29th Annual Report 2020-21

Message from the Chairman

Like most companies worldwide, the COVID-19 pandemic significantly impacted our business. As our immediate response, we focussed on making our plants, distribution centres and offices safe for our people. Our operations and EHS teams worked promptly to ensure safety. At all our workplaces.

Dear Stakeholders, Last year, the world, as we knew it, changed for all. Today, we’re all riding the same sea of challenges. The COVID-19 pandemic, rightly being called ‘the pandemic of inequality’, has exacerbated the existing disparity and political tensions. This global health crisis has been overwhelming public health systems while wreaking havoc on economies worldwide. The immediate economic impact slowed us down considerably. However, it also offered the opportunity to pause, rethink, and design a new and faster transition to a sustainable world.

Just as we started seeing signs of recovery from the impact of the pandemic in Q3FY21, the second wave of COVID-19 dented Q4FY21. It brought about a new set of difficulties with an even more intense and severe impact than the first wave. However, we overcame the hurdles with the same vigour as we did last year. We stood by our employees as health and safety took precedence and provided all possible support, once again, as one family to ride over these testing times.

The announcement of lockdowns in April 2021 resulted in many OEMs cutting down production. This had a cascading effect on the component industry. But as the number of new infections gradually started to drop and with the pick up in the pace of vaccination drives, we soon saw lockdown restrictions starting to ease. This indicated improved demand and better capacity utilisation for OEMs. However, the impact of the pandemic on the supply chain continues inhibiting a complete return to production normalcy.

The lockdown imposed during the second wave was different from the first one. Companies now had a first-hand experience of dealing with the situation that helped them respond better. Moreover, the migrant labour exodus was not as pronounced as it was in the first wave as employers went the extra mile in taking care of contractual operators and fitters.

We also believe that long-term success is achieved by linking economic growth with environmental stewardship and financial performance with social responsibility. As a global company, we will always strive to ensure that our ESG focus is embedded into our strategy and that our growth ambitions are compatible with sustainable development practices, conscientiously seeking the right balance in every choice we make.

COVID-19 Response

Like most companies worldwide, the COVID-19 pandemic significantly impacted our business. As our immediate response, we focussed on making our plants, distribution centres and offices safe for our people. Our operations and EHS teams worked promptly to ensure safety. At all our workplaces. We introduced extra health and safety precautions, including rigorous cleaning and sanitation protocols, regular wellness checks for team members and changes within facilities to comply with social distancing mandate.

While Q1FY21 witnessed a complete washout of sales, we experienced a healthy recovery in Q3FY21, owing to pent up demand and increased demand for personal mobility. As a company, we showed remarkable resilience and strength during the initial part of FY21. H2FY21 saw us seizing the prevalent opportunities on the back of a strong revival of the industry. This helped us immensely in posting solid financial performance. Today, localisation has emerged as one of the key pillars for us, and we believe the prospective long-term demand outlook is still intact. Our prudence and preparedness make us well-poised to capitalise on this demand. We will continue to pursue our goal with new vigour and are confident of emerging much stronger from the current challenging environment.

Consolidation Updates

The merger of Harita Seating Systems Limited and its four holding companies with Minda Industries was completed on April 1, 2021.

Industry Developments

The Government-proposed PLI Scheme of ₹57,000 Crore for the auto sector was a significant development during the year. The Scheme will help the auto sector to thrive on the ‘Make in India’ initiative. Thus, it will turn the sector from being import-oriented for some critical components to an export-oriented one. Further, the voluntary vehicle scrappage policy, included in the Union Budget, will encourage the consumer demand towards new and environment-friendly vehicles. Similarly, the Ministry of Roads and Highways proposed a green tax on old vehicles for reducing pollution. This clearly highlights the efforts that the Government is taking to shift energy consumption towards renewable sources. The Union Budget also announced 15% hike on custom duties on specified auto parts like ignition wiring sets, safety glass, and parts of signalling equipment, among others. This will definitely promote domestic manufacturing of automobile components in the country and reduce the quantum of imports. All these factors and reforms collectively will help us align with the industry developments and thereby help further broaden our future possibilities.

We also believe that long-term success is achieved by linking economic growth with environmental stewardship and financial performance with social responsibility. As a global company, we will always strive to ensure that our ESG focus is embedded in our strategy and that our growth ambitions are compatible with sustainable development practices, conscientiously seeking the right balance in every choice we make.

Sustainability Underpins Success

The success of our business shows that financial returns and social responsibility are interdependent. We look to work together to improve how people live and value our connect within the natural environment while walking towards a better tomorrow. In view of this, we undertook various measures to lower our impact on the environment. We also made a commitment to obtain energy from renewable sources – in line with the Group’s sustainability vision.

During the year, the Group undertook a lot of initiatives, which are expected to have environmental benefits and improve sustainability of the organisation. We have been working to reduce energy consumption, water consumption, CO2 emission, and waste. This will ultimately reduce Operational cost. We have set up a green belt plantation drive covering 40% green area for new plants. We are also undertaking water consumption projects intending to reduce water consumption by 10% in FY22. To reduce our carbon footprint, we have been investing in renewable energy. We have now installed 8.4 megawatts of rooftop solar cells across 20 plants contributing 10% of the power requirement of the Group. We target to further increase renewable energy to 15% by the end of FY22.

Going forward, we are optimistic that personal vehicles sale will swiftly recover as the economic activity picks up, and the preference for personal mobility will further fuel the demand. The second wave had affected the rural areas as well and hence we believe the demand for 2-wheelers might take some time before it normalises. But positive indicators like the forecast of normal monsoon, higher rabi crop sowing than last year, and financial measures included in this year’s national budget will act as a fillip to the rural economy. The mobility demand surge, even as COVID-19 risk is expected to normalise as public transport restarts across regions. Overall the medium- to long-term outlook looks positive for the industry.

On behalf of the Board, I would like to thank all the stakeholders for their continued loyalty and support. I also acknowledge the strong encouragement of our customers, bankers and our business associates. We are looking forward to your assistance to help us achieve a better year ahead and beyond. Last but not the least, I would like to thank all the staff and management for their dedicated services, support, and promise that we will strive to improve further.

Best wishes,

Nirmal K Minda

Chairman & Managing Director