.
Apart from extending financial and management support toVisiocorp, MSSL, with its existing synergies in operations and therelated backward integration, can also support Visiocorp bysupplying wiring harnesses globally for the business and alsoextending support in design, tooling and molding.
Interior mirrors The interior mirrors that come from the Visiocorp houserange from prismatic versions up to complex multi-function systems featuring Reading lamps, Ambientlight, Microphones, Remote control garage door opener,Telematics interface & Emergency switch, Auto dimmingglass, Rain sensor, Air temperature and humidity sensor.
30 Motherson Sumi Systems Limited
Visiocorp’s product portfolio
The Visiocorp product range is a broad portfolio extending fromexterior and interior mirrors to blind spot detection systems for allpassenger vehicle segments. As a technology leader, Visiocorpintroduced the world's first exterior mirrors with integral turnsignal lights, the first combined power telescopic and powerfolding mirror for light trucks and the only camera-based blindspot detection system in the market, featuring leading edgeimage processing technology.
Exterior mirrors Visiocorp offers extensive range of exterior mirrors withfeatures which includes Convex and Aspheric glass,Electric glass adjustment, Glass heating, Power fold, Bulband LED turn signals, Temperature sensors, Memoryposition adjustment, LED light guide turn signals, Bulband LED ground illumination, Water repellent glass, LINBus node.
In the driving seat
31Together we make it happen
Blind Spot DetectionSystems
The first -"seeing" mirror
Visiocorp's high-tech Blind Spot Detection system hasbeen in use since 2005 to monitor the blind spot, helpingto make overtaking easier. It is the first driver assistancesystem which is able to independently recognise movingobjects through electronic image processing. Digitalcameras located in the door mirrors observe trafficbehind the vehicle, taking 25 pictures a second. Smallyet powerful microprocessors in the door mirrors processthe image information. If a vehicle enters the warningzone, an orange LED located inside the car, near the doormirror lights up to warn the driver.
Telescopic Trailer Tow Mirrors
Visiocorp is a world leader in Telescopic Trailer Tow (TTT)mirrors. It was the first to incorporate both power-telescoping and power- folding functions into a trailertow mirror. This allows the driver to electrically extendthe mirror heads when towing, retract it for normaldriving conditions and electrically fold the mirrors to thevehicle when parking.
Turn signals The mirror turn signal today shapes the appearance ofmany vehicle models of numerous car manufacturers. Itslocation at the outermost position of a vehicle and nearthe eye level of the driver ensures optimum visibility ofthe signal light. It was launched in the market in 1998 incooperation with Mercedes-Benz. Today, VisiocorpGroup's incandescent, LED and state-of-the-art light pipeturn signals provide unique styling to exterior mirrors.
A young visionary with a passion to drive growth-centrictransformation, Mr. Laksh Vaaman Sehgal is the CEO ofSamvardhana Motherson Reflectec. He is also on the Board ofDirectors of Motherson Sumi Systems Limited and SamvardhanaMotherson Finance Limited, the flagship and the holdingcompanies of Samvardhana Motherson Group (SMG) respectively.
The son of Mr. V.C. Sehgal, Chairman Samvardhana Motherson Group, Vaaman has an academic record par
excellence, holding a MBA degree from Columbia Business School (USA). Having undergone intensive training in all the main business ventures to gain hands-on knowledge of the Group, he has also spent three years working with theGroup’s collaborators in Germany and Japan.
Vaaman is closely involved in all the new ventures, and he is amember of the core strategic team that is responsible for theoverall management of the Group.
32 Motherson Sumi Systems Limited
Global Presence
USA
MEXICO
Manufacturing Locations
Design & Developement Centre
Representative Office
33Together we make it happen
IRELAND
UK
CZECH REPUBLIC
GERMANY
HUNGARY
CHINASOUTH KOREA
JAPANAUSTRIA
ITALYSPAIN
FRANCE
MAURITIUS
SHARJAH
AUSTRALIA
KANDLA
NOIDA & NCR REGION(FARIDABAD, GURGAON &MANESAR)
NASHIK
PUNE
BANGLORE
CHENNAI
LUCKNOW
PONDICHERRY
SRI LANKASINGAPORE
34 Motherson Sumi Systems Limited
Financial Highlights
Consolidated
2008-09 2007-08 % change
Sales- Net of exciseWithin India 14,430.70 12,817.25 12.59%Outside India 11,525.70 7,464.00 54.42%Total Sales 25,956.40 20,281.25 27.98%EBIDTA 4,004.70 3,352.75 19.44%Profit before tax 2,559.78 2,262.20 13.15%Profit after tax (Net) 1,762.52 1,778.62 (0.91)%Earnings per share - Rs. Per share 4.96 5.03 (1.39)%Reserves and surplus 7,475.55 5,003.15 49.42%Loan Funds 5,880.41 1,999.81 194.05%Foreign currency convertible bonds 3,070.52 2,891.41 6.19%
Capital Employed & ROCE
Net Worth Total Loans FCCB2004-05
1800
1600
1400
1200
10000
8000
6000
4000
2000
0
45
40
35
30
25
20
15
10
5
0
ROCE%
Rs. i
n M
illio
n
ROC
E(%
)2005-06 2006-07 2007-08 2008-09
12382200 2939
1549
2715
3796
1688
2914
5359
2000
2891
7831
5880
3071
Sales break-up Sales Profile
Others42.6%
Volkwagen 2.1%
HSCIL 2.1%
Maruti Suzuki16.6%
Hyundai 13.5%SEWS Hungary7.5%
Ford 5.2%
Tata Motors 3.1%
Mahindra &Mahindra 2.7%
Piaggio 2.4%Outside India44.4%
Within India55.6%
General Motors 2.2%
Rs. in Million
35Together we make it happen
Standalone
2008-09 2007-08 % change
Sales- Net of exciseWithin India 10,382.22 10,420.37 (0.37)%Outside India 2,567.21 2,610.64 (1.66)%Total Sales 12,949.43 13,031.01 (0.63)%EBIDTA 1,688.58 2,361.28 (28.49)%Profit before tax 852.46 1,641.99 (48.08)%Profit after tax (Net) 695.41 1,281.92 (45.75)%Equity Capital 355.55 355.55 0.00%Earnings per share - Rs. Per share 1.96 3.63 (46.01)%Reserves and surplus 3,802.80 3,668.96 3.65%Load Funds 2,311.02 1,719.21 34.42%Foreign currency convertible bonds 3070.53 2,891.41 6.19%
Capital Employed & ROCE
Net Worth Total Loans FCCB2004-05
12000
10000
8000
6000
4000
2000
0
45
40
35
30
25
20
15
10
5
0
ROCE%
Rs. i
n M
illio
n
ROC
E(%
)2005-06 2006-07 2007-08 2008-09
722
1741 2280
1075
2715
3010
1066
2914
4025
1719
2891
2311
4158
3071
3071
Sales break-up Sales Profile
Outside India19.8%
Within India80.2%
Others 30.7%
JCB 2.7%
SWS 2.7%Hindustan Unilever3.7%
Maruti Suzuki 31.8%
Tata Motors 5.6%
Mahindra & Mahindra 5.4%
Piaggio 4.8%
Hyundai 4.8%
HSCIL 4.1%
Ford 3.7%
Rs. in Million
36 Motherson Sumi Systems Limited
Customer Relationships
Armed with a philosophy of nurturing trust at all levels at all times,MSSL has, over the years, built trusted and long-standingrelationships with major players of the Indian and globalautomobile industry. Being a highly customer-focused company,MSSL has always offered extremely customised solutions to itscustomers.
Most of the joint ventures and subsidiaries of MSSL have beenestablished on the core of its trust, which has consistently andconstantly enabled the Company to transform itself in line withthe changing needs of customers across geographies and productprofiles. This, in turn, has enabled the Company to delivermaximum value to its customers.
Customer recognition An endorsement of the trust that our customers have in us is the large number of awards and customer recognitions that we have earnedover the years.
A glance at some of the awards and endorsements received from our customers in 2008-09:
Maruti Suzuki
Performance AwardOverall Excellence
Performance AwardMPS
Performance AwardVA-VE
Performance AwardPart Development
Performance AwardSystem Audit
Performance AwardIncoming Quality
Improvement
Vendor QualityAwareness Quiz
Award
Caterpillar
Bronze level certification for “Supplier Quality Excellence Process"
Hyundai Sumitomo Wiring Systems
Good Practice Award
Honda Siel
National Top performer for service parts supply award
Ashok leyland
National Top performer for service parts supply award
Gold award forDelivery
Toyota
Best Supplier Gold Award Zero PPM Award
Best Cooperation 08-09 Merit Award 08
GE Healthcare
Outstanding Delivery Performanceas a Strategic Supplier
Tata Motors
Outstanding Performance
3722nd Annual report 2008-09
Management Discussions and Analysis
Overview (2008-09)
The year 2008- 09 is unprecedented for MSSL. The year marked
the acquisition of rear view mirror business of Visiocorp, a strategic
move for leveraging on our existing strengths and fostering deeper
customer relationship. This also transforms the company into a
global player catering to Tier1 requirements globally.
Indian Vehicle Market
The Indian vehicle market, after few years of consistent good
growth, witnessed a distinct slowdown in growth. While both
passenger car and Two wheelers market registered positive growth,
the commercial vehicle segment has negative growth over the
previous year.
Figures in Thousand Nos.
Segment 2008-09 2007-08 2006-07
Passenger Vehicles
Numbers 1,846 1,754 1,545
Growth rate 5% 14% 18%
Commercial Vehicles
Numbers 417 545 520
Growth rate (23%) 5% 33%
Two wheelers
Numbers 8,348 8,009 8,444
Growth rate 4% (5%) 11%
During the period, the consolidated revenues of MSSL grew by
28% to Rs 25,956 million and on a standalone basis , the revenues
were almost flat at Rs 12,949 million
Product Portfolio
Rs. in Million
2008-09 2007-08 Growth %
Consolidated
Wiring harnesses 15,675 13,351 17%
Polymer components 4,486 4,370 3%
Rs. in Million
2008-09 2007-08 Growth %
Rubber/metal machined
components 2,152 2,207 (3%)
Mirrors 3,643 353 932%
Total 25,956 20,281 28%
Standalone
Wiring harnesses 9,453 9,517 (1%)
Polymer components 3,216 3,120 3%
Rubber/metal machined
components 280 394 (29%)
Total 12,949 13,031 (1%)
Some of the main highlights of the Company during the year
2008-09 were:
1) The Company acquired the global business of Visiocorp
engaged in the manufacture of rear view mirrors on
6th
of March 2009. With this acquisition, MSSL has
become one of the largest manufacturers of automotive
mirrors in the world. This further elevates its positioning
as a major Tier 1 supplier to automotive industry with
a global footprint spanning 20 countries. The
consolidated figures include one month figures of
acquired entities.
2) The consolidated revenues grew by 13% over the
previous year, if we were to exclude one month of
revenues of the acquired entity.
3) The Company's wiring harness business crossed Rs 15
billion and witnessed a healthy growth of 17% over the
previous year.
38 Motherson Sumi Systems Limited
Sales Performance
The sales performance of the Company during the year 2008-09 on consolidated and stand-alone basis is as follows:
Rs. in Million
2008-09 2007-08 % increase
Consolidated
Customers within India 14,431 12,817 13 %
Customers outside India 11,525 7,464 54 %
Total 25,956 20,281 28 %
Standalone
Customers within India 10,382 10,420 -
Customers outside India 2,567 2,611 (2 %)
Total 12,949 13,031 (1 %)
The Company's sales to customers in India grew by 13% on consolidated basis while on standalone basis it declined marginally by 0.37%.
Consolidated sales to customers outside India increased by 54% to Rs.11,525 million moving from 37% to 44% of total sales. With the
acquisition of the rear view mirror business from Visiocorp, the non-automotive business will decline substantially. However, 2008-09
includes only one month figures of the acquired entity, the non automotive business is 12% of the consolidated revenue.
The revenues of automotive and non automotive business for the year 2008-09 have been as follows:
Rs. in Million
Total Revenue 2008-09 % of Total 2007-08 % of Total % Increase
Consolidated
Automotive 23,969 87% 17,788 86% 35%
Non automotive 3,441 12% 3,139 15% 10%
Unallocated 156 1% (135) (1%) 216%
Total 27,566 100% 20,792 100% 33%
Standalone
Automotive 11,685 88% 12,118 90% (4%)
Non automotive 1,470 11% 1,494 11% (2%)
Unallocated 167 1% (134) (1%) 225%
Total 13,322 100% 13,478 100% 1%
3922nd Annual report 2008-09
Financial Review
The summary of financial results of the Company on consolidated and standalone basis is as follows:
As mentioned earlier, the results for the year 2008-09 include one month result of the acquired entities of Visiocorp. The acquisition has
been done through special purpose vehicle , Samvardhana Motherson Global Holdings Limited, Cyprus in which the Company 's 100%
subsidiary MSSL Mauritius Holding Limited is holding 51 % of the capital. In accordance with GAAPs accounting, the revenues are
consolidated line by line as subsidiary and the share of profit/(loss) of minority shareholders is adjusted as "Minority Interest".
Rs. in Million
Consolidated 2008-09 2007-08 % increase
Sales 25,956 20,281 28%
Profit before interest, depreciation and tax(*) 3245 3379 (4%)
Exchange Fluctuations on FCCB 249 266 (6%)
Exceptional Income / (Expenditure) Net 897 240 274%
Profit before taxes 2,560 2,264 13%
Profit after taxes 2,212 1,750 26%
Concern Share after adjusting minority interest 1,763 1779 (1%)
Earning per share (Rs) 4.96 5.03 (1%)
* Represents excluding foreign exchange fluctuation on FCCBs & exceptional income/expense
The details of exceptional income / (expenditure) are as follows:
1. During the year 2008-09, the Company has one time net income of Rs 1,009 million at Samvardhana Motherson Visiocorp
Solutions Limited.
2. Balda Motherson, the Company 's joint venture has made provision of impairment of fixed assets of which Company has taken
provision of Rs 112 million in its consolidated accounts in proportion of its shareholding in the joint venture.
3. During the year 2007-08, the Company has an income of Rs 240 million arising out of profit on sale of land.
40 Motherson Sumi Systems Limited
Rs. in Million
Standalone 2008-09 2007-08 % increase
Sales 12,949 13,031 (1%)
Profit before interest, depreciation and tax(*) 2,048 2,387 (14%)
Exchange fluctuation on FCCBs 249 266 (6%)
Exceptional Income/ ( expenditure) (110) 240 (146%)
Profit before taxes 852 1,642 (48%)
Profit after taxes 695 1,282 (46%)
Earning per share (Rs) 1.96 3.63 (46%)
* Represents excluding foreign exchange fluctuation on FCCB & exceptional income/expense
Notes:
1. The Company has made provision for Rs 110 million consequent to impairment of fixed assets done by Company's JV Balda Motherson Solution
India Ltd.
2. The figures of 2007-08 include Rs 240 million towards profit on sale of land.
Financial Position
The financial position and other highlights are as follows:
Rs. in Million
2008-09 2007-08 % change
Consolidated
Capital Expenditure (Net) 2,627 1,695 55%
Net Fixed Assets 15,412 6,314 144%
Cash and Bank balances 2,766 954 190%
Net Current Assets 3,169 3,733 (15%)
Net Worth 7,566 4,939 53%
Foreign Currency Convertible Bonds 3,071 2,891 6%
(FCCBs) ** (Euros 45.7 Million) (Euros 45.7 Million)
Loans other than FCCB 5,880 2,000 194%
Standalone
Capital Expenditure (net of disposals) 2,119 1,241 71%
Net Fixed Assets 5,863 4,320 36%
Cash and Bank Balances 179 327 (45%)
4122nd Annual report 2008-09
Rs. in Million
2008-09 2007-08 % change
Net Current Assets 633 2,143 (70%)
Net Worth 3,893 3,605 8%
Foreign Currency Convertible Bonds
(FCCBs) ** 3,071 2,891 6%
(Euros 45.7 Million) (Euros 45.7 Million)
Loans other than FCCB 2,311 1,719 34%
**Includes addition of Rs. 180 million and Rs. 244 million on re-instatement of FCCBs as on 31-03-2009 and 31-03-2008 respectively.
Wiring Harnesses
The Company's brand has been closely associated with wiring
harnesses because of its long standing presence in this product
segment, dominant market share and a high proportion of
corporate revenues derived from it. The wiring harness division
accounts for nearly two-third of the Company's revenue. The
Company together with it's Joint Ventures also enjoys 65% market
share of the passenger car segment in India as accessed by the
Company. The Company is a leading supplier of wiring harnesses
to most of the OEMs in India. The division has the capability to
design harnesses from the vehicle designing stage. There is a high
degree of backward integration for the product. Critical inputs like
wires, connectors, terminals, fuses and fuse boxes, tube clamps
and binders, grommets and seals, caps and sleeves etc are all
manufactured by the group which facilitates consistent, just-in-
time product supply and high quality end product.
The Company with its subsidiaries and joint ventures has its
manufacturing base spread in India, Sharjah, Ireland and the United
Kingdom. These manufacturing unit locations have been
strategically selected to give logistical support to serve major
customer destinations. The combination of design, range, quality,
infrastructure, technology and proximity helped MSSL emerge as
a complete service provider in the field of wiring harness.
The customer base of MSSL spans the entire spectrum of the
automotive industry and includes passenger cars and MUVs, two
wheelers, commercial vehicles, tractors and farm equipment, earth
moving and material -handling equipment, electrical & electronics
and medical systems.
Rs. in Million
Wiring Harness 2008-09 2007-08 % Increase
Consolidated
Customers within India 10,801 9,510 14%
Customers outside India 4,874 3,841 27%
Total 15,675 13,351 17%
Standalone
Customers within India 7,404 7,459 (1%)
Customers outside India 2,049 2,058 (1%)
Total 9,453 9,517 (1%)
Domestic Market
The Company continues to be a dominated player in the domestic
market. During the year the copper prices together with volatile
foreign exchange impacted the revenues of the division.
42 Motherson Sumi Systems Limited
The wiring harness division continued to receive appreciation from
its customers which is reflected in the awards received in the
categories of Quality, Cost, Delivery, Development, Management,
Vendor Performance & Supply to name a few.
Exports
The total export of wiring harness on consolidated basis reached a
new high level of Rs 4.9 billion. The exports from India were almost
flat at Rs 2.05 billion, on standalone basis. The consolidated sales
to customers outside India in this segment grew by 27%; the
growth was also contributed by the Company's joint venture,
Motherson Sumi Wiring System Ltd. (FZC), Sharjah.
Out of the total exports of Rs 4,873 million, direct exports constitute
52% of the total, the rest being exports to the collaborator for the
global passenger car market for which manufacturing is done at
Bangalore and Sharjah.
Outlook
The Company's customer base has expanded this year both
domestically and in the international market with the entry of
various new customers across all segments. The customer base is
expected to expand substantially in the coming years also as many
new customers are entering the market and existing customers
are introducing new models. The prospects of the segment appear
encouraging across the foreseeable future. The cost of main raw
material, copper continues to be volatile in the international market,
which remains a challenge.
The Company has expanded the following capacities during the
year 2008-2009
� "New plants have been set up in Noida & Pune to meet the
requirements of domestic and export market.
� New plant for export of wiring harnesses is being set-up at
Kandla
� The extrusion capacity of Motherson Sumi Electrical Wires,
Bangalore increased from 18,000 km to 26,000 km per month.
� During the year 2009-10, the company will be setting up unit
at Chennai for future upcoming projects of Nissan
Polymer
The division has 14 manufacturing units across India, Sharjah,
Germany and Czech Republic supported by various joint ventures
and subsidiaries. It is amongst the largest plastic component
suppliers to the automotive and consumer electronic industries in
India. The division contributed approximately 17% to the
Company's consolidated revenues in 2008-09.
The range of products manufactured by the polymer division of
the company - Motherson Automotive Technologies Engineering
(MATE) includes injection-moulded components, assemblies, blow-
moulded components and integrated modules. In order to keep
pace with increasing customer requirements, MATE continuously
upgraded its existing facilities and added new facilities. MATE also
manufactures air filters for automotive application with technology
from Roki, Japan. MATE has 10 manufacturing facilities in India
spread over Noida, Manesar, Bangalore, Chennai and Pondicherry.
Rs. in Million
Polymer 2008-09 2007-08 % Increase
Consolidated
Customers within India 2,970 2,718 9%
Customers outside India 1,516 1,652 (8%)
Total 4,486 4,370 3%
Standalone
Customers within India 2,810 2,714 4%
Customers outside India 406 406 -
Total 3,216 3,120 3%
Domestic
During the year, MATE achieved an increase of 3% in its domestic
revenues. The division is focusing on adding new value added
modules that require specialized engineering abilities.
Markets outside India
The exports were severely affected by the global slowdown. On
consolidated basis the sales to the customers outside India was Rs
1.5 billion. In addition to the revenues being contributed by MATE,
this business is operated through the Company's subsidiaries namely
MSSL Polymers GmbH (MSP-G), MSSL Tooling Ltd. (FZC) (MTL),
Global Environment Management (GEM) and MSSL Advanced
Polymers s.r.o.(MSP - CZ). GEM launched its product Aerobin in
Europe, and is setting up the distribution network.
4322nd Annual report 2008-09
Outlook
� New units coming up in Pune and Chennai are near
completion. These units will be meeting the growing demands
of the domestic market mainly catering to the customers in
these regions.
� MSSL Advanced Polymers s.r.o (Czech Republic) plans to build
a new factory. Construction work for the same is to commence
soon
� MATE will be setting up unit at Bangalore and in the Ford
Supplier Park, Chennai.
Automotive Mirrors
Till March 2009 the mirror business was conducted by MSSL
through its joint venture
company Visiocorp Motherson
Limited. The JV is the market
leader in Indian passenger car
market with nearly 48% share
as accessed by the Company.
On 6th March 2009 MSSL
took over the global rearview
mirror business of Visiocorp
Group which was under
administration. With this
takeover MSSL has become
one of the largest
manufacturers of rear view
mirrors in the world. The
details of this takeover have
been discussed in detail in the
earlier sections of this annual
report.
This division contributed a turnover of Rs 3,642 million which
includes full year turnover of the Indian company (49% being MSSL
direct holding) and one month turnover of Visiocorp group. The
last year unaudited turnover of Visiocorp Group was USD 660
million. This division is going to be the major contributor to the
turnover in the coming years.
Rs. in Million
Mirrors 2008-09 2007-08 % Increase
Consolidated
Customers within India 634 329 93%
Customers outside India 3,009 24 1243%
Total 3,643 353 932%
Machined Metal Components, Rubber Components
and others
1. Metal Machining business is done by Motherson Innovative
Engineering Solutions (MINES), a division of MSSL which has
facilities at Bangalore and Chennai. In addition to this ,the
Company has a JV Motherson ORCA Precision Technologies
GmbH at Donaueschngen, Germany.
2. Rubber Business: the Rubber Business is conducted through
the 3 joint ventures with Woco and Motherson Elastomers
Pty Ltd., MSSL is establishing facilities for rubber compounding
and products in India that will use the technology acquired in
Australia.
3. Fuses, Fuse Holders and others - This business is
conducted through its subsidiary Motherson Pudenz
Wickmann Limited.
Rs. in Million
RUBBER/METAL
MACHINED
COMPONENTS 2008-09 2007-08 % Increase
Consolidated
Customers within India 25 261 (90% )
Customers outside India 2,127 1,946 9%
Total 2,152 2,207 (3% )
44 Motherson Sumi Systems Limited
Rs. in Million
RUBBER/METAL
MACHINED
COMPONENTS 2008-09 2007-08 % Increase
Standalone
Customers within India 168 248 (32% )
Customers outside India 112 146 (23% )
Total 280 394 (29% )
The performance of these businesses namely rubber, metal, fuses
and fuse related components has been discussed in details under
"Performance of Subsidiaries and Joint Ventures"
Outlook
The Company has set up facilities for rubber compounding and
rubber moulding at Chennai by shifting part of the equipment
from Australia. This is expected to increase competitiveness of the
Company in the segment.
Performance of Subsidiaries & Joint Ventures
The summary of the financial performance of the Company’s,
subsidiaries is disclosed elsewhere in the annual report & forms
part of the MDA. The summary of financial highlights of the JV
companies is as follows:
Rs. in Million
MSSL Holding Capital Employed Net Sales Profit After Tax Capital Expenditure
2008-09 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08
Kyungshin Industrial
Motherson Ltd. 50% 1,022.70 839.03 4,983.13 3,200.07 440.08 274.96 184.10 262.62
Visiocorp Motherson Ltd.
(formerly Schefenacker
Motherson Ltd.) 49% 337.19 177.91 1,073.12 719.62 67.51 39.70 148.93 18.31
Balda Motherson
Solution India Limited 40% 397.04 744.53 199.82 13.97 (415.84) (130.49) 27.67 77.60
Woco Motherson
Ltd. (FZC) 33.33% 107.45 128.19 266.95 321.92 59.49 103.51 2.20 12.31
Woco Motherson
Elastomer Ltd. 33.33% 167.29 168.98 322.02 326.32 36.65 19.73 3.95 9.11
Woco Motherson Advanced
Rubber Technologies Ltd. 33.33% 307.53 342.73 374.51 385.48 70.34 77.06 12.09 17.52
Calsonic Kansei Motherson
Auto Products Limited 49% 117.15 93.02 3.21 1.27 (45.57) (6.98) 77.38 2.15
4522nd Annual report 2008-09
Brief of companies
MSSL Mideast (FZE)
MSSL (ME) is a 100% subsidiary of Motherson Sumi Systems Ltd
and specializes in manufacturing of wiring harness. It is located in
SAIF Zone Sharjah, UAE.
Area of Business: It supplies wiring harness to leading
manufacturers of material handling equipment and off-road
vehicles in Europe.
Certifications: TS 16949 & UL Certification
Performance in 2008-09: During the year, the company's revenue
grew from Euro 20 million to Euro 21 million. MSSL Mideast entered
the Guinness Book of World records for constructing the longest
balloons chain, for the longest contra line dance and also for
maximum number of faces painted in one hour. This was a part of
employee morale building exercise.
Kyungshin Industrial Motherson Limited (KIML)
KIML is a joint venture between Kyungshin Industrial Co. Ltd.,
South Korea and Motherson Sumi Systems Ltd. The company
manufactures wiring harnesses at twin locations in Chennai (India).
Area of Business: It caters exclusively to the wiring harness
requirements of Hyundai Motors India Limited for its complete
range of cars manufactured in India.
Certifications: ISO/TS 16949:2002, ISO 14001:2004, QUALITY
5 STAR
Performance in 2008-09: KIML achieved a turnover of Rs 4983
million as compared to the Rs. 3200 million in the previous year.
KIML is the 100% supplier of wiring harnesses to Hyundai Motors
India since the beginning. During the year, KIML started mass
production of wiring harness for Hyundai i20 for domestic and
export market. The joint venture has expanded its capacity to meet
the requirements of the customer.
MSSL (GB) LTD.
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and located in New Castle, UK.
Area of Business: The Company supplies wiring harness and
related modules to niche segments in UK.
Performance in 2008-09: MSSL (GB) achieved a turnover of GBP
4 million, as compared to GBP 5 million of the previous year. The
company established its operations in 2007 and is now fully
integrated with the group.
Motherson Sumi Wiring Systems Limited
The company is a joint venture between Motherson Sumi Systems
Ltd. and Sumitomo Wiring Systems Ltd, Japan. The company is
located in SAIF Zone, Sharjah, UAE.
Area of Business: MSWS supplies wiring harness to Sumitomo
Electric Wiring Systems in Europe.
Performance in 2008-09: The joint venture grew its revenues
from Euro 16 million to Euro 30 million registering a growth
of 86%.
Motherson Electrical Wires Lanka Private Limited
The company is a 100% subsidiary of Motherson Sumi Systems
Limited and is located in Sri Lanka.
Area of Business: The Company specializes in the manufacturing
of wires for automotive applications. It supplies wires to different
manufacturing locations of the group.
Certifications: BUREAU VERITAS Certification of ISO 9001:2000
STANDARD
Performance in 2008-09: MWL achieved revenue of US$ 25
million as compared to US $ 24 million of the previous year.
MSSL Tooling Limited (FZE)
The company is a 100% subsidiary of Motherson Sumi Systems
Limited and is located in Sharjah, UAE.
Area of Business: It specializes in the manufacturing of plastic
molded components and tooling.MTL supplies to Tier 1 customers
and supports the polymer business in Europe
46 Motherson Sumi Systems Limited
Performance in 2008-09: The revenue of MTL was Euro 4 million
for the current year, as compared to Euro 2 million of the previous
year registering a growth of 109%.
Balda Motherson Solution India Limited
Balda Motherson is a joint venture between Balda AG (Germany)
and Motherson Sumi Systems Limited and is located in Chennai.
Area of Business: The company supplies injection moulded
components and assemblies for mobile phones, electrical and
electronic equipments.
Certifications: ISO 9000
Performance in 2008-09: The sales for the company reached
Rs 200 million. New products comprised of mobile charger cover.
Calsonic Kansei Motherson Auto Products Limited
The company is a joint venture between Motherson Sumi Systems
Ltd. and Calsonic Kansei, Japan. The manufacturing unit is located
in Manesar, India.
Area of Business: The Company specializes in the manufacture of
climate- control systems including HVAC modules, compressors,
body control modules and meter clusters for the automotive
industry.
Performance in 2008-09: The company generated revenue of Rs
4 million. The company successfully launched HVAC (heating,
ventilation and air conditioning) and Compressors for Maruti Suzuki
India Limited. The company will be engaged in marketing, selling,
exports, service, manufacturing and assembly of auto parts of
integrated HVAC, ECM (Engine cooling module), Exhaust System
(press and welding), CCM (cross car beam), Compressor, BCM
(body control module), Instrument Cluster (meter, electronics) and
CPM (cockpit module). The construction of the Chennai
manufacturing unit has started and production to commence in
the next year.
MSSL Polymers GmbH
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Germany.
Area of Business: The company specializes in the manufacture of
climate- control systems including HVAC modules, compressors,
body control modules and meter clusters for the automotive
industry.
Certifications: TS16949:2002; ISO 14001:2005; ISO 13485
Performance in 2008-09: The company recorded a revenue of
Euro 13 million, as compared to Euro 15 million of the previous
year. A negative growth is shown due to drop in volume of work
of major customers due to global recession.
MSSL Polymers s.r.o
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Czech Republic.
Area of Business: The company serves automotive and medical
equipment industries, mainly the Tier 1 customers who have shifted
base to Eastern Europe.
Certifications: ISO/TS 16949
Performance in 2008-09: The revenue for the company remained
flat at Euro 5 million as compared to 2007-08. A new factory to be
set up in 2009-10 for which land has been acquired.
WOCO Motherson Ltd. (FZC)
The Company is a joint venture between Motherson Sumi Systems
Ltd. and WOCO Group of Germany. The company is located at
the Sharjah Airport International Free Zone, Sharjah, UAE.
Area of Business: WML specializes in liquid silicone rubber injection
Moulding. The product range includes products for automotive
applications, medical equipment applications, measuring and
control technology and kitchen appliances.
Certifications: ISO/TS 16949
Performance in 2008-09: The revenue of the company stands at
Euro 4 million as compared to Euro 5 million of the previous year.
In calendar year 2008, the company distributed a total dividend of
Euro 1.35 million.
4722nd Annual report 2008-09
WOCO Motherson Elastomer Ltd.
The company is a joint venture between Motherson Sumi Systems
Ltd. and WOCO Group of Germany and is located in Noida, India.
Area of Business: The company manufactures and exports
injection moulded rubber components back to the Joint Venture
Partner.
Certifications: ISO/TS 16949: 2002 & ISO 14001:2004
Performance in 2008-09: The revenue of the company stands at
Rs 322 million as compared to Rs 326 million of the
previous year.
WOCO Motherson Advance Rubber Technologies Ltd.
The Company is a joint venture between Motherson Sumi Systems
Ltd. and WOCO Group of Germany and is located at Kandla Special
Economic Zone.
Area of Business: The company focuses on automotive and auto
component manufacturing. The range includes pedal parts and
solid silicon articles for acoustic applications besides manufacturing
and exporting rubber, rubber to metal and rubber to plastic bonded
parts.
Certifications: ISO/TS16949: 2004
Performance in 2008-09: The revenue for the company stands at
Rs 375 million as compared to Rs 385 million of the previous year.
Motherson Elastomer Pty Ltd
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Bendigo, Victoria in Australia.
Area of Business: The company manufactures orbitread tyre
compounds, conveyor belting rubber compounds, automotive
component rubber compounds, weather strips, glass runs, boot
and hood seals, tank straps, rubber flares, bonded components,
suspension ushes, engine and transmission mounts, bump stops,
large engine gaskets, silent blocks, industrial mountings and
couplings, auto and truck suspension components
Certifications: ISO/TS 16949(May2009) / ISO9000-200 /
ISO14001-2004
Performance in 2008-09: The revenue for the company stands
at AUD 32 million as compared to AUD 23 million of last year. To
combat the recessionary trends in Automotive Business, the
company has picked up business for Mixing Compound for Tyre-
retread and Mining Industry. The company plans to shift the
moulding business to India to reduce the cost of production.
Motherson ORCA Precision Technology GmbH
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Germany. It was previously called
Mothersonsumi Reiner GmbH.
Area of Business: The company serves automobile and auto
component manufacturers and tier 1 customers. The product range
includes high precision machined metal components for critical
applications such as fuel pumps.
Certifications: ISO /TS 16949:2002 (2nd edition: 2002-03-01)
Performance in 2008-09: The revenue for the company stands
at Euro 6 million. The operative business of Mothersonsumi Reiner
Gmbh was recently transferred to Motherson Orca Precision
Technology Gmbh. The company specializes in metal machining
and provides key technical support to the venture.
Motherson Pudenz Wickmann Limited
The company is a joint venture between Motherson Sumi Systems
Ltd. and Wilhelm Pudenz GmbH & Wickmann Werke GmbH,
Germany. MPWL is located in Noida, India.
Area of Business: The company's key products are fuses and fuse
holders and electronic circuit breakers. The target sector is consumer
electronics.
Performance in 2008-09: The revenue of the company stands at
Rs 26 million as compared with Rs 29 million of the previous year.
Global Environment Management (FZE)
The company is a joint venture between Motherson Sumi Systems
Ltd. and E- Compost Pty Ltd, Australia. It is located at the SAIF
Zone, Sharjah, UAE.
48 Motherson Sumi Systems Limited
Area of Business: The company has a 100% subsidiary in Australia
for marketing its key product Aerobin in Australia. The product re-
cycles household and garden wastes.
Performance in 2008-09: The revenue of the company stands at
AUD 2 million as compared to AUD 3 million in the last year. Sales
revenue from Australia market is not expected to show any sign of
significant recovery until Spring-09 - which in turn reflects the
economic climate as much the seasonality that influences Aerobin/
Garden sales.
Support Subsidiaries
MSSL GmbH, Germany
The company is a 100% subsidiary of MSSL through MSSL Mideast.
MSSL GmbH is located in Gelnhausen near Frankfurt and acts as
the holding company and corporate office providing support to
the European entities.
MSSL Mauritius Holdings Ltd
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Mauritius. The company is holding investments
in Woco Motherson Limited (FZC) Sharjah, MSSL Ireland Pvt.
Limited, Ireland, Samvardhana Motherson Global Holding Ltd,
Cyprus.
MSSL Ireland Pvt. Ltd., Ireland
The company is a 100% subsidiary of MSSL Mauritius Holdings
Ltd. The company is located in Ireland and provides design services,
mainly to wiring harnesses customers. It also provides logistics
support services to MSSL and MSSL Mideast, enabling them to
supply online to customers in Europe.
MSSL (S) Pte Ltd.,Singapore
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd and is located in Singapore. It provides support to MSSL and
its group companies mainly for international purchasing. The
company is also a holding company for the group investments in
Australia.
MSSL Handles GmbH, Austria
The company is a 100% subsidiary of Motherson Sumi Systems
Ltd. and is located in Austria. It provides support to MSSL by
coordinating with the customers.
MSSL Australia Pty. Ltd.
The company is a 80% subsidiary of Motherson Sumi Systems
Ltd. The Company, after phase- out of Door TRIM Program is now
functioning as the corporate office and holding company for the
group investments in Australia.
MSSL Investment Pty. Ltd.
The company is a 80% subsidiary of Motherson Sumi Systems
Ltd. through MSSL Australia Pty. Ltd.
Loan and funds position
Rs. in Million
Loans Consolidated Standalone
March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008
Short terms loans 2,040 1,458 885 1,380
Long term loans 3,840 542 1,426 339
Foreign Currency Convertible Bonds 3,071 2,891 3,071 2,891
TOTAL 8,951 4,891 5,382 4,610
4922nd Annual report 2008-09
Foreign Currency Convertible Bonds (FCCBs)
During the year 2005-06, the Company had issued Zero Coupon
Foreign Currency Convertible Bonds (FCCBs) of Euro 50.30 millions
of which an amount of Euro 45.70 millions is outstanding as on
31-3-2009. The conversion price of these bonds is Rs 74.30 per
share at fixed exchange rate of Rs 52.01 = Euro 1. In line with
Company's conservative policy, the Company makes provision of
premium payable at the redemption, in case conversion does not
happen by the end date i.e 16th July 2010 as charge to Profit/
(Loss) account. In addition, the Company also provides for exchange
fluctuation on the FCCBs (including on the premium charged so
far to Profit & Loss account) as charge to Profit & Loss account.
During the year, the company has charged an amount of
Rs 249 million (Rs 589 million since issue of bonds) towards
exchange fluctuation and amount of Rs 141 million (Rs 558 million
since issue of bonds) as charge to Profit & Loss account.
Capital Expenditure
During the year, the Company incurred capital expenditure of
Rs 2,627 million and Rs 2,118 million on consolidated and
standalone basis. The significant portion of this expenditure has
been funded from internal accruals. During the year, the Company
expects capital expenditure of Rs 3,000 million to Rs 4,000 million.
Human Resource
Human resource is the organization’s most valued asset. Effective
management of human resources is imperative to the success of
any organization. MSSL believes in this maxim and hence starts by
focusing on recruiting the best talent in the industry. Proper
induction and orientation is stressed upon which provides a sense
of belongingness and ownership towards the organization. This is
the key to MSSL's success. Skills management is conducted as an
ongoing process, with individuals assessing and updating their
recorded skill sets regularly. This is done through training and
development programmes. For senior executives, Leadership
Development Programmes were institutionalized. MSSL provides
an environment to its employees to take higher responsibilities
and stretch assignments from very early stages of their career.
To develop and reinforce the sense of belongingness to the
organization various steps are taken. In our manufacturing units,
for each activity there is a person declared as the owner of that
activity, who takes the onus of maintaining and improving that
activity. Another way of involving employees outside the ambit of
their jobs is in extra-curricular activities which includes cultural
programmes and competitions. There are annual day celebrations,
painting competition for the children of employees, picnics, cultural
activities and quality circles, where maximum employee
participation is solicited. Our team also participated in the global
skill Olympics organized by our collaborator SWS. Such programs
transcend all bars and create the "WE" feeling amongst
employees.
Quality Circle is another one of the employee participation methods.
In MSSL they have emerged as a mechanism to develop and utilize
the tremendous potential of people for improvement in product
quality and productivity. The quality circle movement has been
gaining strength in the Company. MSSL has more than 84 quality
circles operating within the Company, its subsidiaries and joint
ventures. It was a moment of pride for us when 'Uday' quality
circle from SBU- IX was declared the winner at the QCC organized
for the vendors by Maruti Suzuki India Limited. Another quality
circle 'Utsah' from SBU IX was adjudged the winner in QC
competition organized by Maruti Suzuki Supplier's Club. We also
participated in the Quality Circle Convention organized by the
Quality Circle Forum of India for the Delhi chapter and 'Jigyasa'
quality circle from SBU- 1 AH was placed in the excellent category.
MSSL today has a spread in 20 countries round the globe, where
people of different nationalities, ethnicity, language and culture
are working together. This benefits us both ways. It has helped us
in giving a global exposure and understanding to our employees
and has also facilitated in serving our customer across the globe in
a better way.
With a view to share its growth, employees are given option to
have the shares of Samvardhana Motherson Finance Limited.
Environment, Health and Safety (EHS)
The top priority for MSSL is to take the time and initiative to help
protect their employees. Utmost attention is given to the safety of
its employees, related communities and the environment at large.
Health and safety form an integral part of work environment.
In MSSL the responsibility of employee health and safety falls on
Human Resource Management. Educating about safety programs,
making employees aware about the health and safety policy of
50 Motherson Sumi Systems Limited
the Company, conduct formal safety training, etc all form part of
EHS training. The supervisors and departmental heads are
responsible for maintaining safe working conditions.
Various safety measures have started this year. A National safety
week was conducted in MSSL from 4th March, 2009 to 10th March,
2009. Various activities were carried out this week which included
display of safety banners, distribution of safety badges, a quiz
competition on the safety measures and a safety march was held
for the workers on the shop floor of the units. A meeting was also
held with all contractors for safety awareness. In addition to these,
Advanced Fire Fighting Technique cylinders were made available
for the units.
The year saw an incidence of fire in MSWS, Sharjah which was
effectively controlled by the staff with the fire fighting team and
other section associates. Fortunately, there was no harm/ injury to
any of its people. To avoid even such lone incidences several
measures have been taken. Safety audits are carried out at regular
intervals in all the units. A training module of general safety is
introduced for new employees. A new system has been started for
issuing work permit. This work permit system covers all the aspects
related to safety before starting of the work, after completion of
work and also during the work.
Most of the units of MSSL are accredited with ISO 14001
certification. MSSL re-affirms its commitment to provide a safe
working place and clean environment to its employees and other
stakeholders as an integral part of its business philosophy and
values. The Company will continuously enhance its environmental,
occupational health and safety performance in its activities, products
and services through a structured MSSL management framework.
MSSL develops products that help in improving the environment.
Its subsidiary, Global Environment Management, is dedicated
towards developing products for improving the environment. Their
first product Aerobin is a technological breakthrough in home and
garden waste management that allows households to effectively
recycle organics at home. The product helps the average household
divert 50% of their waste away from landfill, into compost. Aerobin
composts aerobically, a decomposition process that doesn't give
off the potent, dangerous, greenhouse gases that occur when
organic waste is decomposed an aerobically in landfill. This reduces
household carbon emissions. The organic compost and diluted
Leachate produced by the Aerobin can be used as a natural soil
conditioner in the garden also.
The aim is to ensure that EHS risks and impacts are managed
effectively and to identify opportunities to reduce risks and
contribute to continuous improvement.
Opportunities and Future Prospects
Global automotive industry is undergoing unprecedented turmoil
that has found its most recent expression in a tightened credit
market. In addition, the familiar industry challenges such as volatile
raw materials costs and fuel prices, tighter regulations, have
combined to create a business environment such as the industry
has not experienced until now.
The economic growth rate in India is expected to range between
6-7 percent in 2009-2010 and the situation will only improve from
here. Government is supporting industry by combining monetary
as well as fiscal measures- the stimulus package released by the
government addresses a wide range of concerns and should
hopefully give big boost to the slowing economy. It is a set of
positive measures towards boosting growth. Interest rates have
been reduced and a cut in the CRR, REPO and Reverse Repo by
the government has increased the availability of credit in
the market.
OEMs are making substantial investments in India to cater to the
Indian market as well as for exporting fully assembled cars from
India. Factors such as superior engineering skills, modest domestic
market growth, the sophistication of its IT industry and increasing
free trade agreements in addition to low cost, are expected to
boost India's auto-component sector growth over other countries
in the coming years.
MSSL is in the phase of consolidating its strengths and building its
capacities for growth. Hence, when the economy world over
stabilizes, the Company will be ready for the challenges the market
will pose. MSSL is in a unique position to service the OEMs by
bringing newer technologies through its joint ventures by being a
complete system solution provider. In MSSL growth is imperative
with time. While there are significant investments proposed to be
made in expanding and upgrading of the facilities, we will continue
to be judicious in our capital spending and will continue to leverage
our strong network of alliances /partnerships.
5122nd Annual report 2008-09
Corporate Social Responsibility - CSR
In line with MSSL's commitment to a better society, Corporate
Social Responsibility (CSR) is being taken up & adopted by the
Company towards ensuring implementation of corporate values
leading to helping deprived children of society through various
programmes in the communities. Various CSR programmes for
children of the deprived communities are being supported by the
Company.
MSSL also lays special emphasis on using environment friendly
product for safeguarding the environment through sustainable
business products. It strives to achieve goals of achieving symbiosis
with nature, and has been proceeding with efforts toward
environmental protection in all aspects of its business activities.
52 Motherson Sumi Systems Limited
Directors' Report
Your Directors have the pleasure in presenting the 22nd Annual
Report together with the audited accounts of the Company for
the financial year ended 31st March, 2009.
Financial Results
The summarized financial results for the year ended 31st March,
2009 and for the previous year ended 31st March, 2008 are as
follows:
(Rs. in Million)
Year ended Year ended
31.03.2009 31.03.2008
Gross sales 14429 15156
Net sales 12949 13031
Other Income 372 447
Profit before depreciation,
interest and tax 1689 2361
Less: Depreciation 545 500
Less: Interest (net) 291 219
Profit before tax 853 1642
Less: Provision for taxation 157 360
Profit after tax 696 1282
Add: Balance brought forward 1597 1127
Profit available for appropriation 2292 2409
Operations and Performance
During the year under review, your company achieved a turnover
of Rs. 13321 million including other income of Rs. 372 million in
comparison of its turnover of Rs. 13478 million including other
income of Rs. 447 million of the previous financial year ended
March, 2008.The marginal decline was due to unfavorable market
conditions in the Automobile Sector.
The profit after tax for the year ended March, 2009 at Rs. 696
million was lower than the previous financial year ended March,
2008 at Rs. 1282 million. As per the Consolidated Accounts the
profit after tax was Rs. 2212 million as compared to Rs. 1750
million in year 2007-2008.
The operational performance of the Company has been
comprehensively covered in the Management discussions and
analysis, which forms part of the Directors' Report.
Dividend
Your Directors recommended payment of dividend of Rs.1.35 per
share of Rs. 1/- each for the financial year ended March 31, 2009.
The dividend, if approved by the members will be paid on or after
September 24, 2009.
Credit Rating
The Company continues to enjoy "A1+" rating by ICRA for its
commercial paper / short-term debt program of Rs 1000 million.
Strategic Acquisition
During the year 2008-2009, the Company has acquired global
rear view mirror business from Visiocorp Plc. through its step down
subsidiary Samvardhana Motherson Visiocorp Solution Limited,
Jersey. The acquisition has been completed on 6th March, 2009.
Visiocorp is a market leader in exterior rear view mirror systems
and brings its cutting edge technology, covering the complete range
of mirrors from low-end entry segments to high-end luxury
segments.
With this acquisition, Samvardhana Motherson Group has become
one of the largest manufactures of automotive mirrors in the world.
This further elevates the group's positioning as a major Tier 1
supplier to automotive industry with a global footprint spanning
20 countries and having 80 manufacturing units.
Fixed Deposits
The Company has neither invited nor accepted any deposits from
the public during the year. There is no unclaimed or unpaid deposit
lying with the Company.
5322nd Annual report 2008-09
Directors
In accordance with the provisions of the Companies Act, 1956
and Articles of Association of the Company Mr. Bimal Dhar and
Mr. Hiroto Murai, Directors of the Company retire by rotation and
being eligible, offer themselves for re-appointment.
The Board of Directors have appointed Mr. M.S. Gujral as Chairman
and Mr. V.C. Sehgal as Vice Chairman of the Company. Further,
Mr. Laksh Vaaman Sehgal has been appointed as an Additional
Director of the Company w.e.f. 30.04.2009.
Your Directors welcome Mr. Laksh Vaaman Sehgal on the Board of
the Company.
Brief resume of the above Directors, nature of their expertise in
functional areas and the name of the public companies in which
they hold the Directorship and the Chairmanship/Membership of
the Committees of the Board, as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchange, are given as Annexure
to the Notice convening the Annual General Meeting.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 and
subject to disclosures in the Annual Accounts, we state as under :-
a) That in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material
departure were made for the same;
b) That the Directors have selected such accounting policies and
applied then consistently and made judgments and estimates
that were reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of
the financial year and of the profit of the Company for year
ended on that date;
c) That the Directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities;
d) That Directors have prepared the annual accounts on a going
concern basis.
Auditors
The Auditors of the Company M/s. Price Waterhouse, Chartered
Accountants, Gurgaon, retire at the ensuing Annual General
Meeting and, being eligible, offer themselves for re-appointment.
The Company has received a letter from them to the effect that
their appointment, if made, would be within the prescribed limit
under section 224(1B) of the Companies Act 1956.
The observations of the Auditors and the relevant notes on the
accounts are self-explanatory and therefore do not call for any
further comments.
Consolidated Financial Statements
In accordance with the Accounting Standard-21 on Consolidated
Financial Statements read with Accounting Standard - 23 on Accounting
for Investments in Associates and AS -27 on Financial Reporting of
Interests in Joint Venture in Consolidated Financial Statements, your
Directors have the pleasure in attaching the Consolidated Financial
Statements which form a part of the Annual Report.
The performance of the Company on consolidated basis its
subsidiaries and joint venture companies, is discussed at length
in the Management discussion & analysis, which forms part of
the Directors’ Report.
Particulars required as per Section 212 of the
Companies Act, 1956
As per Section 212 of the Companies Act, 1956, your Company is
required to attach the Directors report, balance sheet and profit
and loss account of the subsidiaries of the Company.
The Company has granted exemption for the year ended March
31, 2009 by the Ministry of Corporate Affairs from attaching to its
Balance Sheet, the Annual Reports of its subsidiary companies. As
per the terms of the Exemption Letter, a statement containing brief
financial details of the Company's subsidiaries for the year ended
March 31, 2009 is included in the Annual Report.
54 Motherson Sumi Systems Limited
The annual accounts of the subsidiary companies, along with
related detailed information shall be made available to the holding
and subsidiary investors seeking such information at any point of
time. Any shareholder of the Company/ its subsidiaries interested
in obtaining the annual accounts of the subsidiaries may write to
the Company Secretary at the Registered Office of the Company.
The annual accounts of the subsidiary companies shall also be
kept for inspection by any investor in a Registered Office of the
Company. In the opinion of the management, the consolidated
accounts present a full and fair picture of the state of affairs and
financial condition and they are accepted globally.
Audit Committee
The Audit Committee was constituted in terms of the requirements
set out in Clause 49 of the Listing Agreement with the stock
exchange(s) on Corporate Governance comprising Mr. M. S. Gujral,
Maj. Gen. Amarjit Singh (Retd.), Mr. Toshimi Shirakawa and
Mr. Arjun Puri. Mr. M. S. Gujral is the Chairman of the Audit
Committee.
Exports
The Company's exports during the year were Rs. 2347 million as
against Rs. 2499 million in the previous financial year. The Company
continues to make its efforts towards achieving higher growth by
providing cost competitive quality solutions to its customers. In
addition, the Company has set up offices, mainly in Europe, to
constantly service the customers as well as scan the markets for
growth.
Corporate Governance
A separate section on Corporate Governance, forming a part of
the Director's Report and the certificate from the Company's
auditors confirming compliance of conditions on Corporate
Governance as stipulated in Clause 49 of the Listing Agreement, is
included in the Annual Report.
Listing
The shares of your Company are listed at National Stock Exchange
of India Limited, Bombay Stock Exchange Limited, Delhi Stock
Exchange Association Limited and Ahmedabad Stock Exchange.
The bonds of the Company are listed at Singapore Exchange
Securities Trading Limited. The listing fees for the year 2009-2010
have been paid to the said Stock Exchanges.
Particulars of Employees
Information as per Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975
as amended, the name and other particulars of the employees are
set out in the annexure to the Directors' Report.
However, having regard to the provisions of section 219(1)(b)(iv)
of the Companies Act, 1956, the Annual Report is being sent to all
the shareholders of the company excluding the statement of
particulars of employees under section 217(2A) of the Companies
Act, 1956. Any shareholder interested in obtaining a copy of the
said statement may write to the Company Secretary at the
registered office of the Company and same will be sent.
Energy Conservation, Technology Absorption and
Foreign Exchange Earning and Outgo
Information under section 217(1)(e) of the Companies Act, 1956,
read with Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 is given in Annexure 'A' to this
Report.
Human Resources
The relations with the employees and associates continued to
remain cordial throughout the year. The Directors of your Company
wish to place on record their appreciation for the excellent team
spirit and dedication displayed by the employees of the Company.
Acknowledgement
Your Board of Directors would like to place on record their sincere
appreciation for the wholehearted support and contributions made
by all the employees of the Company as well as customers, suppliers,
bankers and government authorities particularly in the state of
Delhi, Haryana, Uttar Pradesh, Maharashtra, Tamilnadu and
Karnataka towards the conduct of the efficient operations of your
Company. Last but not the least the Board of Directors wish to
thanks the shareholders, FCCB holders of the Company and the
collaborator Sumitomo Wiring Systems Limited, Japan for its
continuous support.
For and on behalf of the Board
for MOTHERSON SUMI SYSTEMS LIMITED
Place: Noida M.S. Gujral V. C. Sehgal
Date: 27th July, 2009 Chairman Vice Chairman
5522nd Annual report 2008-09
Annexure `A' to Directors' Report
Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Pursuant to Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of Directors' Report.
A. Conservation of Energy
a) Energy Conservation measures taken :
The Company has constantly been emphasizing as
optimization of energy consumption in every possible area in
its units. Various avenues are being explored at periodic
interval and after careful analysis and planning measures are
being initiated to minimize the consumption of energy by
optimum utilization of energy consuming equipments. During
the year under review, the following measures were initiated/
adopted for conservation and optimize utilization of energy.
� Installation of occupancy sensor to switch-off lights
automatically
� Installation of auto switch-off timer in fans
� Reduction in energy consumed by replacing high wattage
bulbs on machines to low wattage LEDs.
� Energy saving tube lights installed across all units
� Installed variable drive motors on compressors
� Daylight sensors on street lights
� Optimised air-cooling systems
b) Future Proposals for Energy Conversion
The Company will take necessary measures as may be required
from time to time for conversion of energy.
c) Impact of the measures at (a) & (b) above for reduction of
energy consumption
The above measures will result in energy saving and
consequent decrease in cost of production.
B. Technology Absorption
The following efforts are being made in technology absorption:
Research & Development (R&D)
1. Specific areas in which R&D is carried out by the Company
The Company has been continuously working towards
enhancing its research and development capabilities. In
addition to enhancing capabilities in the area of Wiring harness
design and adoption of new methods and techniques for
manufacturing and assembly of harnesses, the company is
also focusing in enhancing its capabilities in the area of Jigs
and applicators designing and manufacturing.
The Company has been keeping pace with the technological
advances by implementation of state-of-the-art
manufacturing best practices. Research and Development was
carried out for the development of the new models for several
Indian and overseas customers.
In process engineering the Company introduced a silicon
sealing machines for earth terminals.
2. Benefits derived as a result of the above R&D
The benefits derived as a result of the above research and
development programmes was in the form of winning new
businesses, building confidence of existing customer and
reducing the time to market.
3. Future plan of action
Steps are continuously being taken for innovation and
renovation of products and enhancement of product quality/
profile, to offer better products at relatively affordable prices
to customers.
56 Motherson Sumi Systems Limited
4. Expenditure on R&D
During the year, the Company spent Rs. 50.72 million. This is
equivalent of 0.38% of the turnover.
Technology absorption, adaptation and innovation
With the changing requirements in wiring harness manufacturing,
the Company has acquired new machines and processes as per
the product requirements. The Company has successfully
implemented a number of Kaizen led improvements to enhance
productivity and manufacturing efficiency.
The company sends it design engineering regularly to its
Collaborator, for working together for designing and development
of new harnesses for future models to be introduced by the OEMs,
in addition to collaborators technicians providing on-site support
to the company.
- Benefits derived as a result of the above efforts: The Company
is now partnering the new development and designing with its
major customers.
- Imported Technology: the company has access and
implemented the latest processes and techniques in its
manufacturing and design facilities.
C. Foreign Exchange Earnings and Outgo
1. The activities relating to export, incentives to increase
exports and developments of new export markets are
discussed below.
The Company has continued to maintain focus and avail of
export opportunities based on economic consideration. During
the year, the Company has exports (FOB value) worth Rs.
2347 million.
2. Total foreign exchange used and earned
(Rs. in million)
a. Total Foreign exchange earned 2389
b. Total Foreign exchange used 4419
The detailed information on foreign exchange earnings and
outgo is also furnished in the notes to the accounts.
For and on behalf of the Board
for MOTHERSON SUMI SYSTEMS LIMITED
Place: Noida M.S. Gujral V. C. Sehgal
Date: 27th July, 2009 Chairman Vice Chairman
5722nd Annual report 2008-09
Report on Corporate Governance
Company's philosophy on Corporate Governance
Corporate Governance is based on the principles of integrity, transparency, accountability and commitment to values. Your Company
views its policies of Corporate Governance not only to comply with the statutory requirements in letter and spirit, but also to aim at
implementing the best practices, keeping in view the overall interest of all its stakeholders. Your Company takes Corporate Governance
as a Critical tool to enhance trust of the Company's customers, employees, investors, government and the Community at large and
would help the Company achieve its goal of maximizing value for all its stakeholders.
Board of Directors
The Board presently comprises of the majority of Non-executive and Independent Directors, who are eminent professionals with a rich
experience in business, finance and public enterprises. The composition of the Board, and the number of other Directorships held by
each Directors and relevant information for their category as on 31.03.2009 is given in the table below:
Name of the Director Executive/Non- executive/ Other Directorship Committee Committee
Independent (in Public Co.) memberships Chairmanships
Mr. V. C. Sehgal Non-executive Director 12 6 1
Mr. Toshimi Shirakawa Non-executive Director 2 1 -
Mr. M. S. Gujral Independent Director 7 5 5
Mr. Hiroto Murai Non-executive Director - - -
Maj. Gen. Amarjit Singh (Retd.) Independent Director 2 4 -
Mr. Bimal Dhar Non-executive Director 10 4 -
Mr. Toshihiro Watanabe Executive/Whole-time Director 2 1 -
Mr. Arjun Puri Independent Director 1 2 -
Mr. Toshihide Ano* Non-Executive Director 2 - -
(Alternate Director to
Mr. Hiroto Murai)
Mr. Pankaj Mital Executive/Chief Operating Officer 2 1 -
(Alternate Director to
Mr. Bimal Dhar)
* Ceased to be an Alternate Director w.e.f. 29.06.2009.
Note - Mr. Laksh Vaaman Sehgal has been appointed as an Additional Director of the Company w.e.f. 30.04.2009.
Attendance at Board meetings and Annual General
Meetings
The Board of Directors of the Company meets at least once a quarter
to review the quarterly results and other items on the agenda.
The information regularly supplied to the Board of Directors include
amongst others the following:
1. Annual Operating plans and budgets and updates.
2. Quarterly Performance of our various units, subsidiaries and
joint venture companies
3. Materially important legal cases
4. Details of any Joint Venture or collaboration agreement
5. Developments on Human Resource of the Company
The Board of Directors of the Company met five times during the
financial year 2008-2009 : (i) June 2, 2008 (ii) July 26, 2008 (iii)
October 21, 2008 (iv) January 2, 2009 and (v) January 27, 2009.
58 Motherson Sumi Systems Limited
The table for the attendance record of the Directors is as given below:
Name of the Director No. of Board Attendance at last
meetings attended Annual General Meeting
Mr. V. C. Sehgal 5 Yes
Mr. Toshimi Shirakawa* 1 Yes
Mr. M. S. Gujral 5 Yes
Mr. Hiroto Murai 4 No
Maj. Gen. Amarjit Singh (Retd.) 5 Yes
Mr. Bimal Dhar 4 Yes
Mr. Arjun Puri 4 Yes
Mr. Akihiko Yamauchi# 1 N.A.
Mr. Toshihiro Watanabe 5 Yes
Mr. Pankaj Mital 1 Yes
(Alternate Director to Mr. Bimal Dhar)
Mr. Toshihede Ano - Yes
(Alternate Director to Mr. Hiroto Murai)
* in addition to attending one meeting, he participated in one meeting over teleconference
# resigned from the directorship of the Company w.e.f. 02.06.2008
Remuneration of Directors
The details of the payments made to the Directors during the financial year ended March 31, 2009 are as follows:
Name of the Director Gross remuneration Sitting fee* Total
(Rs.) (Rs.) (Rs.)
Mr. M. S. Gujral Nil 1,80,000 1,80,000
Maj. Gen. Amarjit Singh (Retd.) Nil 1,80,000 1,80,000
Mr. Arjun Puri Nil 1,40,000 1,40,000
* Includes sitting fees paid for committee meetings
Name of the Director Salary Amount
Mr. Akihiko Yamauchi # Basic salary 2,48,000.00
Bonus --
Other benefits 1,34,492.00
Total 3,82,492.00
Mr. Toshihiro Watanabe @ Basic salary 14,40,000.00
Bonus --
Other benefits 16,00,751.00
Total 30,40,751.00
Mr. Pankaj Mital Basic salary 30,01,200.00
Bonus 5,00,412.00
Other benefits 2,71,713.00
Total 37,73,325.00
# resigned from the Directorship of the Company w.e.f. 02.06.2008.
@ appointed as Whole-time Director of the Company w.e.f. 02.06.2008.
5922nd Annual report 2008-09
Audit Committee
The Audit Committee of the Company comprises the majority of Independent Directors. The members of the Audit Committee met
four times during the financial year 2008-09 and the Committee reviewed the quarterly, half-yearly and annual financial statements
before submission to the Board. The dates on which the meetings were held are as follows:
(i) June 2, 2008 (ii) July 26, 2008 (iii) October 21, 2008 & (iv) January 27, 2009.
The composition and attendance of each member of the Committee is given below:
Name Designation Non-executive/ Independent Committee meetings attended
Mr. M.S. Gujral Chairman Independent 4
Maj. Gen. Amarjit Singh (Retd.) Member Independent 4
Mr. Toshimi Shirakawa* Member Non-executive 1
Mr. Arjun Puri Member Independent 3
The terms of reference of the Audit Committee comprises the
following:
a) To hold periodic discussions with the Statutory Auditors and
Internal Auditors of the Company concerning the accounts of
the Company, internal control systems, scope of audit and
observations of the Auditors/Internal Auditors.
b) To review compliance with internal control systems.
c) To review the quarterly, half-yearly and annual financial results
of the Company before submission to the Board.
d) To investigate into any matter in relation to the items specified
in Section 292A of the Companies Act, 1956 or as may be
referred to it by the Board and for this purpose to seek any
relevant information contained in the records of the Company
and also seek professional advice, if necessary.
e) To review the Company's financial and risk management
policies.
f) To obtain external advice, legal or other professional advise.
g) To secure attendance of outside parties with relevant expertise,
if it considers necessary.
h) To seek information from any employee.
Investors' Grievance Committee
The Company has an Investors' Grievance Committee which looks
into shareholders' and investors' grievances. The following are the
members of the Committee:
Name Designation Executive/Non-
executive/
Independent
Mr. M.S. Gujral Chairman Independent/
Non-executive
Mr. Toshihiro Watanabe Member Executive
Mr. G.N. Gauba, the Company Secretary, is the Compliance Officer.
Share Transfers
� All shares have been transferred and returned in about 20
days from the date of receipt, so long as the documents have
been clear in all respects.
� The Share Transfer Committee meets normally once a fortnight.
� Total number of shares transferred in physical form during the
year 2008-2009 was 29144 as compared to 57742 during
2007-2008.
� As on March 31, 2009, there are no equity shares pending for
transfer.
Investor Relations
86 complaints relating to the non-receipt of shares after transfer,
non-receipt of dividend etc. were received.
All the complaints received during the year were cleared within
the financial year.
The complaints are generally responded to within 10 days from
the date in which they are lodge with the Company.
* in addition to attending one meeting, he participated in one meeting over teleconference
60 Motherson Sumi Systems Limited
Particulars of the past three AGMs
Annual General Date Time Venue Special Resolutions passed
Meeting
19th August 11:00 A.M. FICCI Golden Jubilee Auditorium, Nil
07, 2006 New Delhi
20th July 3:30 P.M. FICCI Golden Jubilee Auditorium, Issue of Bonus Shares in the ratio
30, 2007 New Delhi of 1 share for every 2 shares held.
21st August 11.30 A.M. FICCI Golden Jubilee Auditorium, -Re-appointment of Mr. Pankaj
11, 2008 New Delhi Mital as Manager under the
companies Act, 1956 for a period
of 3 years w.e.f. 01.04.2008.
-Appointment of Mr. Toshihiro
Watanabe as Whole-time
Director for a period of 3 years
w.e.f. 02.06.2008.
- No postal ballot was conducted during the year.
- The following Special Resolution is proposed to be conducted through postal ballot:-
Amendment in the Object Incidental or Ancillary of the Main Objects.
Particulars of loans/ advances and investment in its own shares by listed companies, their subsidiaries, associates, etc.,
required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement
Rs. in Million
Name of Company Status Nature Balance as on Maximum
March 31, 2009 outstanding
During the year
MSSL Mideast (FZE) 100% Subsidiary Loan - 329.45
MSSL Mauritius Holdings Limited 100% Subsidiary Loan - 1.83
MSSL Handels GmbH 100% Subsidiary Loan 10.68 10.68
MSSL (GB) Limited* 100% Subsidiary of MSSL Mideast (FZE) Loan 73.14 84.13
MSSL GmbH* 100% Subsidiary of MSSL Mideast (FZE) Loan 122.63 645.25
Motherson Sumi Wiring 51% Subsidiary of MSSL Mideast (FZE) Loan 137.83 137.83
System Ltd. (FZC)*
Global Environment 78.82% Subsidiary of MSSL Loan - 23.02
Management (FZC)#
Mauritius Holdings Ltd.
MSSL Australia Pty Limited@
80% Subsidiary of Loan 394.85 394.85
MSSL (S) Pte. Ltd.
* By MSSL Mideast (FZE)
#
By MSSL Mauritius Holdings Ltd.
@
By MSSL (S) Pte. Ltd.
6122nd Annual report 2008-09
Disclosures
� No transaction of material nature has been entered into by
the Company with the Directors or Management and their
relatives, etc. that may have a potential conflict with the
interests of the Company.
� Transactions with the related parties are disclosed in Note No.
B(22) of Schedule XIII to the Accounts in the Annual Report.
� No penalties or strictures were imposed by SEBI or the Stock
Exchange.
� All mandatory requirements have been complied with and non
mandatory requirements have not been complied with.
Means of communication
The annual, half-yearly and quarterly results are regularly posted
by the Company on its website www.motherson.com. These are
also submitted to the stock exchanges in accordance with the Listing
Agreement and published in leading newspapers like Business
Standard.
Management discussion and analysis report forms a part of the
Annual Report.
Shareholders' information
1. Annual General Meeting to be held
- Date : 24.09.2009
- Day : Thursday
- Time : 11:30 A.M.
- Venue : FICCI Golden Jubilee Auditorium, Tansen Marg,
New Delhi-110001
2. Financial Calendar (tentative and subject to change)
� Financial reporting for the first quarter ending June 30, 2009:
July, 2009
� Financial reporting for the second quarter ending September
30, 2009: October, 2009
� Financial reporting for the third quarter ending December
31, 2009: January, 2010
� Financial results for the year ending March 31, 2009: May,
2010
3. Book Closure date :
18.09.2009 to 24.09.2009 (both days inclusive)
4. Dividend payment date : on or after 24.09.2009
5. Listing on stock exchanges
- Equity shares
Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers
Dalal Street, Mumbai
Code : 517334
National Stock Exchange of India Limited
Exchange Plaza, 5th Floor,
Plot no. C/1, G Block
Bandra - Kurla Complex
Bandra (E), Mumbai
Code: MOTHERSUMI
Delhi Stock Exchange Limited
DSE House,
3/1, Asaf Ali Road, Delhi
Ahmedabad Stock Exchange
Kamdhenu Complex,
Near Polytechnic Panjara Pole
Ahmedabad
- Bonds:
Singapore Exchange Securities Trading Ltd.
2, Shenton Way
# 19-00 SGX Centre I
Singapore (FCCBs only)
62 Motherson Sumi Systems Limited
6. Market price data
Month The Stock Exchange, Mumbai National Stock Exchange of India
High Low High Low
April - 2008 108.80 86.00 109.90 92.10
May - 2008 98.50 78.00 97.35 80.00
June - 2008 89.90 74.90 89.00 74.20
July - 2008 85.00 67.05 81.45 67.05
August - 2008 90.70 73.25 95.00 73.20
September-2008 93.00 81.35 93.90 70.80
October - 2008 88.50 56.00 89.00 55.00
November - 2008 68.45 47.20 71.65 47.20
December - 2008 70.00 38.00 70.00 39.50
January - 2009 73.00 51.25 75.80 51.45
February - 2009 73.25 55.00 75.50 53.00
March - 2009 71.45 52.00 71.45 51.00
7. Performance in comparison to broad based indices
6322nd Annual report 2008-09
8. Shareholding Pattern of the Company as on 31.03.2009
Category No. of % of
shares held shareholding
Indian Promoters 155764924 43.81
Foreign Promoters 96891795 27.25
Financial Institutions,
Mutual Funds & Banks 22425633 6.31
Foreign Institutional Investors 22068478 6.20
Bodies Corporate 24315800 6.84
General Public (Individuals) 32767259 9.22
NRIs/ Trusts 1287819 0.36
Clearing Members* 32092 0.01
Total 355553800 100.00
* These shares lying in pool account of NSDL/CDSL since buyers' identity
are not established.
9. Registrar and Transfer Agents
The Registrar and Transfer Agent (RTA) of the Company is
M/s Karvy Computershare Pvt. Ltd. The investors can send
their queries to:
M/s Karvy Computershare Pvt. Ltd.
(Unit - Motherson Sumi Systems Ltd.)
46, Avenue 4, Street no. 1,
Banjara Hills, Hyderabad - 500 034
Ph. No.- 040-23312454
Fax No.- 040-23311968
E-mail - [email protected]
10. Share Transfer System
To expedite the share transfer process in the physical segment,
authority has been delegated to the Share Transfer Committee
which comprises:
Mr. V.C. Sehgal
Mr. Toshihiro Watanabe
Mr. Pankaj Mital
Share transfer/ transmissions approved by the Committee are
placed at the Board Meeting from time to time.
11. Distribution of shareholding as on March 31, 2009
Range (Amount) No. of shareholders % of shareholders to total No. of shares % of shares to total
1 - 5000 7501 86.67 4467523 1.26
5001-10000 860 9.94 4740995 1.33
10001 - 20000 132 1.52 1674621 0.47
20001 - 30000 38 0.44 906979 0.26
30001- 40000 12 0.14 409948 0.12
40001 - 50000 11 0.13 514587 0.14
50001 - 100000 33 0.38 2209257 0.62
100001and above 68 0.78 340629890 95.80
TOTAL 8344 100.00 355553800 100.00
12. Dematerialization of shares and liquidity
Your Company's shares are tradable compulsorily in electronic form
and your Company has established connectivity with both the
depositories i.e. NSDL and CDSL. The members are requested to
dematerialize their physical holding in view of the various
advantages in dematerialized form.
Demat ISIN Number in NSDL and CDSL for equity shares: ISIN No.
INE775A01035
64 Motherson Sumi Systems Limited
13. Plant Locations :
Noida (Uttar Pradesh)
Faridabad (Haryana)
Gurgaon (Haryana)
Manesar (Haryana)
Pune (Maharashtra)
Bangalore (Karnataka)
Chennai (Tamilnadu)
Pondicherry
Representative Office(s)
Sharjah
Germany
14. Investors' correspondence may be addressed to:
Mr. G.N. Gauba.
Vice President (Finance) & Company Secretary
2nd Floor, F-7, Block B-1,
Mohan Co-operative Industrial Estate,
Mathura Road, New Delhi - 110 044
E-mail : [email protected]
The above Report has been placed before the Board at its meeting held on June 29, 2009 and the same was approved.
Declaration
This is to confirm that the Company has adopted a Code of Conduct for Board of Directors and Senior Management and the same is
available on the Company's website.
I confirm that the Company has in respect of the financial year March 31, 2009 received from the Board of Directors and Senior
Management a declaration of compliance with the Code of Conduct.
For Motherson Sumi Systems Limited
Date : 29th June, 2009 Pankaj Mital
Place : Noida Chief Operating Officer
6522nd Annual report 2008-09
Auditors' Certificate regarding compliance of conditions
of Corporate Governance
To the Members of
Motherson Sumi Systems Limited
We have examined the compliance of conditions of Corporate Governance by Motherson Sumi Systems Limited, for the year ended
March 31, 2009, as stipulated in Clause 49 of the Listing Agreement(s) of the said Company with stock exchange(s) in India.
The compliance of conditions of Corporate Governance is the responsibility of the Company's management. Our examination was
carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the Listing
Agreement), issued by the Institute of Chartered Accountants of India and 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.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement(s).
We 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.
Kaushik Dutta
Partner
Membership No: F88540
For and on behalf of
Date : 29th June, 2009 Price Waterhouse
Place : Noida Chartered Accountants
66 Motherson Sumi Systems Limited
Financial Section
6722nd Annual report 2008-09
To the Members of
Motherson Sumi Systems Limited
1. We have audited the attached Balance Sheet of Motherson
Sumi Systems Limited, as at March 31, 2009, and the related
Profit and Loss Account and Cash Flow Statement for the year
ended on that date annexed thereto, which we have signed
under reference to this report. These financial statements are
the responsibility of the company's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with the auditing
standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003,
as amended by the Companies (Auditor's Report)
(Amendment) Order, 2004, issued by the Central Government
of India in terms of sub-section (4A) of Section 227 of 'The
Companies Act, 1956' of India (the 'Act') and on the basis of
such checks of the books and records of the Company as we
considered appropriate and according to the information and
explanations given to us, we further report that:
(i) (a) The Company is maintaining proper records showing
full particulars including quantitative details and
situation of fixed assets.
(b) The fixed assets are physically verified by the
management according to a phased programme
designed to cover all the items over a period of three
years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of
its assets. Pursuant to the programme, a portion of
the fixed assets has been physically verified by the
management during the year and no material
discrepancies between the book records and the
physical inventory have been noticed.
Auditors' Report
(c) In our opinion and according to the information and
explanations given to us, a substantial part of fixed
assets has not been disposed off by the Company
during the year.
(ii) (a) The inventory (excluding stocks with third parties)
has been physically verified by the management
during the year. In respect of inventory lying with
third parties, these have substantially been confirmed
by them. In our opinion, the frequency of verification
is reasonable.
(b) In our opinion, the procedures of physical verification
of inventory followed by the management are
reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) On the basis of our examination of the inventory
records, in our opinion, the Company is maintaining
proper records of inventory. The discrepancies noticed
on physical verification of inventory as compared to
book records were not material.
(iii) (a) The Company has not granted any loans, secured or
unsecured, to companies, firms or other parties
covered in the register maintained under Section 301
of the Act.
(b) The Company has not taken any loans, secured or
unsecured, from companies, firms or other parties
covered in the register maintained under Section 301
of the Act.
(iv) In our opinion and according to the information and
explanations given to us, having regard to the explanation
that certain items purchased are of special nature for which
suitable alternative sources do not exist for obtaining
comparative quotations, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business for the purchase
of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the
books and records of the Company, and according to the
information and explanations given to us, we have neither
come across nor have been informed of any continuing
failure to correct major weaknesses in the aforesaid
internal control system.
68 Motherson Sumi Systems Limited
(v) (a) In our opinion and according to the information
and explanations given to us, the particulars of
contracts or arrangements referred to in Section
301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information
and explanations given to us, having regard to
the explanation that certain items/services
purchased are of special nature for which suitable
alternative sources do not exist for obtaining
comparative quotations, the transactions made
in pursuance of such contracts or arrangements
and exceeding the value of Rupees Five Lakhs in
respect of any party during the year, have been
made at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the
public within the meaning of Sections 58A and 58AA
of the Act or any other relevant provisions of the Act
and the rules framed there under.
(vii) In our opinion, the Company has an internal audit
system commensurate with its size and nature of its
business.
(viii) We have broadly reviewed the books of account
maintained by the Company in respect of products
where, pursuant to the Rules made by the Central
Government of India, the maintenance of cost records
has been prescribed under clause (d) of sub-section
(1) of Section 209 of the Act and are of the opinion
that prima facie, the prescribed accounts and records
have been made and maintained. We have not,
however, made a detailed examination of the records
with a view to determine whether they are accurate
or complete.
(ix) (a) According to the information and explanations
given to us and the records of the Company
examined by us, in our opinion, the Company is
generally regular in depositing undisputed
statutory dues including provident fund, investor
education and protection fund, employees' state
insurance, income-tax, sales tax, wealth tax, excise
duty, service tax, customs duty, and other material
statutory dues as applicable, with the appropriate
authorities.
(b) According to the information and explanations
given to us and the records of the Company
examined by us, there are no dues in respect of
income-tax, wealth tax, and cess as at March 31,
2009 which have not been deposited on account
of a dispute. The particulars of dues of service tax
and custom duty that have not been deposited
on account of a dispute are as follows -
Name of the Nature of Amount Period to Forum where the
statute dues (Rs.) which the dispute is pending
amount
relates
Central Excise Service tax 311,367 1999-2000 Customs, Excise and
Act, 1944 and Service Tax Appellate
2000-2001 Tribunal, Chennai
(x) The Company has no accumulated losses as at March
31, 2009 and it has not incurred any cash losses in the
financial year ended on that date or in the immediately
preceding financial year.
(xi) According to the records of the Company examined
by us and the information and explanation given to
us, the Company has not defaulted in repayment of
dues to any financial institution or bank or debenture
holders as at the balance sheet date.
(xii) The Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The provisions of any special statute applicable to chit
fund / nidhi / mutual benefit fund / societies are not
applicable to the Company.
(xiv) In our opinion, the Company is not a dealer or trader
in shares, securities, debentures and other investments.
(xv) In our opinion and according to the information and
explanations given to us, the terms and conditions of
the guarantees given by the Company, for loans taken
by others from banks or financial institutions during
the year, are not prejudicial to the interest of the
Company.
6922nd Annual report 2008-09
(xvi) In our opinion, and according to the information and
explanations given to us, on an overall basis, the term
loans have been applied for the purposes for which
they were obtained.
(xvii) On the basis of an overall examination of the balance
sheet of the Company, in our opinion and according
to the information and explanations given to us, there
are no funds raised on a short-term basis which have
been used for long-term investment.
(xviii) The Company has not made any preferential allotment
of shares to parties and companies covered in the
register maintained under Section 301 of the Act during
the year.
(xix) The Company does not have any debentures
outstanding as at the year end.
(xx) The Company has not raised any money by public
issues during the year.
(xxi) During the course of our examination of the books
and records of the Company, carried out in accordance
with the generally accepted auditing practices in India,
and according to the information and explanations
given to us, we have neither come across any instance
of fraud on or by the Company, noticed or reported
during the year, nor have we been informed of such
case by the management.
4. We refer to note on B-6 of Schedule XIII regarding
managerial remuneration amounting to Rs.3,041 thousand
for the current year paid to whole time director, being a non
resident whose appointment is subject to approval by the
Central Government.
In the event that the Central Government approval is not
received, these amounts are to be refunded by such
directors. This would then result in profit after taxation for
the year to be Rs. 700,278 thousand (as against reported
figure of Rs. 698,271 thousand), credit balance of Profit
and Loss Account to be Rs.1,632,922 thousand (as against
the reported figure of Rs. 1,630,915 thousand), net Current
Assets to be Rs..635,801 thousand (as against the reported
figure of Rs.632,760 thousand).
5. Further to our comments in paragraph 3 & 4 above, we
report that:
(a) We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by
law have been kept by the Company so far as appears
from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in
agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account
and Cash Flow Statement dealt with by this report
comply with the accounting standards referred to in sub-
section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from
the directors, as on March 31, 2009 and taken on record
by the Board of Directors, none of the directors is
disqualified as on March 31, 2009 from being appointed
as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act;
(f) In our opinion and to the best of our information and
according to the explanations given to us, the said
financial statements together with the notes thereon and
attached thereto give in the prescribed manner the
information required by the Act and subject to our
comments in paragraph 4 above give a true and fair
view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of
affairs of the Company as at March 31, 2009;
(ii) in the case of the Profit and Loss Account, of the
profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash
flows for the year ended on that date.
Kaushik Dutta
Partner
Membership No. F 88540
For and on behalf of
Price Waterhouse
Chartered Accountants
Place : Noida
Date : June 29, 2009
70 Motherson Sumi Systems Limited
Balance Sheet as at March 31, 2009
(Figures in Rs. Thousands)
Schedule As At As At
March 31, 2009 March 31, 2008
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital I 355,554 355,554
Reserves & Surplus II 3,802,798 3,668,964
4,158,352 4,024,518
Loan Funds
Secured Loans III 2,233,959 1,584,635
Unsecured Loans IV 3,147,585 3,025,986
Deferred tax liability (net) (Refer B (19) of Schedule XIII) - 22,746
TOTAL 9,539,896 8,657,885
APPLICATION OF FUNDS
Fixed Assets
Gross Block V 7,801,270 6,790,514
Less: Depreciation 3,132,525 2,667,273
Net Block 4,668,745 4,123,241
Capital Work in Progress 1,194,229 196,548
5,862,974 4,319,789
Investments VI 2,763,601 1,775,327
Deferred tax assets (net) (Refer B (19) of Schedule XIII) 15,299 -
Current Assets, Loans and Advances VII
Inventories 1,602,671 1,484,949
Sundry Debtors 1,733,476 2,046,196
Cash & Bank Balances 179,322 326,610
Loans & Advances 1,447,994 1,838,813
4,963,463 5,696,568
Less: Current Liabilities & Provisions VIII
Current Liabilities 2,745,799 2,042,870
Provisions 1,584,904 1,510,715
4,330,703 3,553,585
NET CURRENT ASSETS 632,760 2,142,983
Miscellaneous Expenditure (To the extent not written off or adjusted) IX 265,262 419,786
TOTAL 9,539,896 8,657,885
Significant Accounting Policies and Notes forming part of the AccountsXIII
This is the Balance Sheet referred to in our The schedules referred above form integral part of the Balance Sheet
report of even date
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
for and on behalf of the Board
7122nd Annual report 2008-09
Profit and Loss Account for the year ended March 31, 2009
(Figures in Rs. Thousands)
Schedule For the Year ended For the Year ended
March 31, 2009 March 31, 2008
INCOME
Sale of Finished Goods (Gross) 14,429,406 15,155,792
Less: Excise duty 1,479,977 2,124,779
Sale of Finished Goods (Net) 12,949,429 13,031,013
Other Income X 372,440 447,381
TOTAL 13,321,869 13,478,394
EXPENDITURE
Manufacturing and other expenses XI 11,633,285 11,117,115
Depreciation and Impairment V 545,144 500,629
Interest (net) XII 290,984 218,657
TOTAL 12,469,413 11,836,401
Profit Before Taxation 852,456 1,641,993
Tax Expense
Provision for Current Income Tax 175,730 370,472
Provision for Deferred Income Tax (Refer B (19) of Schedule XIII) (38,045) (28,217)
Provision for Fringe Benefit Tax 15,000 15,500
Provision for Wealth Tax 1,500 2,500
698,271 1,281,738
Less : Income Tax for earlier years 2,862 (179)
Profit After Taxation 695,409 1,281,917
Add: Balance brought forward from previous year 1,597,081 1,126,739
Surplus Available For Appropriation 2,292,490 2,408,656
APPROPRIATIONS
Transfer to General Reserve 100,000 250,000
Proposed Dividend 479,999 479,999
Tax on Dividend 81,576 81,576
Balance Carried to Balance Sheet 1,630,915 1,597,081
TOTAL 2,292,490 2,408,656
Earning per share (Basic/ Diluted) of face value Re. 1/- each 1.96 3.63
(Refer A(11) & B(18) of Schedule XIII)
Significant Accounting Policies and Notes forming part of the AccountsXIII
This is the Profit and Loss Account referred The schedules referred above form integral part of the Profit and Loss Account
to in our report of even date
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
for and on behalf of the Board
72 Motherson Sumi Systems Limited
Cash Flow Statement for the year ended March 31, 2009
(Figures in Rs. Thousands)
For the year ended For the year ended
March 31, 2009 March 31, 2008
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net profit before tax 852,456 1,641,993
Adjustments for:
Depreciation and Impairment 545,144 500,629
Interest Expense 308,382 264,809
Interest Income (17,398) (46,152)
Income from Investment - Dividend Received (46,691) (293)
Lease Rent 5,902 2,118
Profit on Fixed Assets sold (10,948) (247,758)
Debts / Advances Written off 1,379 841
Provision for Bad & Doubtful Debts / Advances (231) (1,389)
Liability no longer required written back (383) (14,483)
Provision for Gratuity & Leave Encashment 20,416 6,949
Provision for diminution in value of Long Term Investments 110,000 -
Provision for diminution in value of Current Investments 187 (5)
Unrealised foreign exchange (gain) /loss 252,374 231,345
Operating profit before working capital changes 2,020,589 2,338,604
Adjustments for changes in working capital :
- (Increase)/ Decrease in Sundry Debtors 326,643 (310,924)
- (Increase)/ Decrease in Other Receivables 567,880 (519,589)
- (Increase)/ Decrease in Inventories (117,722) (280,133)
- Increase/ (Decrease) in Trade and Other Payables 618,260 506,473
Cash generated from operations 3,415,650 1,734,431
- Taxes (Paid) / Received (net of TDS and refunds received) (209,353) (318,401)
Net cash from operating activities 3,206,297 1,416,030
B. CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of fixed assets Including CWIP (2,138,901) (1,598,459)
Proceeds from sales of fixed assets 20,070 357,908
Purchase of investments (including advance against equity) (1,098,460) (475,116)
Loan to Subsidiaries/Joint Venture (net) - 115,144
Lease Rent Payment (5,902) (2,118)
Interest Received (Revenue) 35,018 34,019
Dividend Received 46,691 293
Net cash used in investing activities (3,141,484) (1,568,329)
7322nd Annual report 2008-09
(Figures in Rs. Thousands)
For the year ended For the year ended
March 31, 2009 March 31, 2008
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from long term borrowings
Receipts 1,058,957 118,743
Payments (79,941) (243,987)
Proceeds from short term borrowings
Receipts - 42,500
Payments (52,500) -
Proceeds from Working Capital Facilities (net) (432,058) 708,574
Interest Paid (146,332) (101,145)
Dividend Paid (478,704) (351,733)
Dividend Tax Paid (81,576) (59,879)
Net cash generated/ (used) in financing activities (212,154) 113,073
Net Increase/(Decrease) in Cash & Cash Equivalents (147,341) (39,226)
Cash and cash equivalents Opening 326,610 365,922
Total Cash and Cash Equivalents as per cash flow statement 179,269 326,696
Cash and cash equivalents comprise
Cash In Hand 3,271 4,079
Cheques In Hand 516 220,357
Balance with Scheduled Banks 171,405 97,108
Balance with Non - Scheduled Banks 4,130 5,066
Cash and cash equivalents as per Balance Sheet (restated) 179,322 326,610
Add: Net unrealised loss /(gain) on Foreign Currency Cash & Equivalents (53) 86
Cash and cash equivalents Closing 179,269 326,696
(i) The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3 on Cash
Flow Statement issued by The Institute of Chartered Accountants of India.
(ii) Previous year's figures have been regrouped wherever necessary to conform to the current year's classification.
(iii) Following non cash transactions have not been considered in the cash flow statement:
-Tax deducted at source on income
(iv) Figures in brackets indicate cash outgo.
Cash Flow Statement for the year ended March 31, 2009
This is the Cash Flow Statement referred to for and on behalf of the Board
in our report of even date
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
74 Motherson Sumi Systems Limited
Schedules forming part of the Balance Sheet(Figures in Rs. Thousands)
As At As At
March 31, 2009 March 31, 2008
SCHEDULE I - SHARE CAPITAL
Authorised
803,000,000 Equity Shares of Re. 1/- each
(Previous Year 803,000,000 Equity Shares of Re. 1/- each) 803,000 803,000
Issued
355,557,000 Equity Shares of Re. 1/- each
(Previous Year 355,557,000 Equity Shares of Re. 1/- each) 355,557 355,557
Subscribed and Paid up
355,553,800 Equity Shares of Re. 1/- each
(Previous Year 355,553,800 Equity Shares of Re. 1/- each) 355,554 355,554
Total 355,554 355,554
(Of the above shares 6,090,000 (Previous Year 6,090,000) shares are allotted as fully paid up pursuant to a contract for consideration
other than cash)
(Of the above shares 282,737,000 (Previous Year 282,737,000) shares are allotted as fully paid bonus shares by way of capitalisation
of share premium & general reserve).
(Of the above shares 3,220,000 (Previous Year 3,220,000) shares are allotted by way of conversion of Zero Coupon Foreign
Currency Convertible Bonds)
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE II - RESERVES & SURPLUS
Revaluation Reserve 20,031 20,031
Reserve on Amalgamation 572,346 572,346
Securities Premium Account 291,143 291,143
General Reserve
As per Last Balance Sheet 1,188,363 1,055,808
Additions during the year 100,000 250,000
Deductions during the year - 1,288,363 117,445 1,188,363
Profit and Loss Account
As per Last Balance Sheet 1,597,081 1,126,739
Additions during the year 133,834 720,342
Deductions during the year 100,000 1,630,915 250,000 1,597,081
Total 3,802,798 3,668,964
7522nd Annual report 2008-09
(Figures in Rs. Thousands)
As At As At
March 31, 2009 March 31, 2008
SCHEDULE III - SECURED LOANS
Working Capital Facilities 1
- Rupee Loan 579,284 1,169,976
- Foreign Currency Loan 273,720 124,933
Long Term Loans
(i) From Banks
- Foreign Currency Loan 2,3
1,281,861 244,086
(ii) From Others
- Rupee Loan 4
77,983 14,433
- Vehicle Loan 5
21,111 31,207
TOTAL 2,233,959 1,584,635
Secured Loans referred above are :
1
Secured by first charge by way of hypothecation of all present and future stocks, book debts and other specified moveable
assets of the Company and second charge by way of hypothecation of all present and future immoveable property.
2
Long terms loans due within a year Rs. 270,113 thousand (Previous Year Rs.50,137 thousand).
3
Secured by first pari-passu charge on entire fixed assets both moveable and immoveable of the Company present and future
and second pari-passu charge on the entire current assets of the Company. These are also secured by way of deposit of title
deeds of specified properties.
4
i) Tooling advances received from customers are repayable by way of amortisation on supply of components and hence
cannot be distinguished between short term and long term.
ii) Secured by hypothecation of specific moulds used for production of components.
5
i) Due within a year Rs 8,478 thousand (Previous Year Rs 10,449 thousand).
ii) Secured by hypothecation of specific vehicles purchased against such loans.
(Figures in Rs. Thousands)
As At As At
March 31, 2009 March 31, 2008
SCHEDULE IV - UNSECURED LOANS
Short term loans 1
- From Subsidiaries - 32,500
- Other than Banks 32,400 52,400
Long term loans 2
- Zero Coupon Foreign Currency Convertible Bonds (Refer B (3) of Schedule XIII) 3,070,528 2,891,412
- Other than Banks 3
44,657 49,674
TOTAL 3,147,585 3,025,986
1
Repayable on demand.
2
Long Term Loan due within a Year Rs.Nil (Previous Year Rs.Nil).
3
Tooling advances received from customers are repayable by way of amortisation on supply of components and hence cannot be
distinguished between short term and long term.
Schedules forming part of the Balance Sheet
76 Motherson Sumi Systems Limited
Schedules forming part of the Balance Sheet
SCHEDULE V - FIXED ASSETS (Refer A(2), A(8) & A(12) of Schedule XIII)
(Figures in Rs. Thousands)
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars As at March Additions Deletions/ Total as at Upto Depreciation Depreciation Upto As at March As at March
31, 2008 during Sales/ March March for the year on Deletions/ March 31, 2009 31, 2008
the year Adjustments 31, 2009 31, 2008 Sales/ 31, 2009
Adjustments 1
Tangible Assets
Leasehold Land 562,381 78,830 - 641,211 13,787 7,445 - 21,232 619,979 548,594
Freehold Land 305,654 56,244 - 361,898 - - - - 361,898 305,654
Leasehold Improvements 62,693 185 27,128 35,750 30,089 185 27,128 3,146 32,604 32,604
Building 1,227,162 194,837 - 1,421,999 184,476 44,263 - 228,739 1,193,260 1,042,686
Plant & Machinery 4,125,429 656,678 15,290 4,766,817 2,099,838 406,408 11,696 2,494,550 2,272,267 2,025,591
Furniture, Fixtures &
Office equipments 127,234 11,508 3,743 134,999 97,636 11,711 3,542 105,805 29,194 29,598
Computers 161,743 22,342 1,801 182,284 124,524 23,690 1,761 146,453 35,831 37,219
Vehicles 218,218 73,076 41,052 250,242 116,923 50,936 35,765 132,094 118,148 101,295
Intangible Assets
Technical Knowhow fees - 6,070 - 6,070 - 506 - 506 5,564 -
T O T A L 6,790,514 1,099,770 89,014 7,801,270 2,667,273 545,144 79,892 3,132,525 4,668,745 4,123,241
Previous Year 5,577,885 1,561,376 348,747 6,790,514 2,328,390 471,822 132,939 2,667,273 4,123,241
Capital Work in 1,194,229 196,548
Progress 1
5,862,974 4,319,789
1 Refer B (6) of Schedule XIII
(Figures in Rs. Thousands)
Particulars As at As at
March 31, 2009 March 31, 2008
SCHEDULES VI - INVESTMENT (Refer A(3) of Schedule XIII)
A. Unquoted (At Cost)
In Subsidiaries (Long-term Investments)
Motherson PUDENZ WICKMANN Ltd.1
9,045 9,045
1,403,226 equity shares (1,403,226) of Rs 10/- each fully paid up
MSSL Mauritius Holdings Ltd.1
22,452 22,452
525,000 equity shares (525,000) of Euro 1 each fully paid up
15,699,790 redeemable preference shares (Nil) of Euro 1 each fully paid up 1,002,906 -
MSSL Mideast (FZE) 1
1 equity share (1) of AED 150,000 equivalent to Euro 46,875 each fully paid up 1,997 1,997
12,275,000 redeemable preference shares (Nil) of Euro 1 each fully paid up 708,071 -
Advance against preference shares (Euro 12,275,000) - 708,071
MSSL Handels GmbH 1
1,835 1,835
1 equity share (1) of Euro 35,000 each fully paid up
Motherson Electrical Wires Lanka Pvt. Ltd.1
6,857 6,857
1,456,202 equity shares (1,456,202) of Srilankan Rs. 10/- each fully paid up
7722nd Annual report 2008-09
Schedules forming part of the Balance Sheet
(Figures in Rs. Thousands)
Particulars As at As at
March 31, 2009 March 31, 2008
SCHEDULES VI - INVESTMENT (Refer A(3) of Schedule XIII contd.)
MSSL (S) Pte Ltd.1
100,000 equity shares (100,000) of S$ 1/- each fully paid up 2,655 2,655
1,800,000 preference shares (1,800,000) of S$ 1/- each fully paid up 51,120 51,120
11,200,000 6% redeemable at par non convertible and non cum-
ulative preference shares (Nil) of S$ 1/- each fully paid up 306,263 -
Advance against preference shares (S$ 275,647) 9,149 282,105
MSSL Global Wiring Ltd.1
50,000 equity shares (Nil) of Rs 10/- each fully paid up 500 -
Advance against equity share 33,600 -
In Others
(Long-term Investments)
Woco Motherson Elastomers Ltd.1
11,393 11,393
1,139,333 equity shares (1,139,333) of Rs 10/- each fully paid up
Woco Motherson Advanced Rubber Technologies Ltd.1
6,667 6,667
666,667 equity shares (666,667) of Rs 10/- each fully paid up
Woco Motherson Advanced Rubber Technologies Ltd.1
44,229 44,229
4,422,867 6% redeemable convertible non-cumulative
preference shares (4,422,867) of Rs 10/- each fully paid up
Balda Motherson Solution India Ltd.1,2
18,419,156 equity shares (14,430,578) of Rs 10/- each fully paid up 184,192 144,306
22,958,000 7% optionally convertible redeemable cumulative
preference shares (22,958,000) of Rs 10/- each fully paid up 229,580 229,580
Advance against equity - 11,739
Visiocorp Motherson Ltd.1
67,368 67,368
6,712,990 equity shares (6,712,990) of Rs 10/- each fully paid up
Saks Ancillaries Ltd.1
10,724 10,724
1,000,000 equity shares (1,000,000) of Rs 10/- each fully paid up
Kyungshin Industrial Motherson Ltd.1
86,080 86,080
8,600,000 equity shares (8,600,000) of Rs 10/- each fully paid up
Motherson Air Travel Agencies Ltd.1
1,206 1,206
120,000 equity shares (120,000) of Rs 10/- each fully paid up
Calsonic Kansei Motherson Auto Products Ltd.1
49,000 49,000
4,900,000 equity shares (4,900,000) of Rs 10/- each fully paid up
Motherson Sumi Infotech & Designs Ltd.1
1,250,000 7% preference shares (1,250,000) of Rs 10/- each fully paid up 12,500 12,500
1,200,000 equity shares (1,200,000) of Rs.10/- each fully paid up 13,800 13,800
Total (A) 2,873,189 1,774,729
78 Motherson Sumi Systems Limited
Schedules forming part of the Balance Sheet
(Figures in Rs. Thousands)
Particulars As at As at
March 31, 2009 March 31, 2008
SCHEDULES VI - INVESTMENT (Refer A(3) of Schedule XIII contd.)
B. Quoted
(Current Investments)
HDFC Bank Ltd. 102 102
407 equity shares (11,822 of Centurion Bank of Punjab) of Rs 10/- each fully paid up
Balrampur Chini Mills Ltd. 10 10
1,200 equity shares (1,200) of Rs 10/- each fully paid up
Electrolux Kelvinator Ltd. (Formerly Intron Ltd.) - 12
1,250 equity shares (1,250) of Rs 10/- each fully paid up
Jaysynth Dyechem Ltd. 1 1
100 equity shares (100) of Rs 10/- each fully paid up
GIVO Ltd. 88 219
28,475 equity shares (28,475) of Rs 10/- each fully paid up
Mahindra & Mahindra Ltd. 203 203
1,822 equity shares (1,822) of Rs 10/- each fully paid up
Pearl Engineering Polymers Ltd. 8 16
3,160 equity shares (3,160) of Rs 10/- each fully paid up
Daewoo Motors Ltd. - 34
6,150 equity shares (6,150) of Rs 10/- each fully paid up
Inox Leasing & Finance Ltd. - 1
100 equity shares (100) of Rs 10/- each fully paid up
Athena Financial Services Ltd. (earlier Kinetic Lease & Finance Ltd.) - -
66 equity shares (66) of Rs 10/- each fully paid up
Total (B) 412 598
Total (A+B) 2,873,601 1,775,327
Less: Provision for Diminution 2
110,000 -
Net Total 2,763,601 1,775,327
1
Trade Investment
2
Provision for diminution is in respect of investment in Balda Motherson Solution India Ltd. (Refer B(7a) on Schedule XIII)
Note:
a) Market value of quoted investments 1,251 1,679
(Based on last traded price available as at March 31, 2009)
No. of Shares Figures in Rs. Thousands
b) Investments made during the year
- Equity Shares
Balda Motherson Solution India Ltd. 3
3,988,578 39,886
MSSL Global Wiring Ltd. 50,000 500
- Preference Shares 4
MSSL (S) Pte Ltd. 11,200,000 306,263
MSSL Mideast (FZE) 12,275,000 708,071
MSSL Mauritius Holdings Ltd. 15,699,790 1,002,906
- Advance Against Equity/ Preference Shares
MSSL (S) Pte Ltd. - 9,149
MSSL Global Wiring Ltd. - 33,600
3
Includes equity shares allotted during the year against advances given in previous year Rs. 11,739 thousand
4
Includes preference shares allotted during the year against advances given in previous year Rs. 270,571 thousand
7922nd Annual report 2008-09
(Figures in Rs. Thousands)
Particulars As at As at
March 31, 2009 March 31, 2008
SCHEDULE VII - CURRENT ASSETS, LOANS AND ADVANCES
A. Current Assets
Stock in Trade
(i) Finished Goods 177,361 248,293
(ii) Work in Progress 261,876 333,111
(iii) Raw Material & Components 871,790 832,640
(iv) Goods in Transit (Raw Material & Components) 287,533 65,408
(v) Tools, Store & Spares 4,111 5,497
(1) 1,602,671 1,484,949
Sundry Debtors (Unsecured, unless otherwise stated)
(i) Outstanding for more than six months
Considered Good 1
55,405 51,779
Considered Doubtful 7,672 7,603
63,077 59,382
Less Provision for doubtful debts 7,672 7,603
55,405 51,779
(ii) Other Debts
Considered good 2
1,678,071 1,994,417
(2) 1,733,476 2,046,196
Cash and Bank Balances
(i) Cash in hand 3,271 4,079
(ii) Cheques in hand 516 220,357
(iii) Balance with
(a) Scheduled Banks in
(i) Current Accounts 26,695 8,719
(ii) Deposit account 3
139,056 84,028
(iii) Dividend Account 5,654 4,361
(b) Non Scheduled Banks in 4
(i) Current Account with Bank Austria - 1,527
(ii) Current Account with HSBC Bank Middle East Ltd. 2,043 1,065
(iii) Current Account with Commerz Bank Hanau Germany 2,087 2,474
(3) 179,322 326,610
TOTAL A (1+2+3) 3,515,469 3,857,755
Schedules forming part of the Balance Sheet
80 Motherson Sumi Systems Limited
(Figures in Rs. Thousands)
Particulars As at As at
March 31, 2009 March 31, 2008
SCHEDULE VII - CURRENT ASSETS, LOANS AND ADVANCES
B. Loans and Advances (Unsecured, unless otherwise stated)
(i) Advances recoverable in cash or in kind or for value to be received 5
- Considered good 693,152 804,908
- Considered doubtful 2,666 2,966
695,818 807,874
Less Provision for doubtful advances 2,666 2,966
693,152 804,908
(ii) Loan to Subsidiaries 10,683 336,095
(iii) Loan to Joint Venture Company - 3,314
(iv) Deposits with Excise, Customs & Govt Authorities 743,000 694,580
(v) Advance Tax (Net) 6
1,159 (84)
TOTAL B 1,447,994 1,838,813
GRAND TOTAL (A+B) 4,963,463 5,696,568
1
Includes due from subsidiaries Rs.12,153 thousand ( Previous Year Rs.22,235 thousand )
2
Includes due from subsidiaries Rs. 95,787 thousand ( Previous Year Rs.176,273 thousand )
3
i) Deposits pledged with Excise & Sales Tax authorities Rs.23 thousand (Previous Year Rs. 60 thousand)
ii) Margin money Rs.5,008 thousand (Previous Year Rs 4,901 thousand)
4
Maximum balance outstanding during the Year :
i) Bank Austria Rs.1,994 thousand (Previous Year Rs. 1,674 thousand)
ii) HSBC Bank Middle East Ltd. Rs.23,917 thousand (Previous Year Rs 7,698 thousand)
iii) Commerz Bank Hanau Germany Rs.5,614 thousand (Previous Year Rs 3,868 thousand)
5
i) Includes due from subsidiaries Rs.58,725 thousand (Previous Year Rs. 10,425 thousand)
ii) Includes capital advances of Rs 282,766 thousand (Previous Year Rs. 173,006 thousand)
6
Net of Provision for Fringe Benefit Tax Rs 42,300 thousand ( Previous Year Rs 40,693 thousand)
Schedules forming part of the Balance Sheet
8122nd Annual report 2008-09
Schedules forming part of the Balance Sheet
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VIII - CURRENT LIABILITIES AND PROVISIONS
A. Current Liabilities
(i) Sundry Creditors 1
Total Outstanding dues of Micro & Small Enterprises 2
2,403 3,270
Total outstanding creditors other than Micro & Small Enterprises 2,312,006 1,744,935
(ii) Advance from customers 337,623 183,468
(iii) Other Liabilities 76,475 102,724
(iv) Investor Education & Protection Fund shall be credited by the
following amount:
- Unpaid Dividend 5,654 4,361
(v) Interest Accrued but not due 11,638 4,112
2,745,799 2,042,870
B. Provisions
(i) Premium on Redemption of Zero Coupon Foreign Currency Convertible
Bonds (Refer B(3) of Schedule XIII) 926,225 856,102
(ii) For Dividend (including tax thereon) 561,573 561,573
(iii) For Income tax (net) 3
31,690 48,319
(iv) For Wealth tax 2,779 2,500
(v) For Employee benefit (Refer A(5) & B(21)of Schedule XIII) 60,637 40,221
(vi) For Warranty (Refer B(20) of Schedule XIII) 2,000 2,000
1,584,904 1,510,715
TOTAL 4,330,703 3,553,585
1
Includes due to subsidiaries Rs. 426,376 thousand (Previous Year Rs.118,855 thousand)
2
Refer B(5) of Schedule XIII
3
Net of Advance Income Tax Rs 1,025,389 thousand (Previous Year Rs 1,070,516 thousand)
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE IX - MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted) (Refer B (3) of Schedule XIII)
Premium on Redemption/ Issue Expenditure of Zero Coupon
Foreign Currency Convertible Bonds
Opening Balance 419,786 584,835
Less: Written off during the year 154,524 165,049
TOTAL 265,262 419,786
82 Motherson Sumi Systems Limited
Schedules forming part of the Profit and Loss Account
(Figures in Rs. Thousands)
For the Year ended For the Year ended
March 31, 2009 March 31, 2008
SCHEDULE X - OTHER INCOME
(a) Dividend Received 1
- From other than Subsidiary companies 46,691 293
(b) Rent 46,636 35,052
(c) Provision for diminution in value of current investment written back - 5
(d) Sundries written back 383 14,483
(e) Service Income 176,138 101,902
(f) Profit on sale of Land - 240,041
(g) Profit on sale of Other Fixed assets (net) 10,948 7,717
(h) Miscellaneous Income 91,644 47,888
TOTAL 372,440 447,381
Tax deducted on source
(a) Rent 11,553 4,633
(b) Service and Miscellaneous Income 23,793 12,974
1
Includes dividend from Short term Non- Trade investments 22 293
(Figures in Rs. Thousands)
For the Year ended For the Year ended
March 31, 2009 March 31, 2008
SCHEDULE XI - COST OF MATERIALS AND MANUFACTURING AND
OTHER EXPENSES
Materials consumed
Opening Stock
Raw materials 832,640 609,960
Work-in-progress 333,111 232,649
Finished goods 248,293 236,830
1,414,044 1,079,439
Add : Purchases of Raw materials 7,691,450 8,082,570
Less: Closing Stock
Raw materials (871,790) (832,640)
Work-in-progress (261,876) (333,111)
Finished goods (177,361) (248,293)
Less : Stock damaged due to fire
Raw materials - (59,860)
Work-in-progress - (28,022)
Finished goods - (17,425)
(1,311,027) (1,519,351)
Total consumption for goods sold 7,794,467 7,642,658
Salary, wages & bonus 1,133,573 974,181
Contribution to Provident & Other Fund 105,056 97,366
8322nd Annual report 2008-09
Schedules forming part of the Profit and Loss Account
(Figures in Rs. Thousands)
For the Year ended For the Year ended
March 31, 2009 March 31, 2008
SCHEDULE XI - COST OF MATERIALS AND MANUFACTURING AND
OTHER EXPENSES
Staff Welfare 120,898 122,281
Electricity, Water and Fuel 247,499 235,017
Repairs and Maintenance
Machinery 106,487 126,828
Building 72,839 119,736
Others 96,526 123,225
Consumption of Store and Spare parts 148,488 150,943
Conversion charges 138,964 155,750
Lease rent 5,902 2,118
Rent 72,700 58,358
Rates & taxes 6,242 2,793
Insurance 28,595 28,512
Donation 7,538 7,018
Travelling 167,984 164,299
Freight & forwarding 315,256 273,900
Royalty 59,421 68,088
Cash Discount 28,988 28,247
Commission 1,852 668
Provision for diminution in value of Long Term Investments 110,000 -
Provision for diminution in value of Current Investments 187 -
Bad Debts / Advances written off 1,379 841
Legal & professional expenses 261,635 246,510
Exchange fluctuation(net)
Foreign Currency Convertible Bonds 249,239 265,996
Others 68,574 (81,600)
Miscellaneous expenses 282,996 303,382
TOTAL 11,633,285 11,117,115
84 Motherson Sumi Systems Limited
(Figures in Rs. Thousands)
For the Year ended For the Year ended
March 31, 2009 March 31, 2008
SCHEDULE XII - INTEREST (NET)
Interest & Finance Expense
- Subsidiaries 1,028 2,153
- Privately Placed Debentures 20,224 22,882
- Fixed loans 26,957 9,657
- Amortisation of Premium / Issue Expenditure on Redemption of Zero
Coupon Foreign Currency Convertible Bonds (Refer B (3) of Schedule XIII) 154,524 165,049
- Others 105,649 65,068
Less : Interest Income (Gross)
- From Subsidiaries 12,064 19,740
- From Bank Deposits 3,740 2,641
- From Income Tax Refund - 12,323
- From Others 1,594 11,448
TOTAL 290,984 218,657
Tax deducted on source
Interest Income 831 2,299
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts
A. SIGNIFICANT ACCOUNTING POLICIES
1. CONVENTION
The Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the
applicable accounting standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the
Companies Act,1956. The Company follows the mercantile system of accounting and recognises income and expenditure on
accrual basis.
2. FIXED ASSETS AND DEPRECIATION
FIXED ASSETS
i) The fixed assets except as stated in (ii) below are stated at cost less accumulated depreciation. Cost of acquisition or
construction is inclusive of inward freight, duties and taxes and other incidental expenses.
ii) The fixed assets of the Component Division of erstwhile Motherson Auto Components Engineering Limited (MACE) have
been stated at an amount inclusive of appreciation arising on revaluation of the assets by an approved valuer on December
31, 1998. The method adopted for revaluation of the assets are as under:
a) Land: Prevailing market rate of land as on the date of revaluation.
b) Buildings, Indigenous Plant and Machinery, Furniture and Fixtures, Moulds and Dies: Replacement value.
Schedules forming part of the Profit and Loss Account
8522nd Annual report 2008-09
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
The Company charges assets Costing less than Rs 5,000 to expense, which could otherwise have been included as Fixed
Asset, because the amount is not material in accordance with Accounting Standard 10 -'Accounting for Fixed Assets'.
DEPRECIATION
i) Depreciation on fixed assets except as stated in (ii) below, is provided from the month the asset is ready for commercial
production on a pro-rata basis at the SLM rates prescribed in schedule XIV to the Companies Act, 1956 or based on
useful life, whichever is higher. In accordance with the above policy the following assets are depreciated, at rates
higher than those prescribed in schedule XIV of the Companies Act, 1956:
Rate (%)
Computers 33.33
Vehicles 25.00
Furniture, fixtures & Office equipments 16.67
Electrical Installations 10.00
Specific Identified Plant & Machinery 25.00
ii) In respect of revalued assets, depreciation is being provided on the revalued amounts over the remaining useful life of
the assets at the SLM rates. Leasehold Land is amortized over the balance period of lease.
3. INVESTMENTS
Investments are classified into long term and current investments. Long-term investments are stated at cost. A provision for
diminution is made to recognise a decline, other than temporary, in the value of long term investments.
Current investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refers to the market
value of the investments arrived at on the basis of last traded prices as at the year-end.
4. INVENTORIES
Stores and spares, loose tools are valued at cost or net realizable value, whichever is lower.
Raw materials, components, finished goods and work in progress are valued at cost or net realizable value, whichever is lower.
The basis of determining cost for various categories of inventories is as follows:
i) Stores and Spares, Raw Materials and Components First in First Out (FIFO) method
ii) Work in Progress and Finished Goods Material cost plus appropriate share of labour and production
overheads.
iii) Tools Cost less amortization based on useful life of the items
ascertained on a technical estimate by the management
5. EMPLOYEE BENEFITS
The Company makes regular contributions to the State administered Provident Fund which is charged against revenue. The
Company provides for long term defined benefit schemes of gratuity and compensated absences on the basis of actuarial
valuation on the balance sheet date based on the Projected Unit Credit Method. In respect of gratuity, the Company funds the
benefits through annual contributions to Life Insurance Corporation of India (LIC) under its Group Gratuity Scheme. The
Schedules forming part of the Accounts
86 Motherson Sumi Systems Limited
actuarial valuation of the liability towards the defined benefits of the employees is made on the basis of assumptions with
respect to the variable elements affecting the computations including estimation of interest rate of earnings on contributions
to LIC. The Company recognises the actuarial gains and losses in the profit and loss account in the period in which they occur.
6. REVENUE RECOGNITION
Sales are recognised upon the transfer of significant risks and rewards of ownership to the customers.
Revenue from services is recognised as per the terms of the agreement, as the services are rendered and no significant
uncertainty exists regarding the amount of consideration.
Interest Income is recognised on a proportion of time basis taking into account the principal outstanding and the rate applicable.
7. FOREIGN EXCHANGE TRANSACTIONS
Transactions involving foreign currencies are recorded at the exchange rate prevailing on the transaction date. Foreign currency
monetary items are translated at the exchange rate prevailing at the balance sheet date and the gain/loss arising on such
translation is charged to the profit and loss account. Premium or discount arising at the inception of a forward exchange
contract is amortized as expense or income over the life of contract.
8. BORROWING COSTS
The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use, is charged to revenue in the period in which they
are incurred.
The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised
as part of the cost of that asset.
9. LEASES
Lease rental in respect of operating lease arrangements are charged to expense when due as per the terms of the related
agreement on a straight-line basis over the lease period.
Lease rentals in respect of finance lease transactions entered into prior to 31st March 2001 is charged to expense when due as
per the terms of the related agreement. Finance lease transactions entered into after this date are considered as financing
arrangements and the leased asset is capitalised at an amount equal to the present value of future lease payments and a
corresponding amount is recognised as a liability. The lease payments made are apportioned between finance charge and
reduction of outstanding liability in relation to leased asset.
10. TAXATION
Current Tax
Current tax is provided on the basis of tax payable on estimated taxable income computed in accordance with the applicable
provisions of Income tax Act, 1961 after considering the benefits available under the said Act.
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
8722nd Annual report 2008-09
Schedules forming part of the Accounts
Deferred Taxes
In accordance with Accounting Standard 22 - Accounting for Taxes on Income, issued by the Institute of Chartered Accountants
of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax
rates and laws that have been enacted or substantially enacted as of the balance sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in the future;
however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised
only if there is virtual certainty of realisation of such assets.
Fringe Benefit Tax
Fringe benefit tax is determined based on the liability computed in accordance with relevant tax rates and tax laws.
11. EARNINGS PER SHARE (EPS)
The earnings considered in ascertaining the Company's EPS comprises the net profit after tax (and includes the post tax effect
of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS,
after adjusting for the effect of potential dilutive equity shares.
12. IMPAIRMENT OF ASSETS
Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of an asset's net selling price, and its value in use. Value in use is the present value of estimated future cash
flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
13. PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a
contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require
an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of
outflow of resources is remote, no provision or disclosure is made.
14. USE OF ESTIMATES
In the preparation of the financial statements, the management of the Company makes estimates and assumptions in conformity
with the applicable accounting principles in India that affect the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities, as at the date of the financial statements and reported amounts of income and
expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee
retirement benefit plans, income taxes, the useful lives of fixed assets and intangible assets and estimates for recognising
impairment losses.
These estimates could change from period to period and also the actual results could vary from the estimates. Appropriate
changes are made to the estimates as the management becomes aware of changes in circumstances surrounding these estimates.
The changes in estimates are reflected in the financial statements in the period in which changes are made and, if material,
their effects are disclosed in the notes to the financial statements.
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
88 Motherson Sumi Systems Limited
Schedules forming part of the Accounts
B. NOTES TO THE ACCOUNTS
1. Contingent Liabilities
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
a) In respect of Excise 1
13,803 12,265
b) In respect of Customs 444 444
c) In respect of Entry Tax 8,186 2,667
d) In respect of Sales Tax 13,505 13,784
e) In respect of Service Tax 4,581 3,545
f) In respect of Stamp Duty 4,754 1,804
g) In respect of Income Tax 3,557 1,588
h) In respect of Labour Cases 15,850 14,891
i) The Company has given corporate guarantee in respect of :
i) Subsidiary Company 1,117,221 75,915
j) Bank Guarantees / Letter of Credit furnished by the Company 59,174 46,015
1
Excludes interest
Further, in respect of certain subsidiary companies, the Company has furnished letter of support to enable the said companies
continue the operations.
The amount shown in items "a to h" above represents the best possible estimates arrived at on the basis of available
information. The uncertainty and possible reimbursement are dependent on the outcome of the different legal processes
which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately.
2. Outstanding Capital Commitments
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
Unexpired amount of the contracts on capital accounts and not
provided for (net of advances) 375,704 465,391
3. Issue of Zero Coupon Convertible Bonds
During the year ended March 31, 2006, the Company issued Euro 50,300,000 Zero Coupon Convertible Bonds due 2010 (the
"Bonds"). These Bonds are listed in the Singapore Exchange Securities Trading Limited (the "SGX-ST").The Bonds are convertible
either at the option of the holder at any time on or after August 24, 2005 (or such earlier date as is notified to the holders of
the Bonds by the Company) upto July 6, 2010 by holders into fully paid equity shares with full voting rights at par value of
Re. 1.00 each of the Issuer ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of
Rs.74.32
per Share with a fixed rate of exchange on conversion of Rs. 52.01 = Euro 1.00. The Conversion Price is subject to
adjustment in certain circumstances.
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
8922nd Annual report 2008-09
Schedules forming part of the Accounts
The Bonds may otherwise be redeemed, in whole or in part, at the option of the Issuer, at any time on or after July 15, 2008
and prior to July 7, 2010 subject to satisfaction of certain conditions and at their "Early Redemption Amount" (as defined in the
"Terms & Conditions of the Bonds") at the date fixed for such redemption if the "Closing Price" (as defined in the "Terms &
Conditions of the Bonds") of the Shares translated into Euro at the "prevailing rate" (as defined in the "Terms & Conditions of the
Bonds") for each of 20 consecutive "Trading Days" (as defined in the "Terms & Conditions of the Bonds") the last of which occurs
not more than five days prior to the date upon which notice of such redemption is published, is greater than 130 per cent, of
the "Conversion Price" (as defined in the "Terms & Conditions of the Bonds") then in effect translated into euro at the rate of Rs.
52.01 = Euro 1.00.
The Bonds may also be redeemed, in whole, but not in part, at any time at the option of the Issuer at their Early Redemption
Amount, if less than 10 per cent, in aggregate principal amount of the Bonds originally issued is outstanding.
The Bonds may also be redeemed in whole, but not in part, at the option of the Issuer subject to satisfaction of certain
conditions including obtaining Reserve Bank of India ("RBI") approval, at their Early Redemption Amount, on the date fixed for
redemption in the event of certain changes relating to taxation in India.
Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Issuer in Euros on July
16, 2010 at 126.77 per cent of its principal amount.
The issuer will, at the option of any holder of any Bonds, repurchase at the Early Redemption Amount such Bonds at such time
as the Shares cease to be listed or admitted to trading on the BSE and the NSE (as defined in the "Terms & Conditions of the
Bonds") in respect of the Issuer.
Consequent to the exercise of conversion option by holders of bonds of face value Euro 4.6 million, in the financial year ended
March 31, 2008, the outstanding balance as on March 31, 2009 is Euro 45,700,000.
2
Revised from Rs. 111.45, in accordance with the terms of issue, consequent to the issue of bonus shares by the Company.
4. On March 6, 2009 , Samvardhana Motherson Visiocorp Solution Limited (SMVSL), incorporated in Jersey, 95 % owned by
Samvardhana Motherson Global Holding Limited (SMGHL), together with its subsidiaries acquired all the subsidiaries of Visiocorp
Plc. (in administration) for a cash consideration of Euro 24.77 Million and issue of consideration shares amounting to Euro
1.5 Million to the lenders of the erstwhile Visiocorp Group. SMGHL is a joint venture between the Company and Samvardhana
Motherson Finance Limited through its overseas 100% Subsidiary MSSL Mauritius Holdings Limited, which holds 51% in
SMGHL.
5. As per information available with the management, the dues payable to enterprises covered under "The Micro, Small and
Medium Enterprises Development Act, 2006" aggregate to Rs. 2,403 thousand (Previous year Rs. 3,270 thousand). This has
been determined on the basis of responses received from vendors on specific confirmation sought by the Company in this
regard.
Further, as determined by the management, there is no interest paid/ payable to such enterprises.
6. The management based on the review of future business plans has estimated the value in use/ recoverable value lower than
the carrying value of the certain fixed assets and consequently recognised an impairment loss to the extent of the carrying
value of such assets amounting to Rs. 11,066 thousand. In the previous year the Company had impaired certain fixed assets
included in capital work in progress having value of Rs 28,807 thousand.
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
90 Motherson Sumi Systems Limited
7. (a) During the year the Company has made a provision amounting to Rs. 110,000 thousand for diminution in the value of its
investment in Balda Motherson Solution India Limited consequent to impairment recognized by Balda Motherson Solution
India Limited in its financial statements for the year ended on March 31, 2009.
(b) The Board of Directors' on June 29, 2009 have approved the purchase of Minority Interest of 43.87% in its Subsidiary
Motherson PUDENZ WICKMANN Limited (MPWL). MPWL has a net sales of Rs.264 Lakhs and profit after tax of Rs. 42
Lakhs for the year ended March 31, 2009.
8. Managerial Remuneration:
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 20093,4
March 31, 2008 3
a) Salaries and other allowances 5,364 4,483
b) Contribution to provident and other funds 460 400
c) Perquisites 2,420 1,932
d) Directors Sitting Fees 500 520
Total 8,744 7,335
3
As the employee-wise break up of gratuity and leave encashment is not ascertainable, the amount related to one of the
directors has not been included in the above particulars.
4
Includes remuneration amounting to Rs. 3,041 thousand paid to Whole time Director, being a non-resident whose appointment
is subject to Central Government approval, for which the Company has filed necessary application and approval is awaited.
9. Payment to Auditors
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) Statutory Audit Fees 4,425 3,425
b) Taxation Matters 300 300
c) Reimbursement of expenses 284 273
d) Others (certification charges and other services) 350 350
Total 5,359 4,348
10. Value of imports on CIF Basis in respect of
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) Raw Material 3,486,570 3,799,236
b) Capital Goods 387,864 556,127
c) Spare Parts 55,156 40,403
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
9122nd Annual report 2008-09
Schedules forming part of the Accounts
11. Expenditure in foreign currency on account of: (Cash Basis) (Net of Taxes)
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) Royalty 61,732 42,796
b) Travelling 33,451 56,057
c) Interest 16,032 11,770
d) Professional Fee 89,583 49,721
e) Technical Assistance Fees 6,564 21,113
f) Rent 9,015 8,883
g) Salaries and other allowances 27,921 17,145
h) Computer and Software Expenses 2,016 3,808
i) Others (includes training, bank charges, reimbursements etc.) 65,725 38,946
12. Value of imported and indigenous consumed and percentage of each to total consumption:
A. Raw Materials and Components
Particulars Year ended March 31, 2009 Year ended March 31, 2008
(%) (Rs. in (%) (Rs. in
Thousands) Thousands)
a) Imported 41 3,165,778 43 3,368,521
b) Indigenous 59 4,486,522 57 4,431,509
Total 100 7,652,300 100 7,800,030
B. Stores & Spares
Particulars Year ended March 31, 2009 Year ended March 31, 2008
(%) (Rs. in (%) (Rs. in
Thousands) Thousands)
a) Imported 16 22,998 22 33,162
b) Indigenous 84 125,490 78 117,781
Total 100 1,48,488 100 150,943
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
92 Motherson Sumi Systems Limited
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
13. Actual Production, opening stock, closing stock and sales:
A. Quantity
(Numbers in Thousands)
Year ended March 31, 2009 Year ended March 31, 2008
Wiring High Plastic Wires Wiring High Plastic Wires
Harness Tension Comp. Harness Tension Comp.
Cords Cords
(Nos.) (Nos.) (Nos.) (Kms.) (Nos.) (Nos.) (Nos.) (Kms.)
Opening Stock 496 - 716 10 385 - 759 21
Production 20,177 394 56,701 605 23,305 388 62,267 575
Total 20,673 394 57,417 615 23,690 388 63,026 596
Sales/Consumption 20,327 390 56,958 606 23,194 388 62,310 586
Closing Stock 346 4 458 9 496 - 716 10
B. Value
(Figures in Rs. Thousands)
Year ended March 31, 2009 Year ended March 31, 2008
Opening Sales (net) Closing Opening Sales (net) Closing
Stock Stock Stock Stock
Wiring Harness 151,679 8,962,231 94,710 101,135 8,789,081 151,679
High Tension Cords - 77,753 350 - 84,326 -
Plastic Comp. 42,652 3,203,989 34,557 44,144 3,112,258 42,652
Wires 48,346 514,497 41,304 87,919 515,682 48,346
Others 5
5,616 190,959 6,440 3,632 529,666 5,616
Total 248,293 12,949,429 177,361 236,830 13,031,013 248,293
5
Quantitative information in respect of value disclosed in others is not being given separately as the related revenue and
costs are less than 10% of total revenue and cost of the Company.
14. Earnings in foreign currency during the year:
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) FOB Value of Exports 6
2,346,551 2,499,308
b) Interest Received
- from subsidiary 31,914 19,740
- from banks 787 2,648
c) Miscellaneous Income 8,559 3,351
d) Service Income 943 1,288
6
Includes Deemed Exports of Rs.57,710 thousand (Previous Year Rs 55,182 thousand)
9322nd Annual report 2008-09
15. Remittance in foreign currency during the year on account of dividend:
Year ended Year ended
March 31, 2009 March 31, 2008
a) Amount remitted (Rs. in Thousands) 176,936 131,064
b) No. of non-resident shareholders 2 2
c) No. of shares held by them (in thousands) 131,064 87,376
d) Year to which dividend pertains Year ended Year ended
March 31, 2008 March 31, 2007
16. Licensed and Installed Capacity:
(Figures in Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) Licensed Capacity N. A. N. A.
b) Installed Capacity of 7
(i) Wiring Harness (Nos.) N. A. N. A.
(ii) High Tension Cords (Nos.) N. A. N. A.
(iii) Rubber Components (M.T.) N. A. N. A.
(iv) Plastic Components (M.T.) N. A. N. A.
(v) Wires (Kms) N. A. N. A.
c) Actual Production of
(i) Wiring Harness (Nos.) 20,177 23,305
(ii) High Tension Cords (Nos.) 394 388
(iii) Plastic Components (M.T.) 56,701 62,267
(iv) Wires (Kms) 605 575
7
Not ascertainable as the products manufactured by the Company are of variable size & technical complexities.
17. Raw Materials and Components consumed during the year:
(Figures in Thousands)
Year ended March 31, 2009 Year ended March 31, 2008
Raw Materials and Components Qty Value Qty Value
a) Copper (M.T.) 4,830 1,570,803 5,209 1,708,910
b) Others 8
6,081,497 6,091,120
8
No single raw material or component account for more than 10% of total consumption.
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
94 Motherson Sumi Systems Limited
Schedules forming part of the Accounts
18. Earnings per share
Year ended Year ended
March 31, 2009 March 31, 2008
Weighted Average number of Equity Shares of Re. 1 /- each
(Previous Year Re 1/- each ) outstanding at the end of the year 355,553,800 353,404,456
Net profit after tax available for equity Shareholders (Rs in thousands) 695,409 1,281,917
Basic/ Diluted Earnings (in Rupees) Per Share of Re. 1/- each.
(Previous Year Re 1/- each ) 9
1.96 3.63
9
Potential conversion of Zero Coupon Currency Convertible Bonds issued is anti-dilutive and accordingly, has not been considered
in the calculation of diluted earnings per share.
19. Deferred Tax
(i) The break up and movement of net deferred tax liability for the year ended March 31, 2009 is as under:
(Figures in Rs. Thousands)
Timing differences on account of: As at (Credit)/ Charge As at
March 31, 2009 for the year March 31, 2008
Expenses charged in the financial
statements but allowable as deductions
in future years under the Income Tax Act
(to the extent considered realizable) (177,699) (59,384) (118,315)
Difference between depreciation as per
financial statements and depreciation as
per Income Tax Act 162,400 21,339 141,061
Net Deferred Tax Liability/ (Asset) (15,299) (38,045) 22,746
(ii) In view of the Company's past financial performance and future profit projections, the Company expects to fully recover
the Deferred Tax Assets.
20. The Company has the following provision in the books of accounts as on March 31,2009
(Figures in Rs. Thousands)
Description Opening Balance Additions Utilized / Reversed Closing Balance
during the year during the year
Warranty
Current Year 2,000 1,618 1,618 2,000
Previous Year 2,000 1,247 1,247 2,000
Warranty provision relates to the estimated outflow in respect of warranty for products sold by the Company. Due to the very
nature of such costs, it is not possible to estimate the timing/ uncertainties relating to the outflows of economic benefits.
21. The details of liabilities recognised by the Company in respect of long term defined benefits and contribution schemes in
accordance with Accounting Standard 15 (Revised 2005) for its employees are as under:
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
9522nd Annual report 2008-09
(A) Defined Benefit Schemes
(i) Gratuity
The employees are entitled to gratuity that is computed as half-month's salary, for every completed year of
service and is payable on retirement/termination. The Company makes provision of such gratuity liability in the
books of accounts on the basis of actuarial valuation. The Company pays contribution to Life Insurance Corporation
of India to fund its plan.
(ii) Leave Encashment /Compensated Absences
The employees are entitled for leave for each year of service and part thereof and subject to the limits specified,
the un-availed portion of such leaves can be accumulated or encashed during/ at the end of the service period.
The plan is not funded.
The reconciliation of opening and closing balances of the present value of the defined benefit obligations are as
below:
(Figures in Rs. Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
Gratuity Leave Gratuity Leave
encashment/ encashment
Compensated /Compensated
Absences Absences
Obligations at year beginning 78,133 25,312 62,732 18,326
Service Cost - Current 16,361 6,183 7,298 5,101
Interest Cost 5,895 1,767 3,310 1,324
Actuarial (gain) / loss 14,939 3,808 8,929 8,688
Benefit Paid (3,499) (2,092) (4,136) (8,127)
Obligations at year end 111,829 34,978 78,133 25,312
Change in plan assets
Plan assets at year beginning, at fair value 63,224 - 47,786 -
Expected return on plan assets 5,699 - 3,843 -
Actuarial gain / (loss) 1,174 - 1,688 -
Contributions 19,402 - 13,725 -
Benefits paid (3,330) - (3,818) -
Plan assets at year end, at fair value 86,169 - 63,224 -
Reconciliation of present value of the
obligation and the fair value of plan assets:
Present Value of the defined benefit
obligations at the end of the year 111,829 34,978 78,133 25,312
Fair value of the plan assets at the
end of the year (86,169) - (63,224) -
Liability recognised in the Balance Sheet 25,660 34,978 14,909 25,312
Defined benefit obligations cost for the year
Service Cost - Current 16,361 6,183 7,298 5,101
Interest Cost 5,895 1,767 3,310 1,324
Expected return on plan assets (5,699) - (3,843) -
Actuarial (gain) / loss 13,765 3,808 7,241 8,688
Net defined benefit obligations cost 30,322 11,758 14,006 15,113
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
96 Motherson Sumi Systems Limited
Investment details of plan assets
100% of the plan assets are lying in the Gratuity fund administered through Life Insurance Corporation of India (LIC)
under its Group Gratuity Scheme.
The principal assumptions used in determining post-employment benefit obligations are shown below:
2009 2008
Discount Rate 7.50 % 8.00 %
Future salary increases 6.25 %. 5.50 %.
Expected return on plan assets 9.25 %. 8.00 %.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
and other relevant factors such as supply and demand factors in the employment market.
(B) Defined Contribution Schemes
The Company deposits an amount determined at a fixed percentage of basic pay every month to the State administered
Provident Fund and Employee State Insurance (ESI) for the benefit of the employees. Accordingly, the Company's contribution
during the year that has been charged to revenue amounts to Rs.82,123 thousand (Previous Year Rs. 97,366 thousand)
22. Related Party Disclosures
Related party disclosures, as required by AS18, "Related Party Disclosures", are given below:
I Relationships where control exists:
Subsidiaries of the Company:
MSSL Mideast (FZE)
MSSL Mauritius Holdings Limited
MSSL Ireland Private Limited
MSSL Handels GmbH
Motherson Electrical Wires Lanka Private Limited
MSSL (S) Pte Limited
Motherson PUDENZ WICKMANN Limited
MSSL (GB) Limited
MSSL GmbH
Motherson Sumi Wiring Systems Limited (FZC)
MSSL Tooling Limited (FZE)
Global Environment Management (FZC)
MSSL Australia Pty. Limited
Motherson Elastomers Pty Limited
Motherson Investments Pty Limited
Mothersonsumi Reiner GmbH
MSSL Polymers GmbH(formerly known as G&S KunststofftechnikGmbH)
Global Environment Management Australia Pty. Limited
MSSL Advanced Polymers s.r.o (formerly known as FP Formagrau s.r.o.)
Motherson Orca Precision Technology GmbH
MSSL Global Wiring Limited
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
9722nd Annual report 2008-09
MSSL s.r.l. Unipersonale
Samvardhana Motherson Global Holding Limited
Samvardhana Motherson Visiocorp Solution Limited
Elemental Growth Limited
Horizon field Limited
Visiocorp Holding Germany GmbH
Visiocorp Automotive GmbH
Visiocorp Poong Jeong Co Limited
Visiocorp Hyosang Limited
Visiocorp Holding Australia Pty Limited
Visiocorp Australia Pty Limited
Visiocorp Taree Pty Limited
Visiocorp Hungary BT
Visiocorp Grundbesitz GmbH & Co. KG
Visiocorp Group Services GmbH
Visiocorp Management UK Limited
Portchester Limited
Visiocorp UK Limited
Visiocorp Automotive Valencia S.A.U.
Visiocorp Services UK Limited
Visiocorp Holding USA LLP
Visiocorp International USA Inc.
Visiocorp USA Inc.
Visiocorp France S.A.
Visiocorp Motherson Limited (w.e.f. March 6, 2009)
Visiocorp Automotive Yancheng Co Limited
Visiocorp Automotive Beijing Co Limited
Visiocorp Holding Hungary KFT
Visiocorp Espana S.A.U.
Visiocorp Mexico S.A. de C.V.
Visiocorp Servicios S.A. de C.V.
Visiocorp Verwaltungsgesellschaft GmbH
Visiocorp Patents SARL
Visiocorp Beteiligungs GmbH
II. Other Related Parties
a. Joint Ventures:
Kyungshin Industrial Motherson Limited
Visiocorp Motherson Limited (till March 5, 2009)
Balda Motherson Solution India Limited
Woco Motherson Elastomer Limited
Woco Motherson Advanced Rubber Technologies Limited
Woco Motherson Limited (FZC)
Calsonic Kansei Motherson Auto Products Limited
Ningbo Visiocorp Huaxiang Automotive Mirrors Co. Limited
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
98 Motherson Sumi Systems Limited
b. Associate Companies:
Saks Ancillaries Limited
c. Key Management Personnel:
i) Board of Directors:
Mr. V C Sehgal
Mr. Toshimi Shirakawa
Mr. Toshihiro Watanabe (w.e.f June 2, 2008)
Mr. M S Gujral
Mr. Bimal Dhar
Mr. H Murai
Maj. Gen Amarjit Singh (Retd)
Mr. Pankaj Mital
Mr Arjun Puri
Mr. Toshihide Ano
Mr. A. Yamauchi (upto June 1, 2008)
ii) Other Key Management Personnel:
Mr. Vivek Avasthi
Mr. Ravindra Mathur
Mr. G.N. Gauba
Mr. N Ramanathan
iii) Relatives of Key Management Personnel:
Mr. Laksh Vaaman Sehgal (Appointed Director w.e.f. April 30, 2009)
Ms. Renu Sehgal
Ms. Vidhi Sehgal
Ms. Geeta Soni
Ms. Neelu Mehra
Ms. Padma Avasthi
Mr. Harjit Singh
Ms. Upkar Gujral
Ms. Subina Avasthi
d. Companies in which Key Managerial Personnel or their relatives have control/ significant influence:
Motherson Auto Limited
Motherson Air Travel Agencies Limited
Ganpati Auto Industries
South City Motors Limited
ASI Motherson Communication Solutions Limited
Motherson Techno Tools Limited
Sumi Motherson Innovative Engineering Limited
SWS India Management Support & Service (P) Limited
Vaaman Auto Industries
A Basic Concepts Design India Private Limited
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
9922nd Annual report 2008-09
Motherson Sumi Infotech and Designs Limited
Motherson Engineering Research and Integrated Technologies Limited
Moon Meadows Private Limited
Sis Bro Motor and Workshop Private Limited
Motoman Motherson Robotics Limited
NACHI Motherson Tool Technology Limited
Motherson
Samvardhana Motherson Finance Limited
A Basic Concepts Design Pty Limited
ATAR Mauritius Private Limited
Motherson Auto Solutions Private Limited
Motherson Machinery and Automations Private Limited
Spheros Motherson Thermal System Limited
Matsui Technologies India Limited
Motherson Moulds and Diecasting Limited
Webasto Motherson Sunroofs Limited
Anest Iwata Motherson Limited
Field Motor Private Limited
AES (India) Engineering Limited
Miyazu Motherson Engineering Design Limited
Anest Iwata Motherson Coating Equipment Limited
Nissin Advance Coating Indo Company Limited.
Magnetti Marelli Motherson Holding India BV
Magnetti Marelli Motherson Auto System Limited
Samvardhana Motherson Finance Services Cyprus Limited
Motherson Zanotti Refrigeration System Limited
Motherson TimeTooth Technologies Limited
Samvardhana Motherson Finance Services Inc.
Motherson TimeTooth Technologies Inc.
Tigers Connect Travel Systems and Solutions Limited
Samvardhana Motherson Holding (M) Private Limited.
Motherson Advanced Tooling Solutions Limited
Avon hill Limited.
Fritzmeier Motherson Cabin Engineering Limited.
Air Factory Energy Limited
CTM India Limited.
e. Joint Venturer:
Sumitomo Wiring Systems Limited, Japan
Wilhelm Pudenz GmbH, Germany
Visiocorp Plc, UK (Upto March 06, 2009)
Kyungshin Industrial Co., Korea
Woco Franz Josef Wolf Holding GmbH, Germany
Balda AG, Germany
Calsonic Kansei Corporation, Japan
E-Compost Pty. Limited, Australia
Dermotech GmbH, Germany
Schedules forming part of the Accounts
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
100 Motherson Sumi Systems Limited
Schedules forming part of the Accounts
(Figures in Rs. Thousands)
S. Particulars Parties mentioned in Parties mentioned in Parties mentioned in Parties mentioned Parties mentioned
No. 22 (I) above 22 (II) (a) above 22 (II) (b) & (d) above in 22 (II) (e) above in 22 (II) (c) above
Current Previous Current Previous Current Previous Current Previous Current Previous
Year year Year year Year year Year year Year year
1 Sale of Goods 467,113 567,302 576,296 460,033 47,831 19,157 351,351 387,550 36 -
2 Rendering of
Services 2,380 2,805 181,390 93,705 23,919 19,237 - - - -
3 Sale of Fixed Assets 149 - 252 - - 59 - - - -
4 Purchase of Goods 475,927 612,132 35,327 34,537 353,112 467,797 238,574 320,106 - -
5 Purchase of
Fixed Assets 24,628 3,957 - 8,680 123,734 22,944 1,042 1,760 - -
6 Purchase of Services 4,033 6,205 10,250 5,645 304,130 317,399 2,616 891 4,28710 3,282 10
7 Reimbursement (Net) 38,682 30,242 26,967 4,553 24,093 3,105 8,759 647 - -
8 Investments made
during the year11 2,017,740 - 39,886 192,806 - - - - - -
9 Purchase of Shares - - - - - - - - - -
10 Sale of Shares - - - - - - - - - -
11 Royalty - - - - - - 61,561 78,245 - -
12 Remuneration/Sitting
Fees of Directors - - - - - - - - 14,005 18,191
13 Interest Income 12,051 19,740 442 9,783 - - - - - -
14 Interest Expense 1,028 2,153 - - 907 1,167 - - - -
15 Dividend Paid - - - - 135,979 100,725 130,804 96,892 28,79212 21,384 12
16 Dividend Received - - 45,793 - 875 - - - - -
17 Advance given against
Equity/Preference Shares 42,749 361,131 - 11,739 - - - - - -
18 Advance Received back - - - - - - - - - -
against Equity/
Preference Share - 90,560 - -
19 Loans Received
during the year 2,000 32,500 - - 10,000 10,000 - - - -
20 Loans Given
during the year - 36,209 10,000 - - - - - - -
21 Loans Repaid
during the year 34,500 - - - 30,000 - - - - -
22 Loans Received back
during the year 361,499 51,689 13,314 13 143,806 - - - - - -
23 Security Deposits
Received - - 1,547 30,128 8,492 - - - - -
24 Security Deposits Repaid - - - 128 - - - - - -
Balances as at year end
25 Investments 2,113,700 95,960 678,508 638,622 38,230 38,230 - - - -
26 Advance given against
Equity/ Preference Shares 42,749 990,176 - 11,739 - - - - - -
27 Loans Payable - 32,500 - - - 20,000 - - - -
28 Loans Receivable
(after reinstatement) 10,683 336,095 - 3,314 - - - - - -
29 Advances Receivable 58,725 10,425 12,484 1,496 62,467 8,524 - - 96 -
30 Security Deposit Received - - 11,082 32,561 8,492 2,628 - - - -
31 Security Deposits Given - - - - 2,706 2,706 - - 542 542
32 Guarantees Closing 1,027,989 75,915 - - - - - - - -
33 Trade Payable 426,376 118,855 7,586 6,579 90,463 89,568 53,818 51,397 - 169
34 Trade Receivable 107,940 198,508 113,741 50,368 16,414 3,805 28,373 31,898 - -
10 Rent of Rs 4,287 thousand (Previous Year Rs.3,282 thousand) paid to Mr. V.C Sehgal, Mr. Laksh Vaaman Sehgal, Ms. Renu Sehgal, Ms. Vidhi Sehgal .
11 Include investment in shares amounting to Rs. 1001,915 thousand allotted during the year against advances given in the previous year.
12 Dividend of Rs. 28,792 thousand (Previous Year Rs. 21,384 thousand) paid to Mr. V. C. Sehgal, Mr. Laksh Vaaman Sehgal, Ms. Neelu Mehra, Ms. Geeta Soni, Ms. VidhiSehgal, Mr. Pankaj Mital, Mr. M.S. Gujral, Mr. G.N.Gauba, Mr. Vivek Avasthi, Ms. Renu Sehgal, Ms. Padma Avasthi, Ms. Subina Avasthi, Mr. Harjit Singh.
13 Loan outstanding amounting to Rs 13,314 thousand converted into share application money.
III. Details of transactions, in the ordinary course of business at commercial terms, and balances with related parties as
mentioned in I & II above:
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
10122nd Annual report 2008-09
Schedules forming part of the Accounts
23. SEGMENT INFORMATION
a) Information about Primary Business Segments
(Figures in Rs. Thousands)
Automotive Non automotive Unallocated Total
Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year
Segment
revenue
External 11,685,336 12,117,752 1,470,022 1,494,325 280,412 13,187 13,435,770 13,625,264
Inter-segment 113,901 146,870 - - - - 113,901 146,870
Total revenue 11,571,435 11,970,882 1,470,022 1,494,325 280,412 13,187 13,321,869 13,478,394
Results
Segment result 1,079,659 1,687,554 124,273 159,907 - - 1,203,932 1,847,461
Interest expense
(net of Interest
income) - - - - 290,984 218,657 290,984 218,657
Other
Unallocable
(net of Income) - - - - 60,492 (13,189) 60,492 (13,189)
Profit before
taxation - - - - - - 852,456 1,641,993
Provision for
taxation - - - - 157,047 360,076 157,047 360,076
Net profit
after tax - - - - - - 695,409 1,281,917
Other items
Segment assets 9,595,250 8,553,418 1,103,082 1,185,656 3,151,072 2,539,159 13,849,404 12,278,233
Segment
liabilities 2,489,454 1,641,508 301,686 544,566 6,396,372
14
6,087,672 9,187,512
14
8,273,746
Capital
expenditure 1,036,044 1,327,059 63,726 234,317 - - 1,099,770 1,561,376
Depreciation
& Impairment 480,761 443,012 64,383 57,617 - - 545,144 500,629
Amortization
of Premium
on Redemption
of Zero Coupon
Foreign currency
convertible bonds - - - - 154,524 165,049 154,524 165,049
14
Does not include proposed dividend and tax thereon
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
102 Motherson Sumi Systems Limited
Schedules forming part of the Accounts
b) Information about Secondary Business Segment
India Outside India 15
Unallocated Total
Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year
Revenue by
geographical
markets
External 10,496,740 10,854,572 2,544,716 2,610,635 280,413 13,187 13,321,869 13,478,394
Total 10,496,740 10,854,572 2,544,716 2,610,635 280,413 13,187 13,321,869 13,478,394
Carrying 10,134,084 8,759,603 564,249 873,506 3,151,071 2,645,124 13,849,404 12,278,233
amount of
segment assets
Addition to 1,091,413 1,561,127 8,357 249 - - 1,099,770 1,561,376
fixed assets
15
Includes Europe, America, Asia Pacific, Middle East and Australia
c) Composition of Business Segments
The Company is organized into two main business segments, namely:
Automotive Wiring Harness, High Tension Cords, Wire, Plastic Components, Rubber Components,
Cockpit Assembly
Non Automotive Wiring Harness, Pen-Stamp Assembly, Plastic Components for white goods, Household
Wires, Plates, Aerobin
d) Inter Segment Transfer Pricing
Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and
business risks, with an overall optimisation objective for the Company.
24. Interests in Joint Ventures:
The Company's interests, as a venture, in jointly controlled entities as at March 31, 2009 are:
Name of the Company Country of % Voting power % Voting power
Incorporation held as at held as at
March 31, 2009 March 31, 2008
Kyungshin Industrial Motherson Limited India 50% 50%
Visiocorp Motherson Limited (formerly
Schefenacker Motherson Limited) India 49% 49%
Balda Motherson Solution India Limited India 40% 40%
Woco Motherson Elastomer Limited India 33.33% 33.33%
Woco Motherson Advanced Rubber
Technologies Limited India 33.33% 33.33%
Calsonic Kansei Motherson Auto Products Limited India 49% 49%
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
10322nd Annual report 2008-09
Schedules forming part of the Accounts
The following amounts represent the Groups share of the assets and liabilities and revenue and expenses of the joint venture
and are included in the consolidated balance sheet and consolidated profit & loss account:
(Figures in Rs. Thousands)
Particulars March 31, 2009 March 31, 2008
Assets
Fixed Assets 539,299 613,814
Capital Work in Progress 4,712 20,965
Current Assets 836,826 1,078,676
Liabilities
Secured Loans 84,517 132,193
Unsecured Loans 34,153 23,387
Current Liabilities & Provisions 450,161 690,911
Deferred Tax (Net) 10,768 4,569
Reserves & Surplus 190,717 212,359
Revenue
Sales 3,420,030 2,197,380
Other Income 33,095 14,865
Expenditure 3,175,034 1,979,662
Profit before Tax 278,092 232,583
Provision for Tax 159,143 101,667
Profit after Tax 118,949 130,916
Contingent Liabilities
- In respect of Excise, Sales tax & Service tax matters 4,673 21,211
- Bank Guarantees 198,528 53,027
Capital Commitment 11,668 27,883
25. The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing
legislation under sections 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 appoints independent consultants for conducting a Transfer
Pricing Study to determine whether the transactions with associate enterprises are undertaken, during the financial year, on an
"arms length basis". Adjustments, if any, arising from the transfer pricing study shall be accounted for as and when the study is
completed for the current financial year. However the management is of the opinion that its international transactions 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.
26. The corresponding figures of previous year have been regrouped, rearranged wherever necessary to conform to the current
year's classification.
SCHEDULE XIII - Significant Accounting Policies and Notes forming part of Accounts (Contd.)
for and on behalf of the Board
V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Vice Chairman Whole time Director Chief Operating Officer
Place : Noida G.N. GAUBA
Date : June 29, 2009 Co. Secretary & V.P. Finance
104 Motherson Sumi Systems Limited
I. Registration Details
Registration No. State Code
Balance Sheet Date
Day Month Year
II. Capital Raised during the year (Amount in Rs. Thousands)
Public Issue Right Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
Sources of Funds
Paid-up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Application of Funds
Net Fixed Assets Investments
Net Current Assets Misc. Expenditure
Accumulated Losses Deferred Tax (Net)
IV. Performance of the Company (Amount in Rs. Thousands)
Turnover Total Expenditure
Profit/Loss before Tax Profit/Loss after Tax
Earning per share in Rs. Dividend Rate %
V. Generic Names of three principal products/services of the Company (as per monetary terms)
Product Description Item Code
Integrated Wiring Harness
Rubber Components
PVC Insulated Wire
Information pursuant to part IV of Schedule VI of the Companies Act, 1956
Balance Sheet Abstract and Company’s General Business Profile
3 1 0 3
2 6 4 3 1
N I L N I L
N I L N I L
9 5 3 9 8 9 6 9 5 3 9 8 9 6
3 8 0 2 7 9 83 5 5 5 5 4
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2 6 5 2 6 26 3 2 7 6 0
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+ 6 9 5 4 0 9+ 8 5 2 4 5 6
1 3 51 . 9 6
8 5 4 4 . 9 0
4 0 1 6 0 0 0 0
8 5 4 4 . 9 0
for and on behalf of the Board
V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Vice Chairman Whole time Director Chief Operating Officer
Place : Noida G.N. GAUBA
Date : June 29, 2009 Co. Secretary & V.P. Finance
2 0 0 9
5 5
10522nd Annual report 2008-09
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for and on behalf of the Board
V.C
. SEH
GA
LTO
SH
IH
IR
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ATA
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BE
PA
NK
AJ M
ITA
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Vice C
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Place
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ba
Date
:Ju
ne 2
9, 2
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9C
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V.P. Fin
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ce
Statem
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12
of the C
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Nam
e of the Subsidiary C
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106 Motherson Sumi Systems Limited
(Figures in R
s.Thousands)
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00
9
1M
SSL M
auritius H
oldings Lim
ited
10
0%
EU
R6
7.1
9 6
2,1
37
(3
8,6
12
) 2
4,0
08
-
4
,3
74
2
4,0
08
-
(6
1,4
25
) -
(6
1,4
25
)
2M
SSL M
ideast (FZE)
10
0%
EU
R6
7.1
9 8
27
,9
07
1
,5
19
,9
98
2
,5
18
,8
01
8
2,8
92
1
,3
62
,2
14
2
,5
18
,8
01
1
,4
13
,1
08
3
82
,1
38
-
3
82
,1
38
3M
otherson Electrical W
ires Lanka
Pvt. Lim
ited
10
0%
USD
50
.7
2 7
,7
00
7
01
,7
08
7
27
,0
98
5
4,0
38
-
7
27
,0
98
1
,2
21
,8
90
2
75
,7
22
8
13
2
74
,9
10
4M
SSL H
andels G
mbH
10
0%
EU
R6
7.1
9 2
,3
52
(7
,2
75
) 4
,5
30
5
2 -
4
,5
30
1
,0
72
2
37
-
2
37
5M
SSL (S) Pte Ltd
10
0%
SG
D3
3.3
2 4
36
,4
92
(5
,4
01
) 4
33
,7
63
4
6,3
36
3
91
,8
53
4
33
,7
63
9
,6
95
(2
8,2
45
) 2
,9
32
(3
1,1
78
)
6M
otherson PU
DEN
Z W
IC
KM
AN
N
Lim
ited
56
.1
3%
IN
R1
.0
0 2
5,0
00
3
7,3
60
6
5,8
83
1
,8
55
-
6
5,8
83
2
6,3
89
4
,8
06
6
52
4
,1
54
7M
SSL G
lobal W
iring Lim
ited
10
0%
IN
R1
.0
0 3
4,1
00
(4
,0
26
) 7
9,3
52
7
1,6
92
-
7
9,3
52
-
(4
,0
26
) -
(4
,0
26
)
8M
SSL G
mbH
2
10
0%
EU
R6
7.1
9 1
6,7
98
(1
42
,2
55
) 4
41
,3
64
7
3,6
21
2
38
,8
14
4
41
,3
64
7
1,6
68
(1
30
,6
44
) -
(1
30
,6
44
)
9M
SSL (G
B) Lim
ited 2
10
0%
GB
P7
2.6
6 7
3 (2
8,2
92
) 1
03
,7
56
3
,8
42
-
1
03
,7
56
2
91
,8
38
(8
,7
71
) 2
82
(9
,0
53
)
10
Motherson Sum
i W
iring System
Lim
ited (FZC
) 2
51
%EU
R6
7.1
9 5
37
,5
20
(4
7,7
37
) 9
60
,5
46
3
45
,1
16
-
9
60
,5
46
2
,0
42
,9
54
(1
6,1
56
) -
(1
6,1
56
)
11
MSSL Ireland Private Lim
ited 4
10
0%
EU
R6
7.1
9 3
,3
60
(2
0,0
88
) 7
,2
17
4
76
-
7
,2
17
2
8,2
09
8
,7
93
-
8
,7
93
12
MSSL Tooling Lim
ited (FZE) 2
10
0%
EU
R6
7.1
9 2
70
,9
44
(1
61
,0
99
) 2
01
,7
21
5
2,4
60
-
2
01
,7
21
2
71
,4
16
(9
,6
53
) -
(9
,6
53
)
13
Glo
bal En
viro
nm
en
t
Managem
ent (FZC
) 4
78
.8
2%
AU
D3
5.0
9 1
68
,0
54
(8
8,3
26
) 1
55
,8
68
-
0
.0
7 1
55
,8
68
3
0,3
90
(2
3,5
38
) -
(2
3,5
38
)
14
MSSL A
ustralia Pty Lim
ited 5
80
%A
UD
35
.0
9 1
22
,8
15
5
8,0
02
4
73
,4
06
1
,9
48
7
4
73
,4
06
6
,7
16
1
6,0
06
4
,6
39
1
1,3
67
15
MSSL Polym
ers G
mbH
3
10
0%
EU
R6
7.1
9 3
,4
40
1
37
,6
88
3
18
,9
89
4
5,1
14
-
3
18
,9
89
8
35
,2
92
3
2,9
33
(5
84
) 3
3,5
17
16
Motherson Sum
i R
einer G
mbH
3
10
0%
EU
R6
7.1
9 1
3,4
38
8
7,0
11
1
36
,5
72
6
2,9
42
-
13
6,5
72
8
2,7
66
1
2 1
2 (0
)
17
MSSL A
dvanced Polym
ers s.r.o 3
10
0%
CZ
K2
.5
3 4
,8
98
7
8,4
59
1
77
,4
15
4
7,7
93
-
1
77
,4
15
3
55
,7
75
(8
,7
48
) (1
,6
16
) (7
,1
32
)
18
Motherson O
rca Precision
Technology G
mbH
3
51
%EU
R6
7.1
9 6
,7
19
1
11
,9
74
1
57
,0
85
8
,6
02
-
1
57
,0
85
4
93
,8
87
(2
2,4
06
) -
(2
2,4
06
)
19
MSSL s.r.l. U
nipersonale 3
10
0%
EU
R6
7.1
9 6
72
(8
20
) 9
56
-
-
9
56
-
(8
20
) -
(8
20
)
20
Glo
bal En
viro
nm
en
t M
an
ag
em
en
t
Australia Pty Lim
ited 6
10
0%
AU
D3
5.0
9 0
.0
7 (1
44
,6
64
) 1
6,3
11
2
23
-
1
6,3
11
5
1,6
50
(4
2,4
54
) -
(4
2,4
54
)
21
Motherson Elastom
ers Pty Lim
ited 7
10
0%
AU
D3
5.0
9 4
8
2,9
86
5
76
,8
90
1
31
,7
44
-
5
76
,8
90
1
,1
16
,3
08
1
0,8
25
1
,3
80
9
,4
45
22
Motherson Investm
ents Pty Lim
ited 7
10
0%
AU
D3
5.0
9 4
(3
,0
98
) 1
62
,5
69
1
59
,7
87
-
1
62
,5
69
-
(2
,3
11
) (9
53
) (1
,3
58
)
No
tes
1
As required under Para V
I of the approval dated July 1
0, 2
00
9 - issued by M
inistry of C
om
pany A
ffairs , Indian rupees equivalents of the figures in the foreign currencies in the accounts of subsidiary com
panies has been given
based on year end interbank exchange rates.
2
Subsidiary of M
SSL M
ideast (FZE)
3
Subsidiary of M
SSL G
mbH
4
Subsidiary of M
SSL M
auritius H
oldings Ltd
5
Subsidiary of M
SSL (S) Pte Ltd
6
Subsidiary of G
lobal Environm
ent M
anagem
ent (FZC
)
7
Subsidiary of M
SSL A
ustralia Pty Lim
ited
Statem
ent pursuant to exem
ption received under Section 2
12
(8
) of the C
om
panies A
ct, 1
95
6 relating to subsidiary com
panies
10722nd Annual report 2008-09
To the Board of Directors of
Motherson Sumi Systems Limited
1. We have audited the attached Consolidated Balance Sheet
of Motherson Sumi Systems Limited and its subsidiaries, joint
ventures and associate as at March 31, 2009, the Consolidated
Profit and Loss Account for the year ended on that date
annexed thereto, and the Consolidated Cash Flow Statement
for the year ended on that date, which we have signed under
reference to this report. These consolidated financial
statements are the responsibility of the management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audit.
2. We have conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are prepared,
in all material respects, in accordance with an identified financial
reporting framework and are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. The consolidated financial statements of Motherson Sumi
Systems Limited include the consolidated financial statements
of Samvardhana Motherson Visiocorp Solution Limited
(SMVSL), a subsidiary of the Company. SMVSL's consolidated
financial statements, prepared under International Financial
Reporting Standards, have been audited by another firm of
auditors. The aforesaid consolidated financial statements of
SMVSL, for the purpose of consolidation have been converted,
to the extent required, to make them conform to the
accounting principles generally accepted in India, by the
management of the Company. These statements, converted
to Indian generally accepted accounting principles, have been
reviewed by another firm of Chartered Accountants in India,
whose review report on such conversion was furnished to us.
Our opinion, in so far as it relates to the amounts included in
respect of SMVSL, is based solely on the audit report of other
auditor and the review report furnished to us. The consolidated
financial statements of SMVSL reflect total assets of Rs.
18,541,314 thousand as at March 31, 2009, total revenues
Rs. 4,356,732 thousand and net cash outflow from operating
activities of Rs.865, 305 thousand for the year then ended.
4. Further , we also did not audit the financial statements of
certain subsidiaries, joint ventures and associate, who
collectively in these financial statements reflect total assets of
Rs. 5,274,770 thousand as at March 31, 2009, total revenues
of Rs. 5,918,422 thousand and net cash inflow from operating
activities of Rs. 439,741 thousand for the year ended on that
date. These financial statements have been audited by other
Auditors' Reportauditors, whose reports have been furnished to us and our
opinion, insofar as it relates to the amounts included in respect
of these subsidiaries, joint ventures and associate, is based
solely on the report of the other auditors.
5. We report that the consolidated financial statements have
been prepared by the Company in accordance with the
requirements of Accounting Standard 21, Consolidated
Financial Statements, Accounting Standard 23, Accounting
for Investments in Associates in Consolidated Financial
Statements and Accounting Standard 27, Financial Reporting
of Interests in Joint Ventures issued by the Institute of
Chartered Accountants of India and on the basis of the
separate audited financial statements of Motherson Sumi
Systems Limited and its subsidiaries, joint ventures and
associate, included in the consolidated financial statements.
6. We refer to note on B-6 of Schedule XIII regarding managerial
remuneration amounting to Rs.3,041 thousand for the
current year paid to whole time director, being a non resident
whose appointment is subject to approval by the Central
Government.
In the event that the Central Government approval is not
received, these amounts are to be refunded by such directors.
This would then result in profit after taxation for the year to
be Rs. 2,213,996 thousand (as against reported figure of Rs.
2,211,989 thousand), credit balance of Profit and Loss
Account to be Rs.3,934,609 thousand (as against the reported
figure of Rs. 3,932,602 thousand), net Current Assets to be
Rs..3,171,744 thousand (as against the reported figure of
Rs.3, 168,703 thousand).
7. On the basis of the information and explanations given to us
and on consideration of the separate audit reports on individual
audited financial statements of Motherson Sumi Systems
Limited and its aforesaid subsidiaries, joint ventures and
associate, and subject to our comments in paragraph 6 above
in our opinion, the consolidated financial statements give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the consolidated balance sheet, of the
consolidated state of affairs of Motherson Sumi Systems
Limited and its subsidiaries as at March 31, 2009;
(b) in the case of the consolidated profit and loss account, of
the consolidated results of operations of Motherson Sumi
Systems Limited and its subsidiaries for the year ended
on that date; and
(c) in the case of the consolidated cash flow statement, of the
consolidated cash flows of Motherson Sumi Systems Limited
and its subsidiaries for the year ended on that date.
Kaushik Dutta
Partner
Membership No. F 88540
For and on behalf of
Place: Noida Price Waterhouse
Date: June 29, 2009 Chartered Accountants
108 Motherson Sumi Systems Limited
Consolidated Balance Sheet as at March 31, 2009
(Figures in Rs. Thousands)
Schedule As at As at
March 31, 2009 March 31, 2008
SOURCES OF FUNDS
Shareholders' Funds
Share Capital I 355,554 355,554
Reserves & Surplus II 7,475,548 5,003,153
7,831,102 5,358,707
Minority Interest
Capital 1,622,841 252,322
Reserves 377,274 (26,551)
Loan Funds
Secured Loans III 5,590,611 1,749,941
Unsecured Loans IV 3,360,316 3,141,274
Deferred tax liability(net) (Refer B (9) of Schedule XIII) 145,021 40,136
TOTAL 18,927,165 10,515,829
APPLICATION OF FUNDS
Fixed Assets
Gross Block V 30,175,446 9,491,662
Less: Depreciation 16,275,691 3,460,338
Net Block 13,899,755 6,031,324
Capital Work in Progress 1,512,239 282,179
15,411,994 6,313,503
Investments VI 81,206 49,637
Current Assets, Loans and Advances VII
Inventories 6,111,514 2,893,381
Sundry Debtors 6,132,272 3,287,397
Cash & Bank Balances 2,766,232 953,550
Loans & Advances 4,129,470 1,904,742
19,139,488 9,039,070
Less: Current Liabilities & Provisions VIII
Current Liabilities 12,286,000 3,667,429
Provisions 3,684,785 1,638,738
15,970,785 5,306,167
NET CURRENT ASSETS 3,168,703 3,732,903
Miscellaneous Expenditure (To the extent not written off or adjusted) IX 265,262 419,786
TOTAL 18,927,165 10,515,829
Significant Accounting Policies and Notes forming part of the Accounts XIII
This is the Consolidated Balance Sheet The schedules referred above form integral part of the Consolidated Balance Sheet
referred to in our report of even date
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
for and on behalf of the Board
10922nd Annual report 2008-09
This is the Consolidated Profit and Loss Account The schedules referred above form integral part of the Consolidated
referred to in our report of even date Profit and Loss Account
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
Consolidated Profit and Loss Account for the year ended March 31, 2009
(Figures in Rs. Thousands)
Schedule For the year ended For the year ended
March 31, 2009 March 31, 2008
INCOME
Sale of Finished Goods (Gross) 27,834,070 22,721,233
Less: Excise duty 1,877,689 2,439,984
Sale of Finished Goods (Net) 25,956,381 20,281,249
Other Income X 1,609,711 510,519
TOTAL 27,566,092 20,791,768
EXPENDITURE
Manufacturing and other expenses XI 23,561,398 17,439,020
Depreciation & Impairment (Refer B (6) of Schedule XIII) 1,090,563 846,599
Interest (net) XII 354,349 243,942
TOTAL 25,006,310 18,529,561
Profit Before Taxation and share of profit in Associates 2,559,782 2,262,207
Share of Profit in Associate (Refer B (3) (c) & A (2) (e) (i) of Schedule XIII) 871 2,143
Profit Before Taxation 2,560,653 2,264,350
Tax Expense
Provision for Current Income Tax 366,320 528,839
Provision for Deferred IncomeTax (Refer B (9) of Schedule XIII) (42,080) (35,532)
Provision for Wealth Tax 1,586 2,577
Provision for Fringe Benefit Tax 20,268 17,929
2,214,559 1,750,537
Less : Income Tax for earlier years 2,571 108
Profit After Taxation 2,211,988 1,750,429
- Concern share 1,762,523 1,778,618
- Minority 449,465 (28,189)
Add: Balance brought forward from previous year 2,863,017 1,910,489
Surplus Available For Appropriation 4,625,540 3,689,107
APPROPRIATIONS
Transfer to General Reserve 123,583 264,517
Proposed Dividend 479,998 479,994
Tax on Dividend 81,576 81,579
Tax paid on Dividend by consolidated companies 7,782 -
Balance Carried to Balance Sheet 3,932,601 2,863,017
TOTAL 4,625,540 3,689,107
Earning per share (Basic/ Diluted) of face value Re. 1/- each 4.96 5.03
(Refer B (8) of Schedule XIII)
Significant Accounting Policies and Notes forming part of the Accounts XIII
for and on behalf of the Board
110 Motherson Sumi Systems Limited
(Figures in Rs. Thousands)
Particulars For the year ended For the year ended
March 31, 2009 March 31, 2008
A. Cash flow from operating activities:
Net (loss)/profit before tax 2,560,653 2,264,350
Share of Profit in Associate (871) (2,143)
Depreciation & Impairment 1,090,563 846,599
Technical Fees included in Legal & Professional - 26,207
Interest Expense 383,419 288,611
Interest Income (29,070) (44,668)
Income from Investment - Dividends (901) (293)
(Profit)/Loss on Fixed Assets sold (includes profit on sale
of land Rs. Nil (previous year Rs. 240,041 thousand)) (12,796) (249,010)
Provision for diminution in value of Short Term
Investments created/(written back) 187 (5)
Debts / Advances Written off 24,195 3,197
Provision for Bad & Doubtful Debts / Advances 4,620 14,008
Liabilities no longer required written back (9,024) (17,001)
Provision for employee benefit 15,719 8,692
Unrealised foreign exchange (gain) /loss 410,393 256,223
Provision for warranty 6,581 2,789
Other Provision 53,999 -
Contribution from business stakeholders' consequent to
acquisition (Refer B 4 (b) (ii) of Schedule XIII) (1,119,103) -
Operating profit before working capital changes 3,378,564 3,397,556
Adjustments for changes in working capital :
- (Increase)/Decrease in Sundry Debtors 338,581 (870,322)
- (Increase)/Decrease in Other Receivables 215,131 (445,445)
- (Increase)/Decrease in Inventories (14,017) (811,815)
- (Increase)/Decrease in Trade and Other Payables (910,465) 1,119,346
Cash generated from operations 3,007,794 2,389,320
- Taxes (Paid) / Received (Net of TDS) (509,330) (424,486)
Net cash from operating activities 2,498,464 1,964,834
B. Cash flow from Investing activities:
Purchase of fixed assets including capital work in progress
- Addition During the year (2,755,770) (2,065,617)
Proceeds from Sale of fixed assets 128,512 370,439
Consideration paid for acquisition of business of Empire Rubber - (188,834)
Interest Received (Revenue) 27,071 55,935
Dividend Received 901 293
Consideration paid on acquisition of subsidiaries of Visiocorp Plc
(in administration) (Refer B 4 (b) (i) of Schedule XIII) (1,691,820) -
Investment in Joint Venture (Refer A 2(e)(i) of Schedule XIII) (20,974) -
Net cash used in investing activities (4,312,080) (1,827,784)
Consolidated Cash Flow Statement
11122nd Annual report 2008-09
(Figures in Rs. Thousands)
Particulars For the year ended For the year ended
March 31, 2009 March 31, 2008
C. Cash flow from financing activities:
Proceeds from minority Share holders 1,112,390 77,373
Proceeds from long term borrowings
Receipts 1,065,209 128,743
Payments (101,128) (395,126)
Proceeds from short term borrowings
Receipts 2,191,306 10,000
Payments (145,946) -
Proceeds from Cash Credits (net) (391,686) 543,817
Finance Lease Rent (interest part only) (8,700) -
Interest Paid (213,180) (130,805)
Dividend Paid (478,704) (351,733)
Dividend Tax Paid (81,576) (59,879)
Net cash used in financing activities 2,947,985 (177,610)
Net Increase/(Decrease) in Cash & Cash Equivalents 1,134,369 (40,560)
Cash and cash equivalents - Opening 953,550 993,577
Cash and Cash Equivalents on acquisition of subsidiaries of Visiocorp Plc
(in administration) (Refer B 4 (b) (i) of Schedule XIII) 650,261 -
Total Cash and Cash Equivalents as per cash flow statement 2,738,180 953,017
Cash and cash equivalents comprise
Cash In Hand 15,089 6,237
Cheques In Hand 637 220,990
Deposit Account 595,485 308,463
Balance with Banks 2,155,021 417,860
Total Cash and cash equivalents 2,766,232 953,550
Cash and Cash Equivalents include :
Cash & bank balances as per Balance Sheet (restated) 2,766,232 953,550
Net Unrealised Loss on Foreign Currency Cash & Equivalents (28,052) (533)
Total 2,738,180 953,017
NOTES:
(i) The above Cash Flow Statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3 on Cash
Flow Statement issued by the Institute of Chartered Accountants of India .
(ii) Previous year's figures have been regrouped wherever necessary to conform to the current year's classification.
(iii) Following non cash transactions have not been considered in the cash flow statement :
- Tax deducted at source on income.
(iv) Figures in brackets indicate cash outgo.
This is the Consolidated Cash Flow Statement for and on behalf of the Board
referred to in our report of even date
KAUSHIK DUTTA V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Partner Vice Chairman Whole time Director Chief Operating Officer
M.No.: F88540
For and on behalf of
Price Waterhouse G.N. GAUBA
Chartered Accountants Co. Secretary & V.P. Finance
Place : Noida
Date : June 29, 2009
Consolidated Cash Flow Statement
112 Motherson Sumi Systems Limited
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE I - SHARE CAPITAL
Authorised
803,000,000 Equity Shares of Re. 1/- each
(Previous Year 803,000,000 Equity Shares of Re. 1/- each) 803,000 803,000
Issued
355,557,000 Equity Shares of Re. 1/- each
(Previous Year 355,557,000 Equity Shares of Re. 1/- each) 355,557 355,557
Subscribed and Paid up
355,553,800 Equity Shares of Re. 1/- each
(Previous Year 355,553,800 Equity Shares of Re. 1/- each) 355,554 355,554
Total 355,554 355,554
(Of the above shares 6,090,000 (Previous Year 6,090,000) shares are allotted as fully paid up pursuant to a contract for consideration
other than cash)
(Of the above shares 282,737,000 (Previous Year 282,737,000 ) shares are allotted as fully paid bonus shares by way of capitalisation
of share premium and general reserve).
(Of the above shares 3,220,000 (Previous Year 3,220,000 ) shares are allotted by way of conversion of Zero Coupon Foreign
Currency Convertible Bonds)
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
As at As at
March 31, 2009 March 31, 2008
SCHEDULE II - RESERVES & SURPLUS
Revaluation Reserve 20,031 20,031
Reserve on Amalgamation 572,346 572,346
Securities Premium Account 291,143 291,143
General Reserve
As per Last Balance Sheet 1,226,259 1,079,623
Additions during the year 123,583 264,517
Deductions on adoption of
Accounting Standard 15( Revised) - 436
Deduction on Others - 1,349,842 117,445 1,226,259
Exchange Reserve on Consolidation (Refer A(10) of Schedule XIII)
As per Last Balance Sheet 4,870 (46,722)
Additions during the year 214,866 51,592
Deductions during the year - 219,736 - 4,870
Capital Reserve on Consolidation (Refer A (2) and B (4) (b) (i) of Schedule XIII)
As per Last Balance Sheet 25,487 25,487
Additions during the year 1,064,362 -
Deductions during the year - 1,089,849 - 25,487
Profit and Loss Account
As per Last Balance Sheet 2,863,017 1,910,489
Additions during the year 1,193,167 1,217,045
Deductions during the year 123,583 3,932,601 264,517 2,863,017
Total 7,475,548 5,003,153
11322nd Annual report 2008-09
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE III - SECURED LOANS
Working Capital Facilities
(i) From Banks 1
- Rupee Loan 649,655 1,228,432
- Foreign currency Loan 1,176,322 158,046
Long Term Loans
(i) From Banks 2
- Rupee Loan 3
60,571 73,263
- Foreign currency Loan 4
3,405,249 244,086
(ii) From Others
- Rupee Loan 5
77,983 14,433
- Finance lease liabilities 6
199,720 -
- Vehicle Loan 7
21,111 31,681
TOTAL 5,590,611 1,749,941
1
Includes: - Rs.41,716 thousand (previous year Rs. 56,007 thousand) secured by first charge by way of hypothecation of stock &
book debts and by second charge on plant & machinery and other immovable property both present and future of Kyungshin
Industrial Motherson Limited.
- Rs.6,242 thousand (previous year Rs.197 thousand) secured on primary mortgage over plant and machinery and additional
security over stocks and debtors of Motherson Electrical Wires Lanka Private Limited.
- Rs.13,593 thousand (previous year Nil) secured over machinery of Mothersonsumi Reiner GmbH.
- Rs.35,522 thousand (previous year Nil) secured over assets (like Land & Building & sets of tangible fixed assets) of MSSL
Advanced Polymers s.r.o,
- Rs.518 thousand (Previous Year Nil) secured by first charge by way of hypothecation of all present and future stocks, cash and
other current assets and second charge by way of hypothecation of all tangible movable fixed assets of the Balda Motherson
Solution India Limited.
- Rs.28,136 thousand (Previous Year Rs. 2,448 thousand) secured by first charge by way of hypothecation of all present and
future stocks, cash and other current assets and second charge by way of hypothecation of entire moveable fixed assets
(excluding tools & dies charged to customers, vehicles & leasehold improvements) of the Visiocorp Motherson Limited.
- Rs. 326,813 thousand (Previous Year Nil), under factoring arrangements, secured against underlying receivables, Rs. 468,197
thousand (Previous Year Nil) secured by mortgage on plant and machinery of Visioncorp Poong Jeong Co. Ltd. South Korea.
- Rs. 52,237 thousand (Previous Year Nil) secured by mortgage of the Lonsdale and Taree land and buildings fixed and floating
charge over all other assets Visiocorp Holding Australia Pty Ltd., Visiocorp Australia Pty Ltd., Visiocorp Taree Pty Ltd. and equity
cross guarantees between Visiocorp Holding Australia Pty Ltd,Visiocorp Australia Pty Ltd, Visiocorp Taree Pty Ltd. and the
balance secured by first charge by way of hypothecation of all present and future stocks, book debts and other specified
moveable assets of the Company and second charge by way of hypothecation of all present and future immoveable property.
2
Due within a year are Rs. 320,098 thousand (Previous Year Rs. 69,270 thousand).
3
Rs. 42,283 thousand (Previous Year Rs 42,500 thousand) secured by first charge by way of equitable mortgage of land and
building and hypothecation of plant & other assets and by second charge on current assets of Kyungshin Industrial Motherson
Limited. Rs.18,288 thousand (Previous Year Nil) secured by first pari passu charge on all present and future stocks, books debts
and plant and machinery of Visiocorp Motherson Limited.
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
114 Motherson Sumi Systems Limited
4
Rs. 2,026,950 thousand (Previous Year Nil) Secured by first pari passu charge/assignment of all receivables, all the movable,
intangible assets and immovable assets, of Samvardhana Motherson Visiocorp Solution Limited (SMVSL) and its subsidaries .
Further secured by pledge of shares of SMVSL held by the Company and corporate guarantee of Samvardhana Motherson
Finance Limited (joint venturer) and the Company. Rs. 96,438 thousand (Previous Year Nil) secured by mortgage of plant and
machinery of Visiocorp Poong Jeong Company Limited, South Korea.The balance secured by first pari-passu charge on entire
fixed assets both moveable and immoveable of the Company present and future and second pari-passu charge on the entire
current assets of the Company. These are also secured by way of deposit of title deeds of specified properties.
5
i) Tooling advances received from customers are repayable by way of amortisation on supply of components and hence cannot
be distinguished between short term and long term
ii) Secured by hypothecation of specific moulds used for production of components.
6
i) Due within a year Rs 61,204 thousand (Previous Year Nil).
ii) Secured by specified property, plant and machinery acquired under lease and hire purchase arrangements.
7
i) Due within a year Rs 8,478 thousand (Previous Year Rs 10,561 thousand).
ii) Secured by hypothecation of specific vehicles purchased against such loans.
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE IV - UNSECURED LOANS
Short term loans
- From Banks 34,153 -
- Other than Banks 1
32,400 71,224
- Foreign Currency Loan 148,231 -
Long term loans
From Other than Banks
- Rupee Loan 2
44,657 54,237
- Foreign currency Loan 3
30,347 124,401
- Zero Coupon Foreign Currency Convertible Bonds (Refer B (5) of Schedule XIII) 3,070,528 2,891,412
TOTAL 3,360,316 3,141,274
1
Repayable on demand
2
Tooling advances received from customers are repayable by way of amortisation on supply of components and hence cannot be
distinguished between short term and long term.
3
Long term loans due within a year are Rs.Nil (Previous Year Rs. 124,401 thousand).
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
11522nd Annual report 2008-09
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
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2
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SC
HED
ULE V
- FIX
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A
SSETS (R
efer A
(3
) &
A
(4
) of Schedule X
III)
116 Motherson Sumi Systems Limited
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VII - CURRENT ASSETS, LOANS AND ADVANCES
A. Current Assets
1. Stock in Trade (Refer A(6) and A (2) (e) (ii) of Schedule XIII)
(i) Finished Goods 1,490,928 726,658
(ii) Work in Progress 729,694 498,439
(iii) Raw Material & Components 2,627,543 1,391,972
(iv) Goods in Transit(Raw Material & Components) 469,661 254,135
(v) Store & Spares 793,688 22,177
(1) 6,111,514 2,893,381
2 Sundry Debtors (Unsecured, unless otherwise stated)
(i) Outstanding for more than six months
Considered Good 932,755 29,968
Considered Doubtful1
198,332 9,950
1,131,087 39,918
Less : Provision for doubtful debts1
198,332 9,950
932,755 29,968
(ii) Other Debts
Considered good 5,199,517 3,257,429
Considered Doubtful2
76,577 2,189
5,276,094 3,259,618
Less : Provision for doubtful debts2
76,577 2,189
5,199,517 3,257,429
(2) 6,132,272 3,287,397
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VI - INVESTMENTS
Long-term Investments
1. In Associate
- Net Assets Value
As at the beginning of the year 21,533 - 19,390
Additions consequent to acquisition of subsidiaries of
Visiocorp Plc (in administration) 1, 2
20,974 - -
Share of Profit in Associate 871 43,378 2,143 21,533
2. In Others 37,417 27,506
Short Term Investments in Shares 411 598
Total 81,206 49,637
1
Refer A (2) (e) (i) of Schedule XIII.
2
Refer B (4) (b) (i) of Schedule XIII.
11722nd Annual report 2008-09
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VII - CURRENT ASSETS, LOANS AND ADVANCES
3 Cash and Bank Balances
(i) Cash in hand 15,089 6,237
(ii) Cheques in hand 637 220,990
(iii) Balance with Banks in
(a) Current Accounts 2,149,367 413,499
(b) Deposit account 3
595,485 308,463
(c) Dividend Account 5,654 4,361
(3) 2,766,232 953,550
TOTAL A (1+2+3) 15,010,018 7,134,328
B. Loans and Advances (Unsecured, unless otherwise stated)
(i) Advances recoverable in cash or in kind or for value to be received 4
Considered good 2,801,818 1,142,515
Considered doubtful 4,788 9,315
2,806,606 1,151,830
Less : Provision for doubtful advances 4,788 9,315
2,801,818 1,142,515
(ii) Deposits with Excise, Customs & Govt Authorities 1,327,652 762,227
TOTAL B 4,129,470 1,904,742
GRAND TOTAL (A+B) 19,139,488 9,039,070
1
Includes debt of Rs 188,447 thousand on account of acquisition of subsidiaries of Visiocorp Plc (in administration)
2
Includes debt of Rs 76,577 thousand on account of acquisition of subsidiaries of Visiocorp Plc (in administration)
3
i) Deposits pledged with Excise & Sales Tax authorities Rs.125 thousand (Previous Year Rs.60 thousand)
ii) Margin money Rs.11,833 thousand (Previous Year Rs 5,031 thousand)
4
Includes capital advances of Rs. 304,060 thousand (Previous Year Rs. 190,657 thousand)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VIII - CURRENT LIABILITIES AND PROVISIONS
A. Current Liabilities
(i) Sundry Creditors 10,374,742 2,965,407
(ii) Advance from customers 1,099,485 233,287
(iii) Other Liabilities 781,146 460,695
(iv) Investor Education & Protection Fund shall be credited by
the following amount
- Unpaid Dividend 5,654 4,361
(v) Interest Accrued but not due 24,973 3,679
12,286,000 3,667,429
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
118 Motherson Sumi Systems Limited
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009
(Figures in Rs. Thousands)
As at As at
March 31, 2009 March 31, 2008
SCHEDULE VIII - CURRENT LIABILITIES AND PROVISIONS
B. Provisions
(i) Premium on Redemption of Zero Coupon Foreign Currency
Convertible Bonds 926,225 856,102
(ii) For Dividend (including tax thereon) 561,573 561,573
(iii) For Wealth Tax 2,798 2,546
(iv) For Income Tax (net) 407,846 105,743
(v) For Fringe Benefit Tax 3,596 90
(vi) For employee benefit (Refer A (7) of Schedule XIII) 597,200 107,381
(vii) For Warranty (Refer B (10) of Schedule XIII) 286,190 5,303
(viii) For Onerous Contracts (Refer B (10) of Schedule XIII) 126,549 -
(ix) For Others (Refer B (10) of Schedule XIII) 772,808 -
3,684,785 1,638,738
TOTAL (A+B) 15,970,785 5,306,167
As at As at
March 31, 2009 March 31, 2008
SCHEDULE IX - MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
(Refer B (5) of Schedule XIII)
Premium on Redemption/ Issue Expenditure of Zero Coupon
Foreign Currency Convertible Bonds
Opening Balance 419,786 584,835
Less: Written off during the year 154,524 165,049
TOTAL 265,262 419,786
11922nd Annual report 2008-09
(Figures in Rs. Thousands)
For the year ended For the year ended
March 31, 2009 March 31, 2008
SCHEDULE X - OTHER INCOME
Other Income
(a) Dividend Received
- From Others1
901 293
(b) Rent 48,690 33,893
(c) Provision for dimunition in investment written back - 5
(d) Service Income 177,450 101,902
(e) Liabilities no loger required written back 9,024 17,001
(f) Profit on sale of Land - 240,041
(g) Profit on sale of other fixed assets 12,796 8,969
(h) Contribution received from bussiness stakeholders on acquisition of subsidiaries
of Visiocorp Plc (in administration) (Refer B (4) (b) (ii) of Schedule XIII) 1,119,103 -
(i) Miscellaneous Income 241,747 108,415
TOTAL 1,609,711 510,519
1
Includes dividend from Short term Non- Trade investments 22 293
Schedules forming part of the Consolidated Profit and Loss Account
For the year ended March 31, 2009
For the year ended For the year ended
March 31, 2009 March 31, 2008
SCHEDULE XI - COST OF MATERIALS AND MANUFACTURING AND
OTHER EXPENSES
Materials consumed
Opening Stock
Raw materials 1,391,972 969,479
Work-in-progress 498,439 356,901
Finished goods 726,658 494,926
Increase in opening stock on acquisition of subsidiaries of Visiocorp Plc
(in administration) (Refer B (4) (b) (i) of Schedule XIII)
Raw materials 1,119,643 -
Work-in-progress 260,101 -
Finished goods 913,221 -
4,910,034 1,821,306
Add : Purchases of Raw materials 15,338,292 12,142,549
Less : Closing Stock
Raw materials (2,627,543) (1,391,972)
Work-in-progress (729,694) (498,439)
Finished goods (1,490,928) (726,658)
Less : Stock damaged due to fire
Raw materials - (59,860)
Work-in-progress - (28,022)
Finished goods - (17,425)
Translation adjustment on stocks taken to exchange reserve on consolidation 92,692 -
Total consumption for goods sold 15,492,853 11,241,479
120 Motherson Sumi Systems Limited
Schedules forming part of the Consolidated Profit and Loss Account
For the year ended March 31, 2009
(Figures in Rs. Thousands)
For the year ended For the year ended
March 31, 2009 March 31, 2008
SCHEDULE XI - COST OF MATERIALS AND MANUFACTURING AND
OTHER EXPENSES
Salary, wages, bonus etc 2,883,380 2,042,847
Contribution to Provident & Other Fund 315,476 226,061
Staff Welfare 240,886 197,829
Electricity, Water and Fuel 455,452 363,116
Repairs and Maintenance :
Machinery 217,355 215,889
Building 106,040 131,001
Others 167,780 161,339
Consumption of Store and Spare parts 233,869 187,797
Conversion charges 233,478 357,917
Lease rent 177,422 71,931
Rent 172,844 135,148
Rates & taxes 16,043 11,339
Insurance 83,564 67,064
Donation 8,485 7,357
Travelling 256,843 238,533
Freight & forwarding 602,809 452,238
Royalty 103,284 96,241
Cash Discount 31,939 31,130
Commission 7,076 3,513
Provision for diminution in value of Short Term Investments 187 -
Exchange fluctuation(net)
Foreign Currency Convertible Bonds 249,239 265,996
Others 81,909 (104,362)
Bad Debts / Advances written off 24,195 3,197
Provision for Doubtful Debts/ Advances 4,620 14,008
Legal & professional expenses 543,156 500,042
Amount paid to certain bussiness stakeholders on acquisition of
subsidiaries of Visiocorp Plc (in administration) (Refer B (4) (b) (ii)) of Schedule (xiii) 110,745 -
Miscellaneous expenses 740,469 520,370
TOTAL 23,561,398 17,439,020
For the year ended For the year ended
March 31, 2009 March 31, 2008
SCHEDULE XII - INTEREST (NET)
Interest and Finance Expense
- Privately Placed Debentures 20,224 22,882
- Fixed loans 75,080 16,253
- Amortisation of Premium / Issue expenditure on Redemption of Zero
Coupon Foreign Currency Convertible Bonds 154,524 165,049
- Others 133,591 84,426
Less : Interest Income (Gross)
- From Bank Deposits 22,839 14,962
- From Income Tax Refund 389 12,402
- From Others 5,842 17,304
TOTAL 354,349 243,942
12122nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
SCHEDULE XIII - SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Accounting
The Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the
applicable accounting standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the
Companies Act,1956. The Company follows the mercantile system of accounting and recognises income and expenditure on
accrual basis.
2. Principles of Consolidation
The Consolidated Financial Statements relate to Financial Statements of Motherson Sumi Systems Limited ('the Company') and
it's Subsidiary Companies, Joint Ventures and Associates ('the Group').
The consolidated financial statements have been prepared on the following basis:
a) Subsidiaries
i) The subsidiaries have been consolidated by applying Accounting Standard 21 "Consolidated Financial Statements".
ii) Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer
consolidated from the date of disposal.
iii) The financial statements of the Company and its Subsidiary Companies have been combined on a line-by-line basis by
adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra-
group balances & intra-group transactions resulting in unrealised profits or losses.
iv) The excess of the cost of acquisition over the Company's portion of equity and reserves of the Subsidiary Company at
each time an investment is made in a subsidiary is recognised in the financial statements as goodwill. Negative
goodwill is recognised as capital reserve.
b) Investment in business entities over which the Company exercises joint control and the Company does not hold majority
voting power are accounted for using proportionate consolidation in accordance with Accounting Standard 27 "Financial
Reporting of Interest in Joint Venture".
c) Investment in Associates (entity over which the Company exercises significant influence, which is neither a subsidiary nor
a joint venture) are accounted for using the equity method in accordance with Accounting Standard 23 "Accounting for
Investments in Associates in Consolidated Financial Statements".
d) The Consolidated Financial Statements have been prepared using financial statements drawn upto same reporting dates
to the extent practicable and where financial statements used are drawn up to different reporting dates adjustments are
made for any significant transactions for events occurring between those dates and the date of this financial statement.
e) The Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and
other events in similar circumstances except as sated below and are presented to the extent possible, in the same manner
as the Company's separate financial statements.
122 Motherson Sumi Systems Limited
In respect of the following the group follows different accounting policies as it is not considered feasible to make the
accounting policies uniform
i) The Group has reported its interest in a joint venture, Ningbo Visiocorp Huaxiang Automotive Mirrors Company
Limited (NVHAML) as an associate, using the equity method instead of using the proportionate consolidation method.
The Group's share in the revenues and the total expenditure of NVHAML for the period ended March 31, 2009 since
acquisition amount to Rs. 28,875 thousand and Rs. 30,667 thousand respectively. This does not impact the reported
profits of the Group for the year ended March 31, 2009 or the net assets of the Group as at March 31, 2009.
ii) In certain subsidiaries of the group, inventories are valued on a weighted average cost basis as against the group
policy of valuing inventories on First in First Out ('FIFO') cost basis. The total value of inventories valued on weighted
average basis amount to Rs. 670,497 thousand as at March 31, 2009.
3. Fixed Assets
i) The fixed assets except as stated in (ii) below are stated at cost less accumulated depreciation. Cost of acquisition or
construction is inclusive of inward freight, duties and taxes and other incidental expenses.
ii) The fixed assets of the Component Division of erstwhile Motherson Auto Components Engineering Limited (MACE) have
been stated at an amount inclusive of appreciation arising on revaluation of the assets by an approved valuer on December
31, 1998. The method adopted for revaluation of the assets are as under:
a) Land: Prevailing market rate of land as on the date of revaluation.
b) Buildings, Indigenous Plant and Machinery, Furniture and Fixtures, Moulds and Dies: Replacement value.
The Group charges assets costing less than Rs 5,000 to Rs. 350,000 to expenditure based on limits identified by each entity ,
which could otherwise have been included as Fixed Asset, because the amount is not material in accordance with Accounting
standard 10-' Accounting for fixed Assets'
4. Depreciation
i) Depreciation on fixed assets, except as stated in (ii) to (v) below, is provided from the month the asset is ready for
commercial production on a pro-rata basis based on useful life or where applicable, at the SLM rates prescribed in schedule
XIV to the Companies Act, 1956 whichever is higher. Accordingly the assets are amortised, on the straight line method as
per the rates below:
Indian Entities Overseas Entities
Rates % Rates %
Building -Residential 1.63 2.5-5
Building - Factory 3.34 1.52-20.00
Plant & machinery 4.75-25 5-25
Plant & machinery (Racks Stands & Trolleys) 100 8.00-100
Furniture, Fixtures & Office Equipments 16.67 7.69-33.33
Computers 33.33 9.86-33.33
Vehicles 25 9.86-33.33
Schedules forming part of the Consolidated Accounts
12322nd Annual report 2008-09
ii) In respect of revalued assets, depreciation is being provided on the revalued amounts over the remaining useful life of the
assets at the SLM rates. Leasehold Land is amortised over the balance period of lease.
iii) Goodwill generated on consolidation in respect of subsidiaries is being carried at cost.
iv) Technical know-how fees paid to a foreign collaborator by one of the consolidating company is being depreciated on SLM
basis @ 50%.
v) Intangible Assets are amortised over a period of 2 to 5 years based on their useful lives.
5. Investments
Investments other than in subsidiaries, joint ventures and associates, which are accounted for separately as per Note 2 above,
are classified into long term and current investments. Long term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of long term investments.
Current investments are carried at lower of cost and fair value. Fair value in the case of quoted investments refers to the market
value of the investments arrived at on the basis of last traded prices as at the year-end.
6. Inventory
Stores and spares, loose tools are valued at cost or net realisable value, whichever is lower.
Raw materials, components, finished goods and work in progress are valued at cost or net realisable value, whichever is lower.
The basis of determining cost for various categories of inventories is as follows:
i) Stores and Spares, Raw Materials and Components First in First Out (FIFO) method other than in respect of certain
subsidiaries where costs are determined on a weighted average
basis. (Refer Note 2 (e)(ii) above)
ii) Work in Progress and Finished Goods Material cost plus appropriate share of labour and production
overheads.
iii) Tools Cost less amortisation based on useful life of the items ascertained
on a technical estimate by the management
7. Employee Benefits
a) In respect of the companies incorporated in India
The Group makes regular contributions to the State administered Provident Fund which is charged against revenue. The
Group provides for long term defined benefit schemes of gratuity and compensated absences on the basis of actuarial
valuation on the balance sheet date based on the Projected Unit Credit Method. In respect of gratuity, the Group funds
the benefits through annual contributions to Life Insurance Corporation of India (LIC) under its Group Gratuity Scheme.
The actuarial valuation of the liability towards the defined benefits of the employees is made on the basis of assumptions
with respect to the variable elements affecting the computations including estimation of interest rate of earnings on
contributions to LIC. The Group recognises the actuarial gains and losses in the profit and loss account in the period in
which they occur.
Schedules forming part of the Consolidated Accounts
124 Motherson Sumi Systems Limited
b) In respect of the companies incorporated outside India
Pensions
The Group operates various defined benefit pension plans, certain of which require contributions to be made to
separately administered funds whereas others are not funded.
The cost of providing benefits under the defined benefit plans is determined separately for each plan using the Projected
Unit Credit Method and is based on actuarial advice. The interest element of the defined benefit cost represents the
change in present value of scheme obligations resulting from the passage of time and is determined by applying the
discount rate to the opening present value of the benefit obligation, taking into account material changes in the obligation
during the year. The expected return on plan assets is based on an assessment made at the beginning of the year of long-
term market returns on scheme assets, adjusted for the effect on the fair value of plan assets of contributions received and
benefits paid during the year.
The defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of
the defined benefit obligation (using a discount rate based on high quality corporate bonds), less any past service cost not
yet recognised and the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on
market price information and in the case of quoted securities is the published bid price.
The value of a net pension benefit asset is restricted to the sum of any unrecognised past service costs and the present
value of any amount the Group expects to recover by way of refund from the plan or reduction in the future contributions.
An economic benefit, in the form of a refund or a reduction in future contributions, is available if the Group can realise it
at some point during the life of the plan or when the plan liabilities are settled. In particular, such an economic benefit may
be available even if it is not realisable immediately at the balance sheet date. The economic benefit available does not
depend on how the Group intends to use the surplus. The Group determines the maximum economic benefit that is
available from refund, reduction in future contributions or a combination of both. Legal or contractual minimum funding
requirements in general stipulate a minimum amount or level of contributions that must be made to a plan over a given
period. Therefore, a minimum funding requirement may limit the ability of the entity to reduce future contributions and
considered respectively in determining the economic benefit from the plan.
Contributions to defined contribution schemes are recognised in the income statement in the period in which they become
payable.
Other Long term benefits
The Group recognises as an expenditure the present value of long term retention bonuses, where applicable based on the
expected amounts to pay by considering expectancies of employee fluctuation. The level of fluctuation significantly
impacts the amount to be paid in the future.
8. Revenue Recognition
Sales are recognised upon the transfer of significant risks and rewards of ownership to the customers.
Revenue from services is recognised as per the terms of the agreement, as the services are rendered and no significant
uncertainty exists regarding the amount of consideration.
Interest Income is recognised on a proportion of time basis taking into account the principal outstanding and the rate applicable.
Schedules forming part of the Consolidated Accounts
12522nd Annual report 2008-09
9. Government grants and grants from other parties
Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions
will be met, usually on submission of a valid claim for payment. Government grants in respect of capital expenditure are
credited to the acquisition costs of the respective fixed asset and thus are released as income over the expected useful lives of
the relevant assets. Grants of a revenue nature are credited to income so as to match them with the expenditure to which they
relate.
Grants from other parties are accounted for following the provisions for government grants, if the grants are comparable to
government grants in their nature.
10. Foreign Currency Transactions
Transactions involving foreign currencies are recorded at the exchange rate prevailing on the transaction date. Foreign currency
monetary items are translated at the exchange rate prevailing at the balance sheet date and the gain/loss arising on such
translation is credited / charged to profit and loss account. Premium or discount arising at the inception of a forward exchange
contract is amortised as expense or income over the life of contract.
For the purpose of consolidation, the Company has translated Assets and Liabilities of subsidiaries outside India, whose operations
are classified as non-integral, at the year-end exchange rate and Income and Expenditure items at an average exchange rate
that approximates to the exchange rate prevailing on the date of transaction. The resultant translation adjustment is reflected
as a separate component of Shareholders' funds as "Exchange Reserve on Consolidation".
11. Borrowing Costs
The borrowing costs on funds other than those directly attributable to the acquisition of a qualifying asset i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use, is charged to revenue in the period in which they
are incurred.
The borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised
as part of the cost of that asset.
12. Leases
Lease rental in respect of assets under operating lease arrangements are charged to expense when due as per the terms of the
related agreement on a straight line basis over the term of lease.
Lease rental in respect of assets under finance lease transactions considered as financing arrangements in accordance with
Accounting Standard 19 - Leases and the leased asset is capitalised at an amount equal to the present value of future lease
payments and a corresponding amount is recognised as a liability. The lease payments made are apportioned between finance
charge and reduction of outstanding liability in relation to leased asset.
In respect of assets leased out under operating lease rental income is recognized as income on accrual basis over the lease term.
13. Taxation
Current Tax
Current tax is provided on the basis of tax payable on estimated taxable income computed in accordance with the applicable
provisions after considering the tax allowances and exemptions.
Schedules forming part of the Consolidated Accounts
126 Motherson Sumi Systems Limited
Deferred Taxes
In accordance with Accounting Standard 22 - ‘Accounting for Taxes on Income’ the deferred tax for timing differences
between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or
substantially enacted as of the balance sheet date.
Deferred Tax Assets are recognised only to the extent there is reasonable certainty that the assets can be realised in the future;
however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised
only if there is virtual certainty of realisation of such assets.
Fringe Benefit Tax
Fringe benefit tax is determined based on the liability computed in accordance with relevant tax rates and tax laws.
14. Earnings Per Share (EPS)
The earning considered in ascertaining the Company's EPS comprises the net profit after tax (and includes the post tax effect
of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS,
after adjusting for the effect of potential dilutive equity shares.
15. Impairment of assets
Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable
amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash
flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
16. Provisions and Contingent Liabilities
A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a
contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require
an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of
outflow of resources is remote, no provision or disclosure is made.
17. Use of Estimates
In the preparation of the financial statements, the management of the Company makes estimates and assumptions in conformity
with the applicable accounting principles in India that affect the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and
expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee
retirement benefit plans, income taxes, the useful lives of fixed assets and intangible assets and estimates for recognising
impairment losses.
These estimates could change from period to period and also the actual results could vary from the estimates. Appropriate
changes are made to the estimates as the management becomes aware of changes in circumstances surrounding these estimates.
The changes in estimates are reflected in the financial statements in the period in which changes are made and, if material,
their effects are disclosed in the notes to the financial statements.
Schedules forming part of the Consolidated Accounts
12722nd Annual report 2008-09
B. NOTES TO THE ACCOUNTS
1. Contingent Liabilities:
(Rs. in Thousands)
As at As at
March 31, 2009 March 31, 2008
a) In respect of Excise 1
15,550 13,798
b) In respect of Entry Tax 8,186 2,667
c) In respect of Sales Tax 13,558 13,784
d) In respect of Service Tax 7,535 4,743
e) In respect of Custom Duty 615 444
f) In respect of Stamp Duty 4,754 1,804
g) In respect of Income Tax 3,557 20,185
h) In respect of Labour Cases 15,850 14,891
i) Bank Guarantees furnished by the Company 138,585 99,293
1
Excludes interest
2. Outstanding Capital Commitments:
(Rs. in Thousands)
As at As at
March 31, 2009 March 31, 2008
Unexpired amount of the contracts on capital accounts and not
provided for (net of advances) 526,707 505,443
3. Consolidation:
A. Details of subsidiaries which have been considered in these consolidated accounts are as follows:
Name of the Company Country of % voting power Reporting Dates
Incorporation held as at used for
March 31, 2009 Consolidation
MSSL Mauritius Holdings Limited Mauritius 100% December 31, 2008
MSSL Mideast (FZE) UAE 100% March 31, 2009
Motherson Electrical Wires Lanka Pvt. Limited Sri Lanka 100% March 31, 2009
MSSL Handels GmbH Austria 100% March 31, 2009
MSSL (S) Pte Ltd Singapore 100% March 31, 2009
Motherson PUDENZ WICKMANN Limited India 56.13% March 31, 2009
MSSL Global Wiring Limited India 100% March 31, 2009
MSSL GmbH (through MSSL Mideast (FZE)) Germany 100% December 31, 2008
MSSL (GB) Limited (through MSSL Mideast (FZE)) UK 100% December 31, 2008
Schedules forming part of the Consolidated Accounts
128 Motherson Sumi Systems Limited
Name of the Company Country of % voting power Reporting Dates
Incorporation held as at used for
March 31, 2009 Consolidation
Motherson Sumi Wiring System Limited (FZC)
(through MSSL Mideast (FZE)) UAE 51% December 31, 2008
MSSL Tooling Limited (FZE) (through MSSL
Mideast (FZE)) (Refer B(4) (a) below) UAE 100% December 31, 2008
MSSL Ireland Private Limited (through
MSSL Mauritius Holdings Limited) Ireland 100% December 31, 2008
Global Environment Management (FZC) (through
MSSL Mauritius Holdings Limited) UAE 78.82% December 31, 2008
MSSL Australia Pty Limited (through
MSSL (S) Pte. Ltd) Australia 80.00% December 31, 2008
MSSL Polymers GmbH (through MSSL GmbH) Germany 100% December 31, 2008
Motherson Sumi Reiner GmbH
(through MSSL GmbH) Germany 100% December 31, 2008
MSSL Advanced Polymers s.r.o
(through MSSL GmbH) Czech Republic 100% December 31, 2008
Motherson Orca Precision Technology GmbH
(through MSSL GmbH) Germany 51% December 31, 2008
MSSL s.r.l. Unipersonale (through MSSL GmbH) Italy 100% December 31, 2008
Global Environment Management Australia
Pty Limited (through Global Environment
Management (FZC)) Australia 100% December 31, 2008
Motherson Elastomers Pty Limited
(through MSSL Australia Pty Limited) Australia 100% December 31, 2008
Motherson Investments Pty Limited
(through MSSL Australia Pty Limited) Australia 100% December 31, 2008
Samvardhana Motherson Global Holding
Limited (SMGHL)(through MSSL Mauritius
Holdings Limited) Mauritius 51% March 31, 2009
Samvardhana Motherson Visiocorp
Solution Limited(SMVSL) (through SMGHL) Jersey 95% March 31, 2009
Elemental Growth Limited (through SMVSL) Hong Kong 100% March 31, 2009
Horizonfield Limited (through SMVSL) Cyprus 100% March 31, 2009
Visicorp Holding Germany GmbH (through SMVSL) 2
Germany 100% March 31, 2009
Visiocorp Automotive GmbH (through SMVSL) 2
Germany 100% March 31, 2009
Visiocorp Poong Jeong Co Ltd (through SMVSL) 2
South Korea 90% March 31, 2009
Visiocorp Hyosang Ltd (through SMVSL) 2
South Korea 90% March 31, 2009
Visiocorp Holding Australia Pty Ltd
(through SMVSL) 2
Australia 100% March 31, 2009
Schedules forming part of the Consolidated Accounts
12922nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
Name of the Company Country of % voting power Reporting Dates
Incorporation held as at used for
March 31, 2009 Consolidation
Visiocorp Australia Pty Ltd (through SMVSL) 2
Australia 100% March 31, 2009
Visiocorp Taree Pty Ltd (through SMVSL) 2
Australia 100% March 31, 2009
Visiocorp Hungary BT (through SMVSL) 2
Hungary 100% March 31, 2009
Visiocorp Grundbesitz GmbH & Co. KG
(through SMVSL) 2
Germany 94% March 31, 2009
Visiocorp Group Services GmbH (through SMVSL) 2
Germany 100% March 31, 2009
Visiocorp Management UK Ltd (through SMVSL) 2
UK 100% March 31, 2009
Portchester Ltd (through SMVSL) 2
UK 76.9% March 31, 2009
Visiocorp UK Ltd (through SMVSL) 2
UK 100% March 31, 2009
Visiocorp Automotive Valencia S.A.U.
(through SMVSL) 2
Spain 100% March 31, 2009
Visiocorp Services UK Ltd (through SMVSL) 2
UK 100% March 31, 2009
Visiocorp Holding USA LLP (through SMVSL) 2
USA 100% March 31, 2009
Visiocorp International USA Inc. (through SMVSL) 2
USA 100% March 31, 2009
Visiocorp USA Inc. (through SMVSL) 2
USA 100% March 31, 2009
Visiocorp France S.A. (through SMVSL) 2
France 100% March 31, 2009
Visiocorp Motherson Ltd (through SMVSL) 2
India 100% 3
March 31, 2009
Visiocorp Automotive Yancheng Co Ltd
(through SMVSL) 2
China 100% March 31, 2009
Visiocorp Automotive Beijing Co Ltd
(through SMVSL) 2
China 100% March 31, 2009
Visiocorp Holding Hungary KFT (through SMVSL) 2
Hungary 100% March 31, 2009
Visiocorp Espana S.A.U. (through SMVSL) 2
Spain 100% March 31, 2009
Visiocorp Mexico S.A. de C.V. (through SMVSL) 2
Mexico 100% March 31, 2009
Visiocorp Servicios S.A. de C.V. (through SMVSL) 2
Mexico 100% March 31, 2009
Visiocorp Verwaltungsgesellschaft GmbH
(through SMVSL) 2
Germany 100% March 31, 2009
Visiocorp Patents SARL (through SMVSL) 2
Luxembourg 100% March 31, 2009
Visiocorp Beteiligungs GmbH (through SMVSL) 2
Germany 100% March 31, 2009
B. Details of Associate Company are as follows:
Name of the Company Country of % voting power Reporting Dates
Incorporation held as at used for
March 31, 2009 Consolidation
SAKS Ancillaries Limited India 40.01% March 31, 2009
130 Motherson Sumi Systems Limited
C. Details of Joint Venture Companies which have been considered in these consolidated accounts are as follows:
Name of the Company Country of % voting power Reporting Dates
Incorporation held as at used for
March 31, 2009 Consolidation
Visiocorp Motherson Limited India -3
March 31, 2009
Kyungshin Industrial Motherson Limited India 50% March 31, 2009
Woco Motherson Limited (FZC) (through MSSL
Mauritius Holdings Limited) U.A.E 33.33% December 31, 2008
Woco Motherson Elastomers Limited India 33.33% March 31, 2009
Woco Motherson Advanced Rubber
Technologies Limited India 33.33% March 31, 2009
Balda Motherson Solution India Limited India 40% March 31, 2009
Calsonic Kansei Motherson Auto Products Limited India 49% March 31, 2009
Ningbo Visiocorp Huaxiang Automotive
Mirrors Co. Ltd. 2,4
China 50% March 31, 2009
2
Acquired on March 06, 2009 and accordingly the consolidated Profit and Loss account includes results of these
subsidiaries/ joint venture companies from the date of acquisition till March 31, 2009. The statutory financial year end
for these entities is December 31. Refer Note B(4)(b)(i).
3
With effect from March 06, 2009, 49% directly held by Company and 51% held through SMVSL.
4
Refer A(2)(e) (i) above.
4. Acquisition / Investments during the year
a) Transfer of MSSL Mauritius Holdings Limited's investment in MSSL Tooling (FZE) to MSSL Mideast (FZE):
MSSL Mauritius Holdings Limited, a wholly owned subsidiary has transferred 1,500 shares of face value AED 100 each
amounting to AED 150,000 (equivalent to Euro 32,504) in MSSL Tooling (FZE) to MSSL Mideast (FZE) also a wholly
owned subsidiary at par for a consideration of Euro 32,504. This does not have any impact on the consolidated financial
statements.
b) Acquisition of subsidiaries of Visiocorp Plc.(in administration):
(i) On March 6, 2009, Samvardhana Motherson Visiocorp Solution Limited (SMVSL), incorporated in Jersey, 95 %
owned by Samvardhana Motherson Global Holdings Limited (SMGHL), together with its subsidiaries acquired all the
subsidiaries of Visiocorp Plc. (in administration) for a cash consideration of Euro 24.77 Million and issue of
consideration shares amounting to Euro 1.5 Million to the lenders of the erstwhile Visiocorp Group. SMGHL is a
joint venture of the Company and Samvardhana Motherson Finance Limited through company’s 100% Subsidiary
MSSL Mauritius Holdings Limited. The Group holds 51% in SMGHL.
Schedules forming part of the Consolidated Accounts
13122nd Annual report 2008-09
As a result, the following principal subsidiaries were transferred (directly or indirectly) to the Company:
Name Country of Group interest
incorporation in %
Visicorp Holding Germany GmbH Germany 100%
Visiocorp Automotive GmbH Germany 100%
Visiocorp Poong Jeong Co Ltd South Korea 90%
Visiocorp Hyosang Ltd South Korea 90%
Visiocorp Holding Australia Pty Ltd Australia 100%
Visiocorp Australia Pty Ltd Australia 100%
Visiocorp Taree Pty Ltd Australia 100%
Visiocorp Hungary BT Hungary 100%
Visiocorp Grundbesitz GmbH & Co. KG Germany 94%
Visiocorp Group Services GmbH Germany 100%
Visiocorp Management UK Ltd United Kingdom 100%
Portchester Ltd United Kingdom 76.9%
Visiocorp UK Ltd United Kingdom 100%
Visiocorp Automotive Valencia S.A.U. Spain 100%
Visiocorp Services UK Ltd United Kingdom 100%
Visiocorp Holding USA LLP USA 100%
Visiocorp International USA Inc. USA 100%
Visiocorp USA Inc. USA 100%
Visiocorp France S.A. France 100%
Visiocorp Motherson Ltd India 51%
Visiocorp Automotive Yancheng Co Ltd China 100%
Visiocorp Automotive Beijing Co Ltd China 100%
Visiocorp Holding Hungary KFT Hungary 100%
Visiocorp Espana S.A.U. Spain 100%
Visiocorp Mexico S.A. de C.V. Mexico 100%
Visiocorp Servicios S.A. de C.V. Mexico 100%
Visiocorp Verwaltungsgesellschaft GmbH Germany 100%
Visiocorp Patents SARL Luxemburg 100%
Visiocorp Beteiligungs GmbH Germany 100%
The acquisition costs amounting to Rs.1,920,805 thousand (Euro 28, 429 thousand) comprise the following components:
a) Purchase price of the 100% shares: Rs. 1,673,382 thousand (Euro 24,767 thousand).
b) Costs directly attributable to the acquisition of the Visiocorp incurred for consultants and legal advisors as well as
stamp duties amount to Rs. 146,075 thousand (Euro 2,162 thousand).
Schedules forming part of the Consolidated Accounts
132 Motherson Sumi Systems Limited
c) Costs directly attributable to the acquisition of the Visiocorp incurred for the release of securities provided by the
erstwhile Visiocorp Group to its financing parties amounting to Rs. 101,348 thousand (Euro1,500 thousand). The
consideration for these costs was the distribution of 150,000,000 shares (each having a nominal amount of
Euro 0.01).
The book value of the net assets acquired amount to Rs. 2,985,167 thousand (Euro 44,182 thousand). Accordingly
an amount of Rs. 1,064,362 thousand (Euro15,753 thousand), being the excess of the net assets acquired over
the acquisition cost has been recognised as a capital reserve on consolidation.
ii) Further SMVSL has recognised for a cash contribution receivable from certain business stakeholders. During the
reporting period, the Group recognised Rs.1,119,103 thousand (Euro16,704 thousand) as other income in respect of
the cash contribution. The cash contribution receivable has been included under "Advances recoverable in cash or in
kind" in B (i) of Schedule VII as at March 31, 2009 and has been collected subsequent to the year end.
iii) SMVSL has also accrued for an amount of Rs 110,744 thousand(Euro 16,533 thousand) for payments to be made to
certain business stakeholders for continued business support post acquisition of subsidiaries of Visiocorp Plc.(in
administration)
5. Issue of Zero Coupon Foreign Currency Convertible Bonds
During the year ended March 31, 2006, the Company issued Euro 50,300,000 Zero Coupon Convertible Bonds due 2010 (the
"Bonds"). These Bonds are listed in the Singapore Exchange Securities Trading Limited (the "SGX-ST").The Bonds are convertible
either at the option of the holder at any time on or after August 24, 2005 (or such earlier date as is notified to the holders of
the Bonds by the Company) upto July 6, 2010 by holders into fully paid equity shares with full voting rights at par value of Re.
1.00 each of the Issuer ("Shares") at an initial Conversion Price (as defined in the "Terms & Conditions of the Bonds") of Rs. 74.35
per Share with a fixed rate of exchange on conversion of Rs. 52.01 = Euro 1.00. The Conversion Price is subject to adjustment
in certain circumstances.
The Bonds may otherwise be redeemed, in whole or in part, at the option of the Issuer, at any time on or after July 15, 2008
and prior to July 7, 2010 subject to satisfaction of certain conditions and at their "Early Redemption Amount" (as defined in the
"Terms & Conditions of the Bonds") at the date fixed for such redemption if the "Closing Price" (as defined in the "Terms &
Conditions of the Bonds") of the Shares translated into Euro at the "prevailing rate" (as defined in the "Terms & Conditions of the
Bonds") for each of 20 consecutive "Trading Days" (as defined in the "Terms & Conditions of the Bonds") the last of which occurs
not more than five days prior to the date upon which notice of such redemption is published, is greater than 130 per cent, of
the "Conversion Price" (as defined in the "Terms & Conditions of the Bonds") then in effect translated into euro at the rate of Rs.
52.01 = Euro 1.00.
The Bonds may also be redeemed, in whole, but not in part, at any time at the option of the Issuer at their Early Redemption
Amount, if less than 10 per cent, in aggregate principal amount of the Bonds originally issued is outstanding.
The Bonds may also be redeemed in whole, but not in part, at the option of the Issuer subject to satisfaction of certain
conditions including obtaining Reserve Bank of India ("RBI") approval, at their Early Redemption Amount, on the date fixed for
redemption in the event of certain changes relating to taxation in India.
Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Issuer in Euros on July
16, 2010 at 126.77 per cent of its principal amount.
Schedules forming part of the Consolidated Accounts
13322nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
The issuer will, at the option of any holder of any Bonds, repurchase at the Early Redemption Amount such Bonds at such time
as the Shares cease to be listed or admitted to trading on the BSE and the NSE (as defined in the "Terms & Conditions of the
Bonds") in respect of the Issuer.
Consequent to the exercise of conversion option by holders of bonds of face value Euro 4.6 million, in the financial year ended
March 31, 2008, the outstanding balance as on March 31, 2009 is Euro 45,700,000.
5
Revised from Rs. 111.45, in accordance with the terms of issue, consequent to the issue of bonus shares by the Company.
6. During the year Balda Motherson Solution India Limited, a joint venture company has written down the entire block of fixed
assets (except for land) which constitute a cash generating unit based on the recoverable amounts of such assets. Consequently
the group has recognised Rs 111,740 thousand, equivalent to its share, as impairment in these financial statements. In the
previous year, the Company recognised an impairment loss to the extent of the entire carrying value of assets amounting to Rs.
28,807 thousand that were carried as Capital Work in Progress.
7. Payment to the Group's Auditors:
(Rs. in Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
a) Statutory Audit Fees 6,626 5,790
b) Taxation Matters 337 397
c) Reimbursement of expenses 362 529
d) Others (certification charges and other services) 813 474
Total 8,138 7,190
8. Earning per share
Year ended Year ended
March 31, 2009 March 31, 2008
Weighted Average number of Equity Shares of Re. 1 /- each 355,553,800 353,404,456
(Previous Year Re 1/- each ) outstanding at the end of the year
Net profit after tax available for equity Shareholders (Rs in thousand) 1,762,523 1,778,618
Basic/ Diluted6
Earnings (in Rupees) Per Share of Re. 1/- each. 4.96 5.03
(Previous Year Re 1/- each)
6
Potential conversion of Zero Coupon Foreign Currency Convertible Bonds issued is anti-dilutive and accordingly, has not been
considered in the calculation of diluted earning per share.
134 Motherson Sumi Systems Limited
9. Deferred Tax
(i) The break up of net deferred tax liability as at March 31, 2009 is as under:
(Rs in Thousands)
Timing differences As at Additions on Exchange Credit/ As at
on account of: March 31, 2008 account of fluctuation (Charge) March 31, 2009
acquisition of for the year
subsidiaries of
Visiocorp Plc.
(in administration)7
Expenses charged in the (151,526) (42,938) (193) 82,380 (276,651)
financial statements but
allowable as deductions
in future years under the
Income Tax Act (to the
extent considered realisable)
Difference between 191,662 189,557 (153) (40,300) 421,672
depreciation as per
financial statement and
depreciation as per Income
Tax Return
Net Deferred Tax 40,136 146,619 (346) 42,080 145,021
Liability/ (Asset)
7
Refer Note B (4) (b) (i)
(ii) In view of the Group's past financial performance and future profit projections, the Group expects to fully recover the
deferred tax assets.
10. The Group has the following provision in the books of account as on March 31, 2009
(Rs in Thousands)
Warranty Onerous Contracts Other Total
Opening Balance 5,303 - - 5,303
Additions on account of acquisition of
subsidiaries of Visiocorp Plc.
(in administration)8
270,769 122,317 829,906 1,222,992
Additions during the year 6,582 - 53,998 60,580
Utilised / Reversed during the year (12,029) - (133,925) (145,954)
Exchange translation adjustment 15,565 4,232 22,829 42,626
Closing Balance 286,190 126,549 772,808 1,185,547
8
Refer Note B(4) (b)(i)
Schedules forming part of the Consolidated Accounts
13522nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
Warranty
A provision is recognised for expected warranty claims on products sold during the last year, based on past experience of the
level of repairs and returns. It is expected that most of these costs will be incurred in the next financial year. Assumptions used
to calculate the provision for warranties were based on current sales levels and current information available about returns
based on the warranty period for all products sold.
Onerous contracts
The provision for onerous contracts comprise for expected losses from customer contracts for the next one year. After this
period no provision is recorded as the Group is expecting to turn this customer contracts profitable by cost reductions and
renegotiations with the customers.
Other provisions
Other provisions mainly comprises of two major provisions. One relates to a former fully consolidated subsidiary of Visiocorp
Plc. (in administration) sold prior to the acquisition by the Group, Visiocorp Deutschland GmbH (formerly Schefenacker Mirrors
GmbH) for which an obligation exists concerning transfer of losses due to a profit and loss transfer agreement. The amount
recognised amounts to Rs. 445,929 thousand (Euro 6.6 million). The other provision relates to potential tax threats of the
erstwhile "Lighting" Division of Visiocorp Plc. (in administration) for an amount of Rs. 168,913 .thousand (Euro 2.5 million) that
the Group had taken over consequent on the acquisition of subsidiaries of Visiocorp Plc. (in administration).
11. Leases Obligation Disclosures
Finance Leases:
Assets acquired on finance lease and hire purchase contract comprise property and plant & machinery. These leases are
generally have terms of renewal but no purchase option and escalation clauses. Renewals are at the option of the lessee. Future
minimum lease payment under finance leases and hire purchase contracts are as follows:
(Rs in Thousands)
Year ended Year ended
March 31, 2009 March 31, 2008
Payable not later than one year 58,309 -
Payable later than 1 year and not later than 5 years 139,860 -
payable later than 5 years 114,658 -
Total 312,827 -
Less: Future finance charges 113,104 -
Present value in respect of above 199,723 -
Operating Leases.
The Company has taken various commercial premises, motor vehicles, plant and machinery under non-cancellable operating
leases. The future minimum lease payments as at March 31, 2009 are as follows
(Rs in Thousands)
Payable not later than 1 year 227,073
Payable later than 1 year and not later than 5 years 176,844
Payable later than 5 years 71,281
Lease rental expenses in respect of operating lease is Rs 68,333 thousand.
136 Motherson Sumi Systems Limited
12. Related Party disclosures
Related party disclosures, as required by Accounting Standard 18, "Related Party Disclosures", are given below:
I. Relationships where control exists:
a. Joint Ventures:
Kyungshin Industrial Motherson Limited
Visiocorp Motherson Limited (upto March 06, 2009)
Balda Motherson Solution India Limited
Woco Motherson Elastomer Limited
Woco Motherson Advanced Rubber Technologies Limited
Woco Motherson Limited (FZC)
Calsonic Kansei Motherson Auto Product Limited
Ningbo Visiocorp Huaxiang Automotive Mirrors Co. Limited
b. Associate Companies:
Saks Ancillaries Limited
c. Key Management Personnel:
i) Board of Directors:
Mr. V C Sehgal
Mr. Toshimi Shirakawa
Mr. Toshihiro Watanabe (w.e.f June 2, 2008)
Mr. M S Gujral
Mr. Bimal Dhar
Mr. H Murai
Maj. Gen Amarjit Singh (Retd)
Mr. Pankaj Mital
Mr Arjun Puri
Mr. Toshihide Ano
Mr. A. Yamauchi (upto June 1, 2008)
ii) Other Key Management Personnel:
Mr. Vivek Avasthi
Mr. Ravindra Mathur
Mr. G.N. Gauba
Mr. N Ramanathan
iii) Relatives of Key Management Personnel:
Mr. Laksh Vaaman Sehgal (Appointed Director w.e.f. April 30, 2009)
Ms. Renu Sehgal
Schedules forming part of the Consolidated Accounts
13722nd Annual report 2008-09
Ms. Vidhi Sehgal
Ms. Geeta Soni
Ms. Neelu Mehra
Ms. Padma Avasthi
Mr. Harjit Singh
Ms. Upkar Gujral
Ms. Subina Avasthi
d. Companies in which Key Managerial Personnel or their relatives have control/ significant influence:
Motherson Auto Limited
Motherson Air Travel Agencies Limited
Ganpati Auto Industries
South City Motors Limited
ASI Motherson Communication Solution Limited
Motherson Techno Tools Limited
Sumi Motherson Innovative Engineering Limited
SWS India Management Support & Service (P) Limited
Vaaman Auto Industries
A Basic Concepts Design India Private Limited
Motherson Sumi Infotech and Designs Limited
Motherson Engineering Research and Integrated Technologies Limited
Moon Meadows Private Limited
Sis Bro Motor and Workshop Private Limited
Motoman Motherson Robotics Limited
NACHI Motherson Tool Technology Limited
Motherson
Samvardhana Motherson Finance Limited
A Basic Concepts Design Pty Limited
ATAR Mauritius Private Limited
Motherson Auto Solutions Private Limited
Motherson Machinery and Automations Private Limited
Spheros Motherson Thermal System Limited
Matsui Technologies India Limited
Motherson Moulds and Diecasting Limited
Webasto Motherson Sunroofs Limited
Anest Iwata Motherson Limited
Field Motor Private Limited
AES (India) Engineering Limited
Schedules forming part of the Consolidated Accounts
138 Motherson Sumi Systems Limited
Miyazu Motherson Engineering Design Limited
Anest Iwata Motherson Coating Equipment Limited
Nissin Advance Coating Indo Company Limited.
Magnetti Marelli Motherson Holding India BV
Magnetti Marelli Motherson Auto System Limited
Samvardhana Motherson Finance Services Cyprus Limited
Motherson Zanotti Refrigeration System Limited
Motherson Time Tooth Technologies Private Limited
Samvardhana Motherson Finance Services Inc.
Motherson Time Tooth Technologies Inc.
Tigers Connect Travel Systems and Solutions Limited
Samvardhana Motherson Holding (M) Private Limited.
Motherson Advanced Tooling Solutions Limited
Avon Hill Limited.
Fritzmeier Motherson Cabin Engineering Limited.
Air Factory Energy Limited
CTM India Limited.
e. Joint Venturer:
Sumitomo Wiring Systems Limited, Japan
Wilhelm Pudenz GmbH, Germany
Visiocorp Plc, UK (Upto March 06, 2009)
Kyungshin Industrial Co., Korea
Woco Franz Josef Wolf Holding GmbH, Germany
Balda AG, Germany
Calsonic Kansei Corporation, Japan
E-Compost Pty. Limited, Australia
Dermotech GmbH, Germany
Schedules forming part of the Consolidated Accounts
13922nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
II. Details of transactions, in the ordinary course of business at commercial terms, and balances with related parties as
mentioned in 12 (I) above:
(Rs. in Thousands)
S No Particulars Parties mentioned Parties mentioned in Parties mentioned in Parties mentioned in
in 12 (i) (a) above 12 (i) (b) & (d) above 12 (i) (e) above 12 (i) (c) above
Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year
1 Sale of Goods 1,346,216 901,237 48,819 19,157 364,410 389,407 36 -
2 Rendering of Services 190,211 99,763 24,379 19,467 75 - - -
3 Sale of Fixed Assets 252 7,941 - 59 - 76 - -
4 Purchase of Goods 47,340 36,278 356,212 467,797 1,694,322 1,259,629 - -
5 Purchase of Fixed Assets - 8,680 133,631 23,061 25,817 12,511 - -
6 Purchase of Services 11,608 8,198 406,588 314,452 12,857 9,741 4,707
9
5,119
9
7 Reimbursement (Net) 26,974 4,499 54,581 3,105 8,759 868 - -
8 Investments made during
the year 39,886 193,747 - - - 86,283 - -
9 Purchase of Shares - - - - - 20,443 - -
10 Sale of Shares - - 19,957 - 139,555 - - -
11 Royalty 7,862 5,399 179 - 97,152 87,932 - -
12 Remuneration/Sitting
Fees of Directors - - - - - - 14,765 18,852
13 Interest Income 2,076 11,030 3,409 36 - - - -
14 Interest Expense - - - 1,167 - - - -
15 Dividend Paid - - 135,979 100,725 199,404 136,911 28,792
10
21,384
10
16 Dividend Received 76,198 34,229 875 - - - - -
17 Advance Given against
Equity / Preference Shares - 11,739 - - -- - - -
18 Loans Received during the year 17,500 5,000 17,350 10,000 - - - -
19 Loans Given during the year 10,000 - 75,083 980 - - - -
20 Loans Repaid during the year 17,500 - 42,250 980 - 86,283 - -
21 Loans Received back
during the year 13,314 143,806 - - - - - -
22 Security Deposits Received 1,547 30,128 8,492 - - 7,043 - -
23 Security Deposits Repaid - 128 - - - - - -
Balances as at year end
24 Investments 679,490 638,622 38,230 38,230 - - - -
25 Advance Given against
equity /Preference Share - 11,739 - - - - - -
26 Loans Payable - 17,500 128,182 20,000 - - - -
27 Loans Receivable - 20,814 - - - - - -
28 Advances Receivable 12,484 1,496 64,621 8,524 3,112 - - -
29 Security Deposit Received 11,082 32,561 8,492 2,628 - - 96 -
30 Security Deposits Given - - 71,488 2,706 - - - 542
31 Trade Payable 13,775 8,974 110,626 89,651 75,834 232,391 - 193
32 Trade Receivable 253,835 125,698 67,552 3,826 28,573 33,274 - -
33 Minority Interest - - - - - - - -
The corresponding figures of the previous year have been regrouped and reclassified, wherever necessary.
9
Rent of Rs. 4,707 thousand (previous year Rs. 3,785 thousand) paid to Mr. V.C Sehgal, Mr. Laksh Vaaman Sehgal, Ms. Renu Sehgal,
Ms. Vidhi Sehgal.
10
Dividend of Rs. 28,792 thousand (previous year Rs. 21,384 thousand) paid to Mr. V. C. Sehgal, Mr. Laksh Vaaman Sehgal, Ms. Neelu
Mehra, Ms. Geeta Soni, Ms. Vidhi Sehgal, Mr. Pankaj Mital, Mr. M.S. Gujral, Mr. G.N.Gauba, Mr. Vivek Avasthi, Ms. Renu Sehgal,
Ms. Padma Avasthi, Ms. Subina Avasthi, Mr. Harjit Singh.
140 Motherson Sumi Systems Limited
Schedules forming part of the Consolidated Accounts
13. Segment Information
a) Information about Primary Business Segments
(Figure in Rupees Thousands)
Automotive Non automotive Unallocated Total
Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year
Segment revenue
External 23,968,581 17,788,192 3,441,127 3,138,418 270,286 12,028 27,679,994 20,938,638
Inter segment 113,902 146,870 - - - 113,902 146,870
Total revenue 23,854,679 17,641,322 3,441,127 3,138,418 270,286 12,028 27,566,092 20,791,768
-
Results -
Segment result 2,877,462 2,258,446 (6,621) 266,844 - 2,870,841 2,525,290
Interest expense (net of
Interest income) - - - - 354,349 243,943 354,349 243,943
Other Unallocable (net
of Income) - - - - (43,290) 19,140 (43,290) 19,140
Profit of Associate - - - - 871 2,143 871 2,143
Profit before taxation - 2,560,653 2,264,350
Provision for taxation - - - - 348,665 513,921 348,665 513,921
Net profit after tax - 2,211,988 1,750,429
- Concern Share - - 1,762,523 1,778,618
- Minority Share - - 449,465 (28,189)
Other items -
Segment assets 30,955,162 11,654,958 2,981,084 3,417,401 958,811 729,599 34,895,057 15,801,958
Segment liabilities 13,848,847 2,565,089 779,725 1,003,735 9,840,423
11
6,668,683 24,468,995
11
10,237,507
Capital expenditure 1,440,054 1,846,371 135,946 309,654 - - 1,576,000 2,156,025
Depreciation 842,346 720,202 248,217 126,397 - 1,090,563 846,599
Amortisation of Premium
on Redemption of Zero
Coupon Foreign currency
convertible bonds - - - 154,524 165,049 154,524 165,049
11
Does not include proposed dividend and tax thereon
b) Information about Secondary Business Segments
India Outside India
12
Unallocated Total
Current Previous Current Previous Current Previous Current Previous
Year Year Year Year Year Year Year Year
Revenue by geographical
markets
External 14,425,482 13,315,736 12,870,323 7,464,004 270,287 12,028 27,566,092 20,791,768
Total 14,425,482 13,315,736 12,870,323 7,464,004 270,287 12,028 27,566,092 20,791,768
Carrying amount of
segment assets 9,155,921 9,664,004 24,763,181 5,408,356 958,811 729,599 34,877,913 15,801,959
Addition to fixed assets 1,220,047 1,803,825 355,953 352,200 - - 1,576,000 2,156,025
12
Includes Europe, America, Asia Pacific, Middle East and Australia
14122nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
c) Composition of Business Segments
The Group is organised into two main business segments, namely:
Automotive Wiring Harness, High Tension Cords, Wire, Plastic Components, Rubber Components,
Cockpit Assembly
Non Automotive Wiring Harness, Pen-Stamp Assembly, Plastic Components, Household Wires, Plates, Aerobin
d) Inter Segment Transfer Pricing
Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and
business risks, with an overall optimisation objective for the Group.
14. The long term defined employee benefits and contribution schemes of the Group are as under:
(A) Defined Benefit Schemes
(i) Gratuity / Pension Benefits
The reconciliation of opening and closing balances of the present value of the defined benefit obligations are as below:
Gratuity Leave Encashment/
Compensated Absences
As At As At As At As At
March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008
Obligations at year beginning 750,677 70,292 27,619 21,104
Service Cost - Current 24,488 10,545 7,726 6,492
Interest Cost 11,272 3,769 1,941 1,536
Actuarial (gain) / loss 16,358 8,847 5,115 9,594
Benefit Paid (10,046) (5,647) (3,045) (9,238)
Effect of exchange rates changes (17,481) 296 - -
Obligations at year end 775,268 88,102 39,356 29,488
Change in plan assets
Plan assets at year beginning, at fair value 906,155 52,232 - -
Expected return on plan assets 10,534 4,218 - -
Actuarial gain / (loss) 1,096 1,560 - -
Contributions 24,907 14,231 - -
Benefits paid (6,370) (4,167) - -
Effect of exchange rates changes (23,538) - - -
Plan assets at year end, at fair value 912,784 68,074 - -
Reconciliation of present value of the
obligation and the fair value of
the plan assets:
Present value of the defined benefit
obligations at the end of the year 775,268 88,102 39,356 29,488
Fair value of the plan assets at the
end of the year 912,784 68,075 - -
Liability recognised in the Balance Sheet (137,516) 20,027 39,356 29,488
Defined benefit obligations cost for the year
Service Cost - Current 24,488 10,545 7,726 6,492
Interest Cost 11,272 3,769 1,941 1,536
Expected return on plan assets (10,534) (4,218) - -
Actuarial (gain) / loss 15,262 7,287 5,115 9,594
Net defined benefit obligations cost 40,488 17,383 14,782 17,622
142 Motherson Sumi Systems Limited
Schedules forming part of the Consolidated Accounts
Investment details of plan assets
100% of the plan assets are lying in the Gratuity fund administered through Life Insurance Corporation of India (LIC)
under its Group Gratuity Scheme.
The principal assumptions used in determining post-employment benefit obligations are shown below:
Indian Foreign
Discount Rate 7.0% - 8.0% 4.7% - 17.0%
Future salary increases 4.5% - 7.0% 5.0% - 15.0%
Expected return on plan assets 8.0% - 9.25% 8.33%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
and other relevant factors such as supply and demand factors in the employment market.
(B) Defined Contribution Schemes
The Group deposits an amount determined at a fixed percentage of basic pay every month to the State administered
Provident Fund, Employee State Insurance (ESI) and Social Insurance for the benefit of the employees. Accordingly,
the Group's contribution during the year that has been charged to revenue amounts to Rs.226,061 thousand.
15. Interest in Joint Ventures
The Group's interests, as a venture, in jointly controlled entities as at March 31, 2009 are:
Name of the Company Country of % voting power % voting power
Incorporation held as at held as at
31 March, 2009 31 March, 2008
Visiocorp Motherson Limited India - 13
49%
Kyungshin Industrial Motherson Limited India 50% 50%
Woco Motherson Limited (FZC) (through MSSL Mauritius
Holdings Limited) UAE 33.33% 33.33%
Woco Motherson Elastomers Limited India 33.33% 33.33%
Woco Motherson Advanced Rubber Technologies Limited India 33.33% 33.33%
Balda Motherson Solution India Limited India 40% 40%
Calsonic Kansei Motherson Auto Products Limited India 49% 49%
Ningbo Visiocorp Huaxiang Automotive Mirrors Co. Limited China 50% -
13
With effect from March 06, 2009, 49% directly held by Company and 51% through SMVSL.
14322nd Annual report 2008-09
Schedules forming part of the Consolidated Accounts
The following amounts represent the Groups share of the assets and liabilities and revenue and expenses of the joint
venture and are included in the consolidated balance sheet and consolidated profit & loss account:
(Rs. in Thousands)
Particulars March 31,2009 March 31,2008
Assets
Fixed Assets 934,481 624,473
Capital Work in Progress 4,712 20,965
Current Assets 836,826 1,115,383
Liabilities
Secured Loans 84,517 132,193
Unsecured Loans 34,153 23,387
Current Liabilities & Provisions 450,161 696,274
Deferred Tax (Net) 9,215 4,569
Reserves & Surplus 190,717 253,404
Revenue
Sales 3,420,030 2,294,134
Other Income 29,334 20,853
Expenditure 3,171,272 2,050,587
Profit before Tax 278,092 264,400
Provision for Tax 159,143 101,667
Profit after Tax 118,949 162,733
Contingent Liabilities
- In respect of Excise, Sales tax & Service tax matters 4,673 21,211
- Bank Guarantees 79,411 53,027
Capital Commitment 11,668 27,883
16. Subsequent Events
a) The Board of Directors' in their meeting held on June 29, 2009 have approved the purchase of Minority Interest of
43.87% in its Subsidiary Motherson PUDENZ WICKMANN Limited (MPWL). MPWL has net sales of Rs. 26,389 thousand
and profit after tax of Rs. 4,806 thousand for the year ended March 31, 2009.
b) Subsequent to the year end SMVSL has announced the intended closure of two of its facilities loctated in Germany and
Australia. The estimated cost of such closure, likely to be completed in the current financial year, net of financial supports
receivable is Rs. 236,478 thousand (Euro 3,500 thousand), which is not provided for in these financial statements.
c) On June 1, 2009 General Motors Corp. US Operations filed Chapter 11application. As of March 31, 2009 sundry debtors
of the Company relating to General Motors Corp. and its subsidiaries being affected by Chapter 11application amounted
to Rs. 67,565 thousand approximately (Euro 1,000 thousand) and was paid in its entirety prior to the bankruptcy event.
The Company has assessed the risk of outstanding and unpaid claims with General Motors as of the June 1, 2009 bankruptcy
date of approximately Rs. 74,322 thousand (Euro 1,100 thousand) and believes after considering General Motors expected
exit from bankruptcy, all amounts will be fully recovered. Further, in the event of a prolonged bankruptcy process, as a
deemed "critical supplier" to General Motors Corp., the Company is entitled to preferred status for payment of pre and
post bankruptcy petition claims.
144 Motherson Sumi Systems Limited
17. The Group is required to comply with the local transfer pricing regulations, which are contemporaneous in nature. The companies
in the Group appoint independent consultants annually for conducting the transfer pricing study to determine whether the
transactions with the associate enterprises are undertaken during the financial year on an arm's length basis. Adjustments, if
any, arising from the transfer pricing study in the respective jurisdiction shall be accounted for as and when the study is
completed for the current financial year. The management is of the opinion that its international transactions are at arm's
length so that aforesaid legislation will not have any impact on the financial statements.
18. The current year figures includes the results of SMVSL which acquired the subsidiaries from Visiocorp Plc. (in administration)
from their date of acquisition (Refer B(4) (b)), hence are not comparable. The corresponding figures of previous year have been
regrouped, rearranged wherever necessary to conform to the current year's classification.
for and on behalf of the Board
V.C. SEHGAL TOSHIHIRO WATANABE PANKAJ MITAL
Vice Chairman Whole time Director Chief Operating officer
Place : Noida G.N. GAUBA
Date : June 29, 2009 Co. Secretary & V.P. Finance
NOTICE
Notice is hereby given that the 22nd Annual General Meeting of
the Members of Motherson Sumi Systems Limited will be held on
Thursday, the 24th day of September, 2009 at 11:30 A.M. at FICCI
Golden Jubilee Auditorium, Federation House, Tansen Marg, New
Delhi-110001 to transact the following business:
ORDINARY BUSINESS:
1. To receive, consider and adopt the Audited Balance Sheet of
the Company as at 31st March, 2009 and Profit & Loss Account
for the year ended on that date together with reports of the
Directors and Auditors thereon.
2. To declare the dividend for the year 2008-2009 on the equity
shares of the Company.
3. To appoint a Director in place of Mr. Bimal Dhar, who retires by
rotation and being eligible offers himself for re-appointment.
4. To appoint a Director in place of Mr. Hiroto Murai, who retires
by rotation and being eligible offers himself for re-appointment.
5. To appoint Statutory Auditors of the Company to hold office
from the conclusion of this Annual General Meeting until the
conclusion of next Annual General Meeting at a remuneration
to be decided by the Board of Directors. M/s. Price Waterhouse,
Chartered Accountants, Gurgaon retire at the ensuing Annual
General Meeting and being eligible offer themselves for re-
appointment.
SPECIAL BUSINESS
6. To consider and, if thought fit, to pass with or without
modification(s), the following resolution as an Ordinary
Resolution:
RESOLVED THAT Mr. Laksh Vaaman Sehgal, who was appointed
as an Additional Director of the Company w.e.f. 30th April,
2009 and who holds office till the date of the ensuing Annual
General Meeting in terms of Section 260 of the Companies
Act, 1956 and Article 85 (2) of Articles of Association of the
Company and in respect of whom the company has received a
notice in writing from a shareholder pursuant to Section 257 of
the Companies Act, 1956 proposing his candidature to the office
of Director, be and is hereby appointed as a Director of the
company, liable to retire by rotation."
7. To consider and, if thought fit, to pass with or without
modification(s), the following resolution as an Ordinary
Resolution:
RESOLVED THAT in supersession of the earlier resolutions,
consent of the Company be and is hereby accorded, under
Motherson Sumi Systems LimitedRegd. Office: 2nd Floor, F-7, Block B-1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110 044.
Section 293(1)(d) of the Companies Act, 1956, to the Board of
Directors of the Company for borrowing from time to time
money(ies) as they may deem appropriate for the business and
purpose of the Company, notwithstanding that the money(ies)
to be borrowed, together with the money(ies) already borrowed
(apart from temporary loans obtained from the Company's
bankers in the ordinary course of business) may exceed the
aggregate of the paid-up capital of the Company and its free
reserves, that is to say, reserves not set apart for any specific
purpose, provided that the aggregate of the money(ies) that
may be borrowed by the Board of Directors shall not exceed
Rs. 6,000 Million (Rupees Six Thousand Million only) at any
time.
8. To consider and, if thought fit, to pass with or without
modification(s), the following resolution as a Special Resolution:
RESOLVED THAT in pursuance of Resolution No. 8 passed at
the Annual General Meeting of the Company held on 11th
August, 2008 for the appointment and remuneration of Mr.
Toshihiro Watanabe, Whole-time Director of the Company, and
in accordance with the provisions of Section 198, 269, 309,
310 and subject to Schedule XIII and other applicable provisions
of the Companies Act, 1956, if any, (including any statutory
modification or re-enactment thereof) and subject to the such
other approvals/sanctions as may be necessary, the approval of
the members be and is hereby accorded to the Board of Director's
resolution passed at their meeting held on 27th July 2009,
revising the remuneration of Mr. Toshihiro Watanabe, Whole-
time Director of the Company on the terms and conditions, as
set out in the explanatory statement which shall be deemed to
form part hereof.
RESOLVED FURTHER THAT the Board of Directors be and are
hereby authorized to further vary and/or revise the remuneration
of the said Whole-time Director within the permissible limits
under the provisions of the Companies Act, 1956 or any
statutory thereof, from time to time and to settle any question
or difficulty in connection therewith or incidental thereto.
By Order of the Board
G.N. GAUBA
Place : NOIDA Vice Present (Finance) &
Date : 27th July, 2009 Company Secretary
Regd. Office:
2nd Floor, F-7, Block B-1,
Mohan Co-operative Industrial Estate,
Mathura Road, New Delhi - 110 044
Notice+Proxy-FINAL.pmd 8/25/2009, 8:53 PM1
NOTES
1. Explanatory Statement pursuant to Section 173 (2) of the
Companies Act, 1956 relating to the Special Business to be
transacted at the meeting is annexed hereto.
2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
MEETING IS ENTITLED TO APPOINT ANOTHER PERSON AS
HIS PROXY TO ATTEND AND ON A POLL TO VOTE INSTEAD
OF HIMSELF. THE PROXY NEED NOT BE A MEMBER OF THE
COMPANY. PROXY IN ORDER TO BE EFFECTIVE MUST BE
DEPOSITED WITH THE COMPANY AT ITS REGISTERED OFFICE
NOT LESS THAN 48 HOURS BEFORE THE SCHEDULED TIME
OF THE MEETING.
3. Corporate Members intending to send their authorized
representative(s) are requested to send a duly certified copy of
the Board Resolution authorizing their representative(s) to attend
and vote at the Annual General Meeting.
4. Register of Members and Share Transfer Books of the Company
shall remain closed from 18.09.2009 to 24.09.2009 (both days
inclusive). Dividend, if approved at the meeting, will be paid to
those members whose names appear as:
a) Beneficial Owners, as at the end of business hours on
17.09.2009 as per lists to be furnished by NSDL & CDSL in
respect of shares held in electronic form and;
b) Members in the Register of Members as on 24.09.2009
after giving effect to valid transfer requests received before
the close of business hours on 17.09.2009.
5. Members holding shares in physical form are requested to notify
change of address, if any, to the Company's Registrar and Share
Transfer Agents (RTA), M/s. Karvy Computershare Pvt. Ltd.,
"Karvy House" 46, Avenue 4, Street No. 1, Banjara Hills,
Hyderabad - 500 034 quoting correct Folio Number and in case
of shares held in dematerialized form to the concerned
Depository Participant.
6. Pursuant to the provisions of Section 205A of the Companies
Act, 1956, the amount of dividend which remains unclaimed
for a period of 7 years would be transferred to the "Investor
Education and Protection Fund (IEPF)", constituted by the Central
Government and the shareholder(s) would not be able to claim
any amount of dividend so transferred to the Fund. Accordingly,
the proposed date for the transfer of unclaimed dividend by
the Company for the year 2001-2002 to IEPF is 4th October,
2009.
7. Members/Proxies should bring the Attendance Slip duly filled
in for attending the meeting along with their copy of Annual
Report. No extra attendance slip and/or Annual Report will be
provided at the venue of the Annual General Meeting.
8. Members who hold shares in dematerialized form may kindly
note that their Bank Account details, as furnished by their
Depositories to the Company, will be printed on their dividend
warrants as per the applicable regulations of the Depositories
and the Company will not entertain any direct request from
such members for deletion of or change in such Bank Account
Details. Further, instructions, if any, already given by them in
respect of shares held in Physical form will not automatically be
applicable to shares held in electronic form. Members who wish
to change such Bank Account details are therefore requested to
advise their Depository Participants about such change with
complete details of Bank Account.
9. Members holding shares in physical form and desirous of availing
Electronic Clearing System (ECS) facility are advised to submit
particulars of their bank account, viz. name and address of
branch of the bank, 9 digit MICR code, type of account and
account number to the Company's Registrar and Share Transfer
Agents (RTA), M/s. Karvy Computershare Pvt. Ltd.
10. The relevant details as required under Clause 49 of the Listing
Agreement entered with Stock Exchange of person seeking
appointment/re-appointment as Director is also annexed and
forms part of this Notice.
11. All the material documents, resolutions passed by the Board of
Directors with regard to proposed Resolutions at item No. 8,
Memorandum and Articles of Association of the Company etc.
are open for inspection to the members till the conclusion of
the Annual General Meeting at the registered office of the
Company.
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF
THE COMPANIES ACT, 1956
Item no. 6
With a view to giving further boost up of the Company and
strengthen the Board of Directors, the Directors of the Company
appointed Mr. Laksh Vaaman Sehgal as an Additional Director of
the Company w.e.f. 30th April, 2009.
Mr. Vaaman has done MBA degree from Columbia Business School
(USA). He has also spent 3 years working with the group's
collaborators in Germany and Japan. Presently he is CEO of
Samvardhana Motherson Visiocorp Solution Limited, Jersey.
In accordance with the provisions of Section 260 of the Companies
Act, 1956 and Article 85 (2) of Articles of Association of the Company,
he holds office upto the date of this Annual General Meeting.
The Company has received a notice from a member of the Company
alongwith requisite fee under section 257 of the Companies Act,
1956 signifying his intention to propose the appointment of Mr.
Laksh Vaaman Sehgal to the office of Director.
The Board recommends the appointment of Mr. Laksh Vaaman
Sehgal as a Director of the company.
Mr. Laksh Vaaman Sehgal himself and Mr. Vivek Chaand Sehgal,
Director being related to him be deemed to be interested and/or
concerned in this item of business. No other Director is interested
or concerned in the resolution.
Item no. 7
Under section 293(1)(d) of the Companies Act, 1956, exercise of
borrowing powers by the Board of Directors of the Company in
excess of its paid up Share Capital and free reserves (apart from
temporary loans obtained from the Company's bankers in the
ordinary course of business) requires approval of the members of
the Company by an ordinary resolution.
Presently, the Board is authorised by a resolution of the shareholders
dated July 30, 2007 to borrow monies for the business purposes of
the Company within an overall limit of Rs.5,000 Millions (Rupees
Five Thousand Millions) apart from temporary loans to be obtained
from the Company's bankers in the ordinary course of business.
Your Company today is growing at a fast pace both organically and
inorganically. To take care and successfully implement its ambitious
plans, the Company would require to infuse substantial funds and
accordingly may have to depend on large amount of borrowings
from time to time. It is, therefore, considered desirable to enhance
the limit from the existing level of Rs. 5,000 Millions (Rupees Five
Thousand Millions) to Rs. 6,000 Millions (Rupees Six Thousand
Millions only)
None of the Director of the Company is, in any way, concerned or
interested in the resolution.
Item no. 8
At the Annual General Meeting of the Company held on 11th August,
2008, the Members had approved of the appointment and terms of
remuneration of Mr. Toshihiro Watanabe as Whole-time Director of
the Company for a period of three years w.e.f. 02.06.2008.
Mr. Toshihiro Watanabe is a graduate in Law. He has working
experience of about 32 years at M/s. Sumitomo Wiring Systems
Ltd., Japan in the field of Accounting, Finance, planning and other
related management areas. Mr. Watanabe is the nominee of M/s.
Sumitomo Wiring Systems Ltd., Japan (SWS), Joint Venture partner
of your Company
An application to be Central Government in the presided manner
has since been made for their approval to the appointment and
payment of remuneration as prescribed under the provisions of the
Companies Act, 1956. However the said approval of Central
Government is still awaited. In the meantime, the Board of Directors
at their meeting held on 29th July, 2009 has restructured his
remuneration w.e.f. 1st October, 2008 as detailed hereunder:
1. REMUNERATION
- Basic Salary Rs. 48,000/- per month.
- Special/Hardship Allowance Rs. 77,760/- per month.
2. PERQUISITES AND ALLOWANCES
Category 'A'
He will be entitled to perquisites and allowances like free
accommodation (fully furnished), medical reimbursement, leave
travel concession for self and his family, Electricity, gas and water
charges and all other perquisites and amenities in accordance
with the rules of the Company subject to overall ceiling on
remuneration prescribed under Section 198 and 309 read with
Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956.
Category 'B'
He will be entitled to Company's car with driver and telephone
at residence and a mobile phone. Private long distance call would
be billed to the Whole-time Director.
3. OTHER TERMS
a. He will be entitled to Company's contribution to Provident
Fund - As per Company rules.
b. He will not be entitled to sitting fees for attending meetings
of the Board or Committee(s) thereof.
c. He will be liable to retire by rotation.
d. The aforesaid appointment may be terminated by either
party giving three months notice in advance.
In the event of loss/inadequacy of profit, the aforesaid remuneration
will be treated as minimum remuneration and shall be payable to
him in terms of the provisions of Schedule XIII to the Companies
Act, 1956 as applicable from time to time.
Besides, the remuneration as proposed above, Mr. Toshihiro
Watanabe does not have any other pecuniary relationship with the
Company.
The Board of Directors have recommended the revision of salary
and perquisite of Mr. Watanabe for the approval of members.
None of the Directors of the Company except Mr. Toshihiro Watanabe
is concerned or interested in this Resolution.
This may be treated as an abstract of the terms of the contract or
variation of Mr. Toshihiro Watanabe as a Whole-time Director of
the Company pursuant to section 302 of the Companies Act, 1956.
By Order of the Board
G.N. GAUBA
Place : NOIDA Vice Present (Finance) &
Date : 27th July, 2009 Company Secretary
Regd. Office:
2nd Floor, F-7, Block B-1,
Mohan Co-operative Industrial Estate,
Mathura Road, New Delhi - 110 044
Details of Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting
(Pursuant to clause 49 of the Listing Agreement)
Name of Director
Date of Birth
Date of Appointment
Experience in specific
Functional area
Qualification
Directorship in other
public ltd. companies
Member/Chairman of
the Committee of the
Board of the public
limited companies on
which he is director
Mr. Hiroto Murai
27.02.1967
22.07.2002
He is an engineering
Science Graduate and
associated with Sojitz
Corporation, Japan for
over twenty years.
Engineer, Science
Graduate
Nil
Audit Committee
Nil
Shareholders/Investors
Grievance Committee
Nil
Mr. Bimal Dhar
14.06.1953
16.01.2004
Having more than three decades rich
experience in the field of Automobile
Industry. He has also associated with the
companies in the designing business in the
Automobile Industry.
Master in Mechanical Engineering
- MothersonSumi Infotech & Designs
Ltd.
- Sumi Motherson Innovative Engineering
Ltd.
- Southcity Motors Ltd.
- AES (India) Engineering Ltd.
- Motherson Air Travel Agencies Ltd.
- CTM India Limited
- Calsonic Kansei Motherson Auto
Products Ltd.
- Samvardhana Motherson Finance Ltd.
- Magneti Marelli Motherson Auto System
Ltd.
- Motherson Timetooth Technologies Ltd.
Audit Committee
- MothersonSumi Infotech & Designs Ltd.
- Calsonic Kansei Motherson Auto
Products Ltd.
- Sumi Motherson Innovative Engineering
Ltd.
- Magneti Marelli Motherson Auto System
Ltd.
Shareholders/Investors Grievance
Committee
Nil
Mr. Laksh Vaaman Sehgal
29.11.1982
30.04.2009
He has undergone intensive training in
all the main business of Samvardhana
Motherson Group. He has also spent
three years working with Group's
Collaborators.
MBA
- Motherson Auto Limited
- Samvardhana Motherson Finance Ltd.
- Motoman Motherson Robotics Ltd.
- Motherson Air Travel Agencies Ltd.
- Motherson Techno Tools Ltd.
- Tigers Connect Travel Systems and
Solutions Ltd.
- Motherson Advance Tooling Solutions
Ltd.
- Visiocorp Motherson Ltd.
Audit Committee
- Samvardhana Motherson Finance Ltd.
- Motherson Advance Tooling Solutions
Ltd.
- Motherson Auto Ltd.
Shareholders/Investors' Grievance
Committee
Nil
Details of Shareholding / other convertible instruments of Non-executive Directors of the Company
(Pursuant to clause 49 of the Listing Agreement)
Sl. No. Name of Director No. of Equity Shares Other convertible Instruments
1. Mr. Vivek Chaand Sehgal 12757156 Nil
2. Mr. Toshimi Shirakawa Nil Nil
3. Mr. M.S. Gujral 303750 Nil
4. Maj. Gen. Amarjit Singh (Retd.) Nil Nil
5. Mr. Arjun Puri Nil Nil
6. Mr. Hiroto Murai Nil Nil
7. Mr. Bimal Dhar 45000 Nil
8. Mr. Laksh Vaaman Sehgal Nil Nil
Motherson Sumi Systems Limited
Regd. Office: 2nd Floor, F-7, Block B-1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110 044.
ATTENDANCE CARD22nd Annual General Meeting, Thursday, September 24, 2009 at 11:30 A.M.
Folio No. /DP Client ID ........................................................................ No. of shares .......................................................
Name ..............................................................................................
Address ..................................................................................................................................................................................................
.....................................................................................................................................................................................................
I/ We hereby record my/ our presence at the 22nd Annual General Meeting of the Company being held at 11:30 A.M. on Thursday,
September 24, 2009 at FICCI Golden Jubilee Auditorium, Tansen Marg, New Delhi - 110001.
Proxy's name .................................................... ....................................................
Proxy's signatures ............................................. Members Signature
Note: 1. Please note that no gifts or coupons will be given to the Shareholders for attending the Annual General Meeting.
2. Members holding shares in physical form are requested to advise the change in their address, if any, to Karvy Computershare
Pvt. Ltd., 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad- 500 034 and members holding shares in demat are requested
to advise the change to their respective Depository Participants.
Motherson Sumi Systems Limited
Regd. Office: 2nd Floor, F-7, Block B-1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110 044.
FORM OF PROXY
I/We ............................................................................................. of .................................................................................being
a Member/Member(s) of Motherson Sumi Systems Limited hereby appoint......................................................
of ....................................................or failing him/her .............................................of ...........................................................as
my/our proxy to vote for me/us and on my/our behalf at Annual General Meeting of the Company to be held at 11:30 A.M. on
Thursday, September 24, 2009 at FICCI Golden Jubilee Auditorium, Tansen Marg, New Delhi-110001 and at any adjournment
thereof.
Dated: this ...................... day of ...................... 2009
For office use only
Proxy No. ...................................................................
Folio No. /DP Client ID ............................................... Members Signature
No. of shares .............................................................
Notes: 1. The proxy form should be signed across the stamp as per specimen signature registered with the Company.
2. The Proxy must be deposited at the Registered Office at 2nd Floor, F-7, Block B-1, Mohan Cooperative Industrial
Estate, Mathura Road, New Delhi 110 044 not later than 48 hours before the time for holding the meeting.
3. The proxy need not be a Member of the Company.
Affix Rs. 1
Revenue
Stamp
�
Notice+Proxy-FINAL.pmd 8/25/2009, 8:53 PM5
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