Annual Report 2013-14

108 Pages·2014·1.49 MB·English

Momentum
Annual Report
2013-14
Contents
Board of Directors 02
Management Team 03
Letter to Shareholders 04
Directors’ Report 06
Corporate Governance Report 14
Auditor’s Certificate on Corporate Governance 27
Management Discussion & Analysis 28
CEO and CFO Certification 34
Standalone Financial Statements 35
Auditor’s Report
Financial Statements
Notes to Accounts
Consolidated Financial Statements 63
Auditor’s Report
Financial Statements
Notes to Accounts
Statement pursuant to Section 212 of 86
the Companies Act 1956
Balance Sheet Abstract and Business Profile 88
AGM Notice 89
Attendance Slip 101
Proxy Form 103
Financial Highlights Rs. in million

FY 2013-14 FY 2012-13 Growth

Revenue 3,288.12 2,643.17 24%

EBITDA 299.10 40.94 631%

Profit Before Tax (PBT) 285.32 25.20 1,032%
Profit After Tax (PAT) 186.14 10.59 1,657%

Earnings Per Share (EPS) in Rs. 7.59 0.43 1,654%
A CMMI Dev Ver 1.3 Level 5 company
Board of Directors
Yusuf Lanewala Javed Gaya
Chairman and Managing Director Independent Director
Dayananda Shetty Jagdish Malkani
Executive Director Independent Director
Meenaz Dhanani Narayan A. Menon
Executive Director Independent Director
Company Secretary Registrars and Share Transfer Agents
Shivarama Adiga S. Universal Capital Securities Private Limited
Vice President,
25, Shakil Niwas, Opp. Sai Baba Temple
Legal and Company Secretary
Mahakali Caves Road, Andheri (E)
Mumbai-400 093, India
Registered Office
Tel: [phone]/05; Fax: [phone]
Mindteck (India) Limited
Prestige Atlanta, No.10, Industrial Layout Auditors
7th Main, 80 Feet Road, 3rd Block, Koramangala
B S R & Company
Bengaluru-560 034, India
Tel: [phone]
Bankers
Fax: [phone]
Axis Bank Ltd.
2 | Mindteck Annual Report 2013-14
Management Team
Yusuf Lanewala
Chairman and Managing Director
Dayananda Shetty Meenaz Dhanani
Executive Director Executive Director
Sales
UNITED STATES INDIA, MIDDLE EAST AND AFRICA
Ranga Yeragudi Harish Nair
Bob Spoljaric
EUROPE ASIA PACIFIC
Simon Christopher Jacob Pillay
Function
R&D AND DELIVERY SUPPORT
Surjit Lahiri Shivarama Adiga
Research and Development Legal and Company Secretary
Dr. K.V. Krishnan Ramesh B V
Information Technology Services Finance
Satheesh Sreedharan Pradeep Kizhakkethil
Product Engineering Human Resources
Karen Stark
Marketing and Communications
Mindteck Annual Report 2013-14 | 3
Mindteck is now among
Letter to Shareholders
Dear Shareholders, the year at Mindteck is that we are expanding
I our capabilities in Research and Development
t gives me great pleasure to report that
through our investment in innovation and
Mindteck significantly increased
technology. We created a new structure for our
profitability and improved overall
innovation group that more closely links their
performance for the year ended March 31,
work to the demands of the marketplace.
2014.
We launched two innovative systems:
Despite uncertainties in the global economy
IGNITE, an Energy Management System
and several competitive challenges, we
which transforms office buildings, into energy
maintained a clear focus on the path forward,
efficient smart buildings, and ProdXL, an
on the execution of our priorities, including
Enterprise Productivity Improvement Solution
innovation and technology, strategic and
designed to provide insightful quantitative
profitable growth and operational excellence. feedback to drive employee behavior towards
As a result, revenue increased to Rs. 3,288 organization productivity improvement.
million as compared to Rs. 2,643 million in
Innovation is the great differentiator in our
the previous year, EBITDA was 9.10% as
industry, with this we expect to gain further
compared to 1.55% last year, more
technological distance from our competitors.
importantly, we reported a Profit Before Tax
We aim to continue to build new products with
of Rs. 285 million as compared to last year’s
our customers’ requirements in mind to help
Profit Before Tax of Rs. 25 million.
them innovate and excel.
I am happy to announce that after a gap of five
The global sales, delivery and support teams
years, your Board has recommended a 10%
contributed to our turnaround by supporting
dividend for the financial year 2013-14.
and growing our existing customer base,
Throughout the year, Mindteck continued to acquiring several new customers and winning
deliver on the commitments made to tackle some significant deals.
our clients’ challenges with innovative
From the quality and process standpoint, I am
solutions, develop our people and grow
proud to announce that we were appraised at
profitably to stay ahead of our competition.
CMMI Dev Ver 1.3 Level 5, becoming one of
One of the most exciting developments during
4 | Mindteck Annual Report 2013-14
a select group of global companies appraised at CMMI Dev Ver 1.3 Level 5
the few companies globally to have achieved On behalf of my fellow Board Members, I
this recognition. In addition, we were also re- would like to take this opportunity to thank our
certified for ISO 9001:2008, ISO 27001:2013 shareholders for their continued support and
and ISO 13485:2003. encouragement, our clients and partners for
their continued confidence and commitment as
Our ability and determination to remain
we pursue our growth strategy. I would also
relevant to customers, our long-term
like to pay tribute to our dedicated employees
engagement with key global clients, along with
around the globe whose expertise, commitment
our commitment to all our stakeholders keeps
and reliability have made a vital contribution
us growing strong. I firmly believe that we now
toward our successful year.
have a solid base from which we can catapult to
new heights.
We intend to keep the momentum by
continuing to demonstrate and execute our
Yusuf Lanewala
business plans while maintaining the highest
Chairman and Managing Director
standards of compliance and ethics. Our focus
going forward will be to strive toward
achieving sustained, predictable and profitable
growth; to continue improving our delivery
processes; to forge strong partnerships for new
products and services, as well as to expand our
geographical reach.
Moreover, we remain committed to building
value for all our stakeholders. I look forward to
reporting on our continued progress in the year
ahead.
DIRECTORS' REPORT
To the Members,
The Directors hereby present the Twenty-Third Annual Report of your Company on the business and operations for the year ended
March 31, 2014.
1. RESULTS OF OPERATIONS Rs. in million
Standalone Consolidated
Year ended Year ended Year ended Year ended
31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13
Revenue from operations 758.40 580.38 3,288.12 2,643.17
Other income 8.07 3.86 9.44 14.49
Employee benefits expense 388.54 364.14 2,038.96 1,813.26
Cost of technical sub-contractors 25.32 11.90 675.58 495.16
Other expenses 150.66 168.40 283.92 308.30
Profit before finance costs, depreciation,
taxes and amortization 201.95 39.80 299.10 40.94
Finance costs 1.71 2.27 4.86 4.96
Depreciation and amortization expense 6.15 4.69 8.92 10.78
Profit before tax expense 194.09 32.84 285.32 25.20
Tax expense 74.03 15.04 99.18 14.61
Profit After Tax 120.06 17.80 186.14 10.59
Paid-up Equity Share Capital 245.64 245.17 245.64 245.17
Earnings Per Share (EPS) 4.90 0.73 7.59 0.43
2. BUSINESS Data Storage
During the year under review your Company recorded Mindteck provides product development services in Data
consolidated revenue of Rs.3288.12 million as against Storage technologies to world leaders in the storage industry
Rs.2643.17 million in the previous year, registering a positive for over a decade, while building strong client relationships
growth of 24% in revenue. Of the revenue that was through superior customer service. We have built a pool of
recorded, 80% is attributed to the US and the rest to Asia, talent in storage technologies, especially in the areas of
Middle East and Europe. release QA and QA automation and also own core release
activities.
At an operating margin level, Mindteck recorded EBIDTA of
Rs. 299.10 million (9.10%) this year as against Rs.40.94 Electronic Design Services
million (1.55%) last year. Mindteck’s Electronic Design Services (EDS) group provides
Mindteck‘s Profit After Tax for the year stood at Rs.186.14 core embedded technology solutions to its clients with a
million, as against Rs.10.59 million in the corresponding constant focus on quality, technology, reliability, cost
previous year, registering a growth of 1656.77%. effectiveness and added value.
3. DIVIDEND Mindteck offers a complete range of Electronic Design Services
to address all aspects of the product lifecycle, cost-effectively
The Board has recommended a dividend of 10% (Re. 1 per
and on time. Various phases of Product Life Cycle (PLC) are
equity share of Rs. 10 each) for the year ended March 31, 2014.
This translates into cash outflow of Rs. 29,225,434 including supported through expertise in technologies and processes
dividend distribution taxes. developed for new product designs, verification and validation
and system solutions. This has helped us showcase our
4. BUSINESS FOCUS AND HIGHLIGHTS
competency and capability in a more organized way and has
Mindteck’s core business lines remain Product Engineering
added clear visibility to the engagement model offered to
and Information Technology Services. The verticals of focus
our clients. The Embedded Design Services focuses on
include Data Storage, Smart Energy, Life Sciences and
conceptualization and new product development. Embedded
Government.
Verification and Validation services provides product validation
Principal activities and highlights for the year ended March and verification services, and System Solutions provides system
31, 2014 include: level features such as reliability, safety and value engineering
PRODUCT ENGINEERING for electronic products.
The Product Engineering business unit encompasses Data Strong domain expertise, backed by the capability to provide
Storage, Electronic Design Services, Smart Energy and full product design development, has been the driving factor
Wireless. for most of our repeat business. Our focus on aligning our
6 Mindteck Annual Report 2013-14
capability to the business requirement of our client, close Medical Devices. Reports from leading market research
monitoring and control of project parameters to deliver to agencies have indicated high growth opportunities for this
customers’ satisfaction, cost effectiveness and optimized industry in 2014. According to them, increased investment,
resource utilization have been the key drivers for acquiring outsourcing of research in emerging markets and disruptive
repeat business, as well as new business. technologies are some of the trends that will drive the
The Center of Excellence in-house projects initiative has industry this year.
helped the EDS group in optimum resource utilization, and Mindteck currently works with leading companies in all of
in creating proof of concept models for capability the above segments and have marquee clients offering niche
demonstration to our customers. services in the areas of application development,
Smart Energy and Wireless maintenance and ERP systems.
Mindteck is an established player in ZigBee and 6LowPan Mindteck’s IT Services helps global enterprises gain
wireless stack development and support services for fab and competitive advantage with an innovative, measurable and
fabless semiconductor clients. We mainly focus on long- customer centric approach to realize business objectives
short-range wireless communication and wireless sensor through their IT investments. The IT Services strategy for
networks to design and develop wireless monitoring and the financial year is based on increasing the predictability of
load control solutions in automation space. revenues through more managed service offerings,
improving profitability through more offshoring and value
This year, we have a few prospects interested in integrating
added services. In addition, competencies and skillsets are
Mindteck’s solution for lighting and energy monitoring
being further aligned towards the services that we sell and
control for data capturing and analytics which would result
are in demand, thus providing better quality and predictable
in energy saving and efficiency improvement. Similarly, asset
delivery for our customers.
tracking solutions are built for construction industry while
monitoring and control application with mobility/web app Our deep domain expertise in the areas of Manufacturing,
will help demonstrate our capability to the emerging market Monitoring and Control, supported by strong skills in
of Internet of Things/Everything (IOT/IOE). multiple technologies, helps us in acquiring multiple projects
from leading clients. We continue to grow our IT business
We were successful in demonstrating capabilities for
in Europe for Medical devices, in the US for Semiconductors,
developing central servers, mobility and web applications
Analytical Instruments, and Government, and in IMEA for
for energy monitoring and data analytics for efficient
Manufacturing and ERP services.
operation of the solar power plants hosted on cloud.
Life Sciences
Mindteck has further developed its expertise in providing
the communication stack for an electric vehicle charger in Life Sciences at Mindteck continued to utilize its deep
compliance with SAE (Society of Automotive Engineers) expertise in providing software and hardware solutions to
standard and IEC (International Electrotechnical some of the world leaders in analytical instruments and
Commission) standard. This competency has been further medical devices during the reporting year. Our business
enhanced to develop an electric vehicle emulator which improved with existing clients and numerous new clients
replaces the actual vehicle for test and validation of the stack. were acquired during the current year due to our continued
This has improved Mindteck’s capabilities to address contributions to meet the growing product engineering
expertise required by clients looking for services in DC needs in this space.
charging control and charging kiosk applications. During the year, Mindteck provided valuable technological
Mindteck continues to support and enhance a solar energy support to a leading single board computer manufacturing
monitoring solution for another long-standing client. This company. Additionally, in recognition of its valued
solution has had great success in the UK and the client is contributions in the medical devices segment, Mindteck was
now in the expansion mode. As part of this, we will be selected for Altera Design Services Network Program which
monitoring about 100,000 solar installations for the current adds to Mindteck’s service capabilities in FPGA design.
financial year. Mindteck is in the process of enhancing the As in the previous years, most of the business came from
solution to enable it to scale up to 100,000 PV installations the US and EMEA regions. Our key focus is on ensuring
across multiple servers and geographies. flawless delivery and optimal resource utilization in order
Lastly, Mindteck won another new project from a fabless to enhance profitability.
semiconductor giant for ZigBee stack for their new Traditionally, our contributions are in the embedded
microcontroller. applications development and during the year, we started
INFORMATION TECHNOLOGY SERVICES delivering technical solutions for data analysis and reporting.
Many compliance related applications were developed for a
Mindteck’s IT Services business unit consists of multiple sub-
few of our leading clients.
units such as General Application Development,
Government, Life Sciences, Semiconductors, Cloud and Big Our services toward medical device application development
Data. Mindteck’s Life Sciences vertical mainly focuses on for a key client further strengthened with a team ramp-up
two major markets – Scientific & Analytical Instruments and and execution of more specific projects.
Mindteck Annual Report 2013-14 7
Delivery quality of Life Sciences was extremely consistent CENTERS OF EXCELLENCE (CoEs)
which is demonstrated by the fact that five projects from
Storage Testing
Life Sciences were assessed at CMMI Level 5 and were
The Storage Testing CoE at Mindteck is primarily aimed at
supported by the ISO 1385 re-certification for Kolkata and
providing skills, people, processes and infrastructure to
Bengaluru centers.
enable our customers build and enhance product quality in
Government storage space. Over a decade, Mindteck has built
The Government vertical of Mindteck helps State and Local comprehensive expertise in Storage QA, Automation and
government agencies seize opportunities amid the Performance testing especially in the SAN, NAS and Unified
significant challenges and change they are facing today. We storage space while partnering with multiple storage product
bring a deep understanding of clients' needs, knowledge of vendors.
technologies adopted by governments, and solutions that
Wireless Design
can solve IT challenges, thus enhancing a department’s
Mindteck is focusing on providing monitoring and control
performance, providing efficiencies, and delivering key
solutions by designing building blocks required for wireless
services that optimize processes, resources, and reduces
connectivity for IOT. Current focus is on control nodes,
costs. Mindteck has a strong history of delivering projects
gateway with multi-technology connectivity and webserver/
around Application Development, Program and Project
applications for support over the cloud for building
Management, Business Analysis, Testing, Strategic
automation and energy efficient solutions across various
Consulting and Professional Services.
industry verticals.
With recent government budget reductions, less projects
5. QUALITY
are being completed through formal proposals, and more
At Mindteck,quality is non-negotiable – it is the thread that
focus has been directed to work with government agencies
weaves together all our activities and people. Our continuous
to provide professional services. The staff we provide has
focus towards high levels of quality, robust information and
been successful working on projects with internal
security practices have helped us attain a number of
government teams. Many of the engagements started as
milestones during this year.
short-term placements, but have moved to long-term
opportunities. We won multiple contract renewals as well CMMI DEV Ver. 1.3 Maturity Level 5 – Mindteck has
as new placements at several agencies with this strategy. been appraised at CMMI-DEV Maturity Level 5. Level 5 is
the highest CMMI rating. CMMI is a process improvement
Semiconductor
approach that provides organizations with the essential
Mindteck is a leading software and hardware solutions
elements of effective processes that ultimately improve their
provider for the semiconductor industry. With decades of
performance.
experience, we understand the ecosystem and the market
CMMI maturity level 5 indicates that the organization is
conditions and we possess the vision to understand the
performing and benchmarked at an ‘optimizing’ level. At
challenges and propose the right solutions. Our
this level, an organization continually improves its processes
semiconductor software services and solutions have helped
based on a quantitative understanding of its business
our clients improve equipment software features and
objectives and performance needs. The organization uses a
performance, and increase productivity. Our services focus
quantitative approach to understand the variation inherent
on catering to the software needs of semiconductor capital
in the process and the causes of process outcomes.
equipment manufacturers, subsystem vendors and fabs.
During the year, our Information Security Management
Cloud Computing and Big Data
System (ISMS) was upgraded to the current version of ISO
Mindteck’s Cloud Computing business has helped existing
27001:2013. Apart from security management, we are also
customers migrate their IT infrastructure to Amazon Cloud.
enterprise-wide certified against ISO 9001:2008 (Quality
VCDC (Virtual Cloud Data Center) is an IAAS offering
Management) and continue to hold domain specific quality
developed by Mindteck to create a hybrid cloud between
certification ISO 13485:2003 (for Medical Devices). Our
the private cloud and public cloud to provision resources.
compliance to International Quality Standards shows our
SAAS based application offerings are also explored to help
ability to work with multiple requirements to deliver business
clients build multi-tenet applications to reduce cost and time
and technology solutions to a wide range of enterprises
to market.
around the globe.
We are also embarking on Big Data Analytics based projects
6. INFRASTRUCTURE
in the monitoring and control space. Some of the solution
Mindteck has offices in the United States, India, Singapore,
offerings include multi-image processing for real-time traffic,
Malaysia, Bahrain and United Kingdom. There are also four
predictive analytics for fire systems and smart grid data
development centers equipped with R&D laboratories across
management. The Hadoop ecosystem is offered as part of
the globe. The infrastructure includes space for workstations,
the Big Data solution. This year, we have a few prospects
conference rooms, meeting rooms, labs and a world-class
interested in using Hadoop which will help them to quickly
communication system. The innovative ‘best shore delivery
manage and analyze their data.
8 Mindteck Annual Report 2013-14